By Nathan Cocozza, President, Planet Orange, San Jose, California
We're in the termite business. My two partners and I first introduced an eco-friendly pesticide to the industry two years ago. But people had a hard time believing that our pesticide, made from orange oil, could possibly work. After all, even toxic chemical pesticides created in a laboratory aren't 100% effective against termites.
On top of a naturally skeptical customer base, our competition was not happy that we had a product rated by the EPA as "Generally Regarded as Safe." That rating doesn't require customers to leave their homes during a treatment. Many prospective customers I was communicating with via email, on the phone and in person in the first year of our business had heard from another termite company that orange oil was really just snake oil -- that it wasn't effective at all.
In order to assuage our customers' doubts, we had to work hard to educate them about our product as well as track customer satisfaction, and we had to go all in with our marketing campaign.
Betting on a huge ad spend
In 2008 I was working out of my garage making phone calls and trying to build a customer base. That's when I realized we were going to have to take drastic measures to win the hearts and minds of the skeptics. I had faith in our product, but it was going to take more than faith to convince the public.
At the time, our advertising budget averaged around $30,000 a month, which already represented a significant percentage of our revenues -- as much as 25%, depending on the month. It wasn't enough. We didn't just want to survive; we wanted to become an industry leader.
November through February is off-season for termites, so most extermination companies put their advertising campaigns on hold until the weather gets warmer and people start seeing termites again. We saw it as a perfect opportunity to launch our marketing campaign. As soon as our competitors went quiet, we blitzed the market, spending every available dollar of revenue after operating costs on advertising and marketing over a five-month period. We bought spots on 11 radio stations and television ads on ABC, CBS and FOX and spent an average of $100,000 a month.
We were betting that even though customers might not have termites in their homes when they hear our ad, they'd think of us in three months when they saw that first termite . If our investment didn't pay off, it would be a lean year!
Fortunately, our plan worked. In five months our company went from $100,000 a month in sales to $600,000 a month. We also grew from 12 to 40 employees. We could barely keep up with all the new business.
Educating the consumer
Once we find a part of a house that's infested with termites, we inject the wood with orange oil, which spreads to kill the termites. But a lot of our potential customers didn't really understand our process, or why orange oil actually works. We knew that our customer needed to understand how our process worked if they were going to trust it. With our monthly $100,000 budget, we bought ads on TV and radio. Each medium served a different purpose. We used 30-second TV slots to promote and reinforce our brand. We used 60-second radio slots to educate our customers about our product and our extermination process.
The advertising alone was enough to convince many new customers. But to win over those who still weren't convinced, we went several steps further: In 2008 and 2009, in addition to tripling our ad budget, we decided to double the warranty period for all of our customers to two years -- double the industry standard. Plus we offered a free inspection just before that two-year period ends. If the termites come back within that time, or if a new infestation occurs, we give them a free treatment. This last push completely turned the tide of opinion in our favor. Occasionally we have to go back and give free treatments, but they make up a nearly insignificant portion of our workload.
Business is booming and customers are happy
We went from $1.1 million in sales in 2008 to $6.8 million in 2009. This year we project we'll hit $10 million, and next year more than $13 million. And most importantly, based on our customer surveys, we have a 98% customer satisfaction rate.
-- As told to Harper Willis
Nathan Cocozza and the other co-founders of Planet Orange each logged time at high tech firms in Silicon Valley before getting into the pest control business.
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