Paul Alley on under 1% churn and building the largest Pestmaster franchise

Five minutes before we hit record, Paul Alley had a hook in the water off a dock in Vero Beach, Florida. His company, Pestmaster Services of the Hudson Valley, runs out of Kingston, New York, with a team of 42 and customer churn under 1%.

Paul and his wife, Amy, opened it in 2001 in a market where they didn’t know anybody, and they did $35,000 that first year. Today it’s the largest location in the Pestmaster franchise system, and it has done the pest control at West Point for 26 years.

I see Paul helping owners in the Pest Control Millionaires Facebook group all the time. His approach to customer service is old-fashioned, and he’d be the first to say so.

Who is Paul Alley?

Paul Alley is the president of Pestmaster Services of the Hudson Valley, a franchise in the Pestmaster network that he owns with Amy. Over 39 years in pest management, he became an associate certified entomologist and a bed bug detection canine handler, and he deployed the first entomological scent detection canine in New York State. His team handles general pest control, wildlife, aquatic pest control, vegetation management and even aerial applications by helicopter.

Paul got into pest control as a college kid in Florida who needed a job. In the ’80s he sprayed baseboards at 10 to 15 houses a day on a Miami route, in a stick-shift Toyota with no air conditioning, and he later worked as a senior technician in Texas.

When Paul’s father asked them to move to New York, Paul and Amy bought a Pestmaster franchise in December 2000 and opened in March 2001 with a home show on day one. Out of about 50 Pestmaster locations, Paul says theirs is now the biggest. They brought on their first outside salesperson about a month before we recorded, in their 26th year.

Government contracts are won in the paperwork

The Pestmaster system chases a lot of government contracts, and the franchisor helped the Alleys win West Point Military Academy in 2001. Alongside their residential and commercial accounts, they bid on cities, schools, states and hospitals.

With a pizzeria, you quote a price, sign an agreement and call it a day. A federal contract falls under the Federal Acquisition Regulation (FAR) and can run 150 pages, listing every building and its square footage. Stored product pests, turf-damaging insects and aquatic vegetation each get their own line item, price and written scope of work. The government also sets the minimum you can pay a technician on the job, and benefits go on a separate paycheck.

Getting paid is its own job, since the Army, the Veterans Administration and schools each use a different invoicing system.

“If you miss a penny or you are off by a penny, they kick it back and they don’t tell you why they kicked it back. You just have to figure it out.”

Amy runs a team that does nothing but this specialized billing, and Paul brings the entomology. When an agency asks how they’d handle spongy moth (they treated it by helicopter last year), his team can put a special request together in 2 or 3 weeks. It’s tedious work, but Paul likes being able to say he does the pest control at West Point and the New York Governor’s Mansion. If they trust his company, he figures, it must be doing something right.

Pick a CRM you won’t outgrow

Amy gets the credit for their software. Without her, Paul said, he’d probably still be on some antiquated system, if he used software at all. He sees a CRM as part of the foundation and tells owners to pick one for what they’ll need in 2, 5 and 10 years, not just today. They switched in the middle of their growth, and it was a pain in the butt.

They’ve been on FieldRoutes for about 8 years. Amy spent a couple of days training at its office in McKinney, Texas, and Paul still feels like they’re driving a sports car stuck in second or third gear. They also use Smarter Launch, the proposal software Eric Fletcher co-founded, and Applause, which lets customers tip techs and builds Google reviews. I’ve had Applause co-founder Chris Anderson on the show too.

LSAs get the biggest share of his budget

Local Service Ads are Paul’s biggest marketing spend, and he says they bring a good return. Social media is the other big piece. His team asks for reviews and posts them, and they make sure customers know every tech is licensed and background checked. It helps, he said, that his competition isn’t that strong.

Back when they started, new business came from about 15 phone books. To open a branch today, Paul said he’d reread Zip Code Kings, the book Jonas, Jake and I wrote.

He’s still on the fence about door-to-door, partly because reps have bad-mouthed his company to him without knowing he owned it. He has no problem with anyone who sells with ethics and integrity, only with reps who sell just to sell. Greg Young gave me the other side of that debate.

Churn under 1% starts at the curb

Paul’s customers stay 7 to 10 years on average, and he credits plain customer service. Don’t park in the driveway, because if your truck leaks oil, now it’s on their driveway. Bring the trash can in from the street. Show up in a clean uniform and a clean truck. If a customer passes away, his team sends a condolence letter.

Techs work alone, so Paul wants each one to be his own police. Treat every house like your mother’s, and before you pull away, ask whether you’d pay for the service you just did. If not, go fix it, because the customer will know. Paul says the techs who can say yes don’t get complaints or callbacks.

Somebody is always watching, too. After a fresh snow, one customer sent Paul pictures showing no footprints near the bait stations her tech had supposedly checked. For a first offense, Paul treats that as a teaching moment, and the tech goes back to do the service right.

Walk every candidate to their car

Paul admits his team makes hiring hard on purpose. Before anyone gets an interview, the company pays about $15 to pull a motor vehicle abstract from the DMV. That catches the suspended license or the DUI a candidate didn’t mention.

They hire for morals, ethics and integrity over experience, since there are a lot of bad techs out there who mostly know shortcuts. At the end of every interview, someone walks the candidate out to their car to see how they keep it, because a tech’s truck is his office and a moving billboard.

“If they can’t keep their own stuff in good shape, working condition, clean, how are they going to keep your stuff that they don’t have to pay for?”

A former employer’s opinion isn’t final, either. One applicant admitted he’d been fired, and his old company called him the worst tech ever. Paul’s team walked him through their expectations and decided it had been a them problem. He’s now one of their most recognized techs.

Lying is the fastest way out

Paul has 3 rules. Don’t lie to management, don’t lie to the customer and do your job.

If you’re burned out after a run of 14-hour summer days, call the night before and they’ll work around you. Don’t call at 8 a.m. to say you’re sick, because you didn’t just get sick at 8 a.m.

When we talked, Paul had just fired a tech for lying about his uniforms. Paul had told him to be in uniform next time, and 2 days later he showed up in black jeans and a company sweatshirt, saying none of his uniforms fit, new or old. It turned out he’d never even put the old ones on, and he’d never told anyone they didn’t fit. He called Paul 3 days in a row asking for his job back.

The company hands techs a truck, a gas card and uniforms. About the only thing it doesn’t give them, Paul said, is underwear. He runs on trust but verify, and once someone loses that trust, it’s only a matter of time. It rarely comes to that. Paul says they don’t lose many people, and his COO spends a lot of time on training so every employee knows the expectations.

Run it from the office window

Paul still works in the business every day, but with the right people in place he can step back. His operations manager, now COO, brings him plans backed by data and expected ROI. Paul meets his business consultant at 9:00 every Tuesday and his marketing team at 9:30, which sets the week.

“If you’re looking through a windshield, running your business through a windshield of a truck, you’re in your business. If you’re able to sit and look out the window of the office, you’re working on your business.”

When owners can’t decide between another tech and an office hire, Paul reminds them the tech makes the money and the office person processes it. Virtual assistants made that choice a lot easier for him. VAs in the Philippines and Mexico answer his phones for $8 to $10 an hour instead of $20 to $30, and he’s never had to fire one. If you’re weighing it, PCM has a full guide to hiring pest control virtual assistants.

With that team behind him, Paul spent his first winter in Vero Beach, where he grew up. From a remote desktop that matches his Kingston office, he checks the bank, QuickBooks Online, the schedule, payroll and the CRM. He’d been back to New York only 2 or 3 times in 4 months, and most days he fishes off a dock for 2 or 3 hours, taking calls out there.

My take

Paul’s message to owners was blunt. Stop asking stupid questions on the internet, and stop saying spray. “We don’t spray chemicals. We apply products,” he said. “If you guys want to get paid like a doctor, you got to act like a doctor.”

That goes for your marketing too. Plenty of homeowners size you up on your Google Business Profile and website before a tech ever knocks. If those read like a guy with a sprayer, people will expect to pay like it.

Retention like Paul’s also changes the math on paid leads. A customer who stays 7 to 10 years is worth far more than the first invoice, so you can afford to spend more to win one.

I’m with him on conferences. Paul skips the PestWorld seminars and goes for the dinners, meetings and vendor show, because he thinks the value is in the sidebars. At my first PestWorld I went to every seminar, since I didn’t know anyone. At the most recent one I didn’t attend a single seminar. I spent the whole time with people I knew from online and got way more out of it.

Where to find Paul

Paul will try to help anybody who calls. Shortly before we recorded, he saw a post in our Facebook group from an owner nearby, sent a DM, and he and Amy sat down with the owner and his sister for about 2 hours. He goes by Paul Alley Sr. on social media, and he’s happy to take government contracting questions by email.

• Company: Pestmaster Services of the Hudson Valley
• Facebook: Paul Alley Sr.
• LinkedIn: Paul Alley, ACE