He’s Exterminating Dysfunction in the Pest Control Industry

    By | Small Business

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    As a college student who paid his tuition with summer jobs selling pest-treatment contracts to homeowners, David Royce realized he had a knack for sales. One summer, he sold 900 new accounts compared to the 150 accounts that most of his peers did. He pored over business books to perfect his approach, developed training programs for other agents, and rose in the company ranks to VP of sales while still in college.

    Royce had his sights set on moving to New York City after graduation from Brigham Young University to pursue a career in investment banking or venture capital. But 11 years after graduation, he has made his fortune without leaving the pest control industry or Utah. 

    Royce says the pest control company he began his career with was representative of a “completely dysfunctional industry that relied on Millennial employees for success, but didn’t do much to train or nurture them.” At the next company he worked for, his training materials led to off-the-chart sales. When his boss decided to retire, Royce was offered the opportunity to buy the business instead of heading to New York for a banking job. He says his boss told him, “You’re really good at this and you’d own an amazing company. Or you could spend 80-100 hour weeks doing investment banking for someone else’s company.” Royce went for it.  

    “I licensed his company, built it for four years, learned how the model worked, then sold it to Terminix.” Royce says he used the capital to start another company, EcoFirst Pest Control, which soon also received a Terminix buyout offer.

    By then, Royce had developed strong ideas about how to build a company culture and an extraordinary business. So, he took the offer to gain the capital he needed to start over and build his dream business. Terminix acquired his customers and technicians, and Royce kept his executive team, operations managers, and sales force. He started Alterra in Salt Lake City in 2012, raked in $45 million in revenue in 2014, and was recognized this year as Utah’s Ernst & Young Entrepreneur of the year.

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    Today, Alterra has more than 1,200 employees at 22 locations, and is ranked as the nation’s fastest-growing pest control company. The headquarters boasts features more common to tech firms, such as foosball and ping-pong tables, a basketball court built to NCAA standards, modern glass-enclosed offices, camaraderie-boosting contests such as the Alterra Olympics, and sales competitions with prizes including iPads, laptops, and huge flat-screen TVs. Royce reasons, “We have to be a happy, fun place to attract top talent. Millennials like to socialize, and they like a lot of praise,” Royce says. “They expect that now.”

    Royce acknowledges that his success baffles his competition. “My industry is like a lot of old industries. It’s been around. Everyone assumes they know all about pest control. Most people in it are older. They look at us and say, ‘You’re growing really fast, but I don’t get it.’”

    Alterra appeals to eco-conscious customers with environmentally responsible and pet-friendly products. But more important, Royce says, is its attention to service. “We’re in the relationship business. I look at it as a customer service company.” A sales training manual, videos, and proprietary sales software typically enable agents to improve their sales stats by 70 percent in their first year, Royce says. And a set of 10 core values—including commandments to “elevate the tribe, deliver Wow, celebrate success, embrace change, and be irreplaceable”—guide the company culture.

    “I look at company culture like a religion,” Royce says. His influences? Virgin Group founder Richard Branson, Zappos founder Tony Hsieh, and psychologist Shawn Achor, author of The Happiness Advantage, to whom he attributes ideas such as, “If you really want to be great at work, be joyful and create memorable moments with customers.”

    Though Royce calls the sale of his “baby” EcoFirst “the hardest thing I’ve ever done,” he is certain that no one on the team that followed him to Alterra would rather go back to the old way of doing things. “There is so much more fun and opportunity now, and we have a lot more options and things to do.” Nor does Royce have any regrets about his own career path. “Can you imagine how happy I would be in investment banking?” he asks.

    Follow Adrienne Burke @adajane
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