Ep 85 - Adam-ize It: Best Practices with Todd Leyse

Patrick Baldwin: The flies’ revenge. Ten little flies all in a line and one got a swap then there were nine. Nine little flies disgustingly licking their feet, swat, and then there were eight. Eight little flies mating for more, slam, bam, swat, then there were four. Four little flies colored green or blue, swat, ain't easy? Then there were two. Two little flies dodged the civilian, early next day, there were a million.

Paul Giannamore: That sounds like a pest jest to me, Patrick.

Patrick Baldwin: It's the level of humor that I can understand and appreciate here. Harold Leyse, Todd Leyse’s dad, put together this comic book if you will. It's what I like. It's got pictures in it. That was a poem out of this book. We got Todd Leyse here.

Paul Giannamore: Todd is one of the elder statesmen of the industry. Although I don't know if he'd like me to use using the term elder around him. He's a class act. He is always willing to help everyone. He's an extremely active participant in the Associated Group. He’s been to almost 50 biannual meetings. He’s an all-around great guy. It was great to bring him to The Boardroom for a chat.

Patrick Baldwin: What do you say we go and step on into The Boardroom with Todd Leyse?

Paul Giannamore: Let's do this, Patrick.

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Patrick Baldwin: Todd Leyse, we were just talking about you. Welcome to The Boardroom.

Todd Leyse: It's good to be here. I appreciate the invite.

Patrick Baldwin: You didn't want to spend your vacation hanging out with the Mex in the Potomac Boardroom though, did you?

Todd Leyse: I wanted to but I had the girlfriend and the Mex. It was a tough call.

Paul Giannamore: It’s like oil and water, they don’t mix. It would have been nice to be able to do this down here live in Puerto Rico. You guys had a pretty busy itinerary. I haven't asked you about this, how was the Bacardi factory tour? Did you enjoy that?

Todd Leyse: I've done it before and I didn't remember anything from it many years ago. It was all fresh. It was good. The tasting room was good.

Patrick Baldwin: Did you drink a little much last time?

Todd Leyse: Every day.

Patrick Baldwin: You didn't start Adam’s with $15 million in revenue. There you are halfway on the PCT Top 100. Take us back. I know you're at least a second-generation business. How did Adam’s get started?

Todd Leyse: My dad started the company with a partner in 1971 when I was six years old. My sister was born a little bit later that year. Fast forward many years and his partner passed away. After about 25 years in business together, they had sold about 10% of the caveat to a key employee. They couldn't agree on the future of the company after the one partner had passed away. My dad changed the locks on him after he said he was out of there and he was going to bury the company.

My dad called me up and asked me if I ever considered a career in pest control and I said, “To be honest with you, no. What does it pay?” My dad says, “What do you make?” I told him what I made and he said, “I'll match that.” I said, “I'll give it a year. If I don't like working with you or I don't like the industry, I'll go back to what I was doing in IT management.” A year away from it probably won't hurt my career. It might even help. As it turns out, I loved working with my dad and I loved working in the industry way more than I thought. It's been great since then.

Patrick Baldwin: How did he sucker your sister into coming into the business then?

Todd Leyse: She was already there. Even though she's six years younger, she had already been there a few years. At this stage, she is now the second longest-tenured employee and I'm the third longest-tenured employee. When I got there, she was one of the secretaries and now she manages 25 to 30 people under her.

Paul Giannamore: Who is the longest-tenured employee?

Todd Leyse: We have an employee that was our first office person who started with us at the age of 19. She's been there for over 40 years with us. She was the first office employee and she's still there. We're about to send her to Las Vegas with some gambling money and pay for her trip and a hotel as a thank you for being with us for over 40 years. We try to do different creative things for people who have been with us 25, 30, or 35 years. It's a nice little thank you for being a family-run company. She didn't expect it. She came to the office one day to her cubicle and we had decorated it with playing cards, dice, and things like that. We sprung a surprise on her.

Paul Giannamore: Working down at Rollins’ office, I remember I had a surprise party or two but they would do these surprise retirement parties. There was one guy, I won’t mention his name, they pretty much put balloons up and he came to the office and they're like, “Congratulations, you're retiring.” That's how he went.

Todd Leyse: Forced retirement.

Paul Giannamore: “Here you go. Congratulations, 40 years, and you’re out.”

Patrick Baldwin: That's awesome. What's her name?

Todd Leyse: Patty has been a great employee. She's worked in different positions along the way. She's been a steady, solid employee for many years. We used to have an employee named Jan that worked well into her 70s on a part-time basis. One of the things she did was stuff envelopes for statements, invoices, and whatnot. When she retired, we bought a folding stuffing machine and we named the machine Jan.

Patrick Baldwin: I don't know if that's a compliment or an insult.

Todd Leyse: She came back and visited and we showed her the machine with her name on it. She was pretty pleased that Jan lives on.

Paul Giannamore: Todd, I remember you telling me the story before but remind me of how your old man got into the pest control space, to begin with.

Todd Leyse: He was a great athlete. He had a scholarship in college. First-year college, he chased women and drank too much. After a year, he dropped out of college. He did some construction jobs for summer then joined the army and served for four years in Europe in peacetime. He got to travel all over Europe playing football and baseball. He got back out and came back and moved from small-town Minnesota to the Twin Cities. He had a job in a warehouse.

In the winter here, with the sun being short, he would go to work and it was dark. The warehouse had no windows. He'd come home and it was dark. The only time he'd see the sun was on Saturday and Sunday. He lived with a guy named Whitey. Whitey had white hair. In a small town, everybody had a nickname. My dad's nickname was Zod.

Whitey was working for a pest control company called Lystad’s. Whitey said to my dad, “There's an opening. Why don't you try that?” My dad tried it and fell in love with it. Whitey didn't stay in the industry too long. My dad met his partner there, Don. Between Harold and Don, they became good friends and they both worked there for probably about seven years. After my dad left and started the company with Don in 1971, Lystad’s was sold to Ecolab and that's the basis of how Ecolab got into the pest control industry.

Paul Giannamore: I did not know that.

Todd Leyse: My dad was promised to be a regional manager for Lystad’s of the Texas region. You never know, Patrick. I could have been raised in Texas. Along the way, someone else was given the job even though my dad was promised the job and that was one of the straws that pissed my dad off. There were ups and downs with working for Lystad’s.

When they started the company, they didn't have a strategic plan. They weren't sure if they even wanted employees. Pretty quickly, they wound up with employees but my dad vowed that when he had employees, he wanted to treat them the way he wanted to be treated. We’re a company that's been focused on our employees and trying to do the best we can for them.

Patrick Baldwin: Your dad's name was Zod. His partner, Don, what was his nickname?

Todd Leyse: Donnie.

Patrick Baldwin: That's a good one. There's Whitey. Where did Adam’s come from? I'm trying to make the connection to the company name there.

Todd Leyse: They weren't sure if they wanted to name it after Harold Leyse or Don Hanson. They thought about taking the first three letters of Harold and the first three letters of Don but then they thought Hardon probably wouldn't be a good name.

Paul Giannamore: It'd be a fantastic name. People need to do more of that.

Todd Leyse: They didn't know if one wound up keeping the company and the other one sold to the other one. They weren't sure. They didn't want to name it after Leyse or Hanson. They picked something alphabetically number one in the phonebook. At that time, there were probably only five pest control companies in the Twin Cities advertising the Yellow Pages. If my dad went out on calls, he might ask somebody, “How did you come by Lystad’s?”

A lot of times, they would start alphabetically at the top and work their way down. Once in a while, somebody would start at the bottom and work their way up. He found that alphabetically being number one would probably help them. It was pretty important back then. It's less important now with the internet, advertising, and different ways of getting at people. Back then, when there were 5 or 10 companies, alphabetically being number one was important.

Paul Giannamore: A lot of quadruple A-1 pest controls back in the day I remember. You don't see as many of those anymore.

Todd Leyse: We've been an open book when we run the company and told that story many times and a lot of employees have spawned off from us and started their own company, A Bait, Accurate, Abracadabra, Action to Action. There's probably been at least ten A companies that are alphabetically before Adam’s. None of them have gotten to more than four technicians. It takes a lot more than a good name to build a company.

Paul Giannamore: No Hardon Pest Control coming out of that.

Patrick Baldwin: They lasted no more than four hours.

Paul Giannamore: Look at that, Patrick. That was something that wasn't a dad joke. I like it, Patrick. Were you thinking about that for a while? Are you happy I brought that back up? Were you ready?

Patrick Baldwin: I was ready.

Paul Giannamore: One thing that's nice about not naming the company with your surname is that people don't know if you're the owner or not. You’re like, “Adam’s Pest. I'm not Adam. Call somebody else.” It gives you an opportunity to hide. I like that.

Todd Leyse: The funny thing is some people refer to me as Adam. They think I'm Adam. We've even had female employees get called Adam, which makes no sense. People suck up with a brand sometimes and that's all they can think of. We had a slogan and still have a slogan in our company to tell our employees, “You are Adam.” We had mirrors around the office and we want them to represent the brand as if their name was Adam and they own Adam’s Pest Control. We said, “If this is what people are viewing us as, we might as well own it and promote that.” For over a year, we were promoting that with employees as, “You are Adam.”

Patrick Baldwin: You mentioned torpedoes to me earlier. I got to know what a torpedo is.

Todd Leyse: When I was in elementary school, my dad would occasionally rent one of those trailer cement mixers and he'd pour in different bird seeds, grains, and whatnot. He'd then pour a liquid rodenticide over it wearing gloves and then the mixer would spin and mix all this bait up. He had these labels, let's say a 12x12 inch sheet with printing on one side. He put the print down, take a scoop of the grain, put it in the middle of the piece of paper, ball it up, twist it up, and that was what was called a torpedo.

The label was on the outside. That's how place packs came to be. This was before Bell Labs was making something like a place pack. When they started making it, we quit making our own because it's a pain in the ass to do that stuff. It’s better to buy a good, professional product with the right mix of grains and everything. I was the kid that helped my dad make torpedoes and that's how he would bait for mice. It was what you did to solve problems.

Patrick Baldwin: What size is the cement mixer we are talking about? I was picturing the semi-truck pulling up with a cement mixer.

Todd Leyse: The little, small trailer versions. He would make maybe a six-month supply of rodenticide for himself that way. This was pre-EPA. FIFRA was passed in 1972 and established the EPA so this was prior to that. When he got trained at Lystad’s, he was trained by a guy with one week of experience. The first week on the job, they were slinging 1080 around. If you don't know, 1080 is acutely toxic. If a rat ate 1080, it's going to die in minutes to maybe an hour or two. If a dog came up and ate that dead rat, the dog is going to die. If a bird then ate on the carcass of the dog, the bird is going to die. The secondary and tertiary poisoning were horrible. It was a violent death.

How they would serve it up is they would buy a half-gallon carton of milk, they would drink some of the milk out, and then they would pour 1080 into the carton of milk. They'd go along the railroad tracks with a loaf of bread and dip the bread in and sling it on the tracks and the rats would come out and eat the stuff and die instantly. They would walk miles of tracks. It's not exactly a good placement of bait. It's not a good IPM by today's standards but that's what they did in the ‘60s. It killed a lot of rats, still to this day. I don't think we have many rats in Minneapolis and St. Paul. I credit my dad and his partner for that. It was probably even before Adam’s Pest Control was started that they did a lot of that work.

Patrick Baldwin: Go ahead and say it was before Adam’s Pest Control was started. There you go.

Todd Leyse: I'm absolving all liability. I have a pest control joke for you if you're ready for this.

Paul Giannamore: I want to hear it.

Todd Leyse: When I first got out in the field, one of the first experiences was my dad and I were going after rats and a rat ran up my pant leg. Thanks to my quick reactions, I drowned him. Patrick, I pissed my pants.

Paul Giannamore: Todd, if we think about Adam’s, how many total team members do you have?

Todd Leyse: We topped out about 120 employees in 2021.

Paul Giannamore: Are you more of a residential-focused business or a commercial-focused business? What's your relative mix there?

Todd Leyse: We're close to 50/50, a little bit more residential than commercial.

Paul Giannamore: How active are you in the day-to-day business?

Todd Leyse: I love going to work. I go there all the time. I'm doing this interview from home. My sister and I enjoy working. We've got a great company and a great team. We like the challenges. We work. We give up PTO every year. I took a two-week off vacation and that was highly unusual for me.

Paul Giannamore: Todd, you came out of a relatively short IT background but that's what you were getting into out of school. You get dragged into pest control by the old man, which turned out to be great for the family, for you, and him. How big was that business when you started?

Todd Leyse: We had about 30 employees. We're about $2 million in revenue. When I got there, they didn't have a computer network. It was what you'd call sneakernet. If somebody wanted to share a file, they would write it to a diskette and walk over to the next cubicle and hand it to the next person and put it in their computer. That's how files are shared. Within the first year, I built a computer network for the office. I registered AdamsPestControl.com. I built the website myself, which is simple. It’s about seven pages. We were getting into technology a lot more rapidly.

We did have a used computer system that we had bought from Griffin Pest Control that you guys had helped sell. My dad had driven to Kalamazoo, Michigan to buy their used system when they got a new system. The hard drive to it was about the size of a dishwasher and that was in the basement. That was the computer system. It was all dumb terminals with serial lines running upstairs to green screens. Over time, we replaced all that stuff. Even before I got into the industry, my dad took me to a few PestWorlds and I was looking around for software. I couldn't find anything worth switching. I could find things different, maybe a little bit better, but it wasn’t the right thing.

Paul Giannamore: When you talk about switching, what were you guys using back in those days when you were looking at other software plans?

Todd Leyse: We were using a system based out of Florida called Pest Control Systems, PCS. A number of companies were using it. I had attended a user's meeting in Florida once. I went home and I wrote them two letters. One letter was, “Here's how you could improve your system.” The second letter was, “You should scrap your system and build a new system. Here's how you should build the new system.” Ultimately, they never did do anything. They made small little improvements but they were on autopilot and coasting with their revenue base.

What PestPac built was what my second letter was. It was cloud-based. It was SQL server-based. It had a lot of the things that I was looking for. You could work from home. You had backups that were maintained in the cloud as opposed to on some local server. If a hard drive dies, you lost your whole company. What they had produced was what I was prescribing 3 or 4 years earlier to this other company.

When I saw it, we made the commitment to switch to it pretty early on. We weren't the first ones on their web version but we were one of the early adaptors. I helped a lot of other companies switch to their software. When they ran into problems in the conversion, they referred these new customers to me to help them get their data out of their old system. I was a big advocate.

After being with PestPac for thirteen years, multiple changes of ownership, and multiple promises of, “We're going to redo the database,” or, “We're going to develop this,” or, “We're going to improve support.” At the end of the day, we decided, “We're going to build our own.” We're going to keep growing. We can afford it. We've got the wherewithal to do it. We can build a good team to build something. We weren't building something to be cheaper. This has cost me a lot more money than if I stayed with PestPac or switch to another company. Our goal is to build something better and we've done that.

Paul Giannamore: What's that software called?

Todd Leyse: Blu Star Field Service Management System.

Patrick Baldwin: What makes it different?

Todd Leyse: Some of it is philosophy. We have a philosophy of wanting to integrate with third-party software. We have a philosophy of not nickel and diming our customers. All the clients we've had pay a monthly user fee. We've not charged them on single nickel for anything extra than their monthly user fee. Whereas some of these other companies have their handout at every turn.

We integrate with two different credit card processing companies. One can't grab you by the nuts and say, “This is the fee you're going to pay.” Whereas some of these companies have moved their customers against their will to a proprietary credit card processing system, sometimes at higher rates than we're getting charged from our bank. I've seen some quotes provided to other clients and we're saving 32% compared to what I've seen quotes being given out on credit card processing.

A lot of it is philosophy. A lot of times, with the developers, you don't usually have them talking to customers. They don't always see eye to eye. They don't understand each other's way of talking. I'm unique with my computer science degree. I can talk to the programmers. I can even help the programmers sometimes have concepts but I can also talk to business people.

Software company X might say, “Why would you do that?” They're asking why from the concept of, “We don't understand why you do that.” If I asked, “Why do you want to do that?” I want to understand the heart of it and sometimes dive through the initial request to understand what they're getting at. When I can do that, then I can understand it and I can figure out how it might apply to my business or other clients’ businesses. I then can build it as a standard feature that all clients can use as opposed to customization that one client is using. I build things that are powerful and flexible and yet I can turn around and transfer that information to the programmers.

Paul Giannamore: When you built this software, was it one of those situations where you weren't attempting to commercialize it? You're building this for Adam’s, “This is the software we're going to use because I'm frustrated with what's on the market.” Did you think, “We'll build this for Adam’s but maybe this is an idea that we could commercialize.”

Todd Leyse: I knew we could potentially commercialize it. From the get-go, we built it so it could support other clients. When we went live, we took another client live a couple of weeks later. It was a mistake because the software wasn't ready. It wasn't ready for us. It wasn't ready for another client. They pushed pause and they kept using their software for another month and then we took them live again.

There was some pain in the first six months or so because we didn't have all the features we had in PestPac, features we were using, and we didn't have them implemented yet. Within about six months, we were functional and operating the way we were with PestPac. Since then, it's been improving. Along the way, we figured out we're not that good at selling software.

A couple of years ago, we quit holding a booth at PestWorld. We let our websites sit for a while and we focused on Adam’s. We knew that what's good for Adam’s might be good for our other clients that are running the software. Maybe somewhere down the line, somebody would be interested in the software and would want to sign up.

We grew Adam’s by $1 million and we didn't add any employees and that was in part because we focused on the tasks that our people did at Adam’s. We made it so they could do more with the same amount of people. We grew by another $1 million and we added technicians but we didn't add anybody in the admin team or the contact center. The software enabled us to scale and improve net profits and then turn around and reinvest that to better health insurance and better pay and whatnot for our employees. We were able to get more efficient. When we focused on Adam’s, it became an even better tool for us.

Paul Giannamore: Nowadays, when I look around the market, every time we turn around, somebody's designing some software here in 2022. You have not only the direct experience in growing a traditional pest control company but having a computer science background and also having the experience of having used different software packages. With guys like you, operators, nuts and bolts guys, how do you even tell the difference between different offerings out there?

Todd Leyse: First of all, all companies have basics. You can put accounts in, contacts in, and you can schedule, you can dispatch, you can do some work with mobile, in the field. You then start to get into some more nuanced stuff. One of the things we've done with Blu Stars is we've tried to create things that give us a competitive advantage in our marketplace.

For instance, we picked up an account that we know we're getting three times the price that the prior pest control company was getting. A lot of that has to do with the software and the reporting that we've built into it for this type of customer. We've been able to pick up customers at a higher price point than we ordinarily would and that's where the software can give somebody a competitive advantage. That's not usually what people are on their minds with. I know of a lot of companies that are frustrated with support. They want good, solid support or whatever.

You want to find a company that has at least the basics covered. If you're a commercial company, you wouldn't mind some more advanced billing features. You want a customer portal. You want to be able to see mappings so you can lay out territories, especially if you're a growing company. If you're ten employees and you're always the same, you don't need a whole lot of mapping. You don't need those things.

One of the things with Adam's is we've grown from 30 employees to 120 employees. We've become more and more concerned with scaling. That's not even a word that was on our radar years ago. We started reading books. We've got an attraction. We started reading Scaling Up. We started worrying about scaling within Adam's Pest Control and then we tried to figure out how our software could support us scaling. That's only applicable to companies that are growing more rapidly.

If you're a 5% company and you go to 6%, that's not as big of a deal. When I was at Adam’s, in the beginning, if we grew 10%, that meant adding three employees. Now, growing 10% is adding 12 employees. It’s a completely different deal. We can upload SOPs into our software and link to them. Technicians in the field are going to provide a service for the first time for webbing clothes moths, they don't have to switch over to some other app or read about how to do this or some SOP. Back in the old days, we didn’t have SOPs. We had them a few years ago but now we have them in our software.

Paul Giannamore: Your software is cloud-based. Do you have specific apps for an iPhone? How does that work on a mobile device?

Todd Leyse: Mobile software works on iPhone and Android. We try to support a wide variety of platforms. Whether it's a tablet or a phone, they're pretty responsive and work well on those things. We rewrote our mobile app and came out with our 3.1 under a new foundation if you will with some updated features and a new look and feel. We come up with a new version of the mobile app every three months or so, normally.

This redevelopment took about nine months to redo the whole thing. We have a fresh beginning on the mobile app but still all the features we had before. That's exciting for us because we needed to do that. It was time after running the same mobile app for years but we’ll get better performance out of this. Our mobile app works offline, too. If you're in the middle of nowhere, you can still perform services even if you're not connected to the internet, which is nice.

Paul Giannamore: There are some folks out there who are super excited about the software that they have. They love it, it's great, and it does everything we need. The spectrum goes from moderately tolerant to, “I hate it and I wish I could get rid of it tomorrow.” It is painful to switch. Your business has been around for a while and you’ve got thousands of customers. Your technicians know how to use it. You're not teaching old dogs new tricks. There are a lot of folks out there that want to switch software but it's the switching cost not so much in terms of money but as time, resources, and heartache. When you built Blu Star, did you try to create something that eases the switching cost burden?

Todd Leyse: Back when we had a tradeshow booth for five years, I've had people stop by the booth every year and say, “They need to get off of their software and they want to get to new software.” They could never pull the trigger, in part because they're afraid of the cost. It's not necessarily the dollars. They're afraid of the cost of the switch.

Can you convert my data? Yes, we can convert all of your data. I don't think you could convert all of our data to their systems because we have things that they don't have but we know how to get their data out and put it into place on our system. We've built features that are different. There's no home for some of the stuff we have.

One thing is converting the data. The other thing is the learning curve. When we switched to Blu Star, our mobile was under development for three months and our technicians had no problem learning it. It was easy enough to understand. One of our key principles is easy to learn, easy to use. Within three months, we built a mobile app that our technicians could use and they could function. My biggest concern was them.

If somebody was having a problem in the office, I could walk over to their computer and help them, we could figure it out, we could talk to the programmers, and we could publish a new version that night. The next day, they were having problems with to be fixed. If we didn't deposit checks for a week, we could survive. At some point, we need to deposit checks but we could survive in the office. In the field, I needed people out there working servicing accounts and invoicing people.

Mobile had to be pretty much bulletproof and easy to learn, easy to use. That was our focus when we went live. In the beginning, it was, “Did we have the database? Did we have mobile working?” We did. We didn't skip a beat in the field. My premise with any customer switching to Blu Star is making sure that the mobile people are well trained.

The surprising thing is the first time you go and use the software in your company, there's a big learning curve for everybody. The second time, that's a pretty small learning curve. There might be some different terms. There might be some different ways of doing things. Frankly, oftentimes, there are business opportunities to take advantage of with new software.

When people are looking for new software, they might be wanting to switch due to price or due to support. The reality is the new software might give them the opportunity to improve their business and grow. Not necessarily to lay people off but to free people up to do more important things. Newer and better software might be more efficient in how you process payments, invoices, scheduling, routing, etc, etc.

Patrick Baldwin: Todd, in case Blu Star wasn’t enough and Adam’s isn't enough on your plate, you decide to start Collabetive Services.

Todd Leyse: Collabetive Services is a company and we're pretty open about this. Adam’s Pest Control owns Collabetive Services LLC. Collabetive is the maker of Blu Star. We've worked with other pest control companies to help them leverage our PhD entomologist, maybe help other companies with bug identification, or create training materials. If they have that PhD on file, they can go after certain requests for proposals, large plants, or whatever that might require a PhD on staff and yet they don't have a PhD on staff. They can say they do if they're contracted out with somebody like Collabetive Services.

Patrick Baldwin: I know I struggle with the English language but Collabetive, can I find this word in the dictionary?

Todd Leyse: No. It's a made-up word. It’s two words put together, collaborate and competitive. The concept is if we're working with other pest control companies, together, we can be more competitive. It would help Adam’s Pest Control if we can work with somebody else and can help the other pest control company as well. Blu Star was born out of that as well.

Patrick Baldwin: You had a competitor that's on Blu Star and he was putting in a proposal for a housing authority in your neck of the woods and he needed to get out reports to put in his proposal. You went to your team and said, “We're not bidding on this. Our competitor, locally, is bidding on this. I'm going to help get the reports he needs out of the software. Leave this one alone.” Did I recall the story pretty well?

Todd Leyse: You've got that right. A few years ago, we had received a request for a proposal at a large set of properties and our salesperson was excited to do it. I knew that one of our Blu Star clients already serviced it. I said, “Leave it alone.” That client was calling me and saying, “They got a bid packet and they need to do some more sophisticated reporting.” They weren't using some of the features we had in Blu Star.

I was walking them through how to do some of this stuff so that the customer could retain the business. I told our people, “We're not going to bid on that. Leave it alone. Let this client keep it and keep the business and customer happy.” That's the way it went down. Our people don't have access to that customer’s database. They're in a completely separate database. There's a firewall in place to protect our employees from looking up things. It's not even that they would. It's that I would never want that perception to be there that somebody had looked up what somebody else was charging, someone of them going after their business or something like that.

Patrick Baldwin: I appreciate it. That story stuck with me. I'm curious, going back to the collaborative side of things, would you allow your competitor to be in this? Is this more of a network of pest control companies working together? I heard about the competition. How does Collabetive work?

Todd Leyse: We work with different companies around the country and maybe help them with strategic planning, marketing, PhD services, or process improvement. When I was at Adam’s years ago and there were only 30 employees, a lot of the company was run by my dad and myself. He was a 40-year veteran of the industry and I was a newbie but I had Fortune 100 training. We did a lot of it. We had good supervisors and good people around. We're a technician-heavy company. My dad and I worked our butts off.

At a certain point, when my dad was going to retire, I knew I couldn't do everything he was doing and do what I was doing and that's when we hired our PhD entomologist. It was about a year before my dad retired. Over time, I've built a great team around me. It's the team around me and all the employees that deserve the credit for our growth and success. I'm 1 person out of 120. As much as you could give me credit or I could pat myself on the back, the reality is I'm 1 out of 120. I'm big on team sports. I love basketball. I went to the Timberwolves game. I've got Viking season tickets. Our family is big into team sports and we know the value of a team. We've built a great team at Adam’s.

Patrick Baldwin: You're too tall to give you a pat on the back but at least figuratively, we’ll do it.

Todd Leyse: When you are running your company, how to do price increases? At the end of the day, you've got to execute that. There are theories and concepts. We can all have the same set of theories and we can listen to the same speaker, but you have to walk away and execute. That's the difference. Do you have the company, do you have the people, do you have the horsepower, do you have the bandwidth, and do you have the culture to execute what you're doing? We've shared a lot with people.

Patrick Baldwin: I'm glad you brought that up. I'm laughing over here because you did help me and Bobby there near the end. As much as we set it on The Boardroom Buzz, I got called out and I'm sure you've called me out for it as well. Tell me if you've heard this line before. “Paul, we're not thinking about selling but is it ever too late to increase prices?” Does that line ring a bell?

Todd Leyse: It seems like that might have been something you might have said on The Buzz.

Patrick Baldwin: I definitely did. I got called out for it. Todd, you helped us there. You made time for us and said, “Here's the letter. Here's how you do it. Here's how to calculate it.” I’m super grateful for you doing that, making time, and showing us that.

Todd Leyse: I didn't invent all that. That was stuff I learned from other people, too. Maybe the difference is I took that and I took somewhat of a broken spreadsheet. I made it better and made it a little bit more formulaic and a little bit more usable in a way that can show people the impact of the price increase on their gross profits, their net profits.

You can build in assumptions as far as how many customers you think you'll lose. Price increases are a good thing as long as you don't abuse your customers and have them get priced out of the market and they'll leave you or something like that. As a general rule, price increases are one of the best ways to improve your bottom line.

Patrick Baldwin: I don't know if this applies to you directly, but our audience has a way of chasing down previous guests. I imagine within two hours of your episode getting published, the emails will start flowing in that say, “I want to get Todd's template for increased pricing.” We can collaborate to do an event on price increases and you can share the secrets you've learned over the years.

Todd Leyse: I'd be more than happy to hold a webinar with you and we can make the spreadsheet available to people who want to download it.

Patrick Baldwin: You're the man. TheBuzz@PotomacCompany.com, email and we'll put something together. That’s awesome. I know you've already heard the John Roberts interview. Paul mentioned the culture that not just what the founders say but their actions infiltrate the culture. You have Adam’s, you have Collabetive, you have Blu Star. You’re running through different businesses. You've got a captive insurance program going. You've built these different businesses. How much would you say the culture is between those different entities look similar or different?

Todd Leyse: There is a shared leadership between them, but there are even shared resources. We've had Adam’s employees move over to the collaborative side of things to help with the software. Our main support person is based in Alaska. She was our call center manager for a number of years and she worked for another pest control company before we bought out that company. She has used three different software systems. She's knowledgeable and has almost a foot in the door of Adam’s. Almost all of her time is spent related to Blu Star.

When it comes to Collabetive, our marketing manager is involved with our strategic planning as well as supporting collaborative customers. When it comes to marketing or strategic planning, we've used an outside person for process improvement. We've done this for so many years now that we don't use that person a whole lot anymore.

If we were to help somebody with process improvement, depending on what needed to get done at a different company, we'd either put them in touch with that person and send that person out. We don't have to be in the middle of it or we could go out. Particularly because we've might have done process improvement in that area already so we know what our experiences were like.

We wouldn't come in telling people how to do X, Y, and Z. We would pull it out of their people how to do it in their particular company. We're good at doing process improvement things. Whatever we seem to pay attention to, we tend to improve. That's the struggle in businesses. You can only pay attention to so many things at once before something else falls off the table, then you got to catch it and go work on that.

Patrick Baldwin: Maybe that brings me back to the John Roberts interview of incentives. How do you handle incentives based on what you're paying attention to? Is that something you're constantly thinking about?

Todd Leyse: I'll say something that maybe is a little bit controversial. These days, everybody's talking about engagement. Engagement is important. Some people define it as getting that incremental effort out of people or their job satisfaction, which might lead to lower turnover. All those things are great, but there are some people who think alignment is more important than engagement.

If people's job descriptions and their tasks align with their boss's tasks and align with the company's goals, you're going to have a higher-performing company. What that means is people need to know all the way down to the bottom line, the front line, what their job is and how that aligns with the greater good and the mission, vision, values, and all that stuff. Incentives play into that. If you can have incentives that are tied to those alignments and those goals, then you're going to tend to get the best performance out of your company.

Patrick Baldwin: How would I know if I look at your incentives that they are, for lack of a better word, aligned with alignment and not with engagement? How would that look different?

Todd Leyse: Incentives are difficult in a lot of ways. I looked at it from our service manager, regional manager standpoint for about five years before one of my employees got it done because I had a hard time pulling the trigger on it. One of my things is I don't like to ever hurt somebody’s compensation or hurt people.

When it comes to changing healthcare, I want to make sure everybody has least as good a shape as they were before, and then hopefully better. Some might be better than others, but at least nobody's getting hurt. They finally did it and the next year they tweaked it. The reality is they got the first stab at a down on that. That's what started the service managers getting incented on the right behavior. After a year, when they saw some behaviors that they didn't think were quite aligned with the company goals, they tweaked the incentives.

For instance, if you incent people on not having skips or what some coaches call allowances, great, but then if you give them too much pay for that, then maybe that's all they focus on. They ride their people into the ground so that every last account has worked. “Yes, checkmark, I earned my bonus,” but meanwhile, they turned over 25% of their staff every six months because they were driving people to the ground. That's not quite alignment. You're missing some of the big picture there. You have to incent the right behaviors and not incent the wrong behaviors.

Patrick Baldwin: You're north of the Mason-Dixon line. Is it safe to assume that you pay your technicians hourly?

Todd Leyse: We still have some legacy technicians that are commissioned, but for many years now, all of our newer technicians are hourly.

Patrick Baldwin: Then on top of their hourly, how do you incentivize your technicians?

Todd Leyse: They get sales compensation for upselling at accounts, cross-selling, cold calling. We also created something new called a technician bonus pool. At the end of our season, because we are a little bit seasonal in the north, we look back at the level of effort, whether they were commissioned or hourly. We set aside a certain dollar amount and we said, “You get a slice of that.”

If Patrick, you worked 1,000 hours over that time period and I worked 800 hours over that time period, you were going to get 25% more of that pool than I was going to get because you put in 25% more hours than I did. We said, “If you're still here as of this date, then you're going to get paid a bonus.” The resulting bonus will end up, depending on the employee, up to or over $2,000, somewhere closer to $1,000.

That was something that when they were hired on, they didn't know they were going to get. We're going to do the same thing again, but we're going to up the size of that technician bonus pool. We didn't implement that till partway through the summer but now, we think this will get people to give us that extra hour or two here or there. Because they know that they're going to get a little bit bigger bonus when they're putting out a little bit more effort over the course of the summer.

Patrick Baldwin: You saw results from it even though it hasn't been a full year.

Todd Leyse: Yes. People were happy to have received it. They viewed us as being generous as opposed to money-hungry or whatever people might think of owners. At the end of the day, they're looking forward to next year and a bigger bonus.

Patrick Baldwin: Hopefully, I'm not beating a dead horse here. I'm trying to get my head wrapped around the compensation there. From a practical standpoint, you've mentioned legacy in your production commission technicians. Your newer technicians have been paid hourly. You also said before that, you don't want to punish anyone, less than their healthcare, less than their pay. Is it more profitable the way you have it structured to pay your technicians hourly and not production?

Todd Leyse: Yeah. I'll tell you a little story to explain that. When I got to Adam’s, commission rates were amongst the highest in the industry that I knew of. I routinely attend associated meetings at NPMA Pestworld. I attended a week-long seminar at Harvard University so I can say I went to Harvard, but only for a week. I remember sitting at a round table and the speaker said, “Let's talk about commission rates.” He had a whole little deal about it. He said, “Let's share with each other your commission rates.”

At our table, sitting to my left, the first guy went, then people were like, “This is what my commission rate is.” I went around the table and got halfway across the table. I'm new to the industry. I'm a few years in. John Patton, Patton Pest Control out of Chagrin Falls outside of Cleveland, Ohio, says, “I pay my people 25% commission and I don't see how you can pay people any more than 25% commission and make money.” We were paying people 30%, 32%, 33% commission and we were making money.

By the time the table got around to me, everybody else was lower than us and I was like, “Do I even admit to being 30%, 32%, 33%? I'm going to get laughed out of this room.” Thankfully, our twenty minutes was up and I didn't have to say, but I went home to my dad and I said, “We need to lower commissions.” We didn't lower commissions on anybody that was working for us. In fact, we still have people to this day that are making that kind of commission rate, but anybody new started at 29%, and then a year later, anybody new started at 28%, etc.

The reality is when you get bigger and you have more density, technicians have less drive time so they can make more money even at a lower commission. It's all about keeping them productive and utilized. One of the things we've done with our software is help them have density and efficient routes so that they can get more done.

I talked to Billingsly at Anticimex. My personal opinion is Anticimex’s play is all about density. They would rather build dense areas. They're going into the southwest. They didn't have a strategy of doing southwest, south, north, northeast, northwest. They went into the northeast in the beginning and then down towards Florida as opportunities came in and now, they're in the southwest. My opinion is that they're trying to build density because density improves profitability and from the higher profits, they can buy more companies.

Patrick Baldwin: Where are they going next? That’s the question.

Todd Leyse: There's so much territory for them to cover and so much more density that I don't know, but they will go somewhere next, I'm sure. They have probably turned up the profits would be my guess. Whereas Rentokil seems to be trying to get nationwide coverage, a different strategy.

Paul Giannamore: Todd, we've had some chats on The Buzz about the Rentokil-Terminix merger. You are an extremely well-informed individual. You're an observer of everything going on in the industry. You're heavily involved and associated with various different things. When you learned this announcement, what things went through your head? If this deal closes, how might it change the industry for guys like you?

Todd Leyse: I don't know if it will have too big of an effect on companies our size or smaller companies. I find it fascinating. In a sense, I know Rentokil is a huge company but, in the US, it's a little bit like the small fish swallowing the big fish, which I always find interesting. I tried to put myself in the position of Rentokil on what would I do in this situation. There are so many tentacles to that.

I don't know how Rentokil could go on buying companies right and left because they have some good, dedicated integration people, negotiation people, lawyers, accountants, or whatever all this stuff they're dedicated to. This is such a big integration. That's where the rubber meets the road. My team jokes with me. I can go and negotiate to buy 855Bugs from Patrick, and then I throw it over the fence to my team to integrate then they're like, “What do we do with this? How do we make this work?”

They want more insight into the process earlier on than later and they probably couldn't have given a whole lot of insight to too many people within Rentokil. What do you do with brand? What do you do with the employees of Terminix? What do you do with employees of Rentokil? There are so many tentacles of questions to be answered. I could speculate all day long what I would do, but it's probably not my place to tell them how to run their business.

Paul Giannamore: They certainly couldn't let a lot of folks know on these publicly traded companies when you have these sorts of transactions. In Rentokil North America, there were less than five people who knew about it prior to the actual announcement and less than ten at Terminix, so if you think about the small folks in the need-to-know group. You can't talk to field managers about how we can create value or integrate this in advance of that announcement.

I gyrate week over week as to whether or not this is going to close. At first, I worried about antitrust, then antitrust became less of a concern. Now I look at how these two businesses are trading in the public markets. Due to the share structure, we've got Rentokil rolling over a stock price perspective. This complicates the transaction quite a bit for the shareholders. I know this March rate hike is already priced into the market but if risk assets continue to sell off into the summer, it could be a pure valuation question that could potentially crater this deal.

Todd Leyse: If it does close, maybe Rentokil is a friggin’ genius because maybe they saw values dropping of their shares and the other shares, and they've picked it up for an even sweeter deal.

Paul Giannamore: Andy Ransom is probably one of the most sophisticated deal makers in this industry. When they announced it, Rentokil was trading close to its absolute all-time high, so there might be some truth to that, Todd.

Todd Leyse: Rollins is such a solid company that buying Terminix would probably introduce too many problems. It would probably be too big of a challenge in a way for Rollins and Orkin to say, “We're comfortable tackling this.” They're on top of the world when it comes to, “We've operated the same way roughly for 100 years and we're going to keep doing it.” To take Terminix’s culture and history of top-level turnover over and over again and try to say, “We can fix that,” might not be Rollins’ game to do that.

Paul Giannamore: I'm going to make a broad-based assumption here that Rollins is probably the most difficult acquire for somebody like Terminix from an antitrust perspective. They would have a lot more antitrust issues than Rentokil will face. That's probably a big complication as well. You're right, I don't think there's any way you integrate those two cultures.

Todd Leyse: The way I see it is if Rentokil only gets $150 million in benefit three years down the line, then they've done something wrong. Not that I pored through the financials to know, but my gut was telling me that they should see a way bigger benefit and way sooner.

Paul Giannamore: I tend to agree with that.

Patrick Baldwin: Why do you think if the deal goes through it won't affect you positively or negatively?

Todd Leyse: Even though we're on the top 100 list or just one of many companies, I don't think big companies would go off and say, “We're going to target a particular company or particular area a whole lot.” They tend to run things on a nationwide basis and it's smart. They can leverage nationwide, advertising nationwide this, nationwide that.

They do buy our Adam’s Pest Control keywords and stuff like that and we don't buy their keywords. The reality is we run a good business, we're local, we’re family-owned, we’re in a little different niche than the nationwide players are. People in the Midwest tend to be loyal. We can keep continuing our service. Perhaps a bigger impact has been what Paul calls the doors, the door-to-door companies. I have this love-hate relationship with that concept, too because the reality is they're expanding their market. They're taking people who don't bypass control and they're selling them pest control.

Somewhere down the line, whether it's 1 or 5 years later, they might be unhappy with the service that that company has. Or if it's been sold to a larger company, and then service drops off, then we can pick up the pieces. They expanded the market. They haven't had that much of a negative impact on our business. Our cancellation rate hasn't changed that much since door-to-door knocking has happened. Yeah, we've lost some customers but it hasn't been impactful. We probably have seven door-knocking companies in our market right now. Over 100, 150 people come in for the summer and knock on doors, and yet, I haven't sweated that, so why should I sweat a merger of two companies that exist in our market?

Paul Giannamore: Have you ever thought about using door-to-door yourself?

Todd Leyse: I know a little bit about it, and no, I haven't. The successful ones to me have oftentimes hired unethical salespeople and we've seen that in our marketplace repeatedly. We had a salesperson call us up and pretend to be our customer and ask when they could get out of our contract. We told him, “If you fulfill the contract, you can be out.” They got off the phone, and then they texted us, “Good news I called Adam’s and your contract has been fulfilled so you can cancel at any time.” They were meaning to text this potential customer.

My office staff reported it to me right to the top, “What's going on with this? We don't understand this.” I'm like, “I know what's going on.” I called the customer and he was pissed. He goes, “I never told him to call you. I never told him to cancel.” He goes, “That's it. I'm not doing business with them ever.” That's the reputation stuff that kills our overall industry at times. It certainly kills the concept for door-knocking companies, whether they're selling security systems or pest control or meat, or anything else that door-knocking companies do. I didn't want to be associated with any employees that went rogue on their training.

I've also heard of companies who have hired those companies and they wind up adding a supervisor over the door-to-door company to make sure that all the sales were legit and on the up and up. Now you're paying a high sales commission rate and having to oversee it. Then at the end of the year, your loss of those customers is high because they get pushed into it or they buy from somebody who's nice and friendly, and then the person who shows up can't deliver what they were promised.

Paul Giannamore: Anecdotally, door-to-door does expand the market. I, too, have a love-hate relationship with these guys. The one thing that does frustrate me though is if people want to go out and knock on doors, that's fine. If you're a quality business, the chances of them switching over your customers on the doors is low. What boils my blood is a lot of that unethical type of behavior. Patrick, in 2021, did we play a clip from a door-to-door rep, Josh, out on the West Coast. Remind me what happened. The door-to-door guy called up to pretend to be a woman to cancel service with his company. That’s nonsense. That irritates me.

Todd Leyse: I was home a couple of summers ago and I had so many door-to-door sales coming to my door late afternoon, early evening. I listened to his pitch and I asked him some questions. In the end, I told him who I was. The dude's got a tablet. He can enter in notes. The next salesperson the next year for the same company comes along, he could have seen the notes, but I don't think the first guy even put the notes in so the next guy is telling me the pitch again. In the end, I tell him who I am again. That same year, I had another company calling me.

Some of the stuff they were saying, I can totally see the sales training that they went through. I could replicate that if I wanted to. “Adam's is a good company, but do they do this? Do they do that?” They were always complimentary about Adam's but at the end of the day, they were always trying to point out, “I saw walking up here that you have ants.” I'm like, “Where? Show me.” The guy couldn't show me ants. He just said he saw ants walking up, but there are no ants on the sidewalk, to the driveway, to my front door.

They have stock stuff that they say and they do it from memorization kind of thing, “We use an eco-friendly product that we treat five feet up the wall.” “What product is that?” “I don't know what it is but if it's important to you, I can call and find out.” “Why don't you do that?” “I know the owner of the company.” Technically, they work for a different marketing company. It's a sales company and they probably met the owner for fifteen minutes one day at the local pest control company but they're here from another state, selling door to door, and they claim to know the owner like their buddies.

They're not buddies. They've maybe met them. They may have seen a picture on his website. I don't know. They say different lines that are endearing to the prospect but they're a stretch of the truth. What is this eco-friendly product? It turns out, it's the same product we use but we don't call it eco-friendly. It's marketing.

Paul Giannamore: Maybe you should. Todd, we haven't been in this industry as long as you have been. A lot of our readers are pretty varied. We got guys that got into the industry, who have been at it for a while, and then there are people who are adjacent to the industry, guys like me. This is a broad question but what advice do you wish you would have gotten in the younger years that could have been a shortcut in some of your growing pains in building the business that you've built?

Todd Leyse: I've had a charmed life and charmed career if you will. I don't know that I would have done a whole lot differently. I do know the associate has two meetings a year and people are like family there. They share best practices. Because of that, it hit what I would call fast forward for my professional growth as well as for our company. When I go to those meetings, yes, you hear people speaking in front of the room, and sometimes I would speak about something.

On the bus ride to an Atlanta Braves Game or some other tourist event, I would sit by different people and I would pick their brains. As a newbie in the industry, there were certain people that I respected and looked up to. I would sometimes come up with a reason to ask them a question. It’s like, “This guy's looking at selling his company up north in northern Minnesota to me and this is the makeup. What do you think of it? What do you think I should offer?” He would walk me through that information even though I might have made up that scenario at that given point in time. I wanted to be prepared for when that situation might have come up later.

I had access to a lot of industry leaders, a lot of people who have been past NPMA presidents or might in the future be NPMA presidents. That would be my advice to somebody not out of what I wish I had because I had that. If somebody else was newer or starting up, get involved with an industry association, whether it's NPMA, Associated, The U Group, or some other group locally. Make friends with your local competitors. Ask them questions and this is a good industry to be in as far as people are willing to help other people. If you can learn from others, you can hit fast forward on your business and take it to the next level so much faster with a lot less pain and hardship.

Patrick Baldwin: You made the trip to Waco. You were doing some visits with the Associated partners and you had a meeting up in Dallas. How long have you been in Associated?

Todd Leyse: We were in Associated before I got to Adam’s. They got in 1983 or something that is probably more than 40 years now. Associated started in the late ‘50s and one of the founding members was a cousin of the Orkin family. Associated was started by some relatives of Otto Orkin and some other people in 1958 or so. Lou Kotler out of Tennessee had the original idea in 1958.

Patrick Baldwin: You mentioned Traction. Is that where you picked up getting into EOS was through Associated?

Todd Leyse: There are a lot of Associated members who got into Traction and I don't know specifically where I heard it but it was probably from some other Associated members. We started doing strategic planning in earnest years ago at Adam’s where every fall, we would go off and take some of the top employees. Some years it has been 8 people, some years have been 18 people. It’s different mixes. It’s in part to build a team to develop a strategy but it was a lot more about team building and building skills of some of our leaders and our future leaders. We started doing that and one of the years we had to read select chapters out of the Traction book.

We changed how frequently we had meetings, our meeting pulse if you will, our meeting agendas, how we ran the meetings. We don't publish a new agenda at every meeting. We have an ongoing agenda that's a set format. Traction usually calls for a 1.5-hour meeting every week. We typically do an hour a week. We don't have that many issues to have to process for 1.5 hours worth.

Four times a year, we go over an hour but we only do it with everybody's permission. You're supposed to score the meeting at the end of the meeting and if you score at less than an eight, you're supposed to state why you gave the meeting less than an eight, “We didn't start on time.” One of the principles was to start on time and end on time.

One time somebody scored an eight, they didn't have to say why they scored at eight but then after the meeting, I went to their office and said, “Something's bothering you. You scored an eight. You didn't want to score it a seven because he didn't want to say it publicly. What's bothering you?” They told me what bothered them. We don't score the meeting anymore because it became like if Todd brought in homemade caramel rolls, the meeting got a ten. If Todd didn't bring in caramel rolls, it might have got a nine. Scoring became a little bit more of a joke after about a year.

We have good meetings but it took a while. We developed a company scorecard but we probably didn't do that until the third year of running Traction. You don't have to implement EOS or the whole book all at once and we did not bring in an outsider to help us with it. We did it over time ourselves so people can do it if they want to do it.

It's helped us keep rocks, which are quarterly goals on task. It's helped us to identify issues in one meeting and then process them in the next meeting giving people time to think about it and research and come prepared. As opposed to sometimes we would bring up an issue and we try to solve it right then and there and then our solutions weren't as good as we took some time.

I know Paul that you're not as big of a fan of maybe what I might call a bubble gum book like Traction and it's too simplistic. At the end of the day, we like a lot of the concepts. Anything we ever do Adam’s is we do what we call Adamize it. We take something like that and we make it fit for our business, our industry, and our culture.

Patrick Baldwin: There are two major food groups in Texas. Those are meats and sweets. You've experienced both with Helberg Barbecue and Milk Bottle Cookies but Todd, you mentioned caramel rolls. I'm thinking about sweets now. Thanks.

Paul Giannamore: I was wondering what that was as well.

Todd Leyse: What is a caramel roll?

Paul Giannamore: Yeah.

Todd Leyse: It's like a cinnamon roll but with caramel. The version I make is pretty easy. You could do another podcast and I'll give you the recipe.

Paul Giannamore: Is your father involved in Associated or is that something you got into?

Todd Leyse: My dad was involved in Associated. Justin Pestana had invited him in, in 1983, then my dad went on to invite some other people in overtime. The best two meetings I attend every year are Associated meetings. In the years that I've been in the industry now that I would probably have been eligible to attend more than 52 meetings, I've probably attended 49 of the 52.

Patrick Baldwin: With groups like Associated, it was so rich in some of the older firms in the industry. As we all know, there's been a lot of consolidation and a lot of these businesses have sold. How big is Associated now versus where it was years ago? Was it roughly the same size? Has it shrunk? Do they continue to regenerate new members?

Todd Leyse: We've had stretches where we've trimmed down a little then we've expanded up again through some strategic effort to find people and bring people in. When companies started selling, we didn't know what to do with it. The rule was if you sold Orkin and Terminix because those were the long-time big competitors, you were out.

When Rentokil and Anticimex started buying companies, we liked a lot of those members and they were still willing to come to meetings. They were still willing to share. They weren't going to share Anticimex and Rentokil corporate secrets and stuff like that but they were still willing to share from their experiences so they were still good contributing members. We didn't lose members, per se.

Over time, that relationship got a little bit strained where some companies didn't feel like they could go to the meetings and share openly because you had now a Rentokil in the room or you had an Anticimex in the room. We said, “If you're retired, you can still be a member but if you're still actively working for one of these acquirers, you have to be out.” Over the course of the last couple of years of these acquisitions, we have replaced a lot of those members with good members.

The size of our association is about where we want it to be. We'd probably take a few more members but we don't want to be 100 and 150 members. We like around 70 members or so. We can get into boutique hotels, you can get to know everybody, you get to see the same people. We want to encourage attendance if not twice a year at least once a year. We have things in place to try to encourage people to be attending and not hold down a spot or a territory.

Paul Giannamore: I can imagine if you're young, you've got a small growing firm, there’s a lot of value in that. As you've grown your business, you learned a lot of things. I know people can always continue to learn but do you find yourself after almost 50 meetings being in a position where you're more of the mentor now in Associated than perhaps you were years ago?

Todd Leyse: In my first few years, I was a sponge. I had my lane of expertise being computers so people would come to me with those questions. I've been told by a few of the younger people that they're doing with me what I did with some of the older people years ago where they love to sit by me on the bus or pick my brain at different things. I can't do anything but give back to those people what I received many years ago.

I'm willing to help people. It's a funny feeling though because I don't feel that old. I know that I'm smart per se but I don't feel like I'm that much smarter than anybody else so it's a little weird to have people wanting to pick my brain. I still view myself as that guy who got Adam’s more than 25 years ago. The company's bigger and we have different problems now and we have different challenges and things but I don't feel like I'm that special.

Paul Giannamore: It's a smaller group so you've got these close relationships. When we had taken Griffin out to market, that's when Jeff's wife passed away. I remember when we were starting that process. She was in her last days and they did that big call where all the Associated people got on the phone to say goodbye to her because she probably wasn't going to make it to the next meeting. I remember that outpouring from the Associated group, which is a huge support to Pam and Jeff through that process.

Todd Leyse: Whenever we travel somewhere, Eva loves to find that local tiki bar and go have a drink at a tiki hut. After Eva passed, Jeff did a little bit of a remodel or an addition to his cabin in Michigan and he added a little tiki hut bar on the backside as a homage to Eva. Pam went to the opening ceremony of that if you will, with some of the neighbors at the cabin. Jeff didn't know it but she had set up Associated to be on a GoToMeeting or WebEx meeting some virtual meeting. When he was there and she was there, all of sudden, a whole bunch of people could see this tiki bar and say hi to Jeff and whatnot. It was pretty cool. It becomes family.

When I got into the industry, it was later in 1996, my son was born and the first Associated meeting was in San Francisco. February 1997 was my first Associated meeting. I took my wife and my son with me. Associated has seen my son grow up from being a baby at six months old or so in that first meeting to now. He has a marketing degree from college and works for Adam’s Pest Control. My sister's oldest son works for Adam’s pest control so they've gotten to see all of our kids grow up.

Paul Giannamore: When you think about Associated and U Group, and I don't claim to know much about how this works, Todd, but you can only have one operation in one geography. Are there rules about somebody in the Twin Cities can't join Associated because you're a member from that area? Am I thinking about this wrong?

Todd Leyse: No, you’re right. As a general rule, it used to be a larger protected region. Nowadays, the officially protected region is 75 miles from your home office and that's it. If I have five offices in the Midwest, I can't protect all five offices. I can only protect my home region. If I was in Milwaukee, Madison, Fargo, Sioux Falls, the Twin Cities, and they wanted to bring in a new member in Milwaukee, somebody is probably going to ask me how I feel about it. If I know that member and if they’d be a bad member, I'm going to say no and they're probably not going to get invited in. If I said, “Yeah, they'd be a great member. They’re friendly competitors and they run a good business,” I'm going to welcome them in. I'm going to be on their bandwagon.

There are hard rules and there are unwritten rules. I know some people have been disappointed when they applied and thought they would get in and they didn't get in. We've changed some of the rules over the years to fit the times and not necessarily a situation about a particular company but to not make it a hard process. Associated is tough to get into. We don't want too many members and there are so many territories that we don't want to have overlapping people a whole lot unless everybody's okay with it. We do have people that compete with each other.

Once upon a time, we had a competitor and due to some of their practices, there was no way for us to kick them out of Associated so we asked them to leave and they said, “No, we're not leaving.” They continued on and if they gave a talk, we didn't sit in the room. If we gave a talk, they may or may not have sat in the room. I didn't care. After about a year or two they left. We were thankful because Associated is one of our competitive differentiators that helps our business.

I'll give you an example of how Associated can hit fast forward. I can remember being pretty new in the business. It was in 1999 in Sarasota, Florida and one company got up and talked about how they got into Christmas lights and they franchised it. The franchise company brought them all these training and marketing materials. They had the supplies. Easy peasy. Within three years, they might have lost money in year 1, lost in year 2, but in year 3, they were making money and had $50,000 in winter in revenue. They looked at it as a way to retain their employees into the winter.

Company B gets up and says, “We didn't franchise. We flew over to China. We direct sourced the lights that we wanted. We paid a lot less for the lights. We built our own marketing materials and our own trading materials. In the first year, we lost money. In the second year, we lost a little less. In the third year, we had about $50,000 in revenue.” They had about the same results, different paths. My dad turns to me and says, “Do you want to get into Christmas lighting?” I said, “I don't. Do you?” He goes, “No. Why don't you?” I said, “It's Minnesota. I don't want people climbing ladders on roofs with snow and ice. I can see somebody falling and dying and I want no part of that.” He goes, “Maybe if we were in a different climate, maybe but not in Minnesota.”

We could make that decision based on hearing an hour of talk right then and there that we didn't have to do hours and hours of research, we made the decision pretty quickly. There were others in the room who made the decision to go the franchise route and there were others in the room who made the decision to do nothing. There were others who said, “We want to go on and follow the ABC Jenkins model and see where they direct source from and whatnot.”

Companies can come to their own conclusions and then they need to go execute but I have no doubt that if we decided to get into Christmas lighting, we would have been able to do what they did in three years in two years because I would have gone and visited both of those companies. They would have been willing to share their information. It's hitting fast forward on the execution phase many times.

At its core, it's sharing information. We do bring in some outside speakers once in a while but for the most part, our own members are our speakers. We're sharing best practices and we're benchmarking against each other and trying to learn from those that are best in class so others can become best in class and compete.

Patrick Baldwin: Todd, I am thrilled that you were finally able to pop in and join us on The Boardroom Buzz. This episode was not a commercial for Associated or Blu Star but I appreciated both of those discussions and I know a lot of our readers want to know about that. In regard to Blu Star, the software, if anyone wants to take a look at it, where should they go?

Todd Leyse: Go to Collabetive.com. Reach out and if it's a fit, if there's something you need help with, we've probably got some of the resources to help or you can find me at AdamsPestControl.com and find me that way at all and I’ll point you in the right direction.

Patrick Baldwin: This is good. I appreciate you stepping into the boardroom with us, Todd.

Todd Leyse: I appreciate you having me. It's been great to sit and give gab about different things in pest control and some of the actions that have occurred in times and that might still be a conversation for months to come like the acquisition of Terminix. It's an interesting time, but it's always going to be an interesting time in this industry.

Patrick Baldwin: You're part of Boardroom canon now Todd.

Todd Leyse: I hope that Patrick will refer to Episode such and such with Todd Leyse.

Patrick Baldwin: That's guaranteed.

Todd Leyse: I loved the show. I like listening to what some of these other people have to say. It doesn't matter whether they’re other industry people that are still in the industry, whether they've sold their company, whether it's M&A people, finance people. I love all the content. I listen to every episode because I feel like I'm a fly on the wall learning about things that are above my pay grade. It's appreciated that you guys put this content together and I'm learning a lot from you guys.

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Patrick Baldwin: Blu Star, Associated, EOS, torpedoes, we covered the gamut with Todd.

Paul Giannamore: I never looked at Blu Star because I haven't had time to do that but one of these days. I want to demo it myself because I've spoken to Todd about it before. There's a variety of different software packages on the market. What I like about software like Blu Star, it was designed by an operator for an operator who's intimately involved in the management of their own business. I'm super stoked to look at it myself.

Knowing Todd, the code is probably pristine, lightweight, and efficient. Patrick, you and I should demo it to get a good feel for it so maybe we'll reach back out to Todd and see what we can do. Quite frankly, if any of you folks out there in the industry want to get a hold of it. You've heard Todd tell you how you can look it up so take a look at it and we're interested in the feedback you have.

Patrick Baldwin: You had to step away for a few minutes during the interview. I don't know if he had to pee or maybe you had a closing.

Paul Giannamore: Another one of those awkward events where I've had to leave an interview and it's one of those things where sometimes these closing calls show up on the calendar two hours before and you get stuck. You can't skip the closing call. We had the closing call.

Patrick Baldwin: I asked him about incentives in your stead. You were gone. I was like, “What will Paul ask?”

Paul Giannamore: You channeled me.

Patrick Baldwin: We've got a little bit of housekeeping in a minute but before we do, you got an email and you forwarded it to me. I thought this was awesome. I never thought that The Boardroom Buzz would impact people like this. Let me read the email, “Paul, I wanted to drop in and give you a quick thank you. Aside from everything pest control related that I've learned from you on The Buzz, you've mentioned a few times the conversation with your dad about finding specialists for everything. I've had a nagging mysterious medical issue for the better part of a decade that no doctor, surgeon, or procedure has been able to figure out. Based on what you said, I found a specialist that had a correct diagnosis and treatment plan on the first visit. I'll use specialists from now on in every aspect of life. Thanks, Ben.”

Paul Giannamore: That's great, Patrick. I love getting emails like that. I should thank Mr. Tyler Hinkson who sent me an Amazon gift card for the value that we provide here on The Buzz. It says, “This gift card is worth more than the gift card that I'm sending Patrick because the value I get from you is that much greater.” I’ll tell you how much my gift card was Patrick.

Patrick Baldwin: Thanks, Tyler.

Paul Giannamore: He did not say that, Patrick. I imagine that when I was receiving it.

Patrick Baldwin: Housekeeping, Paul. Dylan's coming down to Puerto Rico. You've got clients coming down. You might be having some due diligence. Cool. Good stuff. We'll maybe take a week off. We'll take off for two weeks. Todd, thanks again for stepping into The Boardroom. Paul, I will see you in a couple of weeks.

Blu Star Field Service Management System

Scaling Up

Collabetive Services

TheBuzz@PotomacCompany.com