Pricing in the Dark: Why Data-Driven Pricing Matters for Pest Control

The Pricing Problem Nobody Talks About

Ask a pest control owner how they set their prices, and you'll hear some version of: "We looked at competitors, considered our costs, and picked numbers that felt right."

That pricing methodology—if you can call it that—was established years ago. Maybe it was right then. It almost certainly isn't right now.

Costs have changed. Fuel is different. Labor markets have shifted. Chemical prices fluctuated. Your service quality improved (or didn't). Your reputation evolved. The market moved around you.

But your prices? They're probably within 5% of where they were three years ago. Maybe you did an across-the-board increase. Maybe you adjusted a few line items. Strategic pricing? That's for companies with pricing departments.

The Data You're Not Using

Here's what's frustrating: you already have the data to price intelligently. It's sitting in your systems, completely underutilized.

• Which services have the highest close rates at current prices? (Probably underpriced)
• Which services get the most price objections? (Need value justification or repositioning)
• What's your actual cost-to-serve by service type, property size, and location?
• Which customer segments are most price-sensitive vs. value-driven?
• How do your prices compare to competitors by specific service and area?
• What's the correlation between price changes and customer retention?

Most companies can't answer these questions because the data lives in disconnected systems, requires manual analysis, or simply never gets examined. So pricing stays static while everything else changes.

The True Cost of Underpricing

Underpricing feels safe. You're competitive. Customers don't complain. Sales close easily. But safety has a steep cost.

McKinsey research has shown that pricing is the most powerful profit lever available to companies—a 1% improvement in price can translate to an 8-11% improvement in operating profit [1]. For a company doing $2 million in annual revenue, even modest pricing optimization can significantly impact the bottom line.

The customers who would have paid more? They're paying less. The services that justify premium pricing? Sold at commodity rates. The value you've built through quality and reliability? Not captured in your numbers.

Underpricing isn't conservative. It's expensive.

Dynamic Pricing Isn't Just for Airlines

The concept of dynamic pricing—adjusting prices based on demand, timing, and customer factors—revolutionized airlines, hotels, and e-commerce. Pest control operators assume it doesn't apply to them.

It absolutely does. Consider pricing variations that make strategic sense:

Building a Pricing Intelligence System

Moving from gut-feel pricing to data-driven pricing requires three capabilities:

• Cost visibility: True cost-to-serve by service type, property characteristics, and location—including labor, materials, vehicle, and overhead allocation
• Market intelligence: Competitive pricing data, win/loss analysis, and price sensitivity testing across customer segments
• Performance feedback: Closed-loop tracking of how pricing changes affect close rates, retention, and profitability

This isn't about raising prices blindly. It's about knowing where you have pricing power and where you don't—then optimizing accordingly. Some services might go up 15%. Others might stay flat or decrease to drive volume. The goal is maximum value capture across your entire book of business.

The Courage to Price Right

Pricing adjustments feel risky. What if customers leave? What if competitors undercut you? What if you lose bids?

These fears are often overblown. Research suggests that customers are frequently less price-sensitive than businesses assume—especially for services where quality and reliability matter [2]. When value is clearly communicated, reasonable price increases typically result in modest customer attrition while improving overall profitability.

The bigger risk is continuing to underprice. Every year you wait, you compound the revenue you're not collecting. Every customer who would pay more gets trained to expect less. Every premium service opportunity gets sold at average rates.

Your pricing tells the market what you're worth. If you're not pricing strategically, you're letting the market decide for you. And the market will always choose the lower number.