Turning with the tides
Pool service industry reflects on year of challenges and growth
Inflation: The hot-button issue that has impacted nearly everyone and every industry over the past year. Pool service businesses and their employees are no exception.
Earlier this year, the industry saw widespread cost increases for things like chemicals, labor and, especially, gas for service vehicles. These increases have strained operating expenses for many in the business.
“It’s difficult to ignore the 8.6% inflation and its impact on everything, including the pool service industry,” says David Isaacs, owner of Isaacs Pools and Spas in Johnson City, Tennessee. “It’s even more difficult to ignore that 8.6 inflation is but a drop in the bucket to the increase in the cost of goods and operating costs for the swimming pool service industry.”
For Isaacs and his company, the biggest changes they’ve experienced over the past year are keeping up with the cost of goods, managing long wait times for products and trying to stay in communication with customers about new pricing, adding a fuel surcharge and tracking down parts they may be waiting on for their pool repair.
Isaacs adds that the impact of inflation is doubly tough because the pool service business is seasonal and garners most of its profit during three to four months a year.
Yet, on the bright side, the service department of Isaacs Pool and Spa is growing immensely. In fact, it’s become so important to the business that Isaacs has invested in a new facility and vehicles.
“This is where the bulk of our business will come from in the next five to 10 years,” he says.
Demand has been “spectacular” for Jacob Beninati, owner of Beninati Pool and Spa in Utica, Michigan, too.
“There’s more demand than I’ve seen in a very long time in all regards of pool service,” he says. “Cleaning and maintenance have probably been our biggest opportunity.”
Beninati adds, “There’s a huge opportunity there to take some market share on new customers and new tools from companies that simply don’t offer service.”
There’s no way around it: For the pool service industry to remain profitable prices must go up.
“Pool service companies should raise prices because there is no way to stay profitable with the exorbitant increases in all costs associated with pool service,” Isaacs says. “There are certainly numerous ways to raise prices, but we simply charged more for each call and each service.”
His company also added a $10 fuel surcharge to every service and warranty ticket billed out. To inform customers of the surcharge, the company sent out a letter using a docusign program to have proof people saw it. Isaacs says while they’ve lost a few customers over it, the majority of them have been understanding.
Throughout the year, Isaacs Pool and Spa have constantly monitored its service department, making sure that prices were fluid enough for them to meet their bottom line.
Mike Tellegen, owner of The Pool and Spa Medic in Molalla, Oregon, also understands the importance of price increases.
He puts it bluntly: To not raise prices is not smart, beneficial or prudent.
“Simply stated,” Tellegen says, “service companies need to raise their rates and just need to do it to maintain the same profit margins prior to this current economical setback.”
He adds that even if economists are foretelling doom and gloom: Stay the course.
“Do not be afraid to raise rates, or else you will not have a business to think about rates,” Tellegen says. “Know your worth and charge accordingly. A business has to stay profitable to help the customer, and, for the most part, customers know and accept this.”
In addition to the obvious raising of prices, pool service professionals have found other ways to combat the current economic climate.
Tellegen says his company has tried to stockpile certain products that are expected to be in short supply, although sometimes it’s a never-ending battle.
“When dry tri-chlor became scarce, the industry moved to other means [like] calcium product and [Poolife] NST Tablets,” he explains. “Then they became popular and that became scarce. Then [people] moved to liquid, and that became scarce, and main players in that arena raised prices multiple times. So, the next avenue was salt systems. Then salt started to become scarce.”
Along the same lines, Isaacs shares that his company has paid more attention to inventory levels to ensure that in the event of a downturn, they aren’t stuck with a lot of product they can’t sell.
Other solutions Isaacs Pool and Spa have come up with to keep the company moving forward are to grow its service department — during the last recession, Isaacs says it’s their service department that kept them in business — as well as put money into savings and invest in its workforce by doing things like creating a vibrant recruitment video and building an employee rec center.
One thing Beninati and his company have done to cut back on labor costs is to add a form on their website where customers can upload pictures of their pools and service needs.
“So, we can really sift through the demand, which streamlines the whole process,” he says. “Instead of troubleshooting over the phone, we can cherry pick the right jobs for us, which means less staffing required in the office and less quotes on-site.”
Ultimately, Isaacs wants his company to be the trusted source when people need a pool service professional.
“When everything shifts, we want to be standing above everybody else as the person to go to,” he says. “The last two years have been tough. Our business has grown substantially, and I’m proud of my entire company for growing and producing record revenue in the midst of the challenge. We have certainly taken the time to celebrate, but it is bittersweet.”
Inflation Impact Calculator
Inflation in the pool service industry surpassed 30% in some regions, which suggests that keeping the status quo on pricing may be simply unsustainable.
So, National Pool Partners came up with a solution.
“At National Pool Partners, we’re in a unique position,” says its CEO Augusto Titarelli. “We have access to deeper data and analytics across our family of brands. These are powerful tools we use to guide our decision-making, and we felt that this was too important an issue to our industry not to share.”
This past April, the company created what they call an Inflation Impact Calculator, which Titarelli says, “is an investment in maintaining the health of our industry and gives pool service companies around the country the resources they need to make smart business decisions.”
The Inflation Impact Calculator, which is available for free use at go-npp.com/inflation, gives business owners insight into their operation to ensure they remain profitable. It only requires a few basic inputs for a business to determine its own unique inflation rate. They’re able to calculate their pre- and post-inflation operating costs with a line-by-line comparison and see immediately what happens to their bottom line if they change prices and even if they lose a few customers as a result.
It’s important to emphasize that National Pool Partners doesn’t collect any data from the calculator, Titarelli adds, or have any visibility regarding use of the tool after it has been downloaded from their website.
He also shares that business owners he’s spoken with, like Rick Beaubouef, president of Easy Pools in Austin, Texas, have said the tool has been a big help in adjusting their business model to ensure they remain profitable. “We know there’s no simple solution to this issue,” Titarelli says. “But our hope is that by sharing the information and resources that have helped our team at National Pool Partners navigate these unprecedented inflation rates, we’re equipping other businesses with the confidence to chart their own operation’s path and ultimately protect their business, employees, customers and our industry.”