The best service model for your business

Pooltrackr Limited

By Ben Richards, Pooltrackr
Monday, 15 January, 2018



The best service model for your business

One of the things we enjoy most about developing our pool and spa business management app, Pooltrackr, is getting to know the people who work in the industry. Learning the similarities and differences in the way their businesses operate has shown us there isn’t a ‘one-size-fits-all’ approach.

There are a few different service models that most pool businesses use. Each has a variety of benefits (and limitations), but it’s important to find the one that suits your business, staff and customers.

Chemistry-only service

In this model, the owner cleans and maintains the pool, and you simply come out and maintain the chemistry. Deliveries from in-store tests would also fit in this group.

Business Customer
Pros Cons Pros Cons
  • Can turn around many services per hour
  • Opportunity to identify other issues with pool, which can result in more work
  • Opportunity to upsell to a regular service
  • If pool is chemically perfect, may not generate solid revenue
  • May result in unhappy customer, as the pool goes off because they maintain it poorly
  • Legal ambiguity around chemical deliveries
  • Cost-effective way to maintain pool chemistry
  • No carrying heavy chemicals
  • They still need to maintain the pool equipment, vacuum, empty skimmers, etc
Conclusion

There are many ways you can make this a highly profitable service type:

  1. Use a junior employee to turn around a high volume of these. It could be a one-day-a-week job, depending on the number of services.
  2. Ensure tight geo-scheduling, minimising time and fuel costs.
  3. Assign a small service fee (~$20), and aim to turn around ~3 per hour.
  4. Use it as an opportunity to identify other issues with the pool/equipment.
  5. Use it to upsell customers to a higher service level.
  6. Add clarifier tablets to every bill to keep pools sparkling and help your bottom line.

Regular service (chemicals extra)

This is your stock-standard regular service, with everything else at an additional charge.

Business Customer
Pros Cons Pros Cons
  • Some pools can be turned around quickly
  • Opportunity to identify other issues with pool, which can result in more work
  • Some pools can be extremely time-consuming
  • Seasonal variation in service revenue
  • Fairly consistent service charge
  • No need to worry about pool maintenance
 
Variation: Chemicals charged by container
  • Often means upsell to larger bag
  • Same process as point of sale so simple inventory
  • Low margins on small containers
  • Can use left behind chemicals if they are needed
  • Bags of old chemicals left lying around pool house — deterioration
    of packaging can lead to wastage and environmental accidents
Variation: Chemicals charged by volume
  • Greater, reliable margins as you can sell small amounts from larger containers
  • Difficult to maintain inventory
  • No bags of chemicals left lying around
  • No economies of scale for high volume of chemicals (probably goes unnoticed)
Conclusion

Regular services are the bread and butter of pool and spa service businesses and carry a low risk. Monitoring your technicians’ sales ensures your team maximises profitability.

Service (including chemicals)

Service charge includes costs of either all chemicals or basic chemicals.

Business Customer
Pros Cons Pros Cons
  • If done well can increase margins
  • Consistent chemical income year around
  • May be a loss-maker on difficult pools
  • Lots of data analysis required upfront to ensure profitability
  • Consistent, predictable cost
  • Encourages tech to add chemicals based on pool health, not bottom line
 
Conclusion

With the right research up front, this model can be more financially rewarding than the models that exclude chemicals — and it means you have a more predictable revenue. But without proper research and planning, this model can lose you money and customers.

Responsive servicing

IoT technology is set to completely transform the industry. Already, pool owners and managers can access live data about every aspect of the pool, from pump temperature, to water chemistry, to pipe pressure and everything in between. And they can control things like pump speed, light colour, cleaner operation and spa temperature. On top of that, AI (artificial intelligence) and automation enable systems to make decisions, like backwashing the filter when the pressure gets too high. This type of technology is rapidly moving from the high-end commercial space to the domestic market.

While many see this as a threat, it is in fact a huge opportunity. With remote visibility of all your pools, you can add huge value for your customers. Imagine saving them thousands of dollars by saving their pump because you saw it was starting to overheat and sent out a tech before it got serious. Or saving their pool from going green because you saw the chlorine levels suddenly drop or their chlorinator suddenly cut out.

Business Customer
Pros Cons Pros Cons
  • Be the first on site when issues arise
  • Add huge value to your customer base
  • Revenue from install and maintenance of IoT devices
  • Licensing revenue from reselling software
  • Regular 24x7 monitoring income with no seasonal variation
  • Large investment upfront required to set up IoT ecosystem
  • Live data constantly streamed means pool stays chemically balanced and hardware issues detected before becoming serious
  • Set and forget for the customer
  • Fee to install and maintain sensors
Conclusion

Within the next 12 months, pool shops and technicians will be offering round-the-clock monitoring with response time SLAs (service level agreements). This is a fantastic business model, as you may not need to send a tech out to resolve an issue. Also, customer satisfaction and retention will grow, as they feel a level of confidence knowing that their pool is being constantly monitored by a professional.

This is an exciting new direction the industry is taking with lots of potential new revenue streams. While the software and technology is not quite there yet, service businesses and shops need to jump on it quickly, as a consumerised version of IoT presents a potential threat.

Pool as a service (PaaS)

As-a-service (aaS) is the business model of the future. For a consistent monthly fee, the customer doesn’t have to worry about anything. You look after the pool, the chemistry and maintain/replace the equipment. Basically, everything non-structural is covered by a monthly fee. A true set-and-forget model from the customer’s perspective.

Business Customer
Pros Cons Pros Cons
  • Potential for high margins
  • Regular income with no seasonal variation
  • Requires a lot of work up front to ensure profitability
  • Tough sell to customer as it’s a big investment
  • Can be costly if all equipment dies on a site
  • Large upfront investment from the business
  • Strong contractual requirements needed to recoup costs if client terminates contract early
  • Predictable outgoings with no variation or surprises
  • Literally forget about your pool; everything is taken care of
  • High initial set-up cost
  • Need to commit to a long contract — usually 12–24 months
Conclusion

This model is probably out of reach for the average pool and spa professional at this time. It requires a huge amount of research, analysis and initial capital, and carries a significant risk, but with the increasing prominence of automation and remote monitoring, this is likely the future of the industry.

Image credit: ©stock.adobe.com/au/Davizro Photography

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