This blog post is a summary of a webinar co-hosted by Niki Acosta, Casey Graham, Megan Kendrick, and Andrew Kidd. Watch the full episode on demand here.
Private equity. High competition. Turnover. Technology. These are just a few of the hot topics currently buzzing around the pool service industry. The industry today looks vastly different than it did just a few years ago. So what does that mean for the future?
We recently held a webinar co-hosted by three of the industry’s most trusted experts to answer that question:
- Casey Graham, Co-founder of Yummy Pools
- Megan Kendrick, Editor at Pool Pro Magazine
- Andrew Kidd, CEO at Poolwerx North America
Throughout this webinar, our panelists uncovered a ton of valuable insights about the future of pool service. We’ve included 10 of them below.
1. Private equity (PE) is causing the biggest shift in the pool service industry
People might not be talking about private equity as much as they were three or four years ago, but according to Megan, “It’s easily the thing that will change the landscape of the industry the most going forward.” For comparison, she says, “We used to get three to four press releases a year about mergers and acquisitions. Now it’s three to four a month or more. We’ve just gotten more used to it.”
For independent owners, that can be a tough pill to swallow. But Casey adds that while there’s a lot of fear around the idea of private equity, we need education on what it is and why it matters. “When [private equity] enters a market,” he says, “It’s because that market is awesome and there’s an opportunity for it to get better and better.”
He notes that the introduction of private equity also signals more sophistication in the form of software and AI solutions. “We need bigger and more dollars to make it a better industry,” he says, and that can’t happen without help from PE.
2. There’s still plenty of room for independence in the field
While PE is making a splash, that doesn’t mean it’s here to undercut the market. According to Andrew, “There’s more than enough for everyone.” As he sees it, all pool service businesses are driven by the same goals: to make more money, realize value, and improve the client experience. Aggregation doesn’t change that, but it does mean that every business has to deliver on those goals to survive.
As Casey adds, “The customer doesn’t care about PE. They care that you answered the call, showed up, gave them a good experience… if I wanted to keep my business small, I would use that to my advantage. You can be a smaller, faster operation that moves faster than big companies.”
“It’s one of the most fragmented industries that’s ever existed on God’s earth,” adds Andrew. “Everybody’s out there giving it a go, but in the heat of summer, you need good communication, good marketing, good strategy, good management. Aggregation helps the industry get better.”
Megan adds, “It’s a rising tide situation. Private equity can help bring our whole industry up. Your company doesn’t need to go that route, but instead of being afraid of it, look at it as an opportunity for your company to get better and ride that wave.”
3. Several regions are poised for growth
When it comes to geography, pool service pros have several options for where they could realize the most growth. Megan’s two cents? “If I were to start a pool company today, it would be in the Southeast.” She adds that lots of big corporations have moved to those states recently, citing a lower cost of living and better quality of life for employees who love the outdoors.
Andrew sees it a little differently: “I would go north, because the ratio of service guys to pools is way lower,” he says. Plus, the market is used to paying more in those regions. “There’s some really interesting metrics coming in around northern markets,” he adds. “They tend to accelerate faster in terms of building clients. Competition and margin availability is quite different.”
4. A strong brand will help you maintain consistency while innovating locally
As businesses grow and enter new markets, maintaining consistency is one of the main challenges each of those businesses will face. Andrew believes that strong branding is the key to clearing this hurdle. “There’s a baseline,” he says. “If you can replicate that, it’s all about scale and efficiency.”
That baseline is created in the systems and software you set up. Making sure everyone has the same training and uses the same programs is important. Once that’s in place, you can adjust to regional anomalies. For example, says Andrew, maybe you need to be an expert on above ground pools in a specific market. “That’s important, but you benchmark by using consistent tools and systems. Good data helps us find opportunities to push through.”
5. Standing out in a competitive market can be as simple as answering the phone
Each panelist agrees that too many pool pros are failing an essential task: picking up the phone. As Casey says, “ People aren't thinking about their pools at work. It’s after hours and weekends.”
Having a strategy for how you’ll field these calls is important. If you don’t, the customer will just move to the next business on their list. “If you can answer first and be there in 24 hours or less, you’ll grow your pool service business,” says Casey.
He adds that response time is a metric you should measure. “Most of the time, we’re focused on the pool but not the systems. The best company has the best systems that they can operate at a high speed, at scale.”
“At scale” is the key phrase here—as a company grows, it gets harder to be responsive. “If you’re one guy working fast, that’s great, but can you replicate that?” asks Casey. “If you don’t have someone picking up the phone, you shouldn’t be running ads.”
6. Culture is the key to keeping employees
Turnover continues to be an issue across the industry. Niki mentions that Gartner recently reported that 46% of field technicians don’t see their current role as a career. But too many business owners are missing a key piece of retaining talent: creating a great culture.
As Casey says, “Unless there’s a culture that really cares and everyone’s connected to a vision that matters, beyond just cleaning pools, you’re going to have turnover.” For Casey, this insight comes from hard-won experience. In the early days of Yummy Pools, he says, “I thought all customers just wanted their pool clean. That doesn’t work. We had to reset the culture.”
Megan adds that culture is the number one reason why a person will either stay with or leave a job. “As business owners,” she says, “We can be so focused on getting the job done that we don’t take the time to look around and say, ‘Are people okay? Are they having a good time at work? Are we meeting needs beyond paychecks?’” And while things like creating a shared mission may feel corny, these are the kinds of cultural necessities that make people feel engaged.
Andrew has seen this shift occur in real-time. “The people entering the workforce now are totally different from the people who entered 20 years ago. It’s not just about the dollar. Culture, cause, alignment, appreciation, and leadership are all important.” As the manager, your job is to figure out which levers work for which people, he says, and stick to them. “Some businesses turn over staff every six weeks, others every six years. You’re chasing your tail if you’re always replacing staff.”
7. “When to hire?” is still the million-dollar question
Many pool service owners put off hiring because they can’t get out of the “doer” mentality, says Casey. “76% of the industry gets stuck in that one-man operation because they think, ‘I don’t have enough time to find the person to help me,’ or, ‘I don’t have enough money to hire someone.’”
But in his experience, many of these owners are being too rigid about how they think of hiring help. “You probably don’t need a full-time person,” he says. “If you’re the person doing everything, you’re the roadblock.” Once you can shift your perspective from, “How can I hire another technician?” to, “How can I get rid of the administrative tasks first?” you’ll free up the necessary time to allow you to grow. He recommends starting with hiring an assistant for five hours a week to help with administrative tasks like setting up Skimmer, or managing your bookkeeping.
Megan adds that hiring is a decision that pays off long term. “Often, your first year with a new hire will be your worst financially. But then your next one is the best one,” she says. “You get to a point where you have to take the risk, and it can be painful as a business owner. When times are tough, you’re the person who doesn’t get paid, but you have to take those risks. Next thing you know, you’ve had your best year ever.”
And when you do get a point where you can hire a new technician, you have to be willing to settle for less than perfect. As Casey says, “If someone can do something 70% as good as me, I’ll let them do it. Their success depends on how well I lead them. You have to be willing to let people do it. Control kills growth.”
8. Fear is holding most owners back from the right pricing strategy
In an industry where too many businesses are taking a “race to the bottom” approach, many owners are unwilling to raise their prices. But all three panellists agree that this is a mistake.
Andrew empathizes with owners. “People are scared that customers will fire them if they raise their prices,” he says. But with rising costs and inflation, he says, you’re essentially giving yourself and everyone who works with you a pay cut if you keep your prices stagnant.
Megan adds that for the broader home service industry, raising prices annually is common practice. “The fear is unjustified.” she says. “We spend too much time looking at what the other guy is doing. What are your books telling you?”
Niki adds that the actual blowback from a price increase is never even remotely as impactful as many owners fear it will be. “The biggest churn I’ve ever heard of from any company was 4%,” she says. “And some of those people ended up coming back! Even if you lose some people, the math works out that you have more time and more money.”
9. Want a healthy margin? Aim for 15%
Profit margin can vary widely from company to company, depending on a number of factors. For Casey, a healthy margin for a well-run company in the Southeast is about 15%. “That’s if they pay their workers W2 and do everything by the book,” he says. “As soon as I see a 20%+ profit, I ask, ‘Do they provide insurance? How about vehicles?’”
All the panelists agree that a single-digit margin usually points to operational leakage. One way to clean this up is with a pricing overhaul. Another is measuring chemicals if you’re a plus-chems business. As Andrew reminds us, with a decent-sized business, overusing chemicals “can amount to tens of thousands of dollars over a year,” so taking the time to track spending and rein it in where necessary can make a huge difference.
10. The business that cracks technology first will win
Just like any industry, automation and AI are likely to shake up the pool service space more than ever in the coming years. As Andrew says, “It’s a super exciting space that’s changing quickly. [At Poolwerx], our largest department is technology and innovation.” As he sees it, the business that cracks the technology piece and gets it right will win.
And while AI may not be fully mature yet, the companies that are leveraging technology to improve their systems and operations are already winning. After partnering with Skimmer three years ago, Casey has seen a huge improvement at Yummy Pools. “I was won over by the team,” he says. “The right team will build the right software to get you where you want to go.”
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