Twenty eleven was a record year for Wichita Falls, Texas. Not only was it the hottest year on record, it was also the second year of what would ultimately be a five-year drought, though no one knew it at the time.
Paul Buckingham, owner of Outback Pools and Spas, was concerned. Post-recession pool and spa sales were still recovering, and now with the threat of water scarcity coming into play, Outback Pools and Spas was in serious danger.
Faced with a fight-or-flight scenario, Buckingham chose the former.
"I looked at my wife and said, 'We can roll up and die, or we can act like we have water,'" he says.
By pivoting his business to focus on portable spas, and completely overhauling his marketing strategy, Outback Pools and Spas was able to jumpstart sales — with spectacular results. In 2015, spa sales increased by a whopping 45 percent and revenue by 47 percent. With orders and cash rolling in, Outback was honored at the 2016 Jacuzzi/Sundance Spas dealer conference in Panama City, Panama, with four major awards.
"The numbers that we did, that was incredible, and we were doing it in the worst conditions that a business that survives on water could be in," Buckingham says.
A Loophole
As it turned out, defending the hot tub industry against potentially crippling water restrictions was the first step in the dealer's dramatic turnaround.
In the summer of 2011, as the mercury climbed to three-digit readings and city regulators gathered to draw up plans for the drought, one of the potential targets they had in mind for sacrifice was the portable spa. As this group, the Water Resource Committee, discussed plans for water usage restrictions, they invited local business owners, Buckingham included, to weigh in on the matter.
"Their statement to us was, 'The perception is that pools and spas waste water,'" Buckingham says, "and we replied, 'That is a misperception.'
"So they asked us to come tell them why."
After two and a half years of discussion, with Buckingham offering his insight as part of an advisory group to the Water Resource Committee, the WRC had created a 50-page document outlining the stages of water restriction. The most severe level of restrictions, stage five, included a ban on all evaporative sources of water, such as swimming pools — with an interesting exception.
To attract onlookers to the truckload sale, Buckingham displayed a few oversized items, including a bright yellow convertible, a Sundance Spas semi truck and a large inflatable, pictured in the back on the right.
"I noticed they exempted all indoor pools from drought restrictions," Buckingham says.
He suspected the exemption was deliberate, as an exemption for indoor pools would allow commercial pools for assisted living centers, rehab centers and aquatic therapy facilities to remain open, as they're used for medical purposes. And in that, Buckingham discovered a loophole.
"Twenty five to 35 percent of our spa sales are to people who have the means to purchase their own hydrotherapy appliance in order to avoid travel to a rehab center three times a week," he says. "They can take hydrotherapy at home several times a day, so their doctors write them a prescription."
Inspired by his time at the Sundance dealer conference in Anaheim, Buckingham invited three local food trucks to work the sale.
With swimming pool sales at a standstill and most existing pool customers choosing to keep their pools closed (to both save water and avoid paying hefty fees for hauling in water to fill them), Buckingham saw this "loophole" as the path to Outback's survival.
In April 2014, Wichita Falls' city council met to enact the stage five restrictions. At that meeting, Buckingham made his case.
"I said, 'I'm here to ask for an exemption for our spas. Let me explain to you how they operate,'" he says. "Even though we had done this with the WRC, the city council just wanted to get rid of any source of water usage at all. So having the ear of the city council, I basically described to them how spas are not evaporative, showed them pictures of spas with covers on them and explained that the spas are like that almost all the time, and also explained the fact that purification systems and filtration systems are so much more superior today than they were even 20 and 30 years ago."
He also cited some strong data. "If we were to fill up every hot tub we had ever sold in the last 19 years, the city would only lose 23 seconds of water a year. That wasn't just within the city, that was within a 75 to 100 mile radius. So I said, 'If that isn't an effective use of water, by all means restrict us!'"
After hearing his argument, the city council unanimously voted in support of an exemption.
Success, With Pause
With the clearance to continue selling hot tubs, Outback Pool and Spa now had a foothold for revenue.
"[The exemption] was a win, but it wasn't a win because we didn't know what it was going to mean for our business," Buckingham says. "But with the hot tubs free of restriction, we decided we had to focus them."
As a result, Outback's showroom turned into a spa showroom, with 20 to 25 spas on the floor. But marketing the shift would be difficult since, as Buckingham explains, Outback couldn't openly promote its hot tubs.
"It's 2014, and everybody is talking water," he says. "It's at your water fountain, it's at church, it's in line at the grocery store, it doesn't matter where you're at, everyone in our community of 150,000 is sharing the same water source and saying, 'How are you saving water? How many units did you use?
"Naturally, we couldn't market this because it could cause major backlash, particularly in a conservative area where public opinion can mean a whole lot. So we had to do this behind the scenes in a way."
The question now was how.
Conference Confidence
In January 2015, Buckingham set out for the Jacuzzi/Sundance dealer conference in Anaheim, Calif., with one goal: to soak up as much information as he could.
With an exemption for spa sales in place, Outback's showroom shifted to focus entirely on portable spas, with 20 to 25 on the floor at any given time.
"The dealer conference they had in Anaheim was focused on your business. They put together programs to help us with lead generation…They spent a lot of money on search engine optimization, pay per click, trying to get the No. 1 position anytime the word 'spa' or 'hot tub' was searched for, and they generated a lot of leads for us. And then they put together sales programs that allowed us to have special financing and rebates.
"And I just said, 'To hell with it. We're just going to follow everything they say we should do.'"
That began with a spring-cleaning sale, followed by additional events throughout the year. These events led up to the year's biggest sale: October's truckload sale.
"The last one we'd done was back in 1987," he says. "We did a four-day sale and I sold 20 hot tubs. It was unbelievable — back in 1987, you could get financing for $25 down. It was a piece of cake."
Of course, times were different now. Financing wasn't as easy to come by, consumers were sensitive about water usage and the cost of a hot tub had risen since Buckingham had sold those 20 tubs in a single event.
With that in mind, Buckingham launched an impressive pre-sale strategy, including digital marketing, TV and print ads. Local radio stations were invited to set up shop on site, providing another channel of promotion throughout the four-day sale. Outback also took advantage of Sundance's lead generation tools to target the demographic most likely to buy a hot tub in his area.
To make a big splash and draw people in, Buckingham got some larger-than-life props. In addition to a semi that bore the Sundance logo, Sundance supplied a 20-foot inflatable rubber duck in a hot tub. For extra flair, a yellow convertible (belonging to Buckingham's wife) was parked out front with an oversized rubber duck inside, which customers enjoyed using as a background for selfies. On top of all that, Buckingham remembered a fun detail from the Anaheim dealer conference he wanted to incorporate into his truckload sale.
"Here we are in Anaheim, and right out front they brought out three large food trucks. And one day we got to go out for about an hour and a half and eat food off these food trucks they'd brought in, and it was like, 'This is cool!'
"I come to find out a couple of our customers own food trucks. We started to talk with them and said, 'Hey, we're going to have a truckload sale. It's going to be a four-day weekend, would you like to come up and set up?' And they did. And it was a blast.
"One guy brought 50 gallons of ice cream two days in a row and sold out. We didn't pay him to come; we just asked him if he wanted to participate."
The sale was a huge success, with Outback selling 21 hot tubs, none of which were financed. And because of Outback's focus on lead generation, Buckingham made a surprising discovery: every customer who purchased a hot tub at the sale, and during 2015 as a whole, were already in the category.
"They either owned a hot tub currently or had owned a hot tub before. They came in to look at it and seek advice, and that's when we would say 'Guess what? The city council determined our spas are not water wasters, you can purchase this and fill it up all day long with potable water and not feel bad about it,'" he says.
When Sundance headquarters caught wind of Outback's results, they too were impressed — so much so that Buckingham was honored with four awards at the international dealer conference in Panama. Among them: exceptional sales growth in the U.S., exceptional customer service and best event of the year, in honor of Outback's truckload sale.
"I was really shocked because when we were in Panama, we didn't have any clue we were going to receive an award. And I got to walk the stage four times in front of all our peers," he says. "And in 19 years of doing that, we'd always seen the big boys doing that."
While success didn't come easy, Buckingham says it does come easier when taking advantage of manufacturer programs and special offers.
"It's really fantastic how we have these tools available to us, but we all sit back and say, 'Well that won't work for my market,' or, 'It's not going to work here in my town.' Guess what? I just ignored that and said, 'Let's just do it,'" he says. "And it gave us a big year."
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