There's been a noticeable shift in the pool and spa industry. Where some businesses might have hesitated to share information or resources with a peer in the past, they are instead working collaboratively to take advantage of this unique moment in history, where an unprecedented interest in the backyard is sweeping the nation.
Teamwork is sprouting in many places: whether it's sharing inventory to cope with supply problems, service technicians crossing state lines to lend a helping hand or fully booked builders recommending colleagues to potential customers, the change is unmistakable.
In the retail sector, one clear example of this collaborative approach can be found at New England Spas in Natick, Mass., where neighboring spa dealers have struck up a unique partnership program. We spoke with Norm Coburn, owner, about the program that he thinks one day could be commonplace among the industry.
New England Spas gets visitors from all over the region. It's not at all uncommon for nonlocals to stop in Coburn's showroom just to look at hot tubs, as residents vacation and move from state to state pretty regularly.
It's also not uncommon, especially in pre-pandemic times, for New England Spas to participate in offsite events, as they are a great way to garner leads and build deeper relationships with its surrounding community. When the company, for example, bought a booth at its local county fair, there was a lot of interest. And there, too, some of that interest came from nonlocal attendees.
"While these nonlocal customers, whether inhouse or at offsite events, were interested in our hot tubs [New England Spas carries both Hot Spring and Sundance spas], the right thing would be for them to shop local from another reputable dealer," says Coburn, "because we can't give them the delivery, service and support they need — and deserve from our industry — as well as grow that relationship.
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"So we would say, 'Well, there's a Sundance dealer in your area. You should call him.' But that was like throwing dice in the dark. And then, it evolved to, 'Well, why don't you give me your lead information, and I can pass it on to your local dealer and have them reach out to you.'
"Eventually, this happened enough times for me to realize there was a real opportunity for us to go one step further. What if New England Spas could rate the deal, but have the customer's local dealer do the delivery and service? We could split up the profit somehow, and that would be a home run — a home run for the customer; a home run for the manufacturer; and a home run for the seller and the fulfillment dealer."
In his small community of New England, Coburn began talking with his neighboring Sundance and Hot Spring dealers. Five of them, coined "sister dealers," jumped on board, and a unique reciprocal trade agreement/partnership was formed.
HOW IT WORKS
1. When a nonlocal customer visits any of the five participating showrooms and is interested in purchasing a hot tub, the dealer will write up a contract.
2. The contract is sent to the appropriate sister dealer (the customer's local dealer), who not only approves the quoted price, but makes sure they have the hot tub in stock — or, at the very least, can obtain one in a reasonable amount of time.
In today's world, inventory is sometimes tricky, notes Coburn. "Does the local dealer have the hot tub requested? Or do I need to supply it?" he says. "There have been a few cases this past year where a sister dealer has actually driven to our showroom and picked up the chosen hot tub."
3. The customer is made aware that their local dealer will be in touch to schedule a delivery time.
4. The jobsite is assessed and the hot tub is delivered.
5. The local dealer calculates added costs after delivery. "Was a heater installed, a lifter, or a set of steps?" says Coburn. "After the job is completed, a quick calculation is made to determine the net profit of the job, figuring in extras and normal costs — like delivery fees, installation fees, that sort of thing."
6. The net profit is split between the two dealers, 60/40. The sister dealer, who made the delivery and now will benefit from the growing relationship, takes home 60%. The nonlocal dealer who made the initial hot tub sale gets 40%.
7. The salesperson at the nonlocal dealer, at least at New England Spas, is given a commission. "Forty percent of the total profit normally comes out to about a 15% commission on the entire deal, which is very satisfactory," says Coburn. "My salespeople are aware of this, that they typically get half of what they normally would, because they don't need to do the normal support that comes with a customer in our own backyard."
8. Enjoy the home run. "Everybody ends up happy," says Coburn. "It's a very courteous, respectful and appropriate way of handling out-of- area customers."
Most dealers already experience crossed lines, says Coburn. "But cooperation between dealers over geographic areas is an issue for our industry, because all too often, it ends with people poaching deals and undercutting peers." If this past year has taught pool and spa professionals anything, it's the importance of relationships, of a network of "people whose shoulders [you] can cry on that are in the same position [you are]."
In sharing this program, he hopes to stimulate conversation and encourage other dealers of the same brand in a geographical area to reach out to one another, because not only could it benefit their businesses, it's an opportunity for the customer to get the best results from their interest in the product.
"I think this program has the potential to be a nationwide network," he says. "Structurally, it is a good foundation for establishing a protocol for spa retailers in the industry. And more than that, what goes around, comes around. If you can work cooperatively with your neighbors, I believe that will come back to benefit the industry as a whole."
This article first appeared in the October 2021 issue of AQUA Magazine — the top resource for retailers, builders and service pros in the pool and spa industry. Subscriptions to the print magazine are free to all industry professionals. Click here to subscribe.