The state of the industry for swimming pool marketing has evolved into some interesting new dynamics, due to an unusual convergence of factors. Not to be overly dramatic here, but I seriously think we are looking at a state of the industry quite unlike anything we’ve ever seen before.
And no, it’s not just because of the pandemic.
DYNAMIC NO. 1: COMPETITION
There’s nothing new or unusual about competition, as it’s been around since the first business opened its doors. But the dynamic is a little different this year, thanks to — yes, in this case — the pandemic.
As I’ve written in the past, many of the homeowners who might have bought new pools in 2023 or 2024 went into panic mode in 2020 and 2021, and bought them then instead. So while pool builders across the country spooled up and beefed up operations to handle the overwhelming flow of leads, that “fire hose” of demand has been tapering back.
Lots of good-sized, well-equipped pool contractors, and a dwindling supply of new pool buyers — that’s not a good situation.
You could certainly attempt the pivot over to renovations (as recommended in AQUA Magazine, March 2023), but that won’t work for everyone, and that won’t keep all businesses afloat. So if you want to avoid the crush of too much competition in 2023 and beyond, you’ll need to tidy-up the usual components of good marketing, including:
- A clear and compelling message
- Powerful website content
- Hyper-responsiveness to inquiries
- Intelligent advertising / lead generation
- And a respectable online reputation
SUMMARY: You may have enjoyed minimal competition over the last few years, but unless you’re in a small and uniquely underserved market, you are likely to see a lot more competition in the months ahead.
DYNAMIC NO. 2: CONCENTRATION
No, I’m not talking about paying attention, and putting your mind power to work here. I’m talking about the shockingly lopsided transfer of wealth that occurred across society over the last three years.
Frequently, when the rich get richer, it has a positive effect on other society strata as well. It’s the old concept of “a rising tide lifts all boats.” But this didn’t happen during the pandemic. Instead, a whopping 99% of the world population saw a decline in wealth, while the top 1% enjoyed an increase in wealth, on average double where they were before.
That’s a significant concentration of wealth into a small group of uber-rich people.
This is great news for you, if you happen to be serving the top 1%. But if you’re running more of a “middle-of-the-road” operation, targeting more middle-class and upper-middle-class homeowners, well, there’s no two ways about it. Your market just got smaller.
So now you have to make a decision. Are you going to continue targeting the exact same demographic you have in the past? Or are you going to concentrate your efforts on a more narrow, but also more lucrative and viable niche?
SUMMARY: I can’t blindly suggest which niche is best for you. But I can strongly encourage you to take a close, hard look at the niches, demographics and micro-markets available in your area, and concentrate your strategies and tactics on whichever one makes the most sense for you.
DYNAMIC NO. 3: CONSOLIDATION
Finally, we have one dynamic that has nothing to do with the pandemic whatsoever. Instead, this has to do with the slow-arriving but long-anticipated maturation of the swimming pool industry. To explain the impact of this, let’s talk about industry life cycles. The four standard stages of any industry are (1) Emergence, (2) Growth, (3) Maturity and (4) Decline.
The residential swimming pool industry emerged in the United States in the 1920s, and experienced explosive growth after World War II, from the 1950s through the 1980s and beyond. The third stage, industry maturity, occurs when there are plenty of competitors around you, and no new territories to burst into. So the most logical way to increase your size, revenue and market share is to start purchasing your favorite neighboring competitor(s). We’re talking about mergers and acquisitions.
And that’s where the pool industry is finally reaching today.
This is most obvious in the pool service industry, where no less than five national pool service companies have started gobbling up local operations from coast to coast, with a goal of becoming a major national player in the next few years.
Pool construction is following a similar, though somewhat slower path, on a more regional basis — with key players getting active in Texas, Florida and the northeast. And there are no signs of that slowing down.
So what does this mean to you? Well, if you’re a business owner who’s on the north side of the half-century mark, then an “exit strategy” should increasingly be part of your long-term thinking. And selling to a consolidator might be the perfect golden parachute you are looking for.
Even if your plan is to hand the business off to your progeny, or other key members of your company, there’s a perfectly legitimate concern that when the founder of the company steps away, the next generation just won’t handle it the same, and the company will crater. Bad news for everyone, all the way around.
By contrast, if one of these regional or national consolidators takes over your company, then (1) they may want your progeny to stay with the company, and become part of the national organization. And (2) their chances of success go up significantly when they are coached and nurtured by experienced, national professionals who work with operations like yours all across the country.
Just keep in mind: You’ll have to have (1) a successful, profitable business, and (2) a clean and thorough set of books that will back up that story. Without that, no one is going to make any kind of offer for your business.
SUMMARY: The consolidators are out there, and someday, they will come knocking on your door. It might be right for you, and it might not, but either way, you should make sure your books are accurate, professionally prepared and up to date.
BOTTOM LINE
In 2023, we are seeing a convergence of three distinct dynamics that will challenge pool industry business owners in the months and years ahead. To protect yourself against the increased competition, you’ll want to tighten up all aspects of your marketing, from messaging and websites to reputation and responsiveness. To protect yourself against the shrinking middle class, you should identify a niche in your area that still has money, and concentrate your efforts on that. As for consolidation, I would encourage you to leverage this trend by meeting with several consolidators, and find out (1) what are your options when selling your company, and (2) what it is worth.
This is one case where knowing the state of industry today may pay handsome dividends for you in the future.
This article first appeared in the May 2023 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.
