Some swimming pool builders are now seeing a decline in new construction leads, sales and revenues, forcing them to make adjustments to their daily operations. In most cases, they have a couple of choices: either begin to reduce overhead or look to replace the lost revenue with other services that are being less affected.
Reducing overhead is hard because it may include laying off staff — long-term employees, friends and perhaps even family. The second option, finding other services to offer, can be much more appealing, and in this scenario, a logical choice for a new pool builder is to step into pool renovations. There are a few reasons why this makes sense.
First, pool renovations are still in relatively strong demand, in the United States alone, it is estimated that nearly one million pools will need some type of renovation done this year. Renovations are also closely related to new pool construction in that almost all personnel and company infrastructure can be repurposed for renovation with only minor updates and training. And lastly, most pool builders and existing suppliers already offer products for pool renovations.
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It’s an obvious and attractive option, but it can actually be quite tricky and expensive. The challenge a pool builder faces when making this transition is that they likely know how to do a pool renovation – but they don't necessarily know how to build a profitable and efficient renovation division.
Pool renovations are a different animal than new construction. They can be more challenging because of wide, inconsistent variables in scope; you can also inherit pre-existing conditions and discover unknown deficiencies after work begins. These inconveniences can lead to scheduling conflicts, warranty issues and unhappy customers.
The upside is that pool renovations can become a high-margin profit center, as they usually require less time to complete so builders get paid sooner. It’s also easier for builders to grab a considerable amount of local market share because in general, there are more projects and the companies competing for them are often smaller and less sophisticated.
So, let’s cover a transitional plan for builders to either add renovations or scale their existing operations. This plan covers the two basic foundational elements required to ensure a profitable and efficient pool renovation business: customer acquisition and production.
Customer acquisition is separated into three subsets that include lead generation, sales and reviews. Let’s first dive into lead generation. The main problem most contractors have with this is that their efforts are fragmented, and they usually have multiple companies doing different parts of their lead generation that aren’t strategically aligned.
For example, they may have one company doing SEO, another doing Google PP, another managing Facebook, another posting social media content and yet another doing print ads. You get the picture. It’s marketing chaos.
An alternative is to interview and find a single company or person that controls the whole strategy, including messaging across all tactics and channels. This integration creates alignment and cohesiveness — and creates better lead volume, consistent outcomes, and will ultimately reduce the overall cost per acquisition for new customers.
The second component in customer acquisition is sales. After you have successfully increased lead flow, you now have to focus on converting those leads into high-margin customers.
The big issue we see in the pool industry is that the salesperson typically walks into a cold pitch at the customer’s home. This is not ideal, as everything is placed on the salesperson’s shoulders — building a relationship from scratch, conducting a needs analysis, answering questions, developing a solution, presenting your products, telling your company’s story, presenting pricing, overcoming price objections, explaining why you are different than competitors... and hopefully closing the sale.
If not, the follow-up begins. As your salesperson repeats this process multiple times per day, every day, over and over again for each prospect, this repetition can lead to inconsistent performance, fatigue, burnout, and eventually turnover. It’s also a disservice to your customers because they may not be getting the whole story.
The better alternative is to use the crucial time after an appointment is set and before the prospect actually meets with a salesperson to do virtually all the pre-selling. This is the perfect time because the prospect is in their zone searching for answers to their questions, excited and impressionable.
Here’s what you do: Set up a learning module with videos, downloads, checklists, planning guides, product brochures and plenty of customer video testimonials. The link should be emailed to the prospect immediately after their appointment is scheduled and can even be part of the appointment confirmation email. This learning module can then be shared with other decision-makers in the house. This is a powerful strategy that will differentiate you from your competitors and influence your potential customers to convince themselves you are the right choice.
After you have completed the renovation for your customer, it’s important to convert them into an advocate that will tell others about their positive experience.
As a business owner, you know proper protocol when the job is finished, but you also need an efficient way to gain customer reviews, which could come in a number of formats: a short video testimonial, an online rating, a post on social media, or simply honest insight about their overall positive experience with your company. I suggest some type of formal rewards program, which can be a game changer.
The bonus is you will leave every customer feeling great at the end of the job — even if it was a little bumpy along the way. People don’t always remember what you said or what you did. Those memories fade with time. However, what they do remember is how you made them feel. Why not conclude their experience with an action that leaves them feeling grateful, appreciative, and happy about your company?
Okay, let’s assume you now have integrated your marketing, you set up a learning module that is sent to everyone who sets an appointment with a member of your sales team, and you are getting plenty of great reviews and referrals. Your sales are increasing, which means you now have to focus on processing the work in the most efficient way possible.
In production, the focus is on three main areas: processes, project management and profitability.
Renovating a swimming pool can be a unique, complex and time-sensitive process. In order to ensure the best possible outcome for your renovation project, it is first essential to have up-to-date processes and documented workflows in place to help avoid unnecessary delays and ensure that all steps of the project are executed according to plan. Additionally, regularly updating processes and workflows can help identify areas for improvement and increase your efficiency — leading to cost savings, an increase in profit, and an overall reduction in project timelines.
Documented workflows also help to build clear communication between team members and customers to ensure everyone is on the same page and working towards the same goals.
One major difference in renovations vs. new construction is how to begin the project. When a new pool is started, the builder typically sends out the first crew, who may either install erosion fencing, pre-strip the area or begin the layout of the pool.
In renovations, however, before any work begins, the superintendent or field inspector should do the initial staging with the customer and a full 21-point inspection. This inspection process serves two main purposes: to review details of the agreement and to make sure there are no unforeseen deficiencies. Examples of these may be surface delamination, cracked bond beams, shell fractures, broken main drains, rusted light niches, etc.
When deficiencies are found, there is an opportunity to add additional, high-margin items to the scope of work. Present multiple options to the customer: your company does the work for an extended fee, allow them to get quotes from other contractors (which they virtually never do), or sign off that they don’t want the additional work done and thus, assume full liability.
The next area of production is project management. To yield big results, I suggest pool builders use completion certificates after every stage of work. Get the customer to sign off on them and rate the quality of workmanship. If there’s a problem, it gets handled immediately and doesn’t become a collection issue later in the project. This will also help create crew accountability around their workmanship, keeping the jobsite tidy and making the final cleanup less work.
The customer should also do an online review for that stage of work. This helps to increase your number of positive reviews and overall score.
The third area of production is profitability. There are several topics to consider that may lead to increased profits per project. The first: converting in-house crews to flat rate or piece work on projects instead of hourly. The motivated hustlers will love it, and it will weed out the time wasters and profit vampires. You can also increase profits by charging extra for certain items — engineering plans, permits, and dump and disposal fees. You’d be surprised at how small items like these can add up. You simply add language to your agreement that states these items will be billed at cost in addition to the final bill.
And finally, around profitability, you should collect draws when they are due. I suggest to our clients that they modify the language on their free items or special offers are contingent upon on-time payment. If the customer wants to change the payment terms during the project or hold back money at the end, they risk losing any discounts, free items or special offers. This is nice leverage for a company and usually eliminates chasing money.
By implementing these best practices, pool builders can ensure that their renovation projects are completed on time, within budget, and to the highest standards.
This article first appeared in the March 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.