Lose a Few, Earn More: Smart Pricing Strategy

0:00This episode is brought to you by Hasa. Liquid is clearly better. Liquid chlorine is the highest purity, works immediately, has no added signaric acid or calcium, and it will leave your pool safe, clean, and clear. And by the bottom feeder professional grade battery-powered vacuum system, it sucks to clean pools, so cleaning pools sucks less. Get $100 off with code DVB100. This episode is brought to you by Schimmer, the number one pool service software in North America. With Schimmer, you can streamline your schedule, grow your revenue, and keep your customers coming back with five-star service. Whether you're a one-person operation or an established team, Schimmer is your partner in success. Visit getschimmer.com slash pool guy to try Schimmer for free for 30 days. Welcome to the Pool Guy podcast show. In this episode, I'm going to talk to you about price

1:08increases in the service industry, particularly if you service pools how to approach your customers with price increases, and everyone's familiar with rising prices and everything. So this may not come as a shock to your customer, but I think it's also helpful to have a strategy when you're increasing your prices. Are you a pool service pro looking to take your business to the next level? Join the pool guy coaching program. Get expert advice, business tips, exclusive content, and get direct support. For me, I'm a 35-year veteran in the industry. Whether you're starting out or scaling up, I've got the tools to help you succeed. Learn more at summepoollearning.com. It actually Schimmer has a great free resource, and I'll put the link down in the description of the podcast for you to get this free downloadable, I guess it's not technically a guide, but there are a lot of different links to different aspects of increasing prices. In fact, I'll just go through it real quick for you. So when you click on the link, it'll give you a downloadable

2:10site to go to to download everything you're going to need, and basically you have some templates to email the customers for price increases. So it's basically a toolkit with a bunch of different things in there. There's a service rate index, which is pretty interesting. I'm going to go over that in the podcast here for you. It's basically a survey of how much pool pros are charging across the nation. There's also a webinar with Casey Graham and how to double your profits, and then there's strategies to increase your pool route, and then there's the increased letters, which, and they also have a price increase in profit calculator. I haven't gone there yet, I'll probably get there, but it's interesting. The price increase letter actually reads it to you, so you got an idea of the general idea of their price increase letter. I have one similar that I said out as well, and it's in a Google Doc file, and let me read it to you, because I think they take a pretty interesting slant on it, and this is from Casey Graham. I'll read this letter for

3:13bait him here for you. It says, hi, it's for the customer, and then put the customer's name. The economy has been in turmoil for a few years, with the rising costs from our distributors and wages increasing the higher to keep great pool technicians. We are focused to do a small price increase. Most companies mandate a price increase and don't leave the customer with any options. We do not believe in doing this. Instead of a mandate, I want to personally ask you this, would you be willing to accept the $25 a month price increase on, and you can put the date here, June 1st, 2026? If this is acceptable to you, no action is needed, and you will see the increase added to your next invoice. If for any reason, you don't want to or can't accept this increase, all you have to do is reply to this email. I will personally get everyone of these emails and make sure that you don't see the increase on your next bill. We will keep focusing on making your pool yummy clean either way. Thank you, Casey Graham, CEO of yummy pools,

4:16and then of course the customer may respond, and then you would just type some canned responses, not for them, not to worry about it, and you're still going to clean their pool the same way without the increase. So it's an interesting strategy to get the customer the option to accept the price increase. My particular logic is that if you increase all the customers $25, let's say, and you have 70 pools, and I guess this is a way to kind of save accounts without using my method, which is a more mathematical method. But if you had 80 pools and you raise everyone from 125 to 150, I'm just using a low number here. So $25 times 80 is 2000 more a month with the $25 increase over 80 clients, but a five of them cancel a service because they really don't want to pay that increase. So you now you're at 75 pools times $25. That's 1875. So you've

5:17added 1875. You lost five customers, but you're charging more to the 75 customers you've kept. So 75 times $25 as 1875 again times 12 months. That's 22,500 that you're making over the previous year with five less customers. Of course you're going to have to subtract the five customers you've lost, and so 125 times 12. That's 1500 times five. That's 7500. Now if you asked the customers for $25 increase, and let's say 65 said it was okay, and 15 didn't want to go up, then you would have 25, or 1625 times 12. You would have an increased revenue of 19,500. And you still have those 15 customers that weren't paying you the 150, the paying you 125 still, and you don't really lose anything on your route at that point. So I guess either way would be effective. I would rather raise

6:23everybody and kind of just cut your losses if anyone cancels. But effectively, I think it might be a strategy you may want to try to implement if you ask the customers for the price increase instead of mandating it to see how effective that is in your business model. And it could be that if you're in a really competitive area, that may be the way you want to go. But I thought it was an interesting strategy as far as raising the prices in a kind of more diplomatic fashion. Let me talk about the service rate index that they created, which is really interesting. And it's pretty in-depth. So they have 30,000 scammer users with over 900,000 pools. They've actually crossed over a million pools at this point. So with 30,000 users, there's plenty of data to gather for them. So it has per stop or flat monthly. So I'm going to use a flat monthly. So you have a map basically of the United States here. And it shows all the states and it shows the colors

7:27will show the high and low average costs by being a lighter color of tan or orange and a darker color going towards brown for those areas that charge much more for monthly service. And you can do with chemicals or without. And you can also go down to regions or you can just pick a particular state if you wanted to or a set of states. So I'm just going to go ahead and look at the entire map and it's an alphabetical order. So if you're in Alabama, your low range is $201 a month. Your low average is 233. Your high average is 243 and your high range is 269 for pool service. And it's interesting because Arizona is right below it. The low range is 112. Low average is 136. The high average is 142. And the high range is 166. So I think all of us should be moving to Alabama within the next six months to get those good service rates. And of course,

8:27you pretty much know certain areas are going to be much more expensive than other areas, especially really competitive areas like Florida. They seem to have some in California, some have some of the lowest rates out there. I would say that the low range is on a really low for my service area in Los Angeles County, San Bernardino County area. The most people are charging in the high range of 1509 as a high range of California. So I would say that the low range of 104 is pretty really extremely low for the cost of living in California. So I would say that you'd have to charge a lot more than $100 a month for a pool service if you're going to survive here in Southern California. Unless you're doing chemicals only or something like that, that's a really low monthly service rate. That's like $25 a week, which is not really, you know, going to pay the bills. So I would say that if you are doing pool service, you are more

9:31in the high range in California. The low range is just not a realistic place to be in. And you would be in the high range. Most of the pools in my area are anywhere from 150 to 185, depending on the service area. There's a tipping point, of course, of going over a certain amount for your area. You won't, you won't land too many bids if you're too high. And if you're too low, you're not going to make any money. So you really have to look at this rate index carefully and kind of gauge it by your particular service area. So the $7500 minus $22,500, you're still net $15,000 that year with losing five customers. So the math works pretty good. It's not a total loss of five people that want the price increase. You still have a pretty good profit with five less customers. I do see an error on the chart. Actually, Hawaii is showing the per stop service rate

10:31and showing in the monthly service rate category. So it's something that they'll probably correct. And the Pool Bay podcast show is teamed up with UPA to bring you affordable, reliable liability insurance, starting at just $64 a month, get up to $2 million in coverage, and the members of my coaching group get an even lower rate. Protect your business and your piece of mind. Sign up with UPA today by clicking the link in the podcast description. But overall, you get an idea. I get a snapshot of what people are charging across the country. I would say California seems to be a little low for my, in my opinion, other rates that I've seen in my area. Same with Arizona, probably. And we get the Texas rate. Texas is kind of like the state where everything is, I'm not going to say the word inflate. Everything's big. Big hat, no cattle kind of thing. And to everything in Texas is bigger. I was at a barbecue place in Dallas and it

11:39was probably the size of a six restaurants combined together here in California. So of course, Texas is a great way to set your rates. The low range of Texas 187, the high range is 259, and the pools are probably bigger than they are here in Southern California and some respects paying on the region. So every state is going to differ in pricing for sure. And you have to find your area pricing specifically for your county and the pools around you so that you're kind of within striking distance when you're going to get bids. I would say you don't want to be the lowest pool service company price wise in your area. But already want to be the highest price pool service in area. You want to fall somewhere right in the middle of the sweet spot. So people are charging one to 16 a month on the low side and on the highest side of charging 200. You at 180 or 185, you're in an actually a good sweet spot where you're making good money. You're not the lowest one. You're not necessarily the highest one. And people may gravitate towards you based on the fact that

12:41maybe the low price one is just not going to provide good service. And it's kind of like a mentality that people have that if the price is too good, it's probably too good to be true. Of course, price increases are the simplest way to increase profits in your business, although it's more painful to the customer. You can also do things so that if let's say you don't want to go all the way to $20 increase, you want to increase it maybe $15 and you can figure out ways to offset some of your costs. A lot of this has to do with your chemical usage. Maybe you can buy chemicals in bulk somewhere and save money per, you know, per pound or if you do certain things to change how you're building the customers for chemicals. So say, for instance, that you're adding fostering movers without charging the customer or you're adding some algebra side each week without charging them. You can start implementing it to where you purchase the container of foster

13:42remover or the bottle of algae sign and give it to the customer leaving at the job site or at their pool, I should say, not really a job site, so your service account. And you can also implement charges at the beginning of the summer. You can do a water conditioner slash algae side charge at the beginning of spring before summer hits and that will cover them for any borey to add to the pool or the pool or X unit or anything else you're going to use and you can set that at say $110 or $120 and that's the charge that every customer receives. We used to do this back in a day was called a conditioner charge. We would charge everyone before summer and this I'm dating myself here, but I'm going to say that it was something around $45 a month to charge them for the pool conditioner. And we would use that to offset some of the chemical costs. And this would be for adding signary gas into their pool. Of course, with the advent of tablets and everyone using

14:42tablets, you no longer have to add signary gas into the pool, but you can actually convert that conditioner charge to an algae side charge and that will increase your profit and offset any kind of algae side you may use in the customer's pool. Again, if you're going to use a pool or X or borey, it's $120, $130 for that charge would be pretty fair to cover the cost of the product. You're going to put in there and you can also move certain things outside of your building. For an example, if you're not charging for triangular tablets, which you should be charging them for a 50 pound bucket and leaving it at the pool. But if you're not, you can implement that slowly bring the customer to where bring it up to the customer to where they're going to pay for the tablets. You can also reduce the amount of maintenance chemicals you're putting in the pool for certain accounts. A lot of times some accounts will require more chemicals and sometimes you absorb it in your business thinking that it's going to even out. But let's just say

15:43that you don't want it to even out anymore than this pool that's on your route that you're putting in, you know, three pounds of cow hypo every week because it's heavily used or there's some kind of problem in using a lot of chemicals there. Just charge them for a 50 pound bucket or 25 pound bucket of cow hypo and leave it at the customer's house and let them know that their pool is actually a heavy use pool. Then you're going to have to charge them for some extra chlorine. Most people aren't going to really push back on that because they really they already know their pool is a heavy chlorine pool, especially if all the kids are using in the summer. So that's one way to offset some of the costs by specifically targeting customers that are heavy use and also targeting customers or pools that are actually draining your resources. You know, if you have a pool that's taking a lot of time and chemicals and mental anguish when you go there dropping that pool is actually going to save you a lot of money and you're still within a limit of losing that account

16:44without having the worry about it. You know, shedding one or two pools and raising the prices and getting rid of those pools specifically is not a bad idea at that at that time and it's something that may help you. So there's a lot of different things you can do inside of your business. Besides just raising prices across the board, you can make some cuts, you can move certain charges, you can implement some other charges for the customers and all of this really helps. One thing you can do also if you're in an area like mine where you clean the filters every six months if they're the full size D filters or quad cartridge filters, you can go from every six months to every four months. In fact, the manufacturer does recommend something more or less around three or four months in their manual and so you can actually increase your filter cleaning by one more time per year. And if you charge $90 per filter cleaning and you have 70 filters that you clean and you're adding one more of it per year, of course, that requires you to do it and do the work, which you made I want

17:48to do if you don't like filter cleaning, but 70 times 90 is $6,300 more for that year by just adding one more filter cleaning service instead of going every six months or going every four months and you're capturing $6,300 more dollars without increasing the prices on your customers and it may even save you a lot of headache. You know, if you're doing it three times a year, that means that the pools are going to run much more efficiently. So it's a win-win for you and for the customer. And of course, you would implement that on every pool, but you can maybe do half the filters every four months the first year and then start gradually moving everyone to that four month schedule for filter cleaning to increase your revenue and increase the water quality of the customers pool by having more frequent filter cleanings. And last, I'll just end with there is some straight math as well. If you have 80 service accounts and you can actually add three more, you have room in your your raw for three more without doing anything. And let's just say you're charging all this is

18:51using a one 15 number, even though it's a bit low times three, that's 450 times 12. Just by adding three pools to the route that you can handle pretty easily with, you know, these aren't pools that are going to take a lot of time. And effort, you've increased your annual revenue by 5400 gross there by just adding three pools. So if you're at 60 pools and you go to 70 pools, you can definitely add more revenue just by adding more accounts. You just can't do this if you already at the peak where you're at 85 or 90 service accounts. If you're one polar, you have to be careful. They're not overloading yourself. But if you have room, you know, simple mathematics, add more accounts, you're going to get more revenue. And it's not all about price increases that add revenue. It's about fine tuning your business and finding that sweet spot where you have just enough pools on your route and you're charging enough for them. And if you do raise the price and lose accounts, you're still in a win-win situation. If you're looking for the podcast, you can find those on my website, www.HermelLearning.com. Click on the podcast icon on the banner. There's close

19:55a 1900 podcast there for you to download and listen to. If you're interested in the coaching program I offer, you can learn more at www.poolguycoaching.com. Thanks for listening to this podcast. I'm gonna serve you a week and God bless. This episode is brought to you by Hasa providing products that deliver clean, healthy water for every aspect of everyday life. The bottom feeder battery powered vacuum system, portable, powerful, and only weighs 12 pounds. And skimmer gets skimmer America's number one pool service software. Podcast listeners can try skimmer for free at get skimmer.com. Backslash pool guy.