This blog post is a summary of a Skimmer webinar from March 2024 with Casey Graham, CEO and co-founder of Yummy Pools. Click here to watch the full webinar on-demand.
Casey Graham has lots of experience maximizing profitability. Over the last 20 years, he and his business partner Renee Weber have grown and sold four different companies in four different industries. Today, they co-run Yummy Pools, which they’ve also rapidly expanded in the few years since they co-founded it.
Casey is the first to admit that his business philosophy is unorthodox—and perhaps a little controversial. In fact, some people get mad when they see the growth strategies he espouses (like expanding from 0 to 1,000 pools in a year or doubling profits without adding more pools—the subject of the webinar we’re summarizing in this article). “They insist they can’t have quality [with strategies like that],” he says. He also says they’re wrong.
Of course, no one has to grow their pool service business this aggressively (and few people do). But Skimmer’s recent survey on The State of Pool Service found that 33% of respondents reported that they would like to reduce their customer count and increase profitability by pool. If you’re one of those respondents (or if you share this goal), Casey has plenty of actionable advice to pass along.
Let’s review the three hidden—and rarely optimized—profit levers Casey thinks you should start pulling to see higher profitability.
First, a note on fear
Casey opened the webinar with a bold statement: “Within one hour of getting a [pool service] profit and loss statement, Renee and I can usually find ways that you could double your profit. Places where you can run things more efficiently or differently.”
Pool service owners tend to get defensive when they hear this claim. “A lot of people think the pool industry is different. Well, every industry is different. They all have their unique qualities, but business in and of itself is not that different.” As he sees it, there are practices and principles that apply across all different genres of business, no matter the industry.
Casey believes that the hesitation to pull these profit levers is a result of fear, doubt, and tradition. Fear that there might be a better way of doing something. Doubt that drastically changing processes won’t compromise quality. And tradition in the sense that it’s always easier to keep doing things the way we’ve always done them.
But as Casey explains, everything starts with your mindset and the openness to ask yourself, “What if it did work in my business?” In other words, replacing fear, doubt, and tradition with curiosity. If you’re looking to double your revenue without adding more pools, you need to be willing to shake things up.
The price increase lever
The first lever available that you can pull as a pool service owner is the most obvious: raising your prices.
As Casey says, “The greatest way to increase the value of your company is to execute price increase strategies, lower the amount of customers, and have bigger margins.” But It’s also a lever many owners are afraid to pull. In fact, Casey believes that fear is often the only thing holding people back from implementing a price increase.
So let’s wade into these waters slowly, first by explaining the philosophy behind this principle and reviewing the math.
The principle
The price increase lever is based on the principle that when you raise the bar, you raise your profits, which results in better customers and better cash flow. Casey used this example during the webinar:
As you can see in the scenario above, most price increases will come with some amount of churn. But if you find the sweet spot through testing, your net increase will make up for the loss in revenue from churned customers. Ever the envelope-pusher, Casey says of the above example, “My take is that you should have pushed harder and lost more customers. If you raise the price high enough, all your margins will have increased.”
The “3” in the example is a multiple of free cash flow, net operating income, or EBITDA. If you increase your annual revenue by $24,000 a year, the value of your company increases by $72,000—or by a multiple of three.
“The higher the profitability, the more your company is worth,” says Casey. “You might get a 4x or 5x multiple on your business if you have bigger margins.” At Yummy Pools, he and Renee buy under-optimized companies at a 3x multiple and increase it to a 6x multiple within 90 days through price increases (and the other two levers we’ll discuss soon).
The process
Planning to increase your prices is one thing, and actually doing it is another. In this (or any) economy, nobody likes having to pay more for the same service. But as Casey explains, if you follow the right process, it won’t feel scary at all. “You can do this without losing any customers,” he says. How? Through continuous testing and by asking—rather than mandating—your increases.
Fire bullets, then cannonballs
It’s a process Casey refers to as “firing bullets, then cannonballs.” That is, don’t just send a mass email saying you’re increasing your prices. Instead, test different price points in small groups first.
“I recommend personally emailing three different test audiences with different price points,” says Casey. “If you want to increase your prices by 10%, send out a 20% price increase to 10 customers. If you lose four of the customers from that test group, you’ll know that the price increase was too high. Do the same with an 18% price increase. Let’s say you lose one customer from that. That’s preferable.”
These emails should be personalized (i.e., written by you and addressed to the customer by name) and can be sent on a rolling basis. “You can do 10 a week for 10 weeks,” says Casey.
And if you’re worrying about which pricing model to follow, Casey doesn’t think you need to be prescriptive. “[At Yummy Pools] we have a number of pricing models because we’ve acquired many companies. Some are a flat fee and some are per visit plus chemicals, and we see the benefits and the downsides of each one.”
Ask, don’t tell
Another important part of this process is asking your customers whether they’re willing to accept a price increase rather than telling them you’ve already done so. Casey uses a template like the one below to introduce the idea to his customers.
Proposing an increase this way makes a world of difference. “93% of our customers accept price increases when we pose it to them this way,” says Casey, “And 7% push back.” For those that do push back, you can either keep them at the same price (which, as Casey notes, is preferable to losing them), or entertain a negotiation.
In Casey’s experience, many customers will come back with something like, “I can’t do $9 a visit, but I could do $5 a visit,” which, again, is vastly preferable to losing a customer altogether.
If a customer does not accept your proposed increase, you can respond back by saying something like, “I understand, and that’s why we didn’t want to mandate this increase. Nothing will change for you and your pricing.” And if they accept, great! Thank them for understanding and implement the increase.
Hidden profit boosters
Casey also notes that there are several services and fees that pool services chronically undercharge for, including:
Service call fees
Yummy Pools charges $175 to come out for any reason. “We lose customers over this, and they’re customers we want to lose because our time costs us money,” says Casey. One exception: his team will come out for free if, and only if, a technician made a mistake during a visit and needs to correct it. But aside from that, this policy is firm. “You wouldn’t expect an HVAC or plumbing company to come for free,” says Casey. This policy has yielded an 8-10% profit boost for Yummy Pools.
Regular filter and salt cell cleanings
This is another set of services many companies are undercharging for. At Yummy Pools, it’s $175 for each. As Casey explains, “[The price] needs to be so high that the customer thinks about it and says, ‘Oh wow, that’s important,’ and it is. It’s not easy for the customer to do.”
Labor and parts (small parts too)
While most pool service companies “just keep stuff on the truck,” says Casey, “We charge for every fitting, every nut, every bolt.” Yummy Pools includes a shop fee line item on repair invoices as a percentage of the total price. “This covers the price for glue, rags, blades, and wear and tear on your truck,” says Casey.
Assessment/inspection fees
“If someone calls us for a ‘green to clean’, we take $175 on their credit card when they book it,” says Casey. He will roll that into the total cost of the service if it’s carried out later on, but taking that fee up front ensures that his team gets paid for every visit.
Repair calculator
At Yummy Pools, the target margin is 35%. To hit that margin, Casey’s team puts “our parts, materials, time, and trucks’ wear and tear” into a model that calculates pricing on repairs. That way, explains Casey, he’s always charging according to his desired margin, rather than “what we think people would pay.”
The chemical spend lever
Chemical spending is a huge expense in the pool service industry, and it can seem non-negotiable. As Casey notes, people talk about the price of chemicals going up across the board, but it can be managed—and curbed—without compromising quality.
The principle
To effectively control chemical spend, you have to measure the micro.
As Casey explains, most businesses take a top-down approach to budgeting. This often looks like setting a budget at a certain amount each month and saying, “This is what we’re going to spend on chemicals.” Other businesses eschew a budget altogether and say, “We spend what we need for the pool. We’ll do whatever it takes to get the pools right.” According to Casey, both of these approaches are wrong.
Yummy Pools takes a bottom-up approach. “We start at the per-pool level and apply a per-dollar amount per stop,” says Casey. Then, they measure each technician against that budget.
The process
So what does coming up with a per-pool budget look like in action—let alone for a company with over 2,000 pools?
Casey used the example of a pool service company that currently spends $10,000 a month in overall chemical spend. As Casey explains, “The most important number to know is: how much are you spending per stop?” In this scenario, the spend is $23.25 per stop.
Once you know this number, you can set a per-pool savings target. As a challenge, Casey suggests seeing if you can spend half of your per-stop amount while maintaining the same quality. He also warns that this is where fear, doubt, and tradition will once again rear their heads. And it may not work perfectly. Yummy Pools ran a two-month experiment trying to reduce their per-pool cost by half. They found it to be a bit too drastic of a decrease, but it did show them that they could still find substantial savings while maintaining quality.
When you’ve found your ideal per-stop chemical cost, it’s time to start measuring your technicians against that goal. Yummy Pools does this with Skimmer’s help.
“We use Skimmer to tell us how many stops each tech has,” says Casey. “If our goal is $12 a pool and each tech has 50 stops a week, we have a weekly budget for that tech we can manage against.”
Finally, Casey points out that most pool service owners aren’t aware that they can negotiate with their vendors. “We negotiate with them big time, and we do it every quarter,” he says. “Every single time, they lower the prices.”
How to manage chemical expenses practically
At Yummy Pools, Casey manages chemical spend with a spreadsheet (you can see an example of it here). It shows his team, per technician, if they’re over, under, or on budget, which helps to keep an eye on things at a micro level.
Each technician at Yummy Pools also manages their own spending by using a company credit card provided by Casey. “The second you start measuring what people are picking up,” says Casey, “They’re more mindful.“
Casey also encourages pool service owners to resist the urge to buy chemicals in bulk. “You may think it’s cheaper, but if you don’t have someone managing exactly how much people are taking or if you have no inventory system, the savings are leaking out by buying and wasting. If you put the responsibility on the technicians, it will be tighter.”
Two Skimmer reports can also help you manage chemical costs easily:
- The chemical dosage report shows chemical spend by tech, customer, month, or year. It also shows you exactly what you’re dosing, what the cost is, and what the profits are for that individual chemical. If you track your chemical usage in Skimmer, you already have this data.
- Profit reports are another useful Skimmer feature that show profitability by customer. Running this report is often an eye-opener, showing which pools are losing money. For these pools, a price increase or chemical adjustment can work wonders for profitability.
The expense lever
Most pool service companies wait until the end of the month to look at their expenses and assess the damage, so to speak. According to Casey, this is a mistake. “You should know where you stand at the end of every single week,” he says. If this sounds like an impossible thing to track on your own, Casey has a plan for that too.
The principle
As Casey explains, this lever operates on the principle that you have to spend to save. In other words, hire help. “You should have a data specialist who tracks and logs your expenses every single day,” says Casey. “[They should input] every credit card swipe, every vendor swipe, every invoice, for every distributor.”
This advice is the same whether your business has 40 or 4,000 pools. “We have over 2,000 and still enter our daily expenses into QuickBooks,” says Casey.
The process
As Casey explains, your data specialist can be a part-time hire (he suggests paying them 2% of your annual revenue). Once you have someone tracking each expense, you can meet with them once a week for an hour to review expenses and discuss any opportunities for savings.
Casey also suggests incentivizing your data specialist by offering them a monthly bonus for finding additional savings for your company. “If they save you more money, they make more money,” he says.
This approach works because it monitors the health of your business in real-time and allows you to make decisions based on data rather than gut feel. And while this may not be a full-time role, it’s still essential to your company’s profitability. “Hire this data person before you hire another technician,” says Casey.
Pull the levers and watch your profits soar
We encourage you to try each method in this article that resonated with you. And if none of them did? Try them anyway. As Casey stresses, you always have the option to test a new approach. If it’s not working, adjust and test again. And if it does work, excellent. That’s more profit in your pocket.
To hear more of Casey's tips for pool and spa service business growth, check out our on-demand webinar, From 1 to 1000 Pools in 365 Days.
