Are you a pool service business owner struggling with how to price pool services?
Setting the right price for your pool services can be challenging, as you need to balance your desire to generate maximum profits with the need to remain competitive and attract customers.
Underpricing your services can hurt your bottom line, while overpricing can deter potential customers. In this blog post, we'll provide you with a complete guide on how to price pool services to maximize profits.
We'll cover everything from conducting market research to identifying your costs and determining your value proposition. Additionally, we'll provide tips on using dynamic pricing, bundling services, and offering discounts and promotions to attract and retain customers.
Whether you're just starting out in the pool service industry or looking to fine-tune your pricing strategy, this post is for you. By following the seven simple steps laid out in this post, you'll be able to develop a pricing strategy that optimizes your profits while remaining competitive.
Let's dive in!
A step-by-step guide to pricing your pool services
Step 1: Research the market
Much of the strategy around pricing your pool cleaning services will revolve around existing market conditions.
Not to go all 8th-grade economics on you, but it all boils down to supply and demand. When there is high demand for pool cleaning services but a limited supply of providers, you can usually charge a premium for your services.
On the other hand, if there are many competitors offering pool cleaning services in your area and demand is low, you may need to lower your prices to remain competitive and attract customers.
It's important to also consider factors like seasonality, weather conditions, and geographic region, all of which can impact demand for pool cleaning services.
In many areas throughout the country, the summer months are the "on" months, and the winter months are the "off" months. However, in states like Florida, with nearly year-round tropical temperatures, pool services are often in constant demand.
But the term "market research" alone is pretty vague and unhelpful. To avoid tossing you in the deep end without a float, here's a step-by-step rubric you can use to do market research in just a few hours.
1. Identify competitors
The first step is to identify your competitors, which are other businesses offering similar pool services in your area. Arguably the fastest and best way to do this is to open up a private window in your web browser (so Google doesn't bias your results) and Google variations of the following keywords:
- pool services in [your city]
- pool cleaning service in [your city]
- best pool cleaning service in [your city]
Take note of the results that populate in the top 1-5 spots, especially in Google's "Map Pack." These are likely the competitors you'll want to pay the most attention to.
2. Create a competitor list
Once you have identified your competitors, create a list of their names, contact information, and their websites. You can do this with pen and paper, but we'd recommend a spreadsheet for ease of inputting data and comparing competitor metrics.
This will also make it easier to compare their pricing strategy later on.
3. Analyze competitor websites
Go to each competitor's website and look for information on the services they offer and their pricing strategy. In the spreadsheet, note down the different types of services they offer, how they present them, and what their pricing structure looks like.
Some pool cleaning companies are a bit cagey about their pricing, so you may need to do some sleuthing and fill out some contact forms or give them a call. Others will be upfront about their pricing, such as this Austin-based company which offers full-service or partial-service cleaning packages:
If you put in the legwork to contact each competitor and collect data on their pricing structure, be sure to find out as many of the following key data points as possible:
- Base price for services
- Additional fees or charges
- Discounts or promotions they offer
4. Compare prices
Once you have collected pricing data from all of your competitors (or as many as you can), compare their prices to determine the average price range for pool services in your area.
This will help you to identify the going rate for pool services in your market and give you a starting point for your pricing strategy.
5. Identify patterns and key differences
Identify any differences between your services and those of your competitors that might justify charging more or less than the average price. For example, if you offer a more comprehensive service package than your competitors, you may actually be undercharging for your services without realizing it.
6. Run your conclusions by other pool service companies
This last step is the real silver bullet: picking the brain of other pool service company owners. Now, we see the obvious flaw in our logic: why would other pool service businesses – your competitors, after all – help you?
The answer to this dilemma is to find pool service experts outside of your TAM (total addressable market). This can be in another city, another state, or in online pool maintenance communities (such as Facebook groups or subreddits).
Let's stick with the Boca Raton example. If I were serving that area, I would stay in Florida, but perhaps look at other Tier 2 cities with similar GDP and job growth. That might lead me to Gainesville, Tampa, St. Petersburg, or Clearwater. From there, I can do more research, find pool cleaners in those areas, and reach out to pick their brains. Sure, not all of them will be eager to help, but many of them will, especially with the understanding that you're in a completely different market than them.
Step 2: Decide on your services
Once you've thoroughly studied competitors, the next step is to decide what services you'd like to start (or continue) providing. There are so many variables in this step:
- Do you service saltwater pools?
- What about indoor pools?
- Do you charge per hour, or per service rendered?
- What will you do if your best customer calls you about a broken pool heater during their Saturday evening pool party? Do you have weekend hours or special "emergency" plans?
Service Categories
Things get much more clear when you break down services into the following categories:
- Service types - Determine the types of pool services you will offer, such as weekly maintenance, equipment repair, cleaning the pool filter, chemical treatment, or seasonal opening and closing services. Consider the demand for each type of service in your area and the equipment and expertise needed to provide each service.
- Service level - Will you offer tiered service packages like "basic" and "premium," or just a one-size-fits-all approach for simplicity? Consider the time and resources required to provide each level of service and the potential demand for each level.
- Frequency of services - How often will you provide your services? Weekly, bi-weekly, or monthly? Consider the demand for each frequency in your area and the potential revenue you can generate based on how frequently you provide services. Competitor research and analysis also comes in handy here.
- Specializations - What specialized skills or niche areas can you focus on to differentiate yourself from your competitors? This could include services like eco-friendly pool maintenance or expertise in servicing specific types of pools or equipment.
Common Services
Some of the most common services offered by pool maintenance providers are:
- Ongoing check-ups and maintenance - This typically includes cleaning and vacuuming the pool, testing and balancing the chemicals, inspecting and maintaining the pool equipment, and adding chemicals as needed.
- Seasonal pool opening and closing - This service involves preparing the pool for the swimming season in the spring, including removing the winter cover, testing the water and chemicals, and inspecting the pool equipment. It also involves closing the pool for the winter, including adding winterizing chemicals, covering the pool, and shutting down the equipment.
- Equipment repair and replacement - This involves diagnosing and repairing any issues with pool equipment, such as pumps, filters, vacuums, and heaters. It may also involve recommending and installing new equipment when necessary.
- Chemical treatment - Chemical treatment can mean a range of different things depending on whether you're dealing with a chlorine or saltwater pool. But at the fundamental level, this includes testing the pool water and adding the appropriate chemicals to maintain proper pH levels and prevent algae and other issues.
- Emergency services - This provides quick responses to urgent pool issues, such as leaks, equipment failures, or other problems that require immediate attention.
Pool pros can also decide between different service models (all of which can be configured in Skimmer), including:
- Per month with chemicals
- Per month plus chemicals
- Per stop with chemicals
- Per stop plus chemicals
Step 3: Determine your costs
As pool owners can attest, a swimming pool is an investment. Research shows that a pool can increase the value of your home by an average of 7%, but that certainly comes at a cost, either to the pool owners themselves or pool cleaning service providers.
In service-based businesses, the equation for pricing is made up of three parts:
- Your desired profit
- The cost of goods and services rendered and operating expenses of your business
- Your pool service costs
To determine the cost of providing pool services, you need to identify and calculate all the expenses associated with offering your services. This includes direct costs, such as labor, supplies, and equipment, as well as indirect costs such as overhead expenses.
Labor costs
First, you need to calculate the cost of labor for your pool services. This includes the wages or salaries paid to your employees, as well as any payroll taxes, benefits, or other associated costs. You can calculate the hourly cost of labor by dividing the total cost of labor by the number of hours worked.
Supplies and materials cost
Next, you need to calculate the cost of supplies and materials used to provide your pool services. This includes pool chemicals, cleaning agents, equipment parts, and other materials necessary to complete the job.
Make a list of all the supplies you use and calculate the cost of each item, then add up the total cost of supplies.
Equipment costs
You also need to calculate the cost of equipment used to provide your pool services. This includes vehicles, cleaning equipment, and any other tools or machinery necessary to complete the job.
Calculate the total cost of all equipment used, including the cost of purchase, maintenance, and repairs.
Overhead expenses
Finally, you need to calculate the cost of overhead expenses, which includes rent, utilities, insurance, and any other indirect costs associated with running your pool service business. These expenses are typically allocated as a percentage of revenue or as a flat fee.
Once you have calculated all your expenses, add them up to determine your total pool maintenance costs. Divide this cost by the number of services you provide (or clients you service) to determine the minimum price you need to charge to break even.
Let's look at an example.
Example: determining the cost of pool maintenance services
Let's say you run a small pool service business that offers cleaning, maintenance, and repair services for residential and commercial customers. You have two full-time employees who are paid a combined total of $60,000 per year, and you estimate that you will work an additional 1,000 hours per year at a rate of $50 per hour.
Your supplies and materials costs include chemicals, cleaning agents, and equipment parts, which add up to $5,000 per year. You also use a van to transport equipment and supplies, purchased for $30,000, and has an estimated useful life of five years, with annual maintenance and repair costs of $2,000 per year.
Your overhead expenses include rent for a small office and storage space of $12,000 per year, utilities and insurance of $4,000 per year, and miscellaneous expenses of $2,000 per year.
To calculate your total cost of providing pool services, you would add up all of these expenses as follows:
- Labor costs: $60,000 (employee wages) + ($1,000 hours x $50/hour) = $110,000 per year
- Supplies and materials costs: $5,000 per year
- Equipment costs: $30,000 (van purchase) + $2,000 (maintenance and repairs) = $32,000 per year
- Overhead expenses: $12,000 (rent) + $4,000 (utilities and insurance) + $2,000 (miscellaneous expenses) = $18,000 per year
- Total annual pool maintenance cost = $110,000 + $5,000 + $32,000 + $18,000 = $165,000 per year
Assuming you service 75 clients per year, your minimum price to break even would be: Minimum price per client = $165,000 / 75 services = $2,200 per client per year.
From here, you can decide how you want to increase your client's lifetime value and how to break up that figure into appealing services that your prospects will actually buy. If you're shocked and appalled at your bottom-line figures, chances are you need a better way of tracking expenses, materials, and labor.
