Is a Service Plus Chems Pricing Model Right for You?
The “service plus chems” pricing model, or service plus chemicals, is an innovative approach to pool service billing that could potentially revolutionize how you bill your clients. By separating the cost of labor and chemicals, you'll not only create more transparency for your customers but also unlock numerous benefits that can help your business thrive.
- Increased transparency for your clients
- Better cash flow for your business
- Easier quoting
- Motivation for customers to maintain water quality
- And the ability to adapt to fluctuating chemical costs
But it may not be for everyone.
To help you decide if a service plus chems pricing model is the right fit for your business, we hosted a webinar featuring Skimmer ambassador Bryce Sirrine and Michael Rodarte from Empire Pool Company, a successful pool service provider based in the Scottsdale/Phoenix area. Michael and Bryce shared their real-world insights on implementing this pricing model and explained how Skimmer software has made the transition seamless for their businesses.
In this blog post, we'll summarize the key points from the webinar and show you how Skimmer can help facilitate a service plus chems pricing model in your pool service business.
Table of Contents
- What is a service plus chems pricing model?
- Reasons to switch to a service plus chems pricing model
- How to communicate price structure change to customers
- How to use service plus chems in Skimmer
What is a service plus chems pricing model?
A service plus chems pricing model is an approach where pool service professionals separate the cost of labor and chemicals in their billing. This means the base service fee covers only the labor, while the chemicals used during pool maintenance are charged separately. This pricing model offers greater transparency for clients and allows pool service providers to better adapt to fluctuating chemical costs.
Michael summarized the pricing model concisely when he said, “Anything that we put into the pool is above and beyond the normal rate."
Reasons to switch to a service plus chems pricing model
Switching to a service plus chems pricing model can provide various benefits for your pool service business. Here are a few reasons why you should consider making the change:
If you notice that you're using too many chemicals for your pools, it's time to evaluate your profits. A service plus chems pricing model can help you maintain a more sustainable profit margin by allowing you to track chemical usage and expenses more accurately, especially when using pool service software like Skimmer.
Enhanced service quality
Charging separately for chemicals led Michael to treat his clients’ pools in a more bespoke way than a one-size-fits-all approach. “This model encourages you to care for pools in a more efficient and effective manner, ultimately improving your service quality,” he said.
Win-win for you and your customers
Bryce and Michael shared examples of how this pricing model can benefit pool service providers and their clients. By separating the cost of labor and chemicals, customers become more conscious of their pool maintenance, leading to better care and lower chemical usage. This can save money for customers and increase profits for your business. And best of all, customers become motivated to maintain better water quality.
Better data and accountability
Utilizing pool maintenance software like Skimmer allows you to keep accurate chemical usage records, making implementing a service plus chems pricing model easier. Michael explained how Skimmer streamlines the invoicing process and makes it simple to track chemical usage and costs and provide easier quoting to customers.
With these benefits in mind, a service plus chems pricing model could be the key to unlocking success for your pool service business. Michael reaffirmed this sentiment in the webinar:
"…[when I] finally made the leap, I found out that it wasn't hard to do, especially if you're already a Skimmer user, and then suddenly, I'm making tons more money. It's been a total game changer for me." Using Skimmer to facilitate this model, you can use the latest technology to optimize your operations and maximize profitability.
Risks of switching to a service plus chems pricing model
While there are several benefits to adopting a service plus chems pricing model, you should be aware of potential risks and challenges you might face during the transition.
One concern when switching to a new pricing model is the possibility of losing customers due to the change. To hedge against this risk, determine the maximum number of customers you can afford to lose without significantly hurting your business. For example, if losing ten customers won't have a substantial impact, it might be a manageable risk. It can be a scary prospect, but you can minimize the potential loss with proper planning and communication.
Customers questioning your dosage
As clients notice a change in their bill, they might start questioning your expertise and the chemical dosages used in their pool. It's important to keep accurate data on chemical usage and provide detailed service reports for your customers to address these concerns, thus earning their trust.
Using Skimmer, you can track chemical readings and dosages for each client, making it easy to demonstrate the rationale behind their bill. By presenting this information in a service report or discussing it with them in person, you can reassure your customers that you're not merely guessing what their pool needs but providing professional, data-driven service.
By being aware of these risks and taking proactive steps to address them, you can successfully transition to a service plus chems pricing model and reap it’s benefits for your pool service business.
How to price chemicals
When transitioning to a service plus chems pricing model, one crucial aspect to consider is how to price the chemicals. This decision depends on the goals and preferences of your pool service business.
Some businesses may aim to break even on the cost of chemicals, while others may want to add a markup to cover additional expenses, such as transportation, time, and potential waste. Michael explained his approach to pricing chemicals on the webinar:
"What I do is I look at my wholesale cost for whatever I'm buying. So if I go buy a quart of PR 10,000, whatever that costs me, I just divide that by the ounces, and then I put that into Skimmer,” he said. “This cost me three dollars an ounce, a dollar fifty an ounce, whatever it is, that's my cost. And then I figure out kind of what I want to charge."
Adding a markup on chemicals can help cover expenses like gas, time, and potential waste. Another approach is to price chemicals based on what a customer would pay for the product at a store, considering the convenience of the pool service.
For this approach, Michael suggested charging a similar price to retail stores like Leslie's or Pinch-A-Penny, factoring in the value of delivering and handling chemical hazards for the customers.
Communicating the price structure change to customers
When implementing a service plus chems pricing model (or any change in your business), customer communication is half the battle. Depending on your customer’s preference, you can tell them through email or in-person conversations., The key is to be proactive and transparent about the upcoming changes.
Michael began informing customers about the pricing changes months in advance. When explaining the rationale behind the new pricing model, he emphasized that the new system allows customers to be charged only for the chemicals their pool requires rather than paying for an estimated amount based on a less accurate guess.
How to communicate price structure change to customers
When transitioning to a new pricing model, it's essential to communicate the change effectively to your customers. Here are some strategies to help you inform your customers about the new pricing structure:
Be proactive and communicate ahead of time
Inform your customers about the upcoming pricing changes well in advance, giving them ample time to prepare and ask questions. This proactive approach will show that you value your customers and are committed to providing transparent and fair service.
Opt for the most personable communication medium
Choose a communication medium that best suits your customers' preferences and makes the conversation more personable. For example, Michael was friends with another pool pro who went door-to-door to discuss the pricing changes with his customers. This approach resulted in almost zero attrition, as customers appreciated the personal touch and direct communication.
Use relatable explanations
Explain the benefits of the new pricing model in a way that resonates with your customers. Michael suggested saying something like, "Everyone's pool takes different amounts of chemicals. I only want to charge you for the chemicals you need and what your pool requires, rather than charging you the same amount for a pool down the street that has parties all the time (and therefore uses more chems)." This explanation highlights the fairness and customization of the new pricing model.
Use email templates in Skimmer
If you have a large number of clients and want to expedite your communication, Skimmer can help. Pool pros can leverage email templates in Skimmer to streamline your communication process, ensuring that your customers receive consistent and clear information about the pricing changes. This will save you time while keeping your customers informed and engaged.
How to use service plus chems in Skimmer
Skimmer also has built-in compatibility with the service plus chems pricing model. Here’s how to access it from the Skimmer dashboard:
- Go to the Customers page in Skimmer.
- Click on Service Rates for the customer you want to update.
- Change the rate type to "Per Month Plus Chemicals" or "Per Stop Plus Chemicals" depending on your preference.
If you want to update the rate for multiple customers at once, you can select them and use the "Bulk Update" function.
Updating your reporting figures to match the service plus chems model
Now, we you must ensure all your reports accurately reflect your chemical prices. Here’s how to set this up:
- Click on "Settings" and then "Readings and Dosages.”
- In the “Cost / UOM” and “Price / UOM” fields, enter the cost per unit for each chemical you use. The price will show up on your invoicing reports.
- Finally, use the profit report in Skimmer to monitor customer usage and ensure that you are charging appropriately.
It’s that easy! You can now utilize the service plus chems pricing model on some or all of your customers and produce detailed reports showing them their chemical usage and corresponding fees.
Switching to a service plus chems pricing model can be a beneficial move for pool service businesses. However, it's important to understand the risks and potential challenges of this pricing model.
To mitigate these challenges, it's important to communicate the change to customers proactively and using a personable medium. Additionally, pricing chemicals in Skimmer can be done by calculating wholesale cost and applying a markup to make it worth the time and effort.
Skimmer also provides an easy way to manage pricing and track customer usage. To learn more about how Skimmer can manage every part of your pool service business, visit our features page, or if you’re ready to get started, click below and try Skimmer risk-free for 60 days today.