Stop Losing Profit: Fix Your Pool Service Billing Strategy

Welcome And The Pricing Dilemma SPEAKER_00 1:02 And welcome to the PoolGame Podcast Show. In this episode, I'm gonna go over if you should include everything in your service fee or if you should charge for everything separate. And I'll go over both strategies and the pros and cons of each one of these methods of how you charge your weekly or monthly service. Are you a pool service pro looking to take your business to the next level?

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Learn more at swimmingpoollearning.com. I'll start with what is considered the white glove service is when you charge for everything, it's all included in the service. All the filter cleanings, salt cell cleanings, the chemicals, the maintenance chemicals, everything would be included in one easy charge to the customer. Now this comes in handy if you have a bigger pool route with a with employees.

That way you don't have to really worry about you know charging the customer when the employee when the employee cleans the filter, or if they add trichlor tablets to the pool. Now this can get really messy when you get spikes in chemical costs as well. So this strategy kind of works, but you may want to adopt a bit of a hybrid model. Also, when you bid for service, this all-inclusive pricing is kind of a detriment when you're bidding against other companies that itemize things.

And basically, psychologically, if you tell the customer that your monthly service is $225 a month, and someone else quotes them $180 a month, but they charge for the filter cleaning separately, they charge for the trichlor tablet bucket, they charge for you know anything beyond the maintenance dose of chlorine and acid, then you're competing against someone who looks like they quoted a lower price. But if you add all those services together, filter cleaning, salt cell cleaning, trichlor tablets, it'll probably be close to what you're charging with the all-inclusive service. So again, charging one flat rate makes billing very simple and easy, and it kind of evens out. So, you know, some accounts may you may spend more money with shock and trichlor tablets, but then the salt pools that you're charging the same amount of money for aren't using tablets or chlorine.

So mathematically, it's kind of a wash in some cases if you look at it that way. It's Chemical Spikes And Employee Overuse SPEAKER_00 3:36 also very easy for you to do the billing every month. So if you have a big route with two employees, I say in 180 pools, having this flat rate service just makes things very simple and easy. Again, the major drawback is if certain pools are using a lot of chemicals, a lot of tablets, or if there's a spike in the cost of chemicals, this really does affect your bottom line.

And it also in a way gives the employees kind of a green light to just add a ton of chemicals to the pool. And this is something that you have to kind of control a little bit because if you do the all-inclusive billing and you're including the chemicals in there, and the employees adding, you know, two gallons of liquid chlory to this pool, you're actually losing quite a bit of money on that one service account. But again, if you look at it like everything evens out with other accounts, then you're not too bad off. You just have to control overuse of chemicals, and you just have to manage your pricing.

So you may have to increase your pricing every season to compensate for the higher chemical costs. Again, at the beginning, when you're trying to bid this, you may be up against others that don't include everything. I'm not a huge fan of the all-inclusive billing because I feel like you you can lose too much money in certain pools this way, and they don't really Why Itemizing Can Boost Profit SPEAKER_00 4:58 all even out. And you're you can actually capture more profit if you do more itemized billing.

The way I look at it is if you hire a contractor, let's say he's gonna remodel your bathroom, and he says, Yeah, I can do it for 10,000, and that includes everything labor, materials, whatever. But the contractor may go get the stuff at the store and realize that, oh man, the the process went up in price by $25, and I thought this tile would be cheaper, now it's more expensive. At the end of the day, when he finishes remodeling the bathroom, maybe he'll make $1,500 after all the cost and labor. But if he were to itemize it, which is what most contractors do, he'll give you a price for labor, and then he's gonna charge you all the parts you're gonna need with the markup on that as well.

And his profit may be $2,500 or $3,000 at that point because he's accounting for all the price fluctuations, the markup, all of this is accounted for. Kind of the same concept when you don't do the all-inclusive billing, you're charging for the filter cleaning. Now, in a place like Florida, where you have a lot of single cartridge filters, this becomes a little bit harder to do, and you may have to include the filter cleaning in your monthly rate. But here in California, Arizona, Nevada, Texas, where you have full-size filters, you know, the quad cartridge filters, full size D filters, you can easily charge for the filter cleaning after or filter cleaning outside of the monthly billing.

Now, what is the going rate to clean the filter? It really varies by region. Some areas are $85 or $90 the filter cleaning, others Filter Cleaning Rates By Region SPEAKER_00 6:43 are $110 or $120 of filter cleaning. So you kind of have to kind of see what the price is in your area.

If you call Leslie's pool supply and ask him how much they would charge to come out and clean the filter, because they do repairs and they do filter cleaning, they'll tell you the price, and you can kind of match it more or less in that range that they quote you, and you kind of know your area what you can get for the filter cleaning. Now, the reason why I like this is because sometimes filters need more than cleaning twice a year, and then if you need to clean it three times a year, you're going to make more income at that service account. Rather than if you include the filter cleaning for the larger filters and you clean it three times in that year, you're actually losing money. It's also a good motivator for you and for the employees that you hire that you know you clean a filter, you're gonna get $50 or $60, and that's extra money for the employee, and they'll be happy to clean the filters at that point.

Rather than you're gonna get paid this amount of money, the filter cleaning has to be done eventually every six months. So, you know, there's not a lot of motivation because there's no extra income for the employee or for you. So I think having the filter cleaning separately is a good motivator for you to go clean that filter. In my opinion, people are motivated by money, and Motivation And Extra Service Income SPEAKER_00 8:19 if the filter cleaning makes extra income that month, definitely clean that filter, and it's going to boost up your kind of your attitude towards doing the job basically.

It also is going again, if you're going to charge separately for filter cleaning, you can actually do more filter cleanings during the season if necessary and not lose that money. The trichlor tablets didn't really take hold, believe it or not, in my area of California till probably about 1992, 19 1992, 1993 is when trichlor tablets became much more prevalent, and the yellow sun tablets with the the bucket, the yellow bucket with the red lid were very popular in my time. Also getting the trichlor tablets in these big barrels with cardboard kind of barrels with the metal lid, kind of like with the conditioner comes in and your supplier. Tablets used to come like that to pool stores, and we used to take them and put them on our truck.

But prior to that, the person that trained me was using liquid chlorine and urinic acid, and he would actually itemize on a carbon Old-School Itemized Chemical Billing SPEAKER_00 9:41 copy kind of invoice. You would write down how much you put into the pool, how much you would charge the customer for it. It was really it was really kind of simple, you know, like liquid chlorine. If you added half a gallon, you would charge him 50 cents.

If he added a quart of acid, he would charge him like 40 cents. It was 1988, so things were a lot cheaper. Gas was under a dollar, believe it or not. And so basically, that's kind of how things operated for him.

He itemized everything, then he would bill the customer, the monthly service, plus the chemicals, and every month they would leave him a check in the timer or cash in the timer, and it would be the exact amount because it wasn't really online billing. Like now he would mail an invoice out, and they would write a check and leave it for him or mail him a check. So it's much easier to do this kind of itemized billing, in my opinion. Now it's kind of harder to not have a baseline rate and then adding stuff to it.

So I like a hybrid approach here. You can still itemize everything using an app like Skimmer. You can itemize all the chlorine and acid, and then every month the customer is going to get a bill that fluctuates. So let's say, for instance, your base rate is 185, you added these chemicals to the pool, and now the customer pays 198.

That's fine, and then the next month they pay 203 or something like that. To me, that gets a little bit confusing, it makes it harder to bill. The Hybrid Model For Predictable Bills SPEAKER_00 11:03 Although you do capture every penny and it goes back into your service and profit, but it is more complicated for the customer that every month the bill is different. So, what I like is a hybrid system of billing.

So let's just say your base rate is 185, and so every month you're going to charge them that. And this will include the maintenance dose of liquid chlorine and myratic acid. So putting a quart of acid in a week, and maybe putting a gallon of liquid chlorine every week or half a gallon. So that's kind of including those chemicals.

And you have to kind of set your base rate to cover those chemicals for all the pools across your route, regardless if it's a salt pool or not. And then if you add anything to the pool, oh, I should back up a little bit. You also would want to charge them for a 50-pound bucket of trichlor tablets when they need it. So charge them for the bucket of tablets, leave it at the service account, some are by the equipment, and thus your tablets are covered.

And basically, any other chemical you add to the pool, any kind of fossil remover or pool or x or enzyme, you're going to charge the customer that month for it. And then when you do the filter cleanings twice a year, you're going to charge them for the filter cleaning. So at least nine or ten of the monthly statements are going to be the same every month: 185, 185, 185. Maybe you're going to charge them for something you add to the pool.

You might want to make it a charge at the beginning of the season. This is something that a lot of pool companies incorporate in April, charge them an algicide or water conditioner charge, you know, $80 at the beginning of the season. That covers borates, covers pool RX, whatever you're going to add as an enhancer that'll be covered right there, or phosphated enzymes, whatever that covers it there. So that makes it even easier.

That that means that nine of the bills during the year are going to be the same: 185, 185, 185. One in April is going to be more because you're going to charge them the 80 or 90 dollars for the Aldricide. And then two times a year they're going to get a bill with the filter cleaning. To me, that's pretty clean and easy for the customer, and it makes things very easy for you as well.

Because most of the time you're giving the customer the same bill, and only three months out of the year you're actually changing that. Whatever the price I get, and a delivery fee. You could charge like $30 or $40 to deliver it. And that's basically it.

Of course, you're going to have incidentals during the season, pump baskets, bags of salt, anything that you're going to put in the customer's pool, you have to charge for. But the majority of customers are going to get the same bill every month. And to me, that's kind of what people expect. You know, Seasonal Add-Ons And Route Consistency SPEAKER_00 14:00 when I have my pest control, or when I have, you know, landscapers send me an invoice, they may add sprinklers to it here and there, or something else, or fertilizer.

But for the most part, every month I know I'm going to get charged X amount and doesn't fluctuate. This also will alleviate some of the price increase, price increase levels when you do it this way. I think I believe that you can raise the prices based on the liquid chlorine and acid going up and maybe gas prices going up. Versus if you're doing all-inclusive, the tablet prices go up, everything goes up, you're gonna have to charge extra for that, and you may have to raise your rates even higher than if you were doing everything outside of a white glove kind of service.

Again, if you have employees, a white glove service does make some sense because it makes things easy. But I also think itemizing is also a good motivator for employees when they get extra money for filter cleaning, and it also helps you keep track and make the filter cleaning more of a kind of a timetable thing. Like for instance, I'll clean the filters on my route in April, and then again in October, and that way it's consistent for the customer too. So they're gonna know that every April and every October they're gonna get a little higher bill with the filter cleaning charge in there.

I usually clean the salt cells when I clean the filters, so you can add that in also that month, and then maybe one more salt cell cleaning sometime during the middle of the season. Much easier, I think, to manage that than to itemize every single item and send a bill that's different every month, or to include everything in one bill. Things might slip through the cracks, and as chemical costs rise, your profit margin shrinks very rapidly. And employees aren't quite as careful when everything is included, in my opinion.

They'll just go crazy with the chemicals and they don't really care because you're paying for everything and they're not paying for anything. And I think lastly, it also makes it easy when the customer misses the extra charge. A lot of people will do drafts from their bank and they'll just put in an amount without looking at the bill, they don't open the bill up sometimes, the email invoice, and they'll just pay you 185. And let's say that month they had you had cleaned the filter and you had charged them 285 because the filter cleaning charge is 100 and they miss that.

Easy enough, you can of course message them and let them know that on the next bill they can pay it or they can pay you in between, and that way it's easy to keep track of that. Rather than if you're charging somebody, you know, 203 and 208. It's a little bit harder to correct the customer when they make a mistake at that point when they don't pay you enough for those for that bill when you're itemizing everything. Billing Mistakes Price Raises And Wrap-Up SPEAKER_00 16:41 And of course, the all-inclusive is very easy, you know, 225, 225, 225, and nothing changes.

So kind of make a decision on what you can tolerate as the operator and as the invoicer, because you're ultimately the one invoicing the customers, and what's better for you ultimately, you don't want to be spending days invoicing customers or you know, double checking everything and looking for missing money here and there. So I I find that the easiest system, in my opinion, is the one I that I spent most time talking about, which is a flat rate, including chlorine and acid, and then building them for filter cleanings, salt cell cleanings, any other extra chemicals that you may add to the pool, above and beyond that. Of course, charging them for a bucket of trichlor and leaving it there during the season. If you're looking for other podcasts, you can find those by going to my website, swimmingprolearning.com.

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Hope you guys have your week and God bless.