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     I think that the way that you present the pricing to a customer matters. Specifically, in recurring services here in Florida. The two services here that have very dominate price presentation “ways of doing it’’ are lawn mowing and pool maintenance. Just look at the Skimmer Service Rate Index and you can see that 94.1% of all skimmer users are presenting with a monthly flat rate with chemicals included. Here in Florida when a customer asks you for your price on mowing or pool services, they are already expecting to receive a monthly flat rate number, with no asterisks or caveats. I like to think that this is happening in a Pavlovian way. Meaning that the customer has been trained or conditioned to expect the price presented in a specific way.

     I am not concerned with the “how we got here” in this situation, rather I wanted to discuss the history only so that we can solve the problem of how to fix the problem of flat rate pricing in pool service.

     I am new to the pool industry but I am not new to the recurring revenue model in home service businesses. When I first started doing lawn care I was advised by someone who is very popular on Youtube (specifically in the lawn care vertical) to offer a per cut price. I connected over the phone with this person through paid coaching and he was emphatic that the per cut price model was the way to go.

     I moved forward with this model, but quickly saw that this way of price presentation caused friction to the sale. I would quickly receive looks from clients if speaking in person or pauses of confusion if over the phone. These would be followed by the questions of them trying to figure out what their bill for the month would amount to. They would say, how many visits is that going to be, or other questions that would all be pointed at trying to know a specific number. Mind you that my presentation for mowing services was very clear. I would email it and go over it in person or over the phone. It would state the per/cut price and it would state the frequency of the visits. People would get tripped up on months with in which they would receive a 5th visit in that month. For example, if you look at July of 2024, and the customers service day is on Monday and their frequency of service is set to weekly mowing then that means on a per/cut price model they will have a larger bill for July 2024 then they did for June 2024. This spurs calls from customers with questions or it kills sales for leads that instinctively know this equals fluctuation in monthly price and revert to a flat rate price because it feels more comfortable.

     This same situation can arise in pool service when a customer is presented with a fluctuating variable such as chemical costs in their price quote for weekly service.

     I suspect that at the heart of pool service owners not addressing this issue in a more calculated way is that most owner/operators don’t know their numbers. More specifically, they don’t know how much they are profiting or losing on each customer. I suspect that they throw out the generally accepted flat rate price, and then hope and pray that there is a net profit after the dust settles and the chemical costs have been paid.

     The way that I see this problem being addressed is in one of two ways. If you can present another way please share with us so that we can come up with the best solution that benefits our industry.

Option #1

Charge a flat monthly rate and then monitor the chems and adjust the flat monthly price up for those that are not getting the right profit margin.

     A pro is that customers expect a flat rate price, so that can help reduce sales friction and keep close ratio at good levels. However, a con is that you don’t know this pool or its usage. This means you may lose some money in the first few months or until you raise prices accordingly after analyzing chem usage on that particular pool. Another con is that you are going to have to send the email with a price increase explaining why the increase. However the reason for the increase is not arbitrary. I would present the increase in a letter that showed the chems usage being higher, rather than a more vague approach of overall inflation as an excuse for the increase. Another pro is that home services are generally quite sticky. Meaning that if you do a good job, answer your phone, look professional and are honest you can raise prices without losing many customers. This happens because at first people don’t trust you, so a simple pricing method can generally overcome this. Then when the price raises come they don’t leave because you have now gained trust and they simply don’t want to find someone else to trust. So that cost difference in the raise is worth the price of the trust gained.

 

Option #2

Charge a flat monthly rate w/ a plus chems model.

     A pro here is that the cost of chems going up doesn’t matter because you are going to maintain the same margin because that increase just goes to the customer. The con is that now you have to sell either new or existing customers on the idea that this is somehow better. My belief is that most customers don’t want to abandon their pavlovian impulses toward a flat predictable rate. Further, some are so busy they won’t even listen they will just do what feels familiar. People don’t always buy what is best for themselves they buy what has been best marketed to them.

     If I had a magic wand I would make option #2 the norm for the pool service industry, unfortunately I don’t have such power. It would ensure excellent bottom lines for us all. I personally think that I will be moving forward with option #1, because my personal goals are to scale up, and when you want to scale I believe that you have to keep things simple.

     I am sure there are all kinds of views on this topic and specific experiences to share from others in the industry that can help us tackle this issue. I am excited to hear some views on this topic.

I concur. When I was first starting out and developing what my pricing structure was going to be this is exactly one of the things I thought of. Most if not all of my competitors in my area, choose the flat month fee price which also includes chemicals. I thought that this method seemed a bit problematic in the sense that, if there were 5 weeks or 5 service visits in that month? Do they charge more, or do they just eat those costs? Rather than deal with all that I implemented a per service pricing or a weekly price. Like you state in your post, when I do present this to the potential client, they quickly try and calculate what the monthly cost is. As they fumble around with that, I let them know what the cost would be if there were 4 weekly service visits for that month. Sometimes they will ask why I do it this way and I simply tell them, that to me, it's a much more transparent way of pricing. I give them an example, that If I told you we charge $175 a month but maybe your service day is on a Tuesday and there happens to be 5 Tuesdays in a given month and I charge you more than the $175, then you’re going to be calling me thinking that I over charged you. I Also, feel that when I tell the client that we are only $$$ per week that it sounds like such a smaller, affordable and more appealing number to them. They also say that they appreciate the transparency in my pricing structure and agree with why I do it the way I do. 

We charge based on the frequency of service. We clean residential pools weekly, vacation rentals twice a week during the season, and commercial pools 3 to 4 times per week. This system is consistent from our point of view but some customers are surprised by it. Once I explain that our schedule ensures their pool is cleaned regularly and doesn't miss a week, they usually understand.

Wanting to bring this topic back from a few months ago.  The new year is coming and that’s always a good time to adjust things.  We are an older, established business with a little over 300 weekly clients (monthly billing), but growing the maintenance side.  Most of the pay by mail, pay after the service (end of the month), and paper door hanger customers have converted (we still have 20% that are hanging on to paper billing - most are doctors, lol)  We have always had a monthly payment with weekly service model.  All chemicals included.  Up to this year we also included cartridge filter cleanings and adjusted rates higher for that, but we now charge for cartridge filter cleanings.  

Our opinion was the customer wanted a consistent payment on a consistent date with no surprises or extra charges (unless it was a repair).

Well, this year we changed that model with charging for filter cleans.  

We also adopted a mid month billing where we send the bill mid month and it is due on the first of the next month before service (pre-pay for services or a subscription).

Now I am toying with the idea of a 4 week billing cycle and although you can seemingly negate a price increase by moving to this model (you sneak a 13th invoice in the year) and give the customer the illusion of no price increase, just another invoice at the same price, it’s a battle to decide if this might work.

4-week billing changes the due date of the invoice every month (not always due on the 1st).  Also, with a 4 week billing cycle the customer gets billed twice in one of the 12 months of the year.  Which brings up another item I think can have good benefits.  The week of Christmas can be an off week for the techs, skip that week of billing and that would negate the one month with double invoicing for the customer.

 So the question is, has anyone used the 4 week billing system, if so what results have you had?  

Hey Everyone.

We decided on weekly charge, billed monthly at the beginning of the month. Offering auto-pay for no additional charge. To my positive surprise, about 35% signed up for this option right away and are now paying in the beginning of the month, rest of customer, make their payments drizzling in thru the month, mostly at the end. 

Yeah the bill fluctuates each month, but as long as the invoice justifies the charges, it doesn't raise any issues. 

For the accounts that always lag with payment, im considering offering 2xbilling pr month. Has anyone explored this option?

Camilla @ WaterWorks

I'm in NY and have presented my pricing as a per week plus chems structure. I explain what they should expect cost wise with shocking and tabs, if it's not a salt water pool, and then the occasional PH or Alk adjustments. I also tell new customers that I like to use the LSI to balance water so we will likely need to add $100 to $150 worth of calcium to the water.

 

I have not had any push back for this structure but I'd like to say in our area this seems to be the norm. My weekly starts at $115/week + chems.

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