Here’s a sneak peak at my “State of the Industry” article on Marketing in Aqua Magazine next month…

In May of every year, Aqua Magazine produces a “State of the Industry” issue where various experts weigh in on what they consider to be the state of the industry within their area of expertise.

I’m all about marketing, so obviously I’m sharing my insights in that area.

And this year, I realized we have an unusual dynamic occurring here, with three different forces converging to produce a unique situation for our industry:

• Competition
• Concentration
• Consolidation

By themselves, none of these are shockingly unique. But when we put them together, we’re looking at a future unlike anything we’ve seen in a very long time, if ever.

First, there’s COMPETITION.

Certainly nothing new or unusual about competition. It’s been around forever.

But the dynamic is different this year, because of what’s happened over the last three years.

Remember the insanity of 2020 through 2022? Many homeowners who would have bought a new pool in 2023 went into panic in 2020, and bought it then instead. So now, not only are interest rates up and the economy down, and pools cost more than ever, but most of the 2023 pool buyers already got their pool.

Basically, the market of 2023 pool buyers evaporated before we ever got here.

This is not a good dynamic!

My recommendation:

Make sure your overall marketing plans and strategies are shipshape, and running on all cylinders, because it’s going to be brutal for the next couple of years.

Make sure you have:

• A clear and compelling message (that instantly explains why you’re the better choice).
• Powerful website content (that immediately engages your visitors, and makes them want to contact YOU).
• Hyper-responsiveness to inquiries (before someone else snatches them up).
• Intelligent advertising / lead generation (to get every possible lead out of every nickel you spend).
• And a respectable online reputation (because 1-star reviews will crater everything).

And we have CONCENTRATION.

(Of WEALTH. Not Brainpower.)

We’re talking about the shockingly lopsided transfer of wealth that occurred across society over the last three years.

99% of the world population saw
a decline in wealth over the last three years.

Meanwhile, the top 1% enjoyed an INCREASE in wealth, averaging DOUBLE where they were before. That’s a significant concentration of wealth into a small group of uber-rich people.

Great news for you,
if you happen to be serving the top 1%.

But if you’re running more of a “middle-of-the-road” operation, targeting more middle-class and upper-middle-class homeowners, well there’s no two ways about it. Your market just got smaller.

So now you have to make a decision. Are you going to continue targeting the exact same demographic you have in the past? Or are you going to concentrate your efforts on a more narrow, but also more lucrative and viable niche?

My recommendation:

We should take a close hard look at the demographics and micro-markets available in your area, and concentrate your energies, strategies and tactics on whichever one makes the most sense for you.

And now we have CONSOLIDATION.

(Our industry matured.)

Let’s talk about industry life cycles. Just about every industry will go through the following four stages of life:

• Emergence
• Growth
• Maturity
• Decline

The US swimming pool industry experienced “emergence” in the 1920s and 1930s, and then “explosive growth” after World War II, stretching from the 1950s to the end of the last century and beyond. Only recently have we seen “maturity,” which is recognizable by the following:

• In every market, there are lots of competitors all around.
• There are no new territories to burst into.
• So if you want to grow, you have to purchase a competitor.
• Now, suddenly, “mergers and acquisitions” is a common phrase.
• And outside consolidators are suddenly interested in our industry.

The most obvious example of this is in the pool service industry, where no less than five national pool service organizations have started gobbling up local service companies from coast to coast. Each consolidator has a similar goal, of becoming a major national player in the industry in the next 5 years.

Meanwhile, pool construction is also going through some consolidation, though currently on a more regional basis. We are seeing this in Texas, Florida and the northeast, and expect to see more of it in the future.

So what does this mean to you?

Well, if you’re a business owner on the north-side of the half-century mark, then “exit strategy” should already be part of your long-term thinking. Which means “talking to a consolidator” should probably be on your radar also.

I’m not saying you should outright sell to a consolidator. But I am saying you should probably have a listen to what they say when they come knocking. Because there are some real upsides here. For example:

• This might give you the perfect “golden parachute” you’re looking for.
• You will likely get a more honest and fair offer from a consolidator who does this for a living.
• If you plan to leave your company to your progeny, their chances of success might actually go up if your company becomes part of a national organization.
• Most consolidators want your employees to stay with the new organization, so their future is secure.
• And in fact, a national organization offers an advanced career path that a local business simply cannot provide.

Just keep in mind that in order to get a good offer, you’ll have to have (1) a profitable, systemized business that will keep running after you leave, and (2) a clean and detailed set of financials that confirm your viability.

FYI – Most businesses do NOT meet these requirements without a lot of advanced preparation.

My recommendation:

Get with an expert or coach who can help you set up your business to be highly attractive for sale at some point in the future.

Look for my full article on “State of the Industry” for marketing in the MAY issue of Aqua Magazine.