Why We Created a Pool Industry Inflation Calculator
Every day, Americans are feeling the impact of inflation as they fill up their tank, check out at the grocery store or head out on the town. That’s why we developed our pool industry inflation calculator.
Within the pool industry, we’re feeling inflation, but at much higher levels than the national average. Monthly inflation for the past 12 months has averaged 5.7 percent nationally. Across the pool industry, it has been much higher–reaching between 25 and 35 percent in some areas!
Cost increases for pool equipment, chemicals, and labor have been rising faster than the rate of inflation.
This jump in the cost of doing business is hitting pool service companies hard and presents a dire challenge. Simply put, these inflationary pressures on costs can erode the profit margins of operations that aren’t actively managing them.
At National Pool Partners, we could not risk the livelihood of our employees or our commitment to our customers, so we had to do something.
Our Pool Industry Inflation Calculator is Open to All
We’re committed to data-driven decision making. Over the last six months, we’ve monitored an acceleration in operational overhead across the country. Cost to serve customers is a key profitability metric, and our weekly analysis was tracking alarming increases. So, we came up with a simple but powerful inflation impact tool.
We developed it to calculate a customized report that shows an operation’s increased costs resulting from inflation and a pricing model to maintain a sustainable margin. It also takes into account how the price increase might result in some lost customers.
This last point is really important. Our leadership team has been in the pool service industry for decades, and we’re well aware just how hesitant many owners are to raise their rates. The fear of losing customers to a cheaper competitor is deeply engrained within the industry. But as we looked around and saw that pricing remained stagnant even amid 25-35 percent inflation, we asked ourselves what could be happening?
This was obviously not sustainable for the industry. It’s impossible to know exactly why this was happening, but our sense was that because the national discourse has focused on the 7-8 percent inflation range, many in the industry understandably assumed that was what their business was facing too. At 7-8 percent inflation, these owners may have confidently felt that they could weather the storm.
So, one explanation for the lack of movement on pricing, we believed, was a lack of awareness of the how inflation was affecting the pool business specifically.
Another aspect we considered was the unprecedented nature of the current situation and, frankly, how it may have paralyzed decision making for some. We saw data and information as the clear solution to that scenario.
Our regional presidents, who have all created and successfully grown their own independent pool service brands, agreed that most pool service companies simply did not have the information to accurately determine what pricing change would serve their business the best.
Before we ran the data for our individual branches, we had internal discussions about what level of price increase might be warranted. In most cases, our gut feeling estimates were lower than what the calculator projected for us.
Creating a Healthier Pool Industry
At National Pool Partners, we know that achieving our mission of elevating the pool service industry means that we need to help create a healthier industry overall.
So, after going through this exercise and developing our pool industry inflation calculator, we decided to release this tool free of charge to anyone else who wanted to use it.
Our scale as a multi-regional pool service company gives us access to a unique and powerful set of data and analytics capabilities. Rather than keep those insights hidden behind lock and key, we’re sharing them—free of charge and without collecting any data or information from users—because we’re healthier when the entire industry is healthier. Our hope is that by providing additional information and tools, businesses will have what they need to make smart decisions that protect their business, employees, customers and our industry.
We hope you find our Inflation Impact Calculator helpful and that it helps instill confidence in charting your operation’s path and response to our industry’s unprecedented inflation rates.
If you do decide to use the tool, we’d love to hear about your experience. Feel free to shoot a note to hello@go-npp.com with the subject line “Inflation calculator feedback” to share your thoughts and feedback.
Wishing you a strong pool season,
Augusto Titarelli
