Growing Your Pool Business: Digital Marketing, Private Equity, and More with Ryan Flannery of Pool Monopoly

In this episode of Between Two Stops, Niki Acosta of Skimmer talks to Ryan Flannery from Pool Monopoly about marketing in the pool service industry. They discuss the shift towards digital marketing, the rise of private equity in the industry, and the strategies pool companies can use to attract and retain customers. Ryan shares insights on buying vs. building routes, the importance of reviews, and setting realistic expectations for marketing investments. They also touch on website design, automation, and the evolving landscape of online advertising. Tune in for valuable advice and perspectives on navigating the modern pool service market!

Transcript

Niki Acosta (00:14.222)

Welcome to your ultimate diving into the latest trends and topics in the pool service industry, bringing you insightful conversations with the best and brightest industry experts, inspiring stories from successful business owners and educational insights to enhance your skills and knowledge. Buckle up between two stops by skimmer starts now.

Niki Acosta (00:40.844)

Welcome, welcome, welcome to Between Two Stops. I'm your hostess, Nikki Acosta, and I'm pretty excited about today's guests. We've got Ryan Flannery from Pool Monopoly joining us today to talk about marketing. Hi, Ryan.

Ryan Flannery (00:54.909)

Happy to be here.

Niki Acosta (00:56.776)

We are happy for you to be here. We've been working together for, I don't know, about the last year or so at this point. And we're very, very excited to have you on. You can tell us about Pull Monopoly. I you all specialize in marketing for pull pros, but tell us your story briefly of how you got to where you are today.

Ryan Flannery (01:03.729)

Yeah, yeah, it's been a long time.

Ryan Flannery (01:22.685)

Yeah, it's kind of a weird one. we, um, we started a pool company in late, uh, 2021 and, uh, my partner and I didn't know anything about pools really at that time. And, uh, we kind of dove right in, no fun intended. Um, but we, did, and we, thought it was going to be really hard. And actually back then it was kind of simple. Um, we kind of had to learn everything from the ground up though. We didn't end up buying any routes. We didn't end up doing any acquisition. did everything organically.

And we went from zero to about 650, 700 pools in about like 17, 18 months or so, give or take. We had quite a few employees on the road, a of stress, but a lot of good things. And we ended up selling that business and then we ended up starting Pool Monopoly, you know, a year and a half ago, give or take. And yeah, now we kind of try to help other pool companies get leads and get more clients and

even sell their routes, help them find routes. We help kind of do everything. And yeah, it's been really fun, especially being partnered with you guys makes it a lot easier. you know, we have a lot of clients that are very happy with both Skimmer and Pool Monopoly. yeah, I think it's been pretty fun to be honest.

Niki Acosta (02:42.968)

Well, we are absolutely glad to have you as a partner. know, one thing that I've learned in the course of working in marketing now for longer than I care to admit is that it's tough, right? There's a lot of technologies out there. The algorithms are constantly shifting and changing. And as we saw with our recent release of the State of Pool Service report, there are

a lot of people now jumping into the digital marketing game. Pull companies in particular, we've seen kind of an increase across the board of people that are now relying on paid sources to get traffic. And you and I have talked at length about kind of the build versus grow via marketing investments.

And so I'd like to get your kind of perspectives on that, because I know you do a little bit of both. How did those two...

Ryan Flannery (03:44.443)

Yeah. So I think you could kind of blame us for a lot more of the new page search going up in the lead vendors going down. Yelp, Thumbtack, Angie's List. I, you know, if I had it my way, they wouldn't be in business at all, which would be really fun. they're pretty bad platforms and the lead cost is insane and you don't really get much. it creates kind of a massive funnel of everybody just

getting shopped to the bottom and it drops prices for every pool company when everyone has to go 10 bucks cheaper than the next guy. And before you know it, you're getting unprofitable accounts, which is worthless. But as far as the buying routes versus building routes, right? That's a big thing that we, sometimes dissuade people from buying routes. But sometimes it makes sense for people. think, I think the days of going and having to go buy routes as your only source of acquisition of new customers is

probably dead with online stuff. It's definitely a lot cheaper. It's obviously a little slower than having to go and buy a route and take over all of that revenue instantly. But it's one of these things that if you can go acquire new pool customers at three, 400 bucks per account in marketing spend, and they're instantly worth $1,500, $2,000, $2,500.

You're essentially putting in $1 and getting back $6, $7, right? Which is a really great return and that's kind of what we try to do for our clients. selling routes makes a lot more sense than buying them. That's kind of the thing that I always tell our clients. And it does make sense for some folks that want to buy versus build. If they start out and they want to buy 50 pools to try to get the hang of it, it's really more of a training process and learning process rather than a good

business decision, or it's one of these types of deals where you're working with a private equity firm and we work with a lot of private equity firms to help source them deals or do anything, right? Even marketing as well. have some pretty large clients here that use Skimmer too, some 4,000 plus pools. And they all want to buy mainly because they're racing to a certain number, right? And they can go and buy routes at

Ryan Flannery (06:03.581)

8, 9, 10, 11, 12 X and they're instantly worth a lot more because they're rolling them up into their massive brand and they can buy a pool account for 1500 bucks and it's instantly worth 4000 at scale, right? Because they go from a top line multiple valuation to an EBITDA multiple, right? Which is a lot heavier. So those guys are doing it very differently than most people. And that's when it really does make sense to buy.

is when you can actually have some leverage. But for most people, it doesn't necessarily make sense unless you're getting a really, really good deal.

Niki Acosta (06:40.846)

So, yeah, I definitely want to dig into the private equity thing a little bit more here in a minute, but as far as what you're seeing, I think there's this kind of, there is a sort of set of expectations that need to be set when you're investing in digital marketing. The mileage that you get out of your digital marketing spend is going to be highly dependent on your local market.

Ryan Flannery (07:01.021)

Mm-hmm.

Niki Acosta (07:08.758)

you know, what others are doing, how much they're spending. You know, I know you mentioned there was a customer, both of ours, that was in an area where nobody was doing digital marketing and you were able to grow them super, super quickly because they just absolutely dominated the digital space. But can you give us some insight on what kind of things to expect if you're going to invest in digital marketing and where that money actually goes?

Ryan Flannery (07:21.533)

Mm-hmm.

Ryan Flannery (07:37.223)

Yeah. So really good question. So I'll start with the person that is in a very small area. Blue water pool service. And he would be okay with me shouting them out because he's a good friend of mine. Brian, very good business owner, very dialed in processes. Great guy. He's in a place that has about 80,000 population.

And so we initially launched Google ads and I told him, I'm like, I don't think there's going to be enough search volume coming in to even spend enough money to get results, right? You only pay for a click on Google. if no one's searching, then nobody will be opting in and becoming a lead. Right. So we started with Facebook ads for him. Um, and we actually just went over all the numbers like two weeks ago or so, cause he hit about a year with us and we did all Facebook, all Instagram ads.

He got a bunch of good images, videos. We edited everything. We split tested a bunch of different targeting. We ended up really killing it in that market. He ended up spending about $30,000 last year. He got about 150 or so new accounts for 30,000 bucks. And then he also got about $300,000 worth of pool liner replacements as well. So he absolutely killed it. And they have a really good team.

They're closing 40, 50 % of leads that come in, which is really high. We have some clients that are a lot lower than that. And that's conversations that we have to have and kind of put the onus back on them for that. Like you mentioned is that it can only take you so far because there's a second half to it, right? We can, we have some clients that get 20, 30, 40 leads in a month and they only close one new account. And then we have some clients in different areas that are.

maybe a little less saturated and they only get 12 leads in a month, but they closed 10 accounts. Right. So it's a very, it's tough, right. And it's probably the same with skimmer. You have some people that understand the product and some people that just don't understand the product and you have to just try to help and, know, put your resources to where, you know, you're giving people the attention they need if there's a deficiency. So I think, I think that's probably the biggest thing that we've, we've seen is we, we see some people getting leads for

Ryan Flannery (09:48.861)

$150 a lead and we see some people getting leads for $40 a lead. And it depends on the market. It depends on the saturation. It depends on a lot of factors and we try to set the proper expectations, but sometimes you don't really know until you're launching. But we always try to set honestly, pretty low expectations for that reason.

Niki Acosta (10:09.166)

It's also a reason why you are not taking new clients in certain markets too, right? Because you don't want your clients competing with each other for ads.

Ryan Flannery (10:14.756)

huh.

Ryan Flannery (10:19.621)

Yeah, we can't write and we do have some areas with multiple clients, right? For example, Phoenix is a massive market where you could probably spend $20,000 a month in Phoenix if you were the only person. So for us to have a few clients is not a big deal because they're only spending 1500 bucks a month, $2,000 a month. And we do very different landing pages, very different websites, very different brands. Nobody would ever even notice, but

We do tell clients, there are certain markets where we can take on a couple of folks. but a lot of markets, like, especially the one that blue water is in, he's the only person that we can take on. Cause if we took someone else on it would absolutely slaughter. And, and we just wouldn't do that. So I think that's a big thing too. And I think a lot of people really sleep on the fact that some of these small markets absolutely kill it. some of our best performing markets are the really small ones.

People love to think, I'm in Phoenix. It's a hot weather. This is going to be great. It's going to be so easy. There's another 1500 pool companies that think the exact same thing and they're spending money and they're running ads. And we turn down so many people every week that want to sign up because we're full and we put them on a wait list. And if someone cancels, then someone signs up the next day and takes the spot. cause there's always someone wanting to spend, especially when pool routes are as expensive as they are. people want to spend money on marketing.

Niki Acosta (11:43.438)

So in terms of the people who are doing it right, the ones that are closing the 10 out of 12, they're picking up the phone or responding quickly. But what else are you doing well, like in their sales process, in their acquisition process? I would imagine that the companies that are out there that are spending on digital marketing aren't necessarily competing on price. So what is it that companies that are winning deals through digital marketing, what is it

Ryan Flannery (11:51.228)

Mm-hmm.

Yeah.

Ryan Flannery (12:08.029)

Mm-hmm.

Niki Acosta (12:13.176)

that they're doing right.

Ryan Flannery (12:15.131)

Yeah. So like, for example, we work with priority and they're massive, massive company. And I work with their salespeople directly because we have kind of a special deal worked out and they're really good people. The salesperson, she's fantastic. She makes almost six figures a year selling pool service, which is pretty amazing. And she works really hard and she's closing about 35, 40 % of leads at scale, getting hundreds and hundreds a month.

which is pretty amazing with a premium premium price, probably 10, 20 % higher than everyone else. Mainly, you know, we set up a lot of automations. It's a lot of followups to get these people in the door and then really good sales scripts where she's actually building value of like why we're different than the other companies, right? And understanding like, Hey, if you're looking for the cheapest pool service and you want Chuck in a truck, who's not going to be insured, bonded, licensed, then we're probably not the right fit for you. Right.

The other thing too, that people really don't, don't, you know, take as seriously as they should is, is having reviews, having the reviews just sells it yourself. For example, priority has over a thousand reviews at averaging a 4.9 star, even on Yelp. have 400 reviews at a 4.9, which is almost impossible on Yelp. Like that's, it's almost impossible. So to have that at scale is pretty amazing. And that makes my job a lot easier. We, we can see two people, in the exact same market.

like a Phoenix market and one person will have a hundred five-star reviews, the other person will have 12 and that person with a hundred will get a lot more deals closed because these homeowners, when they opt in and you talk to them, they'll say, cool, thanks for the quote, let me think about it. And they Google you. And if you have bad reviews, they just won't go with you. So that's another factor that we sadly can't control. And that's something that we see is massive. And as far as the sales process, it is about picking up the phone.

Our clients on average, every month out of the thousands of phone calls that we generate, miss about 30 to 35 % of those phone calls. which is really sad because those are gone, right? And they paid money for that phone call and they missed it. And someone's going to call the next person on Google, right? Or the next person they see on Facebook ads. So that's kind of the biggest thing. And it sounds cliche, just pick up the phone. But if you do pick up the phone and you call people back,

Ryan Flannery (14:37.085)

you're ahead of like 90 % of people.

Niki Acosta (14:40.686)

That's great advice. And by the way, we did a marketing 101 guide with tips on collecting views, branding, digital marketing channels. If you are new to digital marketing and want to learn more, head over to getskimmer.com slash resources and check out that marketing 101 guide. was a ton of work that went into that and very well designed and thought out. And thank you, Ryan, for.

Ryan Flannery (14:50.514)

Mm-hmm.

Niki Acosta (15:10.818)

working with us and providing such great content that we could provide to.

Ryan Flannery (15:15.207)

Yeah, you I just write it out and you guys make it look really good. So, you know, send you a bunch of scribbles. But yeah, it's really cool. And there's definitely a lot of stuff in there that I think people will like. We go through every channel, Google, LSA, SEO, Facebook ads, the lead vendors next door, all that kind of stuff. It's really interesting to see kind of everything shifting. you know, like I mentioned earlier, we get called every week, booked on our calendar for private equity folks looking to get into the business.

Niki Acosta (15:21.003)

You

Ryan Flannery (15:44.951)

And, you know, we're, helping them find pool companies to buy. they buy a lot of our clients. Even we, we do that quite a bit to where the, these big firms are coming in and, know, if they say, Hey, we want someone that's like 500 pools and we have clients, we, tell our clients, Hey, this is what they're looking for. And people, make deals all the time. We did one last week. and. yeah. A lot of them are, especially for the first one. Right.

Niki Acosta (16:06.2)

Are they willing to pay a premium though?

Ryan Flannery (16:12.519)

they're willing to pay a premium because they want to get into space and they want management in place too. Right. So if you have good management, if you have good staff, they will pay a premium. Absolutely. A lot more than the route brokers will get anybody by far. if it's a bigger company, if it's a smaller company, then you're looking at normal pricing, but you just don't have to pay all that commission to the route brokers. So, you know, it's pretty cool. I think it's really interesting seeing how different the space is from back when we were in it.

only three, four years ago really to now. I will say it's gotten a lot more expensive to get pool accounts back then. We used to be getting pool accounts for our pool company at 80 bucks an account, 100 bucks an account. And now, if you're at three, 400, you're killing it because there's a lot more sophisticated people coming into the space and you got to keep up.

Niki Acosta (17:05.07)

Can you repeat that? So what are people generally paying for accounts with you?

Ryan Flannery (17:11.581)

$300, $400 per account, maybe $500, depending on the market. Some of them are lower, some of them are higher, but that's kind of what we shoot for. And that is ad spend, right? So you do spend $1,500, $2,000 a month. You should be getting at least four or five accounts a month, which seems low, but in this market, it's not too low, especially because of how saturated it is. And we have some people that do a lot better, but like I said, I think that should be a pretty good baseline.

that people should be doing. And it makes sense too. If you can go get five accounts for 2000 bucks, then those accounts are worth 8,000 bucks, right? If you want to sell them. So you turn 2000 into 8,000 and you do that for a couple of years and you've got a really great business. It's not easy. mean, we have some clients spending $20,000 a month on advertising, right? And we have some that are spending a thousand and the people that spend 20,000, it goes a lot further. I'll say that for sure. It's really a big difference.

Niki Acosta (18:11.242)

And you have a lot of customers that are just leveraging Pull Monopoly to build and manage their websites too. And I definitely want to talk about that because I visit a lot of company websites. And one of the things that just always stands out to me is on the front page, people don't say what area they service. And I'm like, how am I supposed to know if this is an ideal pull company for me or as a

Ryan Flannery (18:17.2)

Mm-hmm

Mm-hmm.

Ryan Flannery (18:24.967)

huh.

Ryan Flannery (18:32.113)

Yeah, it's crazy.

Niki Acosta (18:40.046)

pool company owner, how do you ensure that you are building a route in your preferred location if you're not telling people what that preferred location is? And I think that's one mistake that I see a lot of, especially smaller companies that are aspiring to grow. One mistake that they make is that they will take anything in their area and then their drive times are just, their service area is so large with such a small crew that they end up.

Ryan Flannery (19:06.983)

Mm-hmm.

Niki Acosta (19:09.07)

losing an opportunity to be even more profitable by keeping that service area a lot tighter.

Ryan Flannery (19:18.001)

Yeah, there's, there's two ways to do it. Right. Like if you want to go balls to the wall, right. And you want to go take on every account, you're going to see a lot lower margins, but you're going to get more accounts. If you want a smaller area, you're going to see higher margins, but you're to get less accounts. So it depends on people's business model. Like for us, we took on everybody, but we also got to 150 accounts in like four months. So it got, you know, tough when you're hiring a new technician every like three or four weeks.

So that gets really exhausting. but a lot of these people have very, very tight routes, which is more profitable and more desirable, especially on an exit as well, which is pretty cool. But with that being said, it's like, it's not the right model for everybody. and I think that people have to find out what, works best kind of for them. and depending on their market too, right? If you're in Phoenix, you have a lot more search volume, but if you're in, you know, some random suburb.

And there's not much search volume. You're, you know, there's not that many people searching. And when people aren't searching, they're not becoming new accounts. So it gets really difficult, but there's always a strategy. And between Meta and Google, there's always something that can be done. And as far as websites, we, do a lot of websites. some people just want websites and we really don't charge very much. we're usually just around a hundred bucks a month, give or take.

Some higher, some lower, depending on what folks want. And we don't charge three, four, five thousand bucks upfront for them usually unless someone wants something very custom. But yeah, we make really, really cool websites. And if you sign on as an agency client, we do it for free. And we revamp everything and we make it really, really cool. And that helps a lot because the brand is huge, right? I mean, a lot of people still have business cards that people look at. A lot of people see an ad, they go type in on Google, they go to your website.

Niki Acosta (21:04.686)

Thank you.

Ryan Flannery (21:14.255)

A lot more people see people's websites than they realize. And even from Yelp, even from Thumbtack, even from Angie's List, people go to your website and if it's bad, you're costing yourself at least a few leads a month. You know, if you do that for a year, you probably missed out on 10 pool accounts. What's that worth? 20,000 bucks, right? So it's all these little things that add up, right? At the end.

Niki Acosta (21:37.558)

And y'all obviously know what works. mean, I would imagine that there are, despite regional differences, volume differences, pricing differences, you all have probably a really good idea of what a good website should have. And you also can help customers set up automated follow-up for these too, right?

Ryan Flannery (21:53.191)

Mm-hmm.

Ryan Flannery (21:58.533)

Yeah, absolutely. So we tie it into our system and they'll be able to get lead notifications. We can make sure that they, you know, get a text message after they opt in, right? So someone goes to the website, we can set up, you know, chat bots on the website to where they can click to text and all those cool things that I think help a lot of these folks out. And the website thing is something that we started more recently doing, but we've done hundreds of them now. And it's been really fun because people really

enjoy it and we have built 2030 plus really good templates out that we customize. And these are not like go daddy templates. These are all built in web flow. very custom, a lot of automation, very vibrant, very different. and people have been really happy and we don't have to charge $5,000 to do it. we just kind of eat that on the front end and you know, kind of just do it to, know,

We really want to help and we want people to be able to do better with the agency and this helps that. So for us, it's like, we don't really need to make that much money on it. just, it helps everyone as a whole, I think, which is really important. Just helps the whole industry really. Like we want thousands and thousands of people on websites because I think it's a, I think it's the bare minimum that people can do and it can make you look very different from the competitors with not that much expense being put out.

Niki Acosta (23:23.286)

Yeah, look, I worked for a hosting company for a number of years. And, you know, one thing that I learned about websites is that you, if you're, you know, a small business, you probably want someone standing behind that website and making sure that it's updated and that it's secure and that, you know, you're updating, you know, the underlying software as patches come out and updates come out. It's not just, you can't just throw up a website.

Ryan Flannery (23:39.825)

Mm-hmm.

Niki Acosta (23:50.994)

and let it run forever. Like there's going to be things, know, security vulnerabilities that are found that, you know, people will patch and you have to update your website. So I think for a hundred bucks a month, your website is a

Ryan Flannery (23:52.997)

Nope.

Ryan Flannery (24:04.741)

And we do unlimited changes too, right? So like if people want to change their phone number, they want to change any design stuff. We do all of it unlimited. And, I think that helps a lot. And I think it's, we probably could charge a lot more, but it just depends, you know? we definitely could, but like I said, I think for us, it's like, it's a volume volume game. And I think, I think it's worth it for the industry as a whole. And it's been, it's been fun. It's been really cool to be able to do it.

Niki Acosta (24:18.614)

Yes, you could.

Ryan Flannery (24:32.699)

make it affordable for literally everybody. If you don't have an extra hundred bucks a month to actually have a website, then it's going to be a tough road. Yeah, I know. we go back and forth sometimes. We've charged a lot more. We've charged, you know, this is kind of the bare minimum, but we've charged a lot more depending on what folks want and depending on the upkeep and stuff like that. But honestly, yeah, it really does start pretty low, which is pretty cool. I mean,

Niki Acosta (24:41.73)

You're not charging enough.

Ryan Flannery (25:00.953)

It's, it just depends on kind of what, what people want and kind of, you know, how we can help. But like I said, I think it's the bare minimum that people can do and not everybody can go spend a thousand, $2,000, $3,000 a month on advertising, but you know, in this market and with how much churn there is in the pool business, you, have to, you have to be able to spend money on it or else you will just dwindle to zero at a certain point, or you won't be able to scale. And I think what's so hard about the pool business is that.

If you want to go hire a new technician, you're going to need to go and get accounts and you're going to need to be able to do it quickly to fill up their route so they can make a full-time income as well. And it's very hard to do that off of just referrals. It's almost impossible. And people have done it. People have built really good businesses, but it takes years and years and years instead of months.

Niki Acosta (25:49.754)

Which is, if that's what you want to do with your pool company, great. You know, if you want, you want slow and steady growth and you want to provide, you know, a premium level service and, you know, be that guy who answers or gal that answers the phone every time a customer calls, then great. There's no shame in running a business like that. There are many, many pool pros and single pullers out there who have made a living, you know, providing really amazing service and growing via referral.

Ryan Flannery (25:52.113)

Yeah, totally.

Mm-hmm.

Ryan Flannery (26:16.413)

Yeah, and it's just a different business model. like for us, we're a lot better at marketing than we are at cleaning pools. And a lot of people are the opposite where they're a lot better at the actual job than they are at marketing. And for us, I think our model was like, let's get as many as we possibly can and then sell it. That's pretty much how it was. And honestly, I think we even sold it too early. If we didn't sell it, I think we'd be probably like 1500 pools by now, maybe 2000. But my business partner, Reese, would have probably had a

panic attack by now. So I think it's, I think it's worth it. It's definitely worth it. think we like being on this side a little bit more. It's definitely, um, when you get to over like 500 to a thousand pools, gets, it gets pretty brutal. I've got stories for days on that.

Niki Acosta (26:47.458)

Thanks.

Niki Acosta (27:03.438)

I'm sure you do. Let's talk about marketing budget real quick because we did ask a question about how many or how much people are spending on marketing just in general. it was actually kind of surprising to me. So for the 2000 plus respondents, 42 % are spending less than 5K a year, which a couple of...

Ryan Flannery (27:06.555)

Mm-hmm.

Ryan Flannery (27:15.569)

Mm-hmm. Yeah.

Ryan Flannery (27:30.213)

Okay.

Niki Acosta (27:33.934)

you know, wraps on a truck and some, you know, branded gear for your team and you're probably in that 42%. But 22 % are spending between five and $10,000 a year and 15 % are spending between 10 and $20,000 a year. So you've got, you know, a good chunk. It's kind of split, right? You've got half people, including the, don't know how much I'm actually spending on marketing.

Ryan Flannery (27:39.868)

Yep.

Yep.

Niki Acosta (28:03.81)

You know, you've got a little less than half of people that are spending less than 5k and then you've got everybody else.

Ryan Flannery (28:03.869)

Yeah

Ryan Flannery (28:09.533)

Yeah. And I think that's like, that's really interesting to me. And I think we're a little bit, um, I think, I think what we see is a little skewed because our clients spend a lot, but we want those clients. If people come to us with a $500 a month budget, it's, it's not really going to do anything at this point in time, right? Maybe in like 2018, 2019, back when there wasn't so much private equity in the game.

We have private equity firms coming to us and saying, can I get to 2000 accounts in one year? Can I spend a hundred grand a month? Right. Like those are the people that are coming into the space and it's pretty scary to think, but it's also like, we have to step up as like small business and be able to spend the money. And I know it's hard, but yeah, I think that like 1500 to $2,000 a month is probably the bare minimum to grow at least 50, a hundred accounts a year. I think that's the biggest thing. And then also allocating that.

during the months that it makes sense. For us, we don't lock people into contracts. We have a lot of people that will pause in the winter time, which is totally fine. And they'll come back in February, March, April, May, and they'll go do eight months a year and just spend a little bit more for those eight months and turn it off for four months because they want to save money, which is totally fine. I think that makes a lot of sense. spending it during the right time of year is important. And I think it's interesting that only

Basically one out of 10 people are spending enough to even kind of work with us or even get on Google ads. know, Google ads in a lot of these areas are $20 a click, a hundred dollars a lead, right? So if you're spending 500 bucks a month, you're getting maybe four or five leads a month, which is, that's tough. You know, that might be one account. And I think that used to work and now it's just gotten more expensive. Back when we were in the business, we were spending five bucks a click and now it's 20 in the same market.

So the lead cost has gone up 400 % in two and a half years.

Niki Acosta (30:09.376)

And the data that we collected in our state of pull service report definitely echoes what you said. looks like this year there has been a 61 % increase in paid search over... It's all your fault, Ryan. And search engine optimization.

Ryan Flannery (30:26.247)

Might be all of our clients. It might be. Yeah.

Niki Acosta (30:34.414)

19 % increase in spend for search engine optimization than there was a year prior.

Ryan Flannery (30:40.669)

Yeah, and people are getting off organic social, posting on Instagram, Facebook organically without running ads behind that. Kind of a waste of time nowadays, to be honest with you. I hate to say it, but...

Niki Acosta (30:52.172)

Yeah, are designed to show you stuff that people are paying to show you, right?

Ryan Flannery (30:57.851)

Yeah. And it's not like it's, you know, organic TikTok stuff where you're advertising products that could go viral and UGC style content. That's not what it is. I mean, it, doesn't really make sense to spend time to post a picture of the pool you just cleaned and say, we do pool service. It's pretty much a waste of time. to be honest, I mean, we have clients that offer to pay us to manage their social media. And I'm like, Hey, look, don't pay us anything. Don't even bother with it because it just, it doesn't make sense.

It maybe did like seven, eight years ago, maybe. Um, but it just doesn't reach anybody nowadays. You know, you have to buy space. have to pay, pay Mark Zuckerberg. That's all he cares about. Um, yeah, yep. You got to pay for it. And that's just how it goes. And I think the paid search is really interesting because that's Google ads. That's Google LSA. Um, that's intriguing. That's gone up a lot. mean, 61 % is insane. And you're seeing that as a direct correlation to lead costs going up as well.

Niki Acosta (31:36.206)

Pay for those animals.

Ryan Flannery (31:55.545)

It's going up for everybody in almost all home services, but especially pools. And it's just because there's so many people that are going in. mean, there's funds that are coming in ready to spend $50 million on acquisition. A lot of the older folks that I talked to about this, all the old PE fellows, they're like, this is how plumbing was in like 2013. Everyone's coming in and they're rolling up everybody. And it makes sense and it's a great business. So

If it was me and I still had my pool company, I would be just going, you know, it's so hard on trying to get as many accounts and planning an exit in the next 12 months and cashing out and doing something different. That's what I would be doing. And I think that's what a lot of our clients are doing is they're, you know, they're wanting to really cash out at the end of it. And it's, you know, it's great. And then someone buys it and then they have their turn to go and make some money and spend some money to grow it and do their thing, whatever they want to do. And some people want to just hold it forever and make income.

And that's amazing too. It just depends on what you want to do.

Niki Acosta (32:54.894)

So speaking of private equity, this is another question we asked in our report. The question was, within the pool space, there's been an increase in private equity investment leading to company roll ups. How do you view this for the industry? 17 % said great, fine, positive, awesome. 26 % said negative. The rest are neutral or don't have an opinion at this stage. It is clear to me that especially in the Sun Belt, especially in major

Ryan Flannery (33:05.949)

Mm-hmm.

Niki Acosta (33:25.014)

metro areas that there is, like you said, a ton of money coming in to space and a lot of roll-ups happening. How do you think about these roll-ups? You work with the smaller guys, you work with private equity firms. How do you feel about the private equity entering the space?

Ryan Flannery (33:32.157)

Mm-hmm.

Ryan Flannery (33:42.631)

Yeah.

Ryan Flannery (33:47.239)

think it depends like who you want to be and what your story is. think if you're, if you want to be a couple hundred pools and you want to be able to run advertisements and grow your business every year, I think it's scary. because if you don't plan for an exit, then you're never going to benefit from private equity coming into space and driving up your lead costs.

But if you do want to exit at some point, which is probably like most people, want to at some point, because the pool business is hard. You can't do this thing forever. It's not easy. People have like five, 10 years in them. then they're like, you know, I'm good. I'm going to go do something else. And I think it depends if you want to build something pretty amazing and sell it and get to a thousand pools and cash out. I we've seen a thousand pools go for, you know, $4 million. It's a lot of money. And I think, you know, we've seen four or 500 pools go for over a million.

well over a million at times. And if you want to get there and cash out, you should be very happy that private equity is coming in because they're going to pay a premium as opposed to Joe Schmo buying your company because they want to get in and they want to buy everyone else. And they're willing to pay a premium for the first one they get into because they want your staff, they want your management, they want all of it. And I think that's kind of the biggest thing with this whole thing is like, if people are going to try to get in and private equity is like, Hey, we've identified this is something I want to attack.

which they did this with pest control. They've done it with HVAC, plumbing, roofing, garage doors. They've done it with everything and pool service is now what's happening. I think it just depends what side of the fence you sit on. If you want to sell at some point, then you should be happy. If you never want to sell, I would be a little bit scared because it's only getting a little more difficult to acquire customers organically with a lot of these people spending so much money. So yeah, it just depends who you are and your story.

Niki Acosta (35:35.758)

One thing I've noticed too about the private equity firms that are out there is they're able to scale their operations. They're able to scale their marketing functions and their marketing spend. Yeah.

Ryan Flannery (35:44.849)

I mean, look at Casey Graham. I mean, and he's not even a private equity person. He's, you know, he's a business owner. He's, you know, just like us, just, just better. And honestly, it's a, he did it pretty much self-funded and, he did it on a smaller scale than some of these guys, but he did it in a really, really fast and big way. and he did pretty good for this industry and he killed it, but absolutely killed it. And that model is.

really interesting to do what he did in two years is really impressive. And, you know, a lot of people are trying to emulate that. A lot of people are trying to emulate that. So if you want to sell it, you're going to cash out, but you're only going to cash out if you have enough accounts. So to me, get as many accounts as you can. If it makes sense to buy and you can get a good deal from someone retiring or they offer seller financing, right. And you can pay, you know, five X upfront and maybe five X on the back end. That's amazing too. You know, just

Try to get as many as you can when it's not getting more difficult. Cause I think if paid search keeps increasing 60 % a year, that's a direct correlation to lead cost. 60 % a year. And that's literally what we've seen in three years, 60 % times three is almost 200%. And so in some markets it's even more than that. so yeah, it's really interesting data.

Niki Acosta (37:05.41)

you're competing for eyeballs, right? And the more people competing for those eyeballs, the more expensive it's going to be. mean, digital ad spaces is limited, right? There's only so many ads you can put up.

Ryan Flannery (37:11.463)

Very simple.

Ryan Flannery (37:17.852)

There is, and there's only so many searches. And so if you have a thousand people a month searching for pool service and you have a 50 people advertising for it, it's going to be more expensive than if you had a thousand people searching and only 10 people looking, right? Google is going to charge less per click, which results in a cheaper cost per lead. And now we have so many more competitors coming into the space and they're like, yeah, I don't care. I'm going to spend 10,000 a month. You know?

Niki Acosta (37:42.296)

So if I'm a pull service company owner, and I've got couple hundred pulls, how do I sell against these private equity backed companies with amazing branding and flashy websites and all the reviews? How would you position yourself against a company like that?

Ryan Flannery (37:58.236)

Mm-hmm.

Ryan Flannery (38:05.245)

Well, I think those people have to be more expensive because they have more overhead, right? So you're by definition going to be a little bit cheaper on price. And two, if it was us, and I think my main pitch would really be like, I'm the owner operator and I'm going to take better care of your pool than some corporate enterprise. Right? Like I think that's probably the biggest pitch that I would use if I was still in the business. It's, look, I know there's a lot of these big companies coming up and they're charging you a lot of money.

And for us, we don't have to do that. And we have really good pool technicians, an owner operator, we're family owned, right? When we run ads for our clients, everything is family owned, locally operated, right? And we take a lot of pride in that. We even have pictures of the owners on the landing pages and websites because people love that. They prefer that. And even for private equity firms, we still have pictures of the local operators because people want that. They want to see that it's not some big conglomerate.

you know, not to call anybody out, but you have people like pool troopers and ASP and people know those are just massive, massive companies that, you know, they don't want to give them their business, but they're spending the most money. So they're being seen the most, but if you can get in the space of 200, 300 pools and you can compete against them and still get some eyeballs, you're going to win, especially if you can sell it properly and you'll, you'll take their business because when they get that big, the owners are not present.

And you have managers, managing managers, managing managers, and things are going to slip through the cracks and the reviews are not going to be as good as your reviews. It's very, very hard to be thousands and thousands of pools and have really good reviews. One of the only companies that did it. Yeah, it's almost impossible. And like I said, Priority is probably one of the only companies that has managed to do it that we've seen. but if you look at those massive conglomerates, their reviews are usually atrocious. So cost them a lot.

Niki Acosta (39:44.782)

It's hard to spell quality.

Ryan Flannery (40:01.391)

on that because it's huge. So it's not that hard.

Niki Acosta (40:02.786)

What is priority doing right, if you're allowed to say?

Ryan Flannery (40:07.105)

one of the owners is extremely, extremely involved still in even in five different markets. He's flying around. He's meeting with all the managers, right? All, all the managers are very dialed in and they pay people very, very well. You have people managing pools that are making six figures a year. So when you pay people well, you get better people and the pool industry sometimes doesn't want to pay people well because it's, you know, low margin. How do you get higher margin? You have to charge the customer more.

But when you charge the customer more, you can pay your employees more. And when you can pay your employees more, you get better reviews. So it's kind of pick your poison, right? If you want to be cheap, you're going to get cheaper labor and worse customer service, but you're going to get more accounts because you're cheaper, but you might not even retain them because your labor's not as good. So there's, there's such a fine line between being able to charge enough to justify good management and good employees and

too little to where you're going to get bad reviews because you can't even afford to go back and clean something. You can't afford to right your wrong, right? If someone messes up a heater install, you can't afford to give them a free heater. But like these big companies that have good reviews, they will make it right. A $5,000 mistake, they will cut you the check. Someone like Priority will do it if they mess up. yeah, even minor things because reviews are everything and

Niki Acosta (41:25.762)

Yeah, or credit your account for even minor things, right?

Ryan Flannery (41:32.989)

I think a lot of people get pretty emotional with the customers and I've been that way too. you know, we didn't, we didn't start with much money in the pool business. We didn't put that much money into it. And you know, someone wants free service. Someone wants this, that it's like, I can't afford that. You know, when you make 20, 30 bucks a month off of an account and you give someone a free month, you just worked eight months for free, giving them one free month, you know? So it's really tough. I empathize with these pool company owners because it's not easy. It's, it's really difficult. It's a very low margin business, but

The biggest thing that you can do is set yourself up to sell it at some point. I think that's what everyone should have in front of them is they should be trying to set themselves up to sell it and make quite a bit of money and even rebuild it. We have a couple of clients that sold routes last year and they're rebuilding them again and they're going to sell them again. We have like five people that are doing that and I think it's great. I think it's really cool because they'd rather do that. They'd rather go sell it for 500,000 bucks than continue to make 100,000 a year.

Niki Acosta (42:33.154)

Yeah, I met a guy recently at the trade show in Texas, the International Show, and he said the same thing. He built a company, he sold it for a bunch of money, he stayed with the company that acquired his for a while, and then he was like, no, I'm kind of burned out on that. I want to go back and do it all over again.

Ryan Flannery (42:50.683)

Yeah, why not? It's fun. I mean, it's a really cool business model. I think it's something that people should definitely consider at some point. You know, it's one of the only spaces where your product is an actual commodity and that it actually has enterprise value, right? So like you actually can go acquire a hundred pools and sell that for 150,000 bucks. You can't go do that in other spaces. If you have a plumbing company that does a hundred K a year, no one's buying that.

Cause it's not recurring. So you pretty much only have like landscaping pest control and pool service. And really pool service is the biggest market for the recurring accounts to actually be exitable, even if they're small. So, you know, I think it's pretty cool. I'm, I'm excited to see what happens this year. I think it's going to be really interesting. I think overall people just need to invest in marketing and obviously it's self-serving because I have a marketing company, but it's also, there's not much other options, right? You either are growing or you're dying.

Niki Acosta (43:21.58)

Right.

Ryan Flannery (43:50.673)

Those are the options. There really is no in-between sometimes, unless you've been around for a while. A lot of these folks that have been around five, 10 years, they have such a great referral base and for them, they can replace any churn with referrals. And I think that's amazing. We're talking with a client actually in Florida who wants to sell his company and he's never spent a dollar on ads until he was working with us. And he's got, 400 pools and all of them are in like a four mile radius.

Like an insane business. took them 17 years. So, you know, that's tough. 17 years is a long time. So it just depends kind of what you want to do. No right or wrong answer, really.

Niki Acosta (44:33.644)

Yeah, and look, the last thing I'll add is that I've been at Skimmer now for three years, and I will say that it's pretty evident that the type of folks that are getting into this business are younger, they're tech savvy, they believe in digital marketing, like, you know, the...

there's a change of the guard happening in the pool space. And I know plenty of folks who have spent their entire lives building their own pool companies. But I think we're starting to see the tide shift, like having software and making sure that you're spending on digital marketing is almost becoming table stakes, right? if you're not, yeah, if you're not.

Ryan Flannery (45:01.597)

Mm-hmm.

Ryan Flannery (45:25.413)

It's a bare minimum now. Like it's, I think it's crazy when people don't have software. Like we, we have some people that sign up and obviously we just refer them all to skimmer. But what's funny is like, we have a lot of people that like, I don't have any software. And we're like, how do you have a hundred pools? And they're like, I just remember that. That's just unbelievable to me. Like it's a, it's an absolute must, especially for it's such a small price to pay.

to have software and honestly marketing is way more expensive than software and people still won't have software. I find that crazy that you're going to spend $2,000 a month on marketing and you don't have a software. That is wild to me. But you know, that's just kind of how it goes. I think it's a learning process. I think it's an old school business and I think the tides are turning though. They're really, really turning. We even in the last like six months. yeah. Even in the last six months, it's been

Niki Acosta (46:14.84)

And it's happening for us. Yeah.

Ryan Flannery (46:19.651)

unbelievable. Logan, our sales guy, every day it's another private equity firm. And then I end up talking to them and they're like, yeah, we want a billion accounts in the next hour. And we're like, all right, you know, it's, it's really interesting how it's working out. But you know, it's fun to see it play out, but you know, it does make our job harder. You know, I wish that leads were five bucks, 10 bucks, like they were 10 years ago, it would be fantastic. But it makes our job a little harder doing it like this because

There's so much competition, but we just do the best we can and try to shift and change with the market. But at the end of the day, you're either growing or you're dying. It's really not easy nowadays, but it's still very doable. We have a lot of clients that do really, really well and every market's different, but we'll find a solution that makes sense. That's all you can do is just keep pushing.

Niki Acosta (47:13.442)

and balance out what you're spending on which channels and seeing how they perform and doing the AB tech like you talked about and see what does better in market areas. All that is expertise well worth paying for. Speaking of, if somebody wants to get a hold of you and pull Monopoly, whether it's a website or digital marketing or even just to shoot the breeze and talk about how they can improve.

Ryan Flannery (47:21.394)

Yeah.

Niki Acosta (47:39.31)

you know, their business even with minimal spend, what is the best way to do that, Ryan?

Ryan Flannery (47:44.071)

Just go to Poolmonopoly.com. You can check out our website. You can see some stuff we've done. We've launched a new website a few months ago and it's pretty cool. And we've got a bunch of stuff on there and you can book a call. You'll talk to Logan and he can go through kind of everything with you and go read the Skimmer Pool Monopoly ebook too because that goes through a lot of stuff and some case studies in there as well with clients and you know, yeah, it's been really fun and yeah, just.

Reach out to us. We're happy to chat. talk to well over a hundred, 200 pool companies a month and we love doing it. So yeah, feel free to reach out. We love talking pools. We're pool nerds, Nikki and I, think all of us are. We somehow ended up here and it's all we think about. So we love it. It's so much fun.

Niki Acosta (48:33.048)

Well, Ryan, thank you so much for taking the time to join. I'm sure our listeners will appreciate this. And if you are interested in that State of Pool Service Report, is available for free on our website at getskimmer.com slash state of pool service. And you can access the free download there. So.

Thank you again, Ryan, and I'm sure we'll have you back sooner rather than later and also see you in real life at some point soon. So thanks for joining.

Ryan Flannery (49:03.867)

Yep. Thanks for having me. We appreciate it.