Water Treatment: Still A Steady Flow Of Business
As the water treatment market builds momentum, more and more plumbing service contractors acknowledge its potential for profitability by adding it to their business diversities. But it doesn't end at the kitchen sink anymore.
All of today's new plumbing and heating technologies - from tankless water heaters to high-end fixtures - work best with treated/purified water supplying it. And it's up to the professionals to bring that to the customer's attention, says Jim Krenz, plumber for 33 years and owner of Amy Plumbing and Heating Inc., Elgin, Ill.
“Properly treated water cuts down on the maintenance of an entire plumbing system - toilet mechanisms will last longer, faucets will last longer, appliances run more efficiently,” says Krenz, a former river water plant operator and a Class A water treatment specialist.
Since its inception in 1984, Amy Plumbing has witnessed the evolution of the water purification market first-hand as its hometown underwent a rebirth right outside its headquarters' doors. With booming new construction and a shift in local utility water supplies, Krenz decided to take his water treatment department seriously, and positioned Amy to provide its customers the gamut of services for all things water.
Complementing Amy Plumbing's experiences, PM recently completed its Water Treatment/Purification Equipment Study, which ultimately points to a growing and steady marketplace that plumbing and heating professionals can continue to tap into.
It also suggests that those not involved in this segment of the plumbing service business are missing out on an easy way to add value to the services already offered to their customer base.
Survey SaysMost noted from the survey was that 60 percent of readers already are installing water treatment/purification equipment, with one-third of water treatment professionals reporting annual revenues between $10,000 and $25,000.
Respondents' views on the market are encouraging: 60 percent said the water treatment market stayed the same this year, while 35 percent saw an increase in business. Of those that saw an increase, one-third saw more than 25 percent growth. As a projection, 72 percent of respondents believe the water treatment installation market will increase significantly over the next five years.
Like Krenz's customers, respondents list homeowners' concerns about taste and odor of their tap water as the strongest reason for purchasing water treatment equipment (94 percent). About 75 percent of homeowners are looking for professionals to solve their water hardness problems. Chlorine, most recently addressed in the media and in water quality arenas for its long-term adverse affects, received 63 percent of respondents' reported consumer concerns.
To treat these concerns, 84 percent of PM water treatment professionals said they use cartridge filters for water/taste issues. Water softening equipment is installed by more than 74 percent of respondents, and reverse osmosis systems were installed by roughly 60 percent.
This summary of PM's survey results offers a positive outlook on the water treatment/purification market, proving that it can't hurt to diversify your business to include this profitable installation service to your customers.
Amy - Treating Water ProfitablyThe year is 1984. The beautiful Fox River Valley, roughly 30 miles west of Chicago, has just undergone a major change in municipal water systems with the construction of a new river water plant, which supplies water to the city of Elgin and its neighbors to this day.
Previously, customers received their water from deep artisan wells, and the product was consistent: the earth's natural aquifers hadn't changed much from the beginning of time, supplying naturally filtered water for most of the valley.
With customers' water now coming from an ever-changing surface water system - with a natural turnover in the spring and fall - the taste and quality of tap water was now … different. Not bad, just … different.
“And 'different' is perceived as bad,” says Krenz on the discerning palette of consumers. “People like what they're used to. If it changes, they say it doesn't taste good. And that opened up a market for us.”
Back in 1984 Krenz was serving as night operator of the newly opened river water plant, and at the same time he also was putting the final touches on his newly named plumbing service business, Amy Plumbing & Heating.
Being a strictly residential service contractor - leaving behind the new construction and commercial markets - Amy Plumbing had to take plumbing service to the next level and provide complete assistance to meet all the needs of its customer base. For Krenz, adding water treatment to his diversified company was a no-brainer - even back in 1984 before it was fashionable for consumers to know what was in their drinking water.
Up until a 1986 code change, it was illegal for anyone but a licensed plumber to install water treatment equipment in Illinois, so that automatically set up service plumbers as “experts” in the field. But the one thing Krenz will not do is make the assumption that, as a plumber - even a Class A water treatment specialist - he knows everything.
“When we decided to be more serious about the water treatment and conditioning industry, that's when I went out looking for a partner to give us the background knowledge on the products we were using,” Krenz says. “We didn't feel that we - even as licensed plumbers, so-called 'experts' - had adequate capabilities to go out and make decisions for our customers without someone behind us who had greater depth of knowledge.”
He began to search outside conventional channels for his water treatment equipment. Krenz was really looking for the training and support he had come to expect from his plumbing and heating reps.
“There were experts on boilers and piping and fittings, but no experts on softening,” Krenz admits, whose business had recently started offering tankless water heaters to its customers and felt water conditioning and this new technology went hand in hand. “We prefer not to install a tankless water heater unless it has fairly soft water. It cuts down on the maintenance of the equipment.”
That search for a go-to company for technical support led Krenz and Amy Plumbing to a relationship with Springsoft Inc., an international OEM of water conditioning and filtration products.
The informal “handshake” relationship works as a two-way street. Spring Soft provides Amy Plumbing with reliable products in a very timely manner, with background information and expertise on the industry, and Amy Plumbing techs are out there installing it in customers' homes.
When the 17-20 Amy technicians are in the field in the presence of the customer, they occasionally come across something that stumps them. At that point, they need to give the customer the confidence that the problem will be taken care of as soon as possible with an answer from an expert.
“We don't need voice mail or phone tag, and three days later a live person is found, all the while the customer is having water quality issues for a week. That's not soon enough. We want to deal with a problem today,” says Krenz. “If you're going to build a plumbing service business that treats Saturdays and Sundays just like Monday thru Friday, you need to have these people in the background who are available like that. You can't possibly know all the answers all the time.”
Spring Soft's Erick Browark, a third-generation water specialist, says the company is happy to offer its 45-year industry expertise to clients.
“They learn from us and we learn from them,” Browark says. “Amy does an excellent job of communicating to its customers about how these products can work for them, and if we can supplement that in any way then we certainly will try to pursue that.”
Time Is MoneyThe evolution of the consumer has had its effects on the water treatment market. The level of research the consumer does when he decides to invest in a water treatment system is skyrocketing. Which is good because poorly run companies are run out of business, says Krenz. But the expectations about what professionals should deliver have risen as well.
And people are willing to spend money with you today, Krenz observes. The educated consumer understands that higher quality products cost more money, but it also helps to have technicians versed in the ways of communication and cross-selling techniques to be able to optimize a visit to a customer's home.
“In our industry, it used to be that the best in the business were the ones who could fix things the best. That's changing,” Krenz says. “Today, unless a service technician is a reasonably good communicator, he doesn't stand a chance with customers to explain the added value.
“We came up with a 'Peace of Mind Provider' sheet for the technician who was initially uncomfortable with presenting options of Amy's other services to customers,” says Krenz. “They use this tool to begin the conversation. 'Here's an item you may want to take a look at while I'm doing the repairs,' he may say. 'I have special prices today if you see any concerns you want addressed. We can look up the price together when I'm finished with this task.' It's an ice breaker without being a sales pitch.”
To make sure all water treatment selling techniques are up-to-date, Amy Plumbing conducts weekly staff meetings to address issues or concerns. During that time Krenz, his technicians and his service manager, Jason Glover, can voice opinions about any problems that have come up during the week.
The company's monthly Shop Dinner Meetings take on larger issues and are training-focused. These mandatory nighttime meetings get every Amy technician together - from drain cleaning to HVAC - so they all can understand new products and converse with a customer about water quality needs. This across-the-board tactic in selling options to consumers - whether on a no-heat call or a stopped drain - optimizes the service call, because time today is more important to people than a few dollars.
“You only have so much time when you're invited into someone's home to find solutions to their problems, and to ask leading questions to see if water quality is a concern. In that time, you must present them with options for other things that may be done,” says Krenz. “You can't go in and do the $40 repair and leave. You lost money, and the customer wasted his time. You have to optimize the appointment for 1) the customer to realize the added value, and 2) for us to make up for all the cost it takes to get that $55-an-hour man in the $55,000 vehicle to the customer's house.”
Krenz has even found that more and more customers are getting upset when things aren't noticed on a service call. Today's customer may ask, “Why didn't the plumber ask me about the taste of my tap water?” or, “Why didn't he notice my water softener leaking?”
Big Box Vs. The ExpertsAmy Plumbing makes its bread and butter on “Mom and Pop” customers. These are generally homeowners from the “boomer” age with a bit of disposable income, who've done the DIY bit over and over again, but are now ready to leave it to the experts.
The company boasts 3,000 customers to its Amy Discount Club service agreement membership, where Amy technicians visit three times a year for maintenance and service. By keeping updated maintenance records on all its customers, though, Amy sets itself apart from the big boxes.
“The one thing we can offer people is if you buy the product from us, it's ours. We're there. Someone's going to answer the phone and take care of your problem and put you at ease,” Krenz says.
“Consumers go to the big boxes and they'll see a product labeled 'water filter,'” says Browark on the misconceptions and misleading price points found at retail. “I've seen a lot of people apply filters in a very upside down and backwards manner: filters too small for an entire home environment; filters installed for the wrong purpose; purification used for sediment, etc.”
Krenz agrees. “We see plenty of misapplied water softeners, which can be similar to boilers, furnaces or other home appliances that are beyond the scope of most homeowners. Water softening is not a plug-and-placement process; there's more to it.”
For Amy Plumbing, water treatment customers are low-maintenance customers. As part of a service call, a technician - supplied with all previous service records and appliance history - comes out and performs a checklist. So, for example, if a tech makes a call for the furnace, and the customer has an RO system that hasn't been serviced in the last nine months, Amy Plumbing makes sure there are membranes and service materials on his truck to take care of that as well.
Keeping the work history records for customers of Amy Plumbing is just the responsible thing to do, according to Krenz, and it brings the company's service to another level.
“People don't switch doctors every time they have a headache. Doctors have your health records,” says Krenz. And it's the same with Amy Plumbing customers. “They know the relevance and importance of having that same information is just as important in what we do to their home for water treatment or any other equipment we service.”
Words To The WiseKrenz offers his suggestions to those on the fence about entering the water treatment market, and No. 1 is align yourself with a partner, not just a vendor. Someone to supply the product and the expertise to back it up.
“If people getting into the market take it as seriously as getting into HVAC or backflow prevention, then they should get the training as well as search out the technical support,” Krenz emphasizes. “And I don't just mean searching out price lists or product brands; it shouldn't have anything to do with that.”
Also, if you're ready to take water treatment seriously, accounting-wise you'll need to separate it off as a unique division of your company. “And track it,” Krenz says about his ability to compare sales and marketing numbers more closely with water treatment as a separate department.
Keeping abreast of new products and systems on the market is also high on his list of priorities. Krenz has noticed that by re-focusing his technicians every so often during the year in training on water treatment equipment and sales techniques he sees, for several months after, a definite increase in sales for those products and services.
“You'd be surprised how quickly your sales can grow and how your customer base can grow. How much more effective you can become in your market,” says Browark of adding water treatment to your business. “One company can see water treatment as so explosive - and it sure can be with the right motivation and the right people - that water treatment can overtake and turn one company into another. It's very strange how that happens.”
For Krenz right now it's just a lot of fun to see that aspect of his business grow. Amy Plumbing is moving into its third new headquarters location with larger training rooms, more integrated offices and conference areas, a separate space for accounting and dispatch, and a new showroom for premium products to help customers make the decision that the better product is the right decision.
And because Amy Plumbing is poised to take on any plumbing, heating or water treatment problem, the company is on the way to remain a profitable service business for generations to come. “Amy Plumbing is working toward a 'lifetime of service' with 100 percent referral from our customers. We're not perfect yet, but we're doing everything we can to try to ensure that our customers stay forever.”
A complete copy of the PM Water Treatment/Purification Equipment Study can be purchased for $95. For more information, contact Cory Maxwell at firstname.lastname@example.org, 248/244-6415.