Industry members are reporting a rise in the number of clients who fall behind in their payments, with the service segment being the most affected.
“Regular accounts that you’ve had for 10, 15 or 20 years, sometimes they take advantage,” says John Romano, president of All-American Custom Pools and Spas in Norwalk, Conn., a Pool & Spa News Top Builder. “We close [pools] down in the fall, and we don’t get paid until spring. Then it’s like we have to hold them hostage for them to pay before we’ll open their pool.”
In times like these, it’s vital that companies have a solid collection strategy for all customers, whether they’re being served by the firm’s construction or service department.
Here, Romano and others share their strategies for keeping customers on track.
It’s important to avoid consumers who don’t deserve your trust in general.
“You have a bunch of what I call professional beaters out there,” Romano says. “They’ll get you in, knowing that they’re going to file for bankruptcy or lose the house. They’ll get the lawn mowed every week, get the pool serviced, get the house painted, knowing that they’re going to [rob] somebody.”
Romano combats this by following a local business journal that lists homeowners who have liens placed against their houses. If he sees a current or prospective customer, he’ll either deny credit or demand payment right away.
Another company, Gohlke Pools, also tries to keep clients honest from the start. “For all of our new customers, whether they’re going to be doing weekly pool cleanings or repairs, we get a credit card upfront,” says Christy Horton, office manager for the Denton, Texas, firm. “We explain that we won’t charge it unless [their bill] isn’t paid within 30 days.”
In addition, customers seeking repairs that will cost more than $500 must pay at least 50 percent down before the service is performed. This applies no matter how long the person has done business with Gohlke Pools.
As far as new clients, Romano has them pay COD for every appointment for at least a year. After proving themselves, homeowners are allowed a $2,000 credit maximum. If they exceed the limit, his computer won’t even print a work order until the customer catches up.
When it comes to construction, there’s a powerful carrot that prompts homeowners to make their payments — namely, the next building phase won’t start until they do. But collecting that last payment can be a sticking point.
“The pool industry has a black eye,” says Ron Robertson, president of Robertson Pools in Coppell, Texas. “There’ve been so many [builders who’ve] gone broke, and so many of them leave unfinished pools,” says the Pool & Spa News Top Builder.
“[Homeowners] think we’re going to get their money and not finish, even though we’ve been around for 26 years. They get a little wary — someone told them, ‘Don’t give that last check until everything’s done.’”
To collect the last payment, Robertson and his crews do the final walk-through and punch list before plastering the pool. This way, customers can look at almost all the work and point out any problems. After making any needed fixes, they collect their final payment.
“The plaster crew shows up with a work order that says, ‘Collect check,’” he says. “They go to the homeowner and explain that they’re there to plaster the pool, but need to pick up the check before starting.
“The homeowner sees the plaster crew there, getting ready to work, and then they happily give us the check.”
On the rare occasion when a check is not forthcoming, the customer has to watch the plasterers load the truck again. “When they see the crew rolling up the hoses and getting in their truck, [the customer] starts coming out with the check,” Robertson says.
Another company tries a similar approach. Mission Pools in Escondido, Calif., monitors its customers along the construction process, but doesn’t clamp down on those who fall behind until it’s time to plaster. “We don’t schedule plastering on a residential pool until all payments are made up to plaster,” says Brad Cotton, chief financial officer of the Top Builder.