After news broke of a pending merger between two of the industry’s largest trade associations, industry professionals — even those with close relationships to one or both of the groups — registered surprise.
“You could have knocked me off my chair,” said Lawrence Caniglia, executive director of the Northeast Spa and Pool Association. “I never saw that one coming.”
Once it sunk in, most were upbeat and saw it in a positive light. “After I got off the floor and thought about it, [I realized] it’s a very smart move,” Caniglia said.
That didn’t stop NESPA from calling all entities involved — APSP, NSPF and Genesis, the design and construction education group that joined with NSPF last fall. NESPA wanted to make sure the education programs would not be hampered. “We have a distinct interest in seeing the certification programs continue,” Caniglia said. “I was reassured 100 times that that was a major reason they’re doing this.”
Like Caniglia, many industry observers with ties to at least one of the associations believe that a merger can ultimately benefit everyone — as long as certain programs and assets are preserved and the players don’t get in their own way. Some have concerns about there being one less voice in the industry, but others see the development as a natural evolution.
Information to date
Many details are yet to be fleshed out.
The boards of both organizations have agreed to merge, with both sides characterizing it as a “marriage of equals.” However, each group must perform its due diligence — looking at each other’s books, evaluating the other’s staff, etc. — so each board can assess the fit.
“The wheels are turning, but I believe we all can see what the enormity of work there is to properly produce a merger of equals that is best for the industry,” said NSPF Chairman Bruce Dunn.
Before deciding to merge, the groups gathered as much public information as they could. Now is the time to share data that is more current and hasn’t been filed yet, or that is more private.
At press time, each organization planned to discuss the matter more at their next board meetings. The associations have enlisted the help of a consultant to serve as a third-party facilitator.
Guessing the details
Still to be figured out are the name and location of the merged organization, as well as the staff.
As to location, several professionals have stated preferences. One possibility would be to move operations to a Sunbelt state, especially one known for lower costs of doing business, such as Texas, said John Romano, president of All American Pools & Spas in Norwalk, Conn., and former long-time APSP board member.
Caniglia wondered about the viability of relocating to the center of the country, close to a major airport, making it easier for members and volunteer leaders to travel in and out for meetings and events. Chicago came to mind.
But others see merit in running the merged entity out of both groups’ existing headquarters — APSP’s offices in the Washington, D.C., area, providing more immediate access to Congress and federal agencies for government advocacy and standards writing; and NSPF’s Colorado, Springs, Colo. digs, closer to the west.
Synergies and efficiencies
In explaining their optimism about the deal, observers cited a principle that speaks to the very sensibilities of the groups’ business-owner members — namely, economies of scale.
“In an environment where dollars are limited, this seems to me like such an efficient way to spend our money,” said Brian Quint, president of Seattle-based Aqua Quip. “Rather than to have parallel activities, it makes more sense in terms of economies of scale to have one voice.”
Many hope the pooling of funds will help with an objective APSP and its predecessor, the National Spa and Pool Institute, have chased for decades — shepherding an effective, national marketing campaign to raise awareness of the benefits of pool and spa ownership. Despite several attempts to initiate national media campaigns, even after the Web opened up lower-cost options, it has been hard to fund a program that would stick.
“We haven’t been able to do a lot to drive new consumers into our category,” Quint said. “I hope education and marketing are the two greatest opportunities to result from the groups coming together.”
Education is the other main concern among professionals. Several cited a strength of NSPF’s that they expect to serve members well — its infrastructure for delivering courses online. Several said APSP’s content is strong, but the organization has had difficulties delivering programs through platforms other than in-person classes and seminars.
This especially bodes well in areas such as the Northeast, where licensing is becoming the rule rather than the exception. Licenses require established education, but not everybody can take several days off to attend classes. “The nimbleness on NSPF’s part will make it a lot easier to work with them,” Romano said.
For the pool industry, there’s a psychological benefit to the merger, believes Bill Kent, CEO of distributor/manufacturer Team Horner Group and an NSPF board member. Just the exposure to NSPF and its population of enthusiastic aquatics operators, lifeguards, swim coaches and others who make their living using pools can rub off, he said. “The user groups bring a different spiritual passion to the table, because they spend their entire lives around our product, and they love our product,” he said.
Trend toward alliances
The merger continues a trend in which organizations have begun joining together. But a few years ago, industry associations had been on a different trajectory. About 10 years ago, some groups chose to splinter off, saying they would be better served by specialized associations. The International Hot Tub Association formed, saying their product was being overshadowed. And the South West Pool and Spa Association assembled in the Phoenix area, with professionals there saying their region was being ignored by APSP.
But coming out of the Great Recession and struggling to maintain membership numbers, some groups began casting a wider net to attract more professionals. The California lobbying group SPEC transformed into a full-blown trade association and changed its name to the California Pool and Spa Association, and the National Plasterers Council began reaching beyond its namesake segment to register builders, service firms and manufacturers.
In fact, before the intent to merge was announced, APSP and NSPF were exploring ways to expand into what had been considered the other’s specialty. The NSPF brought on Genesis to help it gain footing into the residential sector, while APSP’s Builders Council was considering ways to cater to commercial contractors.
But APSP President and CEO Rich Gottwald, upon examining the industry after his hiring, saw the associations accounted for about $13.8 million — not much. “He was saying, ‘We can do much, more together than we can cannibalizing each other,’” Caniglia said.
Under his watch, APSP began reaching out to several other industry associations and held an all-associations meeting in early 2015 to discuss ways they could come together for the good of the industry.
APSP hasn’t been the only group to try this tack. The California Pool and Spa Association actively pursued this strategy and announced last month that it had entered into 1- to 3-year affiliation agreements with several organizations, including NSPF, APSP, the Foundation of Pool and Spa Industry Education, and the Western Pool and Spa Show. More are expected. Through these agreements, the groups will share funds and other resources, provide channels to encourage membership to the other groups, and rely upon each other to provide certain services to their members. In some cases, professionals who sign up for one group automatically receive dual memberships.
"I think we shouldn’t be competing for members, because we should work together, because the goals would be the same," said John Norwood, executive director of CPSA, which is based in Sacramento. "So I think it’s recognition that we’re wasting efforts competing and we need to work together towqard the same goals to benefit the industry."
In that vein, he sees the potential APSP/NSPF merger as a positive move. “It will unify the industry and make it a lot simpler to develop policy,” he said.
If and when the merger should take hold, it will mark a coming home of sorts, Kent said. NSPF was started by the National Spa and Pool Institute in the 1960s, he said, so that it could apply a somewhat different discipline and focus on education and research. In NSPF’s first 25 years, the two groups remained close, he said. “There used to be a dues checkoff on your dues renewal form for NSPI that you could add on $100 to donate to the Foundation,” he said.
The groups grew farther apart as politics and certain personalities took over, he said. “That separation is now coming to a close, as we go back together as strategic partners with a grander vision of growing the business,” Kent said.
While many of those connected to APSP or NSPF were positive about the development, some lesser-involved individuals were unconcerned, ambivalent or wanted to withhold judgment until more information is provided.
There can be value in diversity, which a merger stands to hinder, said one professional, Scott Heusser, owner of Idaho Aquatic Services in Meridian, Idaho. As a renovator who holds memberships in both groups and teaches CPO courses, Heusser said he values the missions of both associations. But he also appreciates the separate voice that each brings.
“The NSPF just seems a bit different in that they really do try to [promote] healthier living through swimming, where the APSP kind of seems … to be more concerned about the industry. That’s kind of the beautiful difference between the two.”
The merger could result in one mission overshadowing the other, he fears. “I don’t see … [APSP] going after the end user and trying to promote swimming as a healthy habit,” he said. “They certainly want to promote professionalism in the builder, which is a positive to the end user, but it’s not the same as [promoting] the healthy benefits of aquatics.”
He also worries that having one organization will make it harder for those who don’t agree with the prevailing opinions of the group. “Getting bigger makes it more difficult for those folks to offer [a dissenting] opinion, at least an opinion to truly make a difference,” he said.
Watching things unfold
There is a saying that Dunn has used since the intent to merge was announced, and that some who have been through this process say. To paraphrase: Associations aren’t merging; people are merging.
People know this. Asked if he objected to the merger, Romano said, “No. Just as long as people don’t get in the way.”
Taking these two large organizations and turning them into one entity — no matter how that takes form — is going to take a while. “There are a million questions they have to go through, and it’s going to take time to figure all this out,” Caniglia said. “I don’t see this happening for at least 18 months.”
People are very aware of the long history that each association has, and some of the strong personalities that have made their mark.
Dunn said the groups will follow the advice of the third-party facilitator they’ve commissioned. “That old history and baggage doesn’t need to come into the conversation,” he said. “Today is today. … There isn’t any place for turf wars. It all has to be what’s best for the industry. If you can keep that focus, you’ll come out with a good outcome.”
Professionals are watching hopefully.
“I would hope and expect that we take as much politics out of it and then just really focus on what are the results we want and then focus on results,” Quint said.