Vance Blog

Dear Pool and Spa Colleague:

The horrors recently perpetrated in New York City, Washington, DC and Pennsylvania have affected us all, bringing overwhelming waves of sadness, anger and concern while fortifying our love for the United States of America. I offer my deepest sympathies to any of you who lost family members or friends on September 11.

In addition to facing both real and perceived threats to our courage and determination as Americans, each of us as business people must also consider the economic impact of recent events. We know the airline, hotel and other travel related industries have been devastated. As leaders in the pool and spa industry, we all have to join together to try to ensure the long-term success of our companies and, in turn, protect the livelihoods of our employees.

How do we expect the pool and spa industry to be impacted by the terrorist attacks of September 11?

Consumers will feel a great deal of financial uncertainty, and families will instinctively hesitate to commit to major purchases. It could be argued, depending on how events unfold in the next few months, that homeowners will shy away from digging that new pool.

I don’t believe that will happen, and here’s why:

Yes, families will hesitate to travel. Yes, the natural response is to cancel that trip to Europe or the Caribbean. Accordingly, people will choose to hunker down with their families, spend time with loved ones and stay in the safest places they can find. Like their backyards!

There is no question that, now more than ever, our products are uniquely positioned to bring joy and comfort to many people. There is no better activity for people today than joining with family, friends and neighbors to enjoy each other’s company in a nearby backyard paradise.

I urge all of you to be proactive and energetic in getting this message out to as many homeowners as possible. While there is obviously no positive side to our national tragedy, we can do our part to keep our economy strong, preserve jobs and provide secure havens for all of our friends and neighbors.

I wish you all the best in these challenging times. Let’s work together, stay creative, and build a better future.

Sincerely,

Vance

Vance A. Gillette
Vice President and General Manager, Pool Systems

Two industry leaders talk about what’s happening in the pool industry.

BY MICHAEL FICKES

THE PREDECESSORS of today’s Teledyne Laars/Jandy Products have a lot of firsts to their credit. In 1949, Avy Lewis Miller invented the first pool heater, which eventually came to market as the Laars Heater. In 1966, Teledyne acquired Laars Engineers and created Teledyne Laars.

In 1958, not long after the first pool heaters were installed, Andy Pansini stared at a garden hose that had fallen into his pool. As water pressure made the hose wriggle around the pool, Pansini envisioned the first automatic pool cleaner.

He designed it, built it and named it Jandy, combining his first name with his wife’s first name, Jane. Soon, Jandy Industries brought Rigid Arm Pool Cleaners to the market.

Innovations continued with the Jandy Valve, which gave pool plumbers a high-flow valve that accommodated several pipe diameters and featured a time-saving grease cap lube system.

During the ’90s, Jandy developed one of the first families of pool/spa electronic controls. In May 1996, Teledyne Laars acquired Jandy Products, creating Teledyne Laars/Jandy Products, a division of Fortune 500 giant Allegheny Teledyne Inc.

Teledyne Laars/Jandy Products operates three business units. The largest, Pool Systems, makes residential and commercial pool heaters, spa heaters, valves, pool cleaners, accessory maintenance devices, waterfalls and other pool features, and electronic pool and spa controls.

These products are shipped across the United States and around the world from manufacturing facilities in Novato, Calif.; Moorpark, Calif.; and Deerfield Beach, Fla.

Recently, SWIMMING POOL/SPA AGE talked with Robert Rasp, president of Teledyne Laars, and Vance Gillette, vice president and general manager of the Pool Systems business unit. Here’s what they had to say.

SP/SA: Mr. Rasp, you have been with the company for three years and president for one. Where do the opportunities lie for the Pool Systems Business Unit?

RASP: There are tremendous opportunities for us by expanding our product offerings. We want to focus on introducing new products that add value for pool owners and create additional revenue-generating opportunities for distributors and builders. Most importantly, we hope to differentiate our company by introducing products that enhance pool ownership, products that will make it more appealing to own a pool while reducing the drudgery and complexity associated with operating and maintaining one.

SP/SA: What kinds of products?

RASP: Electronic controls are a good example. Our line of controls add convenience and flexibility to a pool. We also want to develop new water features for our line of fountains, water falls and rock falls, products that enhance the aesthetics of a pool.

SP/SA: Overall the pool business has been growing sluggishly, if at all. Electronic controls and pool features are high-end products. How do you square your enthusiasm for these products with consumers who seem uninterested in pools?

RASP: Although there are no hard numbers to evaluate, industry estimates indicate that consumers buy 150,000 inground pools a year. Thirty percent are pool/spa combinations, a high-end purchase. Of the total pools installed yearly, about 10 percent (or 15,000) use electronic controls, another high-end item. A market penetration of 10 percent is probably triple the percentage of pools equipped with electronic controls five years ago. So, while the overall market may be sluggish, the high-end appears to be growing. A number of our products are positioned in the middle to high end.

GILLETTE: Let me add that industry research shows us that one of the main objections consumers have to purchasing a pool is the drudgery of operating and maintaining it. And it is drudgery.

If you have a pool/spa combination designed around one set of equipment, think of the work involved in using it. To use the spa, you must walk to the back of the yard to the equipment pad. You must turn a series of valves. You must make sure the automatic pool cleaner is turned off. You must turn on the heaters. Then you must wait until the spa heats up, checking it periodically until it’s right. Then you can get in.

A half-hour later, you may want to turn the temperature down. So you have to go back to the equipment housing. When you are finished, you must trudge back to the equipment housing and reverse the system.

Electronic controls eliminate this. Today, you can push a button at a console in the house or beside the spa, telling the system to rotate the valve, turn on the heater, and lock out the pool cleaner. You can even access the system over the telephone. For years, the experience of using a spa really wasn’t all that pleasant. Electronic controls are changing that.

SP/SA: Are you saying that introducing technology to a pool system can help move the market forward?

GILLETTE: It’s quite possible. The bad news is that research has shown that consumers don’t understand the extent of advanced technology products available. As consumers learn about these products, I think their attitudes will change.

Alternative sanitation systems also promise to make pool ownership easier and less costly. Take the new electrolytic chlorine generator. Instead of buying chlorine every month, you have a small manufacturing plant connected to your pool that makes chlorine daily. At the end of the month, the cost is about the same as what you would pay monthly if you bought chlorine and lugged it home. After three years, the equipment would pay for itself and your costs would go down.

SP/SA: You mentioned consumer attitudes. Along with the perception of drudgery connected to pool ownership, consumers also seem to believe that our industry is unprofessional, which is another reason for foregoing a pool purchase?

GILLETTE: I have a different view on this. Sure, there are unprofessional representatives in every industry, but as a consumer, if you do your homework, get several bids and study them, you’ll wind up with an excellent pool. I would say we’re building the best pools ever.

I think we’re suffering from an inferiority complex. We look down on ourselves. But look at the beautiful pools we’re building: infinity edge, negative edge, with fiber optic lighting, electronic controls and automatic cleaning systems. We couldn’t, or at least didn’t, build pools like this 10 years ago.

Yet we’re preoccupied by the professionalism issue. We are a professional industry. Before we can persuade the public to understand this, we must believe it ourselves.

RASP: I agree. Pool builders are growing more sophisticated every day. Twenty years ago, a pool was a rectangular hole in the ground. Today, pools are eloquent works of art. When the public begins to realize this, they will raise their expectations and create opportunities for all of us.

SP/SA: Let’s look ahead. How might current industry trends change the way the pool and spa industry does business?

RASP: I think that one of the most dynamic trends in our industry is the rapid consolidation of manufacturers, distributors and builders.

I don’t want to speak for distributors and builders, but from my point of view, consolidation among the industry’s manufacturing companies eventually will benefit all of us.

Consolidation produces bigger companies and offers economies of scale. You can cut the cost of repetitive tasks and shift money into research, product development, customer service and other “value-added” activities.

Instead of numerous companies selling one or two specialized products, a limited number of manufacturers will compete with complete product offerings. Instead of evaluating hundreds of competing products, sales reps and companies, distributors and builders will have fewer and better choices to make.

In summary, consolidation among manufacturers will increase competition, thereby requiring manufacturers to significantly improve their performance with respect to the cost and quality of the products they offer and the level of customer care and service they provide. As a result, the entire industry will benefit - from distributors to builders to dealers to consumers.

Moving our industry to the next level is as easy as adopting a new way of thinking and doing things.

ACCORDING TO a recent American Demographics magazine report, 17,000 new products were introduced in the United States in 1994. Eighty­-five percent of them failed.

That means more than 14,000 new products, representing significant investments in product development and promotion, didn’t grab a position in their respective markets. Why? Poor market research.

But the need for market research isn’t limited to new product offerings. Business publications are filled with stories of businesses that didn’t recognize marketplace shifts, changes in consumer tastes or threats from competitive forces.

They sacrificed tomorrow’s opportu­nities on the altar of yesterday. Their passion was for old business, old products, old methodologies and old marketing. They failed to develop a passion for new opportunities, technologies, consumer tastes or market approaches.

I’m afraid this is what’s happening in our industry. We are allowing a variety of leisure-time activities to siphon discretionary dollars that could be invested in the total backyard environment.

Consider resort travel. After commercial jets started flying across the Atlantic in 1958, ocean liner passenger service went into a steep decline. Ship owners responded by conducting extensive market research and launched a campaign equating an ocean cruise with health and prestige. Ships were refitted and redecorated to become resorts.

Today, cruise lines operate in all parts of the world. There are about 25 major cruise lines that stress the beauty, healthful benefits and convenience of ocean cruising.

Leisure-time marketing isn’t confined to cruise or resort travel. Count the number of motor homes on our highways. They’ve become a mainstay at national parks and resorts nationwide.

My point is that the money spent on travel, motor homes and cruises could be better invested in developing a complete backyard environment consisting of a pool and spa, waterfalls, landscaping and outdoor lighting. This approach would bring a resort-like atmosphere closer to home.

As an industry, we don’t have a strategy that allows us to participate in the resort and motor home travel markets. We are content to market against each other. We need a passion for what we do as an industry, a passion that will lead to an increased interest in our products.

A Mixed Report Card

While NSPI has taken steps to pass on this passion, we need to help. During its last expo, NSPI made a day available to the public. However, I think the timing and location should be reviewed.

Holding a pool and spa show in November pits our industry against the Christmas season and winter holiday mind-set. And because everyone likes to go fishing when the fish are biting, consumer-orientated pool and spa shows should be conducted in March, April or May, when homeowners are thinking about home projects and summer.

If the show is to be an effective consumer marketing tool, it should be conducted in a prime geographic area. It also should emphasize the total backyard environment.

While Phoenix (the site of the 1996 show) represented such a market, I question Chicago in 1997. Let’s take our message to our markets. Let’s pass our passion to those who can envision and embrace it. Although I’m happy our expo is open to the public, I think we must expand the show concept. I encourage NSPI to book space at the larger regional home and garden shows.

These shows have a demographic profile that is close to ours, including home builders, homeowners, architects and some 10,000 landscape architects. And the regional schedule, which should only include our major markets, should emphasize the total backyard environment.

NSPI deserves credit for creating some impressive television spots, but how many people have seen them? Studies indicate that any given television advertisement needs significant repetition to be effective. If the NSPI spots are designed to benefit the entire membership, they must be aired on a national basis.

I also suggest they use a high-profile spokesperson who can be identified with swimming or leisure-time activities. The spokesperson should be a draw for regional shows, promotions and lectures, discussing the long-term health benefits of owning a pool and spa. This person should have a strong female appeal, since the lady of the house influences many of the landscape decisions.

Forging Strategic Alliances

Earlier, I mentioned the success of the cruise and resort travel industries. Such results were not achieved by concentrating exclusively on the consumer. To build awareness of their products, passenger lines and resort destinations conduct intense marketing and education campaigns with travel agents, editors, television and radio reporters and employee incentive executives.

Pick up any Sunday newspaper or city magazine and you will see how successful this approach has been. Travel magazines or exotic cruises are regularly the subject of in-depth reports.

How often do you see comparable coverage of attractive, contemporary backyard environments?

NSPI should create strategic alliances with - and develop marketing plans for - the same type of audiences as our competition. Travel agents draw the blueprints for leisure-time plans. Real estate agents, architects and home builders play the same role for home and outdoor living.

Are we educating these audiences?

Do we have regularly scheduled newsletters addressing their needs and interests? What percentage of home builders are including pool and spa environments in their designs?

Home and garden magazine editors, leisure-time television/radio reporters, and Sunday newspaper supplement editors always are looking for a good story. If we don’t feel the results we achieve in the backyard environment make a good story, then we lack the passion necessary to compete in today’s business arena.

Throughout history, business leaders have been characterized not only by their ability to feel passion­ately about their objectives, but also by the successful transfer of that passion to their respective publics.

Once we pass the passion about the backyard leisure-time environment around our industry, it will be just a matter of time before we surpass our competition and assume a position of leadership in leisure-time choices.

I found through 23 years in sales that it’s important to “tell people what you’re going to tell ‘em,” “tell ‘em and then tell ‘em what you told ‘em,” because most people just don’t get it the first time.

Does the Milk Advisory Board attempt to rationalize cholesterol to the consuming public? No, they talk about the nutritional benefits … Milk does a body good.

Does the beef industry talk about fat and cholesterol? No, they talk about the quality of the product… Beef, real food.

Both industries over the years have modi. fied the perception of their product offerings to address consumer concerns. The milk industry offers “low fat 2 percent, 1 percent and no fat.” The beef industry sells “lean and closely trimmed.” These “modified products” are more a matter of perception than reality.

Can we change the consumer’s perception of our product offerings? Absolutely, we can. But first we must change our own
perception of our products.

We, as an industry, should be talking about how truly exciting and enjoyable owning a swimming pool or spa is. In addi­tion to family fun and recreation, let’s talk about the relaxing, lavish lifestyle in hav­ing a pool/spa environment in your own backyard. Let’s recognize that we are at war and our enemy, our true competitor, is the recreation and leisure businesses. The RV dealers and pleasure boat dealers, the travel time share and vacation packages are the competition.

Ask yourselves, does the pleasure boat industry pre-occupy itself with the startling number of fatalities annually due to the unsupervised or irresponsible operation of speed boats? Does the automobile industry remind us that 3,700 small children were killed last year in automobile accidents? No. Instead, the automotive industry has pro­moted safely features such as airbags and safely belts, etc. We as an industry should promote our safety features - covers, alarms, etc. Let’s not scare potential pool owners away from our product.

These industries always promote the positive. A recent example, the RV Industry Association ran a four-page insert in USA Today, Friday, April 27, 1990. It was filled with interesting editorial material. Articles titled: “Recreation Vehicles: From Simple to Sumptuous”; “RV Freedom No Substitute'’; and “Summer 90 Ushers in Decade of RV Travel.” The RVIA also has created a “National RV Open House Week” and organized the Discover American RV Getaway-Giveaway.

Budweiser Brewing has been giving away swimming pools and promoting this give­away in their advertising. This publicity is tremendous for our industry. Yet it’s inconceivable that there are these people in the pool industry criticizing the Bud campaign because of the product. Would we prefer Budweiser giveaway RV’s?

Our swimming pool industry needs vision and leadership, now! We can’t afford to wait. Leadership makes all the difference. Lee Iacocca pulled Chrysler Corporation up out of a sure grave. Iacocca has vision. His conviction and commitment was so strong, he agreed to defer his own compensation. Our industry needs such leadership.

We need leadership that has the vision to expand our business 1/2 billion dollars now. It can be done.

Such an increase is achievable. We need only look to the new home construction market. Increasing the sales of pools and spas by only 2.5% with these 1.5 million new homes could accomplish this goal.

The swimming pool industry needs lea­ders who have the vision to accomplish this, leaders whose convictions are so strong they work without a golden parachute and insist on pay for performance.

It has become evident that many people in our industry share these feelings. We must redirect our industry and our destiny. Your voice and involvement is vital to the future and success of our industry.

Let’s not just survive, let’s prosper as an industry.