Myth 39: sharing statistical information about my customers will only hurt me

Pool & Spa News, Oct 30, 2002

CAUSE Many company owners mistakenly think that any information they provide about sales or marketing will only end up helping their competition

EFFECT Often businesses are unable to effectively measure the success of their products, making it difficult to gauge the marketplace--or get financing

It's no secret that the pool and spa industry has shied away from sharing business information and statistics. For instance, how many industry people even know how many portable spas or inground pools are purchased each year? Not many, and if they do, they're not telling.

"Geographically speaking, I think it would be nice to know how many pools are being built each year," says Bill Kent, president/owner of Homer Equipment in Fort Lauderdale, Fla.; a past president of the National Spa & Pool Institute; and current board member of NSPI-Florida and NSPI Broward Chapter.

This type of information helps build industry confidence, says Kent. "People may say, `Hey, buying a pool is not such an adventure after all,'" he says. "`There are already between 5- and 10 million of them in the ground.'"

He says it also gives businesses a realistic perspective: "It helps people understand that they're not just lone eagles and are part of something much larger. I think psychologically it would help them become more professional about what they do."

Maintaining (and sharing) good financial information about your business is important when it comes time to acquiring financing from a bank, as well. Without it, many companies stay stuck in neutral, never getting an opportunity to grow.

"Everything from poor bookkeeping to poor management practices make it difficult to walk into a bank and develop a relationship," Kent says. "The bank needs to have confidence that your financial statements are true and correct, and they need to have confidence in you.

"A banker ultimately looks at whether or not you carry cash reserves, or if you're building equity within your business by keeping retained earnings instead of taking all the money and spending it on big boats and airplanes," he adds.

Some parts of the industry already offer valuable information. For example, the Pool Heat Pump Manufacturers Association shares industry data as part of its certification program. "I think everyone enjoys knowing where they are positioned, from a market share standpoint," Kent says. "Companies that belong to the PHPMA are able to compare their position relative to their competitors on an overall basis, thanks to this information.

"It's only shared by the members," he adds. "But it's still a usable tool in terms of companies understanding how their position in the product niche is going."

Better statistics and information may have political ramifications, too. Having legislators understand the size and scope of the industry serves a vital role, says Kent. "If you talk to the legislators, they don't have any facts. Maybe it would dispel some of the myths that they use to pass negative legislation," he says.

"They deal in symbolism because they don't know how many pools exist and how many are being built," he notes. "Frankly, even their drowning statistics are problematic."

WHAT YOU CAN DO

Appeal to trade associations to collect data.

"If they collect overall information, we can compare our market share and how we're doing relative to the rest of the industry," Kent says. "There might be some business intelligence that could come out of it."

Share your data and urge industry colleagues to do likewise.

Often the reluctance to share information comes from the thought, If no one else is sharing, why should I? But if other industry people know you're cooperating, they might be more likely to share data, too.

Pay close attention to publicly traded companies.

"Our biggest competitor is a public company," Kent says. "I can track their sales and profit margins.

"It doesn't necessarily affect how I run my business," he adds. "It just gives me a better understanding of knowing who they are and what they're doing."

--R.J.W.