Sticker Shock

A couple of weekends ago, I got that unpleasant surprise of no hot water. That’s not nearly as bad as no water, but when you’re looking forward to a hot shower, it’s still a big letdown. After two or so hours of trying to resolve it myself, it was clear that it was time to call in a professional, in this case the company that had installed the product less water heaterthan three years ago. The good news was that everything would still be under warranty.

More good news – right there on the side of my non-working water heater was the installing company’s 24-hour service dispatch number (or so I thought). My call was answered promptly and we set up a service call for the next morning.

There was one minor point of contention: she couldn’t find any record of her company installing the unit. But no problem; as long as I had my paperwork from the installation showing that they had indeed installed it, everything would be covered. I assured her that I did and I even knew exactly where it was filed. She did give me a stern reminder that if it turned out that someone else had installed the product, there would be a significant non-refundable service charge (think Sunday morning) and of course, no warranty coverage.

I never gave it a second thought until later that evening when I grabbed the paperwork out of the file. To my astonishment, the business name on the paperwork didn’t match the company that I had been talking with on the phone! By now, you have probably figured out what happened. Earlier in the year, the plumbing contractor that I’d been on the phone with had been out to repair a broken outside faucet. But while their technician was here, he had slapped his company’s business sticker on the side of my water heater over the sticker of the contractor that had actually installed it. Once I figured this out, I quickly cancelled the one service call and rescheduled with the installing contractor.

Here’s an example where a good business practice was overdone. From both a contractor and consumer perspective, business stickers are great. They’re a convenient and inexpensive way for the homeowner to know who to call if there’s an issue. But this contractor got overzealous with it and almost led me down the wrong path as a result. He ended up coming off as unprofessional. And come to think of it, I better go see whose stickers are on the HVAC unit and water softener. If they belong to him, they’re coming off.

“How did we live without ________?”

Wouldn’t it be cool if someone made a washing machine and dryer that was one unit? A single appliance with a single door that you put your dirty laundry into and when the cycle was complete, the clothes were clean AND dry. I read recently that the appliance companies have been looking at this for years and in the not too distant future, an integrated washer and dryer may be a reality. Whenever that happens and we all have those, we may look back and think about how ridiculous it was to have to move a pile of wet laundry froFrigidaire-Affinity-Laund08-lgm the washing machine to the dryer. But until then, we just accept the way things are and never give it a second thought.

Looking in the other direction, there are tons of examples already in our lives today. Who knew we needed smart phones, microwave ovens, or cruise control on our cars? But in every case, up until we had those products, we didn’t know the difference.

What about our industry? I would suggest that variable-speed, constant pressure systems fall squarely into this category. I know this because if you ask a homeowner that has upgraded to constant pressure, they will tell you that they will never go back to a conventional system. But for them to get there, their water systems contractor had to lead them there. Not a single one of those homeowners woke up in the middle of the night thinking, “Boy, I wish someone made a water system that got rid of that large tank and gave me better, more consistent pressure.” They just assumed that for all the advantages of being on a private water system, these were just things they had to live with. They didn’t know there was a better way until they got to experience it for themselves.

Not everyone has a smartphone and likewise, you won’t sell an upgraded, constant pressure system to all of your customers. But to those customers that you do, they won’t be able to imagine going back to their old system ever again.

In the meantime, I think it’s time to go move my laundry from the washer to the dryer.

Cupcakes versus water well drilling

“Barriers to entry” is a marketing term that sounds sophisticated, but all it really means is, “How hard is it to get into a business?” Barriers to entry are simply those things that keep someone new from entering a market.

Barriers to entry take many forms. One of the most common is simply a high amount of capital ($$$) required for someone new to enter a market. The airline industry is a good example here. Related to a high amount of capital is scale, or how large does the business have to be in order to be profitable. The automotive industry is a prime example. Other barriers to entry are an entrenched and loyal customer base (think Starbucks or Harley Davidson), or even legal and regulatory hurdles (think liquor stores).

Obviously, if you’re already in a market or industry (the marketing books call this the incumbent), you want the barriers to entry to be high in order to keep competition out. But if you are starting a business (that’s the entrant), you want the barriers to entry to be low. However, the problem with markets with low barriers to entry is that in the long-term, it’s very difficult to make a profit. That’s because even when you’re first, everyone quickly sees that youDrilling day2’re making a profit and it’s easy for them to jump in.

Here’s a great example: cupcakes. Cupcake shops have been all the rage the last few years. But I ran across an article the other day about the “cupcake bubble”. Come to find out, the cupcake market has reached saturation and even been overbuilt in many regions. Many shops are going out-of-business. There just aren’t enough people to support all those cupcake shops.

So why a cupcake bubble? Because the barriers to entering this market are so low. There are always hurdles to starting any business, but opening a cupcake shop in the scheme of things is pretty easy. So, lots of people saw a profitable trend with low barriers and jumped in. But as a result, it became difficult for most of them to make a profit over the long-term.

So what does any of this have to do with water well drilling and the water systems industry? Well, if you’re a professional water well contractor, the barriers to entry for someone who wants to enter your market are fairly high. It takes specialized equipment that represents a significant capital investment. It also takes specialized expertise and knowledge and experience to be successful. There are also regulatory barriers dealing with licensing and DOT regulations. And chances are you have a loyal customer base.

The point is that not everyone can do what we do as an industry and what you do as a water well contractor. We are unique. And when you couple that with the value and quality of the product we deliver at a very reasonable cost, you start to realize that once again, we’re in a great industry.

If it’s not right, it’s wrong

440x380_acAwhile back, I was attempting to plug my phone charger into a dimly lit wall outlet in a hotel room. I wasn’t having much success, and only when I realized that the outlet had been installed upside down did I understand why. And not only was the outlet installed upside down, but it was also crooked and the screw on the cover plate had been torqued down to the point that the plate was cracked.

In any case, I got my charger plugged in and never gave it a second thought until a couple of weeks later when I spent a couple of long days in a meeting facility. I happened to notice that every single outlet and switch cover screw in the room were perfectly aligned in the vertical, even those close to the floor that you couldn’t really see.

This practice that makes things look a little better has a name in woodworking: it’s called “clocking”. But is it worth the bother in this case? It certainly doesn’t make any difference in the functionality of the product. And my guess is that I’m the only one who has ever sat in that meeting room and taken notice.

So in the scheme of things, is it a big deal? I think it actually is. It tells me that the electrician who installed these outlets took pride in what he was doing. He took that extra half second to get everything as perfect as he could even though the pay was the same. What’s more important is that I can pretty much guarantee you that all the connections and wiring behind that cover are first-rate and done with the same precision. The attention to detail inspired confidence.

When you think about it, that outlet isn’t much different than a wellhead. People can’t see what’s down in the well. They can’t see your splices or pump alignment or whether you’ve used a flow sleeve. They can, however, see what’s at the top. And if what they see at the top looks sloppy, well, they’ve got to wonder about what’s below. On the other hand, if the workmanship above the ground is precise and well-organized, chances are they’ll make the same assumption about the rest.

There are lots of analogies that we can draw from this, but to me it’s another example of what defines a professional versus someone who is just going through the motions. A professional is willing to take the time to get things right. Not just the big stuff, but the details as well.

That first electrical outlet that was upside down with the broken cover? I have no idea what was behind the plate, but it sure didn’t inspire confidence in the integrity of the rest of the product.

Ten things I wish the public knew: the final four

IMG_1599We’ve finally arrived at the third and final installment of my short series on the Ten things I wish the public knew about our industry. The last two posts covered one through six (Ten things #1,  Ten things #2). So current sporting activities notwithstanding, here are my final four:

7. Most well owners love their water systems.

Ask most private water systems owners what they think of their well water and they will tell you “I love it!” They like the taste, especially as opposed to chemically-treated public water, they like being in control of their water system, and they like the feeling of not being tied to the whims (and invoices) of a water authority. To many, a private water system symbolizes independence and self-sufficiency–and good, clean water.

8. That bottle of spring water you’re drinking? … It’s well water.

You know those bottles of water you buy at the store  labeled natural spring water? That label makes for good marketing, but the truth is that is spring water is simply groundwater, and there’s a good chance that water came from a well. Private well owners get all the natural spring water they want virtually for free–straight from their well. Of course, labeling a bottle well water just wouldn’t have the same ring to it.

9. Even where groundwater isn’t perfect, we can usually fix it.

In certain regions, the groundwater may naturally contain high amounts of iron, sulfur, or other minerals, making it less appealing for drinking and household use. In these cases, there are plenty of safe, effective, affordable technologies out there to address and remove these components, leaving the homeowner with a high quality source of water. These technologies don’t have to involve chemicals, either (e.g. reverse osmosis, filtering systems, etc.).

10. Well water makes environmental sense.

One might believe that having a common water infrastructure in the form of public water would be a more efficient delivery system than lots of private water wells. The fact is that it’s not, and there are two big reasons. First, it takes a lot of energy to move water through all those miles of pipes–pipelines that in many cases don’t exist today. Second, pipes have lots of leaks. It’s estimated that literally millions of gallons of water are wasted each year due to the aging infrastructure of public water. Pumping groundwater right from a well at the source is far more efficient and, well, greener.

There you have it. It may evolve or expand over time, but that’s my current list of the ten things I wish the public knew and understood about groundwater and our industry. I’d love to hear your commentary.

Ten things I wish the public knew: #2

Drilling day2Last week, I started my short series on the ten things I wish the public knew about our industry (Ten things #1) and covered the first three. Here’s this week’s list:

4. Groundwater expertise is different than plumbing expertise.

Not all groundwater contractors are plumbers, and not all plumbers are groundwater contractors. In fact, although some water well contractors and drillers provide plumbing services as part of their business, most of the time they don’t overlap. The groundwater industry requires a distinct knowledge base and skill set–and even different equipment. Think of it this way: someone who works on melting furnaces in foundries is not the same person who would on the furnace in your home, and vice versa. Some of the underlying science and mechanics might be similar, but these are really two different jobs requiring distinct expertise.

5. We work under tight regulatory constraints.

Groundwater is a precious resource and, appropriately, obtaining a license to access and drill into it is a formidable task. In addition, nearly all states require water well contractors to receive a certain number of hours of continuing education each year in order to maintain that license. Of course, given the size and complexity of a drilling rig, there’s a significant safety and driver training component as well. We don’t just punch holes in the ground; we have to be well-trained and ensure regulatory compliance.

6. The lowest priced water system may not be the best quality water system.

I’m a firm believer that you generally get what you pay for. Go to the internet or the Yellow Pages and you’ll probably find several options for water well contractors in any given area. Whether you’re installing a new system or simply need to get back in water, the lowest price isn’t always the best option. For example, one contractor may be offering an upgraded system that includes constant pressure, whereas another may be offering a conventional system. One may offer a tank sized to meet your needs today, but another may offer a tank sized to accommodate potential demand increases. Different prices may also be reflective of different warranty options or service agreements. In the long run, it pays to understand the difference.

Next week I’ll wrap up the series with 4 more Things I wish the public knew about our business. Stay tuned.

Ten things I wish the public knew: #1

In my job, I do a lot of airline travel. Although I’m generally a limited talker with whomever ends up next to me, I often get the question, “So, what business are you in?” From these and other random encounters with the general public, I’ve built up a sizable database of its perceptions of water wells and the groundwater industry.

Drinking_waterWhat follows isn’t a revelation by any means, but I’m continually amazed at how little the general public knows about groundwater and the groundwater industry. Even end-users such as homeowners and farmers who have their own private water systems generally have little knowledge of how water gets to their tap.

Given this, I’ve decided to write a short series around the ten things I wish the public knew about our industry. You’ll find the first three below, with the rest to follow in subsequent posts.

1. Chances are, your water comes from a well, even if you don’t know it.

I consistently hear: “I’m on city water; I don’t get my water from a well.” Actually, there’s a good chance you do. For example, I live in a good-sized city with several water sources, including a river and a couple of reservoirs. However, my city also has numerous large water wells, and a significant amount of our water is supplied from those wells. But ask any of my neighbors where their water comes from and they would never think that it comes from a well.

2. Groundwater is important. So important, in fact, that we literally can’t live without it.

The general public has no deep appreciation of groundwater’s importance, and therefore the importance of the groundwater industry. Only 2.5% of the world’s water is freshwater and of that, 69% of that is locked up as ice at earth’s poles. What’s left is surface water and groundwater. Between the two, surface water comprises only 0.4% and the rest of groundwater. That’s not nearly enough surface water to supply the needs to humankind. Not only does much of our clean, fresh drinking water come from the ground, we have to have it to survive as a civilization.

3. Groundwater contractors are experts with unique professional knowledge.

Not only do groundwater contractors have to be good business people, they also have to have very specialized technical expertise. Drilling contractors, for example, often maintain more than a million dollars worth of equipment, with more bells, whistles, levers, and buttons than most people can imagine. They have to understand geology and hydrology. Pump installers have to have an outstanding working knowledge of electricity and hydraulics, and more often than not, electronic technology as well. Not everyone can do this job.

Stay tuned for more Things I wish the public knew  next week.