Evaluating Return On Investment – The Value of Superior Water Quality
Recently, a prospective client asked a very telling question. We were discussing the benefits of using our system, which combines ozone, UV, and small amounts of chlorine, when the client asked, “What is the return on investment for our system as compared to using traditional chlorine-only sanitation?”
It certainly wasn’t the first time I’ve been asked that question, and while I do understand why people want to know the ROI, especially given the upfront expense of our systems, it reveals a lack of understanding of the key issues they’re facing in their own facilities.
For starters, it strikes me as misguided, even ironic, to compare doing something correctly to doing it the wrong way. It’s like comparing the value of driving a high-performance automobile with state-of-the-art safety technology to the “affordability” of riding in a rusted jalopy with no doors, bald tires, and no brakes. All it takes is one accident and there really is no comparison.
When considering the ROI for our water-treatment system, you have to take into account the cost of the problems that will be avoided by using the right set of treatment technologies. After all, establishing how quickly the system pays for itself goes far beyond simply defining how much will be saved by reducing chlorine use.
Questions of Cost
An accurate ROI calculation means asking a number of key questions, all of which lead to some sobering answers. Those queries should include:
How much revenue is lost during facility downtime due to water quality issues?
Quite simply, when the pool is closed for a day, a week, or longer, how much income do you lose? For high-use facilities, such as a resort or a competition pool, the numbers can get big in a hurry. That’s especially true when considering ancillary revenue streams such as concessions, equipment rentals and premium offerings such as cabana rentals or fine dining.
Far more troubling and difficult to estimate, you have to ask: What’s the cost of having customers get sick from using your facility?
Leaving the possibility of a lawsuit and skyrocketing insurance premiums aside, disease outbreaks can be crushingly expensive, both in terms of dollars and public goodwill. Not only will the health department likely close the pool and possibly demand system upgrades, people who get sick from the water will almost certainly stop their patronage. They are also very likely to spread the word to family and friends that the facility should be avoided.
Beyond those two all-encompassing issues, even the more mundane concerns can result in huge costs.
What’s the cost of draining and refilling the pool to correct water quality problems? Some health departments require draining and refilling whether there are problems or not, but when there is an outbreak or other health issue of some kind, you can bet the health officials will require draining and refilling as part of the required remediation.
What’s the cost of losing lifeguard and maintenance staff due to respiratory problems resulting from breathing chloramine-laden air? There’s already a shortage of lifeguards in many areas, and hiring and training new staff can be costly. Air and water quality will inevitably impact employee turnover and absenteeism.
The list goes on:
What’s the cost of re-heating the pool or spa after it’s been closed?
What’s the cost of adding stopgap specialty chemicals such as clarifiers, algaecides, flocculants and shock treatments in a constant effort to stay ahead of the water-quality issues?
What’s the cost of materials in and around the pool corroding?
It’s well known that many indoor aquatic facilities in particular often undergo expensive renovations because they’ve been damaged by corrosion due to water and air-quality problems. In some cases, the costs of those types of repairs are so great the facilities are abandoned altogether.
And the most troubling question of all: What’s the cost of a bad public reputation?
I’ll leave that one to your imagination.
When you estimate and add up all of those factors, all of which are disturbingly common to pools treated by the antiquated chlorine-only method, you don’t have to be an accountant to know that the risks of refusing to improve can be devastating. And that’s true for everyone involved, from property owners, to management, to staff and especially to the consuming public.
Then there’s the other side of the equation: how much do you stand to gain by way of maintaining truly gourmet water quality?
(After all, the greater the gains, the greater the ROI.)
For example, when parents know that the environment is safe, wholesome and enjoyable, they are far more apt to bring their kids there for fun, swim instruction, or even athletic training. I know from personal experience that as a parent when you can trust someone with your kids’ well being, you’ll go out of your way to take advantage of those products, services, organizations, or facilities.
Likewise, when senior citizens are comfortable and confident in the water conditions and cleanliness of the facility, they too are more prone to use programs designed for their needs. The same is true for therapists and doctors who believe aquatic therapy and exercise will benefit their patients. Or coaches working with elite athletes — or basically anyone who loves the idea of being in the water but doesn’t appreciate being exposed to possible health hazards.
All of this is why I believe the simple question, “What’s the ROI for your system?” shows how much more work our industry must do to inform the public about water quality issues. We have everything to gain by pointing out the risks and costs but more important still, the benefits that attend making the best water-treatment choices.
Yes, progress comes at a price, but we have to ask what’s the cost of refusing to change?