Summary: With big-box retailers an even more visible presence with their own water treatment products, dealers are left to seek for new avenues of profitability. One idea rich in tradition, though often bypassed, is soap. This article provides an introductory primer for dealers to get reacquainted with an old standby.
Soft-water soaps have a long, honorable history in the water conditioning industry. Introduced shortly after the end of World War II, these specialty soaps quickly became the preferred tactic for closing a water softener sale. In the ’90s, however, soft-water soaps lost some of their luster as water dealers experimented with direct marketing, cross-promotional giveaways, lead generation programs and other approaches to closing sales.
But times change. Today’s sophisticated consumer demands the kind of real value that a soap program represents. Consequently, soft-water soaps are riding high on a fresh wave of popularity among water treatment dealers who see them as an excellent low-risk closing tactic as well as a source of highly profitable residual income.
What are soft-water soaps?
“Soft-water soap” is an umbrella term that includes household soaps (such as liquid laundry soap, granulated laundry soap, liquid dish soap and granulated automatic dish soap) and personal care soaps (bar soap, liquid hand soap and shampoo) specifically formulated to perform in soft water. One common denominator shared by all these products is they’re formulated for use only in soft water. Unlike their over-the-counter (OTC) national-brand counterparts, soft-water soaps don’t contain water conditioning agents. Being mass-marketed, OTC brands must perform in any type of water, hard or soft, so a good percentage of their volume consists of water-softening chemicals¾nearly 50 percent in some cases. Soft-water soaps don’t contain these chemicals so an ounce of soft-water soap has more cleaning power than an ounce of OTC soap. Compared to OTC brands, soft-water soaps are highly concentrated and rich in value, which is an excellent selling point in their favor.
Another important difference between OTC brands and soft-water soaps is that OTC brands typically contain detergents, i.e., synthetic soaps, derived from petrochemicals while most soft-water soaps are derived from naturally occurring fatty acids (plant or animal oils). Strictly speaking, no soap can be “100 percent all-natural” because soap is the product of a complex industrial process. Still, soft-water soaps contain little or no phosphates, foaming agents, benzene derivatives or other “industrial-sounding” chemicals, which makes them very consumer-friendly. Some manufacturers of soft-water soaps also offer allied products such as all-purpose cleaners, glass cleaners, and specialty dispensers that, although not “soft-water soaps” in the literal sense, offer enhanced value and proven marketability.
A winning tactic
Traditionally, soft-water soaps have been used as closers for water softener sales presentations. They’re still effective in this role. In the soap closer, the water treatment dealer doesn’t sell the soap¾he literally gives it away.
Anyone who’s ever sold a water softener can tell you that too many in-home sales pitches hit the rocks when the subject of price comes up. Many homeowners’ household budgets seemingly can’t accommodate the extra monthly payments that water conditioning systems entail. Soft-water soaps offer an effective way of overcoming these price objections.
In the soft-water soap close, the dealer says something like this: “Mr. And Mrs. Jones, the U.S. Bureau of Labor Statistics says that in 2001, the average American family of four spent approximately $60 every month for household soaps, cleaners and personal care supplies. Your own monthly expenditures for these items are probably in the same range.
“Now, if I could fully or partially eliminate this monthly soap and cleaner expenditure for, say, three years, that should leave plenty of money in the budget to finance your water softener, shouldn’t it? Well, I can do just that by giving you this three-year megapack of soaps and cleaners specially designed for your new soft-water household.”
Voilá! By giving the homeowner a supply of soft-water soaps, the water treatment dealer allows the homeowner to transfer one household expense (soaps and cleaners) to another (the water softening system) without materially increasing his or her monthly cash outlay. It’s a zero-sum situation.
Does the soap closer make sense for you? It depends. Most three-year soap packs wholesale for around $100 while one-year packs are considerably less. If you’d spend $100 to close a sale worth a few thousand¾and a lot of water dealers do just that¾then soaps are right for you.
Bill LaFountain, sales manager of Culligan in Modesto, Calif., considers soft-water soap to be not only an excellent closer, but an important element of a comprehensive win strategy. “Soap products are an integral part of our home water treatment package presentation,” LaFountain says. “By offering soaps, our goal is to provide our customers with an option to manage their water treatment needs with little or no additional money out of pocket.”
The U.S. soap and cleaner market is huge. According to www.bizstats.com, the size of the domestic soap and cleaner market was estimated at $102.9 billion in 2001. That’s a lot of soap. With a consumer market that big, residual sales of soft-water soap is a tremendous opportunity.
In these days of category-killing, big box stores and the resulting ferocious competition they’ve brought to the industry, water treatment dealers are looking for ways to fight back by offering added value to their customers. It’s an excellent long-term survival strategy.
Some progressive water treatment dealers offer salt deliveries. Others sell maintenance programs and service packages. Still others have introduced home delivery of bottled water. In short, they’ll offer any water-related product or service that the big boxes can’t match. These dealers are slugging it out on their own turf, they’re setting the rules and they’re winning.
Given this dynamic competitive matrix, soft-water soaps can be a valuable addition to any water dealer’s line. Because most soft-water soaps aren’t available in the big box stores or mainstream retail grocery outlets, they don’t compete head-on with the major OTC brands. This allows the water dealer to stock them as an upscale specialty item that’s available nowhere else.
As we’ve seen, the soft-water soap closer is a valuable closing tactic. But residual soap sales aren’t limited to new installations. Any homeowner who has soft water¾whether as a result of a household water softener, municipal service, reverse osmosis technology or naturally mineral-free water¾is a potential buyer of soft-water soap. Even if a homeowner bought his softener at a big box outlet, he’s still a candidate for soft-water soap. And as savvy water dealers are discovering, “there’s gold in them thar hills.”
Sold at retail prices comparable to national OTC brands, soft-water soaps generally bring margins ranging from 50 to 100 percent and that’s compared volume-to-volume, i.e., one gallon of soft-water soap vs. one gallon of an OTC brand. When you factor in the concentrated nature of soft-water soaps, the consumer value equation looks even better. For example, one gallon of a prominent soft-water liquid laundry soap yields 128 average-sized laundry loads compared to 16 to 32 loads from a national OTC brand (see Table 1).
No need for extra space
A well-tweaked, soft-water soap retail program doesn’t even require floor space since most soft-water soap manufacturers will drop-ship your order straight to the consumer’s door. That’s about as close to pure gravy as it gets.
Some dealers, however, feel that stocking soap products is well worth the floor space. LaFountain agrees: “We’re a full service water treatment dealer with a retail store. We feel it’s our responsibility to our customers to provide them a source after the initial sale where they can conveniently purchase the soap products we’ve introduced to them.”
To LaFountain, the residual sales potential of soft-water soaps is obvious: “Once a customer has a water treatment system installed in their home, why would they continue to purchase soap products with water softening agents in them?”
The bottom line is this—an aggressive water treatment dealer will follow up his soap closers by cashing in on residual retail sales. As with salt delivery, residual soap sales are low-hanging fruit. You just have to shake the tree a little.
What to look for
If you’ve decided to add soaps to your line, bear in mind that not all soft-water soaps or soap suppliers are created equal. When choosing a supplier, keep the following factors in mind:
Quality: Today’s consumer is smart and more than a little cynical. He or she expects products to live up to their advertising and, if they don’t, you’re probably going to hear about it. So before laying in a supply of soap, order samples from several suppliers. Compare them. Pass them around. Take them home for your family to try. Chances are, if you’re happy with them, your customers will be happy, too.
Trendiness: Make no mistake, consumers not only follow trends, they make trends. For example, two of the hottest soap and cleaner trends today are antimicrobial soaps and citrus cleaners. If a supplier doesn’t or can’t offer them, you may want to consider another. Geographical demands vary, too. Laundry powders, rather than liquids, may be popular in your neck of the woods. Does your supplier offer them?
Packaging: Consumers’ quality perceptions are heavily influenced by OTC brands. After all, people are subjected to these brands’ radio, television, and print advertising on virtually a round-the-clock basis. Be sure that the soft-water soap you choose features stylish, contemporary packaging that fits consumer perceptions of what a “real” soap product is supposed to look like. Inconsistent, amateurish product packaging can rob your whole pitch of credibility.
Marketing support: In choosing a soft-water soap supplier, examine samples of their pitch books, brochures and other sales aids. Are they top quality? Do they reflect the kind of image you’re trying to project? Does your supplier offer on-site soap sales training for your staff?
Peripherals: Gift bags, convenient sample sizes and other items such as these add value to your soap offering. Some manufacturers even offer “soap conservation kits”—self-metering dispenser sets that further increase the efficiency of their soaps. When choosing a soap supplier, it pays dividends to select one that offers the best value equation to your customers.
The days when a water treatment dealer could sit back and wait for the phone to ring are probably over forever. The competition in today’s water treatment market is so stiff that a new entrepreneurial spirit has arisen among formerly complacent water treatment dealers. These dealers are eager to try any approach that puts them one step ahead of the big boxes and keeps them there. For more and more of these dealers, soft-water soap is the answer. Thanks to a brutally competitive consumer environment, one of the industry’s oldest traditions is now one of its most modern.
About the author
Dan Shideler is marketing director for Fort Wayne, Ind.-based Pro Products LLC, a supplier of water treatment chemicals, test kits and soaps. He can be reached at email: firstname.lastname@example.org.