Source: www.TurfMagazine.com
When days shorten and temperatures drop, many landscape company owners start thinking about new ways to keep their best employees busy and to generate extra revenue to close out the year. Holiday lighting is one option that continues to gain momentum within the industry.
Jason Paulk, founder of the Atlanta-based landscaping company, Paulk Outdoors, did just that . only backwards!
In September of 2002 he bought into Christmas Decor, a holiday lighting franchise. Initially, he focused solely on selling and providing holiday lighting services, which kept him busy from early fall through December each year. Realizing he was missing the bigger service picture, a couple of years later he also began offering landscape services-from design to install to maintenance. The holiday lighting side of his business usually grows about 15 percent per year on average, despite the addition of the landscaping services.
Pleasing the Younger Consumer
Jason Paulk, founder of the Atlanta-based landscaping company Paulk Outdoors, is shifting his marketing focus from baby boomers and seniors to the generation X and millennial crowds, the spenders now demanding all of the latest trends and technologies.
Through franchisor Christmas Decor, Paulk Outdoors offers design services featuring virtual reality via a new software program for these tech-savvy clients. “We can take pictures of a customer’s home and superimpose various lighting designs on it to present a large variety of options to fit the customer’s budget,” he explains.
Although Paulk’s sales team is just starting to use the software program, it’s proving to be a real sales booster for this new target market.
Pro Care Services in Boise, Idaho, took the more traditional route to holiday lighting services by adding them to its mix of commercial and residential landscaping services. Its holiday lighting operation is independent of franchising and is coupled with snow removal services to keep its company’s crews busy year-round.
“We have a large book of business in office buildings and retail centers,” says Kevin Allen, Pro Care general manager. Allen oversees the design, materials, installation, maintenance, removal and storage of its holiday lighting services. “We also install many of our residential properties’ holiday decor inside and out, including live plants (i.e., wreaths and garlands). We work with our materials, rarely installing our customers’ lights. This ensures we’re using commercial-grade products that are reliable and vibrant throughout the winter.”
Both Paulk and Allen have learned quite a bit about successfully selling holiday lighting services. Photo: Paulk Outdoors
Know your niche
Allen finds the highest lighting decoration demand is for lighting attached to the edge of a building or home’s roofline (fascia) to outline the structure. Homeowners are uncomfortable doing this themselves, so they call in a pro. His commercial clients, including office buildings and retail centers, tend to use old-fashioned, oval-shaped lights on rooflines, but more clients are moving to LEDs. His residential clients tend to buy lights for both rooflines and trees on their properties.
In the Intermountain West, Allen finds getting people to switch to LEDs remains a challenge. “LEDs offer many benefits but are still much more expensive than incandescent lighting, and we have to carry inventory in both incandescent and LED.”
Another holiday lighting service challenge is finding enough qualified workers to install the holiday displays in a safe and customer-pleasing fashion.
“There’s a lot of competition for blue-collar workers right now,” Allen says. “At Pro Care, holiday lighting is done by existing team members when the season for sprinklers, mowing, lawn/tree services and annual flowers ends.
“Our process for selecting and training team members for holiday lighting is detailed,” he continues. “First we determine which team members have an eye for detail, are comfortable working at heights, can work in very cold conditions and are worth developing/advancing before next spring. Then we train them in the classroom and in the field, focusing on safety first, as well as proven techniques that consistently yield great results. Finally, we use checklists and follow-through. Sometimes you can’t see the full quality of an installation in the daylight, so our managers will return in the evening to verify everything looks wonderful.”
Paulk Outdoor’s client mix is 60 percent residential and 40 percent commercial. “In the Atlanta area, it’s hard to compete with the big guys who manage the large commercial office buildings and shopping malls,” he says. “These larger companies can go direct to manufacturers, avoiding the middle man. We have been successful in focusing on the stand alones and ma-and-pa businesses.”
Pricing for profit
Paulk Outdoors has learned a trick or two about increasing its efficiencies and profitability in holiday lighting. “We try to encourage our customers to make a three-year commitment, so we provide great pricing incentives,” he says. “We amortize the costs to our customers. We don’t offer packages; rather we offer line items such as fascia outlining and providing original design and installation. For more efficient production, we target clusters of homes within certain blocks, but we haven’t been very successful with that yet.”
ProCare makes sure that its new sales team members have installed lights before so they are familiar first-hand with the process. “We give them unit pricing scales that allow quick estimates of labor and materials based on footage,” Allen says. Employees have the freedom to provide a prospect with a rough quote on the spot. If the quote is within the customer’s budget, the employee can draft a formal bid for approval. Allen also insists his employees carry samples so prospects can visualize their options, and see the quality of the commercial grade lighting.
Paulk says pricing is critical in his holiday lighting business. “We have to set a price that is high enough for prospects to realize we are serious about providing a high-quality service. Due to the quality of our products, large storage facility, licensing, insurance, industry knowledge and trendsetting, we cannot afford to be profitable at lower margins,” he says.
Paulk Outdoors generally deals with large sales orders. “It’s not worthwhile to work with customers for less than a $1,000 sales ticket,” he says. “We’ve found the majority of our clients will have to spend upwards of this amount in order to get the effect that they want. Paulk Outdoors’ average sale is $3,000, substantially more than the franchise national average sale of around $1,400.
ProCare prices its fascia outlining by the linear foot. “We’ve tracked labor and materials for many years and can see patterns in job costs,” Allen says. “Trees and shrubs are a bit less predictable. We price by the number of strands, which includes tax, markup and labor. If the property is particularly unique or challenging, we’ll account for that in the quote, too.”
Timing, timing, timing
Another important factor for Paulk and Allen is the six- to eight-week selling and installation window for holiday lighting. “By mid-October, we contact existing customers for reinstallation,” Allen says. “Weather tends to be nice into November, so many property owners and managers don’t get serious about holiday lighting until after the first week of November. Many prefer the lights be installed and operational by Thanksgiving, allowing only a few weeks for installation. A second wave of sales happens just after Thanksgiving, as owners and managers see holiday lights around town. After the first week of December, sales slow to a crawl. Most people don’t want to invest a lot of money into a display that only lasts two to three weeks.”
Top 4 Holiday Lighting Questions Answered
For landscape contractors adding holiday lighting services, the same questions tend to come up again and again. Here, Brandon Stephens, president of Christmas D_cor, answers the top four questions landscapers ask about holiday lighting.
1. What is the average cost a residential customer will pay for a lighting display project?
On average, it’s $1,479 for new residential and $1,384 for re-install residential. Some residential clients purchase up to $10,000 in lights per year.
2. Is the holiday lighting industry growing?
The holiday lighting and decorating industry is bigger than ever and growing at an unprecedented pace. Although the industry is in its infancy, time-starved consumers spent over $200 million last year on decorating services during the holidays with over 800 percent growth in the past six years.
3. What are the startup costs/working capital?
This is one of the least expensive businesses to get into because costly equipment is seldom required. For each full service installation crew, we estimate ladders and tools at $750 to $950, and a startup inventory of $3,000 to $5,000. Each additional crew will have about the same cost in ladders and tools, but inventory should be increased about $2,000 per crew.
4. Do you need a bucket truck or have to hire an electrician?
No. You can learn how to light higher areas without the use of a bucket truck. There are decorating alternatives to extremely high tree lighting. On rare occasions, usually commercial applications, a bucket truck can be beneficial. You can learn a variety of ways to find and use power sources available. On commercial jobs and rarely on residential orders, you may need to have an electrician install additional power. This is very easy to accomplish, as most electricians are not busy during this time of year.
Although Paulk starts to sell and install lighting as early as the first week of October, the big rush occurs just after Halloween. “We try to get as many new contracts as early as possible in the season by offering early installation incentives. We can wrap trees and outline fascias, allowing the lights to stand unlit until the holiday season rolls around. The customer can then just flip the switch whenever they’re ready.”
