HOLIDAY LIGHTING: Deck the Halls Like a Pro

The holidays are like weddings,” says Chris Kaylor, owner of Kaylor Landscape, a landscape construction firm based in Porterville, Calif. “People are just nuts with what they’ll spend,” he says, explaining that both events evoke tradition, family and joy. For some people, they’re priceless.
 
Kaylor Landscape added a holiday lighting franchise eight years ago. “When I first started they said the average sale was $700 nationwide, and I thought, ‘We’re never going to sell that in Porterville,’” Kaylor says.

Boy, was he wrong. Since then he’s sold holiday lighting projects priced at more than 10 times that amount at residences and businesses across California’s San Joaquin Valley. Kaylor estimates the holiday business brings in 15 to 25 percent of his company’s $2 million revenue.
 
Other green industry companies tell similar success stories, whether they run holiday lighting franchises, are members of a supplier’s organization or choose to go it alone.
 
Christmas Décor, an industry franchisor, estimates consumers spent $200 million on holiday decorating services in 2005 – an 800 percent increase since the year 2000.
 
“It’s become bigger and bigger,” says Kevin Allen, general manager of Pro Care Landscape Management, Meridian, Idaho. “What’s interesting is you don’t get a significant drop-off rate and you have tons of new customers every year.” Pro Care entered the holiday decorating business on its own about 20 years ago upon a landscape customer’s request and has seen a spike in the service in recent years, thanks in part to a local population increase. “It definitely has grown every year; last year we probably had a 20 to 30-percent growth rate – it was more than we could handle,” Allen says.
 
Part of the reason the holiday decorating industry is booming, decorators say, is upper- and middle-class consumers’ willingness to pay a premium for specialized services that save them time and toil.
 
It’s all about convenience. Consider Kaylor’s point about weddings: It’s common for a double-income couple to fork over thousands for a consultant to help plan for every last detail of their big day.
 
By the time the happy couple is settled into their new home and strapping kids into car seats, it’s likely they’ll seek more services to shave seconds off time spent away from their family. Enter the landscaper, the cleaning lady, the pooper scooper service and – at the busiest time of year – the holiday decorator.
 
“I don’t think you’re able to find a whole lot of people who enjoy installing and taking down their own Christmas lights,” says Brad Finkle, founder of Creative Decorating, an Omaha, Neb.-based holiday decorator and supplier of decorations and industry training materials.
 
While homeowners value the warm fuzzy feelings they get from having a bright home at the holidays, few of them like doing the grunt work – especially in regions where wintertime weather will leave them feeling less than warm and certainly not fuzzy. It’s the same for businesses – especially retail outlets that know holiday decorations encourage traffic from shoppers, but don’t want to risk putting their employees on rooftops and ladders during inclement weather.
 
“And it does come down to time,” Finkle adds. “With two-income households and kids and activities, people just don’t have the time to spend decorating their homes. It’s one of those things like cutting the grass – people like it to look professional and have someone else take care of it for them.”
 
The professional look, decorators say, is as good of a selling point as the time-saving aspect. The bar is raised with every professionally installed display that goes up in a neighborhood. “It still comes down to keeping up with the Joneses,” Finkle says. “All you need is that one person on the block to start and then another one will, and then you’re adding more lights every year.” After all, nobody wants their display to be the only amateur-looking one on the block.

SEASONAL BIZ. Manufacturers and franchisors estimate green industry companies account for 80 to 85 percent of all professional holiday lighting installers. Other seasonal businesses like pool/spa-care providers and pest control operators and a small percentage holiday-only companies round out the rest of the industry.
 
Adding winter business alleviates an owner’s anxiety about finding a way to keep dedicated employees on the payroll year-round.
 
“One of the bigger benefits for us is that it keeps our guys working for that extra two months,” says Mike Kaplan, operations manager for Giannini Landscaping, Lindenhurst, N.Y. As Giannini’s maintenance and lawn care work slows down in October, 14 of the firm’s employees transform into holiday lighting crewmembers. Crews begin installations around Halloween, often working 70- to 80-hour weeks during the height of the season (from Thanksgiving to mid-December), and stay busy taking down displays until about Feb. 1. “So our guys are really only off for a month before spring,” Kaplan says.
 
Another attractive aspect of holiday lighting is its consistency. It’s even been called weather- and recession-proof. While Mother Nature can certainly make an outdoor decorator’s life difficult, profits don’t depend on how much it snows. Christmas happens every Dec. 25; snow is not guaranteed, as many landscape contractors with snow-plowing divisions learned during the unseasonably warm winter of 2005-2006.
 
Decorators also say this “luxury” service is not hit hard by economic downturns, due to the deep pockets of the customers who purchase it and the sentimentality factor. “I don’t want to sound hokey, but the holidays are a magical time,” says Brandon Stephens, Christmas Décor’s director of marketing. “People want to make their home as warm and comfortable as possible, and they’re going to budget for it. It could have something to do with the higher-end clientele, but its just one of those things that people don’t want to let go.”
 
Kaplan agrees. “Sept. 11 slowed down our landscape side of the business, but not our holiday side.” It's part of a greater trend in the holiday industry as a whole – not just with outdoor lighting. According to a January 2006 report in the trade publication Selling Christmas Decorations, disasters and high gas and heating prices don’t hurt the holiday industry as much as they do others. In fact, these events can cause more people to spend Christmas at home, which may mean they’ll put extra effort into decorating for the holidays.

OFFERINGS. When a contractor creates a holiday lighting division, he or she has a lot of options.
 
To start, there’s the decision to purchase a franchise or go it alone. Also, several outdoor decorating suppliers offer “membership,” or access to their products at a discount, training and support, for initial and/or annual fees. (See “Franchise or Fly Solo?” on page 130.)
 
Typically, when customers sign on with a holiday decorator, they receive design, installation, maintenance, removal and storage. Not all firms offer storage, but it’s advantageous for several reasons, most importantly because it’s part of selling convenience.
 
“If they’ve paid you to put them up, they pretty much don’t want to worry about them after that,” Allen notes. Also, storage is important so the following season the contractor doesn’t waste time going to an installation appointment only to find a box of damaged materials or that the homeowner forgot to leave out the appropriate extension cords, notes Scott Hease, founder of Holiday Bright Lights, an Omaha, Neb.-based holiday lighting membership system that manufactures products and provides training and marketing materials to holiday decorators.
 
Storing your customers’ decorations also can seal the deal for the next season. “Providing storage kind of ensures we get to reinstall the following year,” Kaylor says. “They seem to feel more obligated and want to go with us again because we’re taking care of it for them.”
 
Another aspect of selling convenience is maintenance that’s offered while the lights are up. “People need to be well-prepared to support their products,” Allen says, noting that his company offers a full warranty on products for the first year. “You should ask yourself: If a light bulb burns out, are you going to rush right out and fix it or ignore it?”
 
How to price products and whether to sell or lease them is another consideration contractors should make.  
 
When a contractor sells the products, customers are charged for the product during the first season and then for labor only in subsequent seasons. Typically, the commercial-grade lighting that professional decorators use lasts three to five years.
 
“For first-time buyers, we say, ‘Spend what you’re going to spend this year. If there’s something else you want, add it next year,’” says Darryl Zellmer, president of Lawn Systems, West Bend, Wis. One benefit of selling the products is customers understand that their costs will go down considerably for the next few years.
 
Leasing products or providing a “service package,” as the Christmas Décor franchise calls its format, is beneficial to customers who don’t want to worry about purchasing new products when theirs age. Christmas Décor automatically replaces faulty or aging decorations. “It’s similar to a lease, but it’s not really a product-focused program,” Stephens says.
 
Regarding pricing: “There’s really no standard procedure,” Hease says. “I see a lot of companies that operate in different manners. Some charge higher prices for product and lower prices for labor in the first year. Others almost give the product away and mark up their labor really high.”
 
Profitability typically comes from product mark ups, other decorators say. “Usually, products are marked up 100 percent,” Finkle says. “Some items like wreaths and ornaments can be marked up more than that, up to three times the cost.”
 
Contractors’ pricing models vary: some price products by the foot, the strand or item, often adjusting price for installation difficulty. For example, a second-story strand of lights may cost more than a strand installed on the first story. Whether or not rappelling is required or equipment rental is needed also can add to cost. Individual product prices are then added to labor rates for the job’s total price.
 
Real estate fluctuations from one market to the next greatly affect job prices, but the average residential sale for Holiday Bright Lights’ national network of contractors is $2,500, Hease says. Other contractors agree, sharing average new installations fees from $1,000 to $10,000.

 SHORT AND SWEET. One of the greatest challenges a holiday lighting installation firm encounters is the short season. Contractors typically send out contracts for existing clients in September to secure existing business before signing on new customers. To maximize the selling season, which typically starts in October but peaks in November, it’s important for holiday lighting salespeople to qualify customers over the phone.
 
“You really only have 45 days to do installations, so you have to be organized and prepared,” Hease says. “Make sure that customers are looking for the services you offer and the products you offer so you don’t waste your time.”
 
Kaylor knows his time is precious during holiday sales season. “An estimate takes at least an hour, and you only have so many hour slots in the short window of the holiday lighting season,” he notes. One way to weed out customers who think it will cost about $50 for a few hours of work is to implement a minimum charge.
 
“We screen on the phone, and that’s really important,” Pro Care’s Allen says, adding his minimum charge is around $300. “A lot of people want you to come out and they certainly want the service, but when they see what it costs they get sticker shock.”
 
Zellmer agrees that a tactful but honest phone screening approach is necessary. “We explain that it’s high-end, commercial-grade lighting,” he says. “After we’ve asked the customer a few questions, we kindly point out that there’s a $1,000 minimum. Some of them might get sticker shock, but I just explain that half of the price covers the product, and that it’s not worth my time to come out if I’m going to make less than $500. It weeds out about half of the people that call in.”
 
Once you have the “right customers,” decorators say the sales process is short and sweet.
 
“If they’re prepared to spend the money, it’s probably already sold in their minds,” Zellmer says.
 
Typically, a salesman visits a property armed with a portfolio, and talks with a client about what he hopes to achieve within his budget. One tactic Kaylor’s salesmen have employed is proposing more decorations than a customer can afford, including specialty items like wreaths and lawn ornaments, for example.
 “By over-proposing, we’re able to let customers pick and choose what they want and come up with a program that maximizes their budget.”
 
Because qualifying leads is essential, acquiring new business through traditional broad-based marketing methods probably isn’t the best approach. “In years past we did some billboards, although I can’t say that brought in a whole lot of business,” Allen says. “We did some TV commercials, which gave us a good response, but until this year we hadn’t done direct marketing, but I am going to send out a mailing this year to some targeted clients.”
 
Other decorators also send out mailings to prospects in a specific income bracket or to their top-spending maintenance, lawn care or design/build clients. Hease recommends that lawn care and landscape businesses do this as early as July by slipping a flyer into their late-summer invoices. Another effective method some contractors use is to identify high-income neighborhoods and canvass the area with door hangers or flyers.
 
Often, one installation will sell others, holiday lighting contractors say. The best advertising can be the house down the block – or the installation crews themselves.
 
Giannini Landscape stopped using traditional advertising for its holiday lighting services a few years ago. The company yields enough business from maintenance accounts, word-of-mouth referrals and pickups that come from installation crews decked out in Christmas-themed uniforms including red sweatshirts that say “Giannini’s Elves.” Also, the company asks customers if it can place a promotional sign in the front yard and it augments its trucks with magnets that tout holiday-decorating messages rather than landscaping ones. “We always hear, ‘I’ve seen your trucks,’” Kaplan says. 
 
Just as the selling season is short, installation times are, too, as most customers prefer their decorations be installed around Thanksgiving. It’s not always possible, though, and many contractors begin installing lighting in mid-October.
   
Kaylor Landscape offers an incentive for early installation on new sales. It offers a 20-percent discount for those permitting installation during October and a 10-percent discount for those that permit installation from Nov. 1 until before Thanksgiving. Take-down time isn’t as taxing. Firms usually begin removing lights on Jan. 1 and, depending on the weather, it takes about a month.

TRAINING & TIPS. As the installation period is squeezed into several booming weeks, it’s important for crews to know how to hang lights efficiently and have a good base of electrical knowledge. For contractors not lucky enough to have an electrical expert on staff, this type of training – along with light-hanging tricks of the trade – is available from a variety of sources, primarily franchisors and product suppliers. Usually these are national companies, but Zellmer’s company received training and purchases products from a local supplier. “They conduct the training, and have a whole course on marketing and selling,” Zellmer says, adding that it’s extremely important for a contractor to get formal technical training.
 
“On the electrical side, there’s a lot of fooling around when you’re figuring out the amps and the draw, especially on an older house or one where there’s been renovations,” he says. “You can have a lot of headaches. But you live and learn.”