With the slumping economy, many landscapers may be experiencing a standstill in acquiring new accounts or a loss of those existing. One way to supplement the lack of growth is by adding another service to your offering, one that has shown to be in demand regardless of the economic state. So far, holiday decorating services have proven to be just that.
Holiday decorating services, like those provided by franchises Christmas Décor and Brite Ideas Decorating, offer homeowners the ability to pay to have their holiday decorations erected, maintained and then dismantled at the end of the season. Services such as these were introduced more than a decade ago and continue to see growth.
GROWTH DURING UNCERTAIN TIMES
“The market has experienced a sharp increase on both the residential and commercial sides,” shares Blake Smith, CEO of Christmas Décor. “People in general are extremely busy, especially those households with children and two working parents. They like to outsource what they can. Plus, decorating the outside of your home in the winter is one of those things that can be a less than desirable project. From the need standpoint, demand grows each year.” Christmas Décor had estimated growth of 8% last year.
Even in the downturned economy, demand for decorating services continues to grow in target markets. To some, the service is considered more of a need than just a want. Decorations are a must during the holiday season, and seeing the twinkly lights can provide comfort in a time of economical uncertainty and distress.
“The wonderful thing about holiday lighting is the fact that it is a very emotional purchase for the residential market, which is primarily what we target,” says Josh Minturn, national sales director for Brite Ideas Decorating. “This works in our favor as this emotional want in uncertain times has historically triggered and transitioned into an emotional need to fill the void the uncertainty has left.”
As Smith from Christmas Décor explains it, a contractor who gets into holiday decorating this year can potentially bring 30-35% of their contracts back next year and add another 20-30% to that each ensuing year.
TARGETING THE RIGHT BUYERS
The service’s growth may prove that holiday decorating is more recession-resistant than some other services offered in the green industry. Success—especially in a soured economy—depends on effectively selling to the right target market.
“The reality is that people will only spend the money they have or have access to, and with the middle class beginning to feel the squeeze, holiday lighting companies should also expect to feel a pinch as these customers drop off,” explains Minturn. “Brite Ideas has positioned itself well by targeting primarily the upper-income earners—not relying on the fringe customers to drive our business.” Those who have traditionally targeted more of the middle-class customer will likely have a greater chance of feeling the effects of the economy.
The profile of a target customer will vary by region. While household income varies by market, residences that are approximately 3,000 square feet and up are a safe place to start. From there, word can spread and sales can grow.
“When a company gets into this business and starts to build a client base, we see it start to go down into the middle-income markets,” explains Smith. “The neighborhood may be considered high-end, but the outer edge has those starter homes owned by up-and-coming homeowners.”
Homeowners in the outlying areas may be attracted to the decorated homes—and the extra time the services afford homeowners—and in turn acquire similar services. The families farther out, with even lower incomes, probably should not be targeted, as they would usually prefer to do their own decorating and save on the cost of hiring it out. Plus, price would become a much more contentious issue with these customers.
As new trends in holiday decorating have hit the scene, a case of keeping up with the Joneses has helped grow and stabilize sales even further. “Decorating isn’t about just hanging lights anymore,” says Smith. “People in our target group don’t want what everyone else in their city has—they want a unique display.” New holiday design features like animation, silhouette displays and LED lights are providing customers the unique edge they desire.
A trend that has seen rapid growth and demand is the use of LED lights. The lights allow homeowners to save on cost when in use, making decorating services that much more attractive. “The holiday lighting market has really shifted, almost wholeheartedly, to LED products,” explains Minturn. “The benefits are extremely apparent to most customers (the longevity of the bulbs and the energy efficiency), and cost has begun to slightly retreat.” The look of the lights is virtually the same as standard incandescent bulbs with a similar color and glow.
The growing LED trend can also be used as a marketing tool when approaching a client. “LED uses about a tenth of the energy,” says Smith. “You’re talking about a very significant thing. In the current economic state, that is a big plus; to be green-conscious is a good marketing piece for us.” Christmas Décor LED customers will save enough money to equate a 5-10% discount when you consider operational costs in addition to installation.
The success of a landscaping business that also offers holiday decorating services depends on more than just the health of the market. Business owners must develop a plan to effectively run what is essentially two businesses.
“Many insist that you need to have good installation crews lined up before establishing a lighting business to take care of customers professionally and in a timely fashion once lighting jobs are sold,” says Minturn. “Installation crews are certainly important, but in my experience, the best landscapers that have come through our program and made a dent in their local market have been the companies that best understand the sales process and how to produce sold jobs. If there is money on the table, landscapers will do what it takes to complete a project in terms of installation.” If the salespeople are strong enough at selling the jobs, the installation will follow.
Balancing the landscape installation and maintenance side of the business with a holiday decorating division may seem challenging, but in fact, can help fill the holes in the slow season. “They may start selling in November their first year or two,” says Smith. “But then they may start in October the next year, then early October, and slowly but surely you have this seesaw effect. When one business slows down, the other really jumps in.” The staggering of the two businesses can aid in profitably keeping staff on year-round, saving on the cost of recruiting and training new employees seasonally.
Landscapers should consider what adding a holiday decorating service could do to help their business in a downturned economy. These services have continued to show growth due to their strong demand regardless of the economic state. As landscapers manage the added service effectively over the years, returning contracts will continue to appear, something that is always welcomed, especially in an unhealthy economy. Differentiating yourselves from others by offering more may be a tool for survival.