Bright Ideas: Shedding some light on the landscape lighting industry

For insight into the landscape lighting market, changing lighting technologies, industry opportunities, and more, Landscape and Irrigation recently spoke with Brandon Stephens executive vice president of The Decor Group, Inc., and Nite Time Decor, a provider of landscape and architectural lighting that offers franchise opportunities for entrepreneurs seeking to market, sell, design, install and maintain low-voltage landscape lighting systems.

LI: Tell us a little bit about Nite Time Decor.

Stephens: Nite Time Decor offers a fast track for contractors to maximize their presence in the landscape lighting industry. We’ve developed a complete business system — everything from prospect identification and marketing, to design and installation. Our specialty is helping contractors operate as efficiently as possible, while commanding the highest price, which leads to increased profitability.

LI: What are the benefits of becoming a franchisee, or the benefits to landscape contractors in general of adding landscape lighting services to their existing business models?

 Stephens: First of all, landscape lighting is one of the fastest-growing segments affiliated with the green industry. Demand is growing, and market is being created. Getting into the industry now gives the landscape contractor an opportunity to be unique. It is also becoming a standard add-on sale to landscape design/build jobs. The landscape lighting client also presents a unique opportunity for the contractor’s business — our true target is an affluent client who spends north of $20K per year on their home. Bringing these recession-resistant clients into your client base can create a huge advantage for you — both in great economic times, as well as downturns like we’ve seen the last couple of years.

LI: How much training is necessary for a contractor to become efficient or capable of installing relatively complex lighting systems?

Stephens: If you just want to install a system here and there, there are some solid one-day seminars that are offered in many markets by lighting product distributors. These cover the basics. Our initial training is about 50 hours (one full week) with ongoing support and refresher courses, because we know you cannot retain everything you hear during training. With the growth, the industry changes fast, and ongoing support and training are critical.

LI: What type of existing business model should a company have in place before entering the landscape lighting market/offering these services?

Stephens: You have to have a strong marketing and sales organization, and stay committed to the business. Most contractors simply tap into the “add-on” side of the business, proposing lighting in addition to another job. We’ve seen that only about 1/3 of our franchisees’ business comes this way — the other 2/3 comes from actively marketing the landscape lighting service, not to mention the added benefit of upselling additional services to these households.

LI: What are some of the biggest challenges facing the landscape lighting market in general?

Stephens: The product distributors have “branded” landscape lighting as a product industry, and it still is for the most part. Most consumers know that they can go down to their local home improvement store and get a box of fixtures for a couple of hundred dollars. They can plug them in and have light — and lets face it, compared to darkness, any light looks good.

 Lighting contractors know that there is much more to it than that. Using high-quality products is a must, but proper design and installation takes time and knowledge. Knowing where to place fixtures, and how to truly design the portrait using levels of light makes a huge difference in the final look. It’s not about just plugging fixtures into the ground.

The big challenges we see are 1) finding the client who sees the value in having it done properly, versus just having lights, 2) effectively explaining the value and giving that client what they want, and 3) giving better-than-promised follow-up service.

Our average sale is just shy of $4,000, and you must deliver outstanding value to command that type of money. There are low-cost contractors out there putting in lights, so we have seen cases where someone has undercut our price from time to time. But, for the value-driven client, we don’t feel there is much to compare to.

LI: How has the economy impacted the landscape lighting market?

Stephens: Our clients are more “recession resistant” than the average consumer, but they are not “recession proof,” so we have seen an impact. We’ve seen that our clients have spent differently in the past couple of years. We’ve seen more “phase-in” projects. For example, we find a property that needs 100 fixtures to complete the portrait. Rather than do it all at once, they will do the front yard, then the back yard, then the courtyard, then the sitting area, for example, over the course of a year or 18 months.

LI: What are the biggest trends, in general, in landscape lighting fixtures and the technologies/products being used?

Stephens: We get asked a lot about LED lights. The technology keeps improving, and isn’t too far off — but we have not been comfortable with the color of the light itself. It is different than Christmas lights, where you look directly at the bulb. In landscape lighting, you look at the “effect” of the bulb. So, today, we are staying with incandescent technology — because we aren’t comfortable with LED landscape lighting technology yet. Plus, the LED bulbs cost about ten times as much as incandescent. As prices come down, and the look of the light gets better, we will take a closer look.

We are also doing a lot of work using the new 24-volt system. It offers some flexibility and some significant efficiencies to both the contractor and the client. We have installations where we save about 30 percent on wire, 20 percent on labor, and 20 percent on transformer cost using the 24-volt system. We’ve also been experimenting with using lower-wattage lamps on this system, and cutting energy consumption by almost half over the normal 12-volt system.

LI: Are there any new trends in terms of the design/implementation side of the landscape lighting market?

Stephens: Every year, it seems that prospects are getting better at identifying differences between shoddy landscape lighting and well-done installations. Five years ago, a client was more apt to be comfortable with 12 or 13 fixtures — even if the job took 30 to do it right. We’ve seen that clients can tell the difference, and will want to do it right, versus settling. It has also gotten easier to demonstrate the value of the design/implementation. Many people we talk to have already done the do-it-yourself kit and it lasted about 18 months, so they recognize the value of taking care of the system.

LI: In terms of the Christmas Decor business, I realize that is a separate aspect of your business, but how can landscape contractors further enhance their business with the addition of holiday lighting?

Stephens: It’s no secret that you can make good money in holiday decorating — our average franchise reports a net profit of 28 percent, which they really like. Some will make as much net profit in 3 months as they do the rest of the year with their landscaping business. It’s also a great way to recruit those affluent clients, to whom you can then upsell additional services. It keeps employees busy year round, and allows you to use your equipment to generate more revenue — you’re paying for your truck and trailer, they may as well be out in the field generating money. Plus, Christmas is on the calendar, so you don’t have to depend on snow like you do in snow removal — another off-season option — because demand is built in. Our system is designed as a bolt-on division for the contractor, and it fits what they already have — we have two-man operations that do $50,000 in holiday decorating, and we have larger companies that do in excess of $2 million, so it fits their production capacity.

For more information about landscape lighting, Nite Time Decor or Christmas Decor, visit www.nitetimedecor.com or www.thedecorgroup.com