When Chase O’Shea arrives at a homeowner’s residence or place of business with sample strings of LED holiday lights to “show and tell” how customized illumination designs deliver a strong visual impact, it’s pretty easy for him to leave with a contract.
“We might go into a room and turn off all the lights and I’ll plug in the strand so they can see it in person,” he says, adding that the “color mix is really what sells.”
Sometimes, he brings lights his competitors install to show the difference in clarity and hue. And if the neighbors already have a lighting display, which is not uncommon in his Tulsa market, then it’s likely a done deal.
Demand for holiday lighting presents a lucrative, recurring-revenue service opportunity for O’Shea, president of Chase Lawn & Landscape. “We’re not trying to become exterior decorators, but at the same time, we are crafting a separate division within the business that will strictly focus on decorations,” he says. “If we can scale that and devote one or two people to running it, you aren’t getting distracted from the green industry.”
Chase Lawn & Landscape primarily focuses on design/build and installation work such as outdoor living environments, which has also witnessed an increase in demand during the last year. Holiday lighting systems, along with permanent color-changing lighting displays, are one more way to create an experience. And people are willing to invest.
“We are seeing a lot more demand for colored lights,” says Jason Haynes, president, All Outdoors, Greer, S.C. “It’s one of those things where if we do one house in a neighborhood or on a cul-de-sac where no one else has lights, all the neighbors want it after that. It makes a huge difference in the landscape at night.”
Priced for profitability.
O’Shea sees significant potential in the holiday lighting sector, and he’s stoking sales by offering a discount to existing clients who opt for the service. “It’s an early-bird discount, essentially,” he says of the deal. He’ll give 25 linear feet of lighting for free, or 5 cents off per linear foot.
His pricing structure decreases the cost per linear foot every year a customer selects the service. The first year costs the most because of the initial design and setup. But in the second year, the $5/linear foot cost is reduced to $4.50.
“That’s because we are not buying materials, so our profit margins grow,” he says.
“There is tremendous growth opportunity with holiday lighting and decorations.” Chase O’Shea, president of Chase Lawn & Landscape
The third year, cost per linear foot drops to $4 or $3.50 for larger jobs. The pricing sticks at this rate for following years, and customers pay $120 per year for storage or $12 per month that is automatically withdrawn. The storage fee includes a 35-gallon protective container. All decorations are labeled so they easily can be installed the next year, such as marking “southeast entrance” or “front yard oak tree.”
As for profitability, here’s where O’Shea says the recurring service can make a nice bottom-line impact. Because of the pricing structure and reduction in materials/time after the first holiday installation, profit margins begin at about 25% and can be as high as 60% in subsequent years. “It all depends on how efficient the crew is and how well they know the home or office,” O’Shea says.
Haynes emphasizes that installation expertise is key to profitability. So is pricing the service accurately. “You have to know the best way to run the wire,” he says,. “For a lot of companies, it can be hit or miss with the bidding.”
Receiving a phone call from a homeowner that wants Haynes and his team to re-install lighting that was done improperly is not unusual. Holiday and event lighting requires expertise and knowledge related to writing, fixtures and voltage drop. It’s detail-oriented work. “There’s math involved in calculating voltage drop,” he says.
For example, larger projects with more than one transformer require synching so light brightness is consistent. The color-change lighting systems Haynes installs for holidays, or any day, are zoned like traditional landscape lighting. “Each fixture has its own code,” Haynes says.
“So, when you install that fixture, you plug it into the transformer, and you can control it separately. If you want to change the color of the pin oak tree in the front yard, you can do that. You can also dim lights or make them brighter.”
O’Shea seconds the technical expertise required to correctly install holiday and event lighting displays. Specifically, the LED commercial-grade string lights his company uses have bulbs that are on a one-diode system vs. the three- to five-diode systems of typical bulbs. The reason why is, if a one-diode bulb has an issue, it goes out and does not impact the rest of the string. However, a three- to five-diode bulb that has an issue may dim or turn bluer in color, therefore looking different than others on the string and compromising the overall appearance of the display.
“The one-diode system boils down to a brighter LED with less problems during installation,” O’Shea says.
Meanwhile, advances in outdoor lighting give homeowners the flexibility to make any day a holiday. Haynes has a system at his own home. “We love it whenever we have company come over to the house because we can set the lights to different themes,” he says.
Some homeowners set color-changing lights to their favorite team’s colors on game day. And, of course, the lights can be programmed for holidays like Halloween, St. Patrick’s Day, Easter and Fourth of July. “The system has a built-in calendar, too, so you can pretty much auto-set them to turn on a certain date,” Haynes says.
As for holiday lighting design trends, O’Shea says most of his clients ask for lighting on guttering and peaks, and along rooflines. “Peaks are the hot spot because a lot of times, people don’t have the equipment to access them, or they are not brave enough to get up there because it’s high,” he says.
O’Shea expects to add more décor to the holiday lighting lineup, such as large-scale blow-up characters (like snowmen and Santa).
Overall, the trend is to be festive. More people are investing in lighting and taking pleasure in the brightness it brings to life.
According to a 2020 Statista report, Americans increased spending on décor in 2020 by one-third compared to 10 years ago. Last year amid the pandemic, people started early with lighting for the holidays — it was a pick-me-up. And, the Christmas Décor franchise reported significant sales growth and welcomed new franchisees in 2020 and expects the same for the 2021 season, according to a company update.
“Whether you are well-established and the largest landscape company in your area, or if you are the smallest, there is tremendous growth opportunity with holiday lighting and decorations,” O’Shea says. “And don’t stop at holiday lights. You can do displays like pumpkins and hay bales during Thanksgiving, Halloween decorations — and so on. You can really scale a business doing this.”