Hitting the Market on the Upswing: How To Be Successful in Landscape Lighting and Other New Services

Here's a challenge faced by every contractor: How do you expand your business profitably in a rapidly-changing market place?

Today the green industry is transforming itself from a small "Mom and Pop" business orientation into a multi-billion dollar economic force. That means you will see new trends, new products and new opportunities every day.

If you understand the dynamics of business cycles and the activities they generate, you will be ready to take advantage of these opportunities as they reach the marketplace.

For example, consumer buying trends are creating demands for products and services that offer new niches for "landscape entrepreneurs" like yourself.

Just a few years ago landscape lighting, water gardening and other landscape specialty products only interested the "designer market." Not so today. Landscape specialty products have become more affordable, more reliable and more in demand by typical American homeowners.

These "specialty products" offer a glimpse of where your business will evolve in the coming years. Take a look at the landscape lighting industry. It's an ideal case study of a new, emerging product and installation service in a dynamic industry.

Understanding a Business Cycle

To understand the opportunities that await the risk-taker, let's take a look at a typical business cycle: In the early stages of a business cycle, there is a limited marketplace, little competition and profits tend to be high. Many of today's landscape professionals, for example, started out with a truck and basic equipment, and discovered there was a growing market for lawn and landscape maintenance. However, as their local markets matured, competition increased and profits started to erode.

To stay successful, many landscape firms had to offer more services and products than their original "core" business to distinguish themselves from the competition and to ensure new areas of profitability. For example, the lawn maintenance contractor began to offer fertilizing services. The landscape contractor began to install brick paving, and the irrigation contractor began to offer landscape lighting and other specialty products like water gardening.

A Simple Marketing Maxim

Each of these landscape professionals who earned success discovered the power of a simple Marketing Maxim: The easiest person to sell is the person you are currently selling. All business is based on personal relationships, and the power of a good relationship is very influential in the green industry.

That is one of the reasons why landscape lighting has grown at such a rapid rate. Professional contractors, like many others in the green industry, have discovered the value of building long-term relationships with each of their customers.

When a relationship based on trust, dependability and professionalism is established and cultivated, there is an excellent opportunity to sell more products and services. Customers will ask someone they know for lighting, paving, water features or landscape improvements before they open the yellow pages and start from scratch.

As many contractors have discovered, there are major financial and marketing benefits in selling products and services to your existing customers. You already have a strong referral base upon which new business can be built. That means you can decrease the high costs involved in attracting new business, including advertising and promotion.

An Easy Transition

It follows that new services, like landscape lighting and water gardening, are booming. It's a very easy transition from landscape irrigation to landscape lighting. Most contractors can hear themselves saying:

"Mr. Jones, as long as we're updating your irrigation system, can I give you an estimate to add a new landscape lighting system? It'll add safety and beauty to your landscape and increase your property values!"
Contractors who sell a range of products and services to their established customer base can anticipate new business throughout the year and lower overall costs.

What New Products or Services to Offer

Deciding what new products or services to offer your customers requires consideration of several important factors:

First, when defining areas for new growth, you need to look at potential size, as well as the current state of the market. If the market is large and saturated (lawn maintenance, for example), you will find classic business cycle attributes: high levels of competition, razor thin profits, large capital and labor investments. Lawn maintenance may be a big potential in terms of size, but it is already suffering the ills of a mature market. Most contractors would rather be on the upswing of a rapidly-growing and still- profitable business, rather than on the downside of a large business that has high costs and low margins.

That's why new specialty products, like low-voltage landscape lighting, have become so popular today. Homeowners and builders are aware of the value of professionally-installed outdoor lighting and the demand has grown at double-digit rates over the past several years.

Barriers to Entry

Here's a second important consideration: What are the barriers to entry? Remember the old put-down "trunk slammer?" If it does not take much knowledge or equipment to get started, more people will enter the same business. That's what sets landscape lighting apart. You do need to have some electrical and technical knowledge to be successful. And you need to be proficient in installation practices and have a basic understanding of lighting design and techniques.

A business that has some barriers to entry, like landscape lighting or water gardening, will be a more profitable operation for a longer period of time. And that's where the growth will be.

Customer Profile

A third consideration is your customer profile: Does your new product or service fit into the demographics of your customer base? Are your customers mid- to upper-end residential or commercial users with a willingness to invest in landscape design and construction, irrigation and other services? If so, would they would be good candidates for new products, like landscape lighting or water gardening?

As the green industry grows and matures, you will see more contractors expand their product and service offerings. And the successful ones will be building stronger relationships with their core client base. To stay ahead of the competition, they will find new niches with specialty products. Perhaps one firm will specialize in grading, irrigation or hydro-seeding, while another may excel in high-end residential landscape construction, landscape lighting and water gardening.

Whatever area of the green industry you serve today, take a look at your next job and evaluate what other products and services you could be offering your customers and ask yourself "Is there a future in this for me?"