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Lite4
11-22-2007, 09:58 PM
Is anybody else out there offering financing to your customers for new installs. I use JDL credit and it has really been great this time of the year because most people are saving their money for Christmas gifts and with this credit I can offer them 8.9% or 180 days same as cash. The same as cash feature has been very popular. If they go with the 8.9% it works out to 20 bucks per month per 1000. financed. Most people seem to be going with the 6 months same as cash though.

The Lighting Geek
11-22-2007, 10:14 PM
I offer JDL Credit, MC, Visa, Amex, PayPal and they always seem to write a check. LOL! The few times they use credit cards is to get the airline miles. I think it is a great way to get the clients who might not otherwise buy right now. It can be a very powerful tool when needed.

Pro-Scapes
11-23-2007, 08:54 AM
Who did you guys contact to get set up with JDL ? I dont really use John deere landscapes as its a bit far for me and the prices have been higher than my current costs.

I would like to start offering a credit promotion. We were using a local credit co that offered 12 mo SAC but I didnt like the profesionalism of them at all.

Lite4
11-23-2007, 09:36 AM
Billy, Just go into a JDL outlet and they can get you signed up. If you finance through them you have to buy product through them. I think JDLs prices across the board are higher than anybody, However, I told em if they want my business they will match my competitors prices; which they do. They will always match pricing. They carry just about everything and around here nobody gives you better service than they do.

INTEGRA Bespoke Lighting
11-23-2007, 09:53 AM
Is anybody else out there offering financing to your customers for new installs. I use JDL credit and it has really been great this time of the year because most people are saving their money for Christmas gifts and with this credit I can offer them 8.9% or 180 days same as cash. The same as cash feature has been very popular. If they go with the 8.9% it works out to 20 bucks per month per 1000. financed. Most people seem to be going with the 6 months same as cash though.


I have been wanting to talk about target marketing for some time and this thread is a great stepping off point....

Who do you want your clients to be? Who is your target market? I asked myself these questions before I opened my company. I thought long and hard about this because, as I see it, you cannot really have it both ways. If you want to target and serve the masses (80% of the market), you will require a different approach and business style then if you want to target and serve the upscale clients. (10% of the market)

By going after the mass market, you will need to be more price conscious and understand that you are essentially competing with the everyday cost of living: mortgages, bills, etc. You will also have to be ready to do some high volume sales numbers to stay viable. By going after the upscale market, you can be more liberal with your designs and installations, specify top quality components and have less worries about competing influences.

Financing could be an important offering if you are targeting the mass market, whereas the upscale market generally has no interest or need to finance items such as outdoor lighting.

Many people dismiss my ideas of target marketing to the upscale clients. They suggest that these opportunities do not exist in their area, or that this market segment is too difficult to capture. I would suggest the exact opposite. Every city, and town that I have ever visited in N. America has an upscale market. As far as capturing this market share, well it requires patience and a commitment to "TQM" (Total Quality Management).

Here is my case example:

You open up your lighting business and your first call is from the owners of a smaller property in the older part of town. You go out and visit, design, specify, sell, and install a system for them. Given the property and their budget etc it comes out to a $2k - $3k job. They then have a party and invite their peers over... Everyone loves the lighting and wants to know who did it and how much it cost. Calls start coming in... you are busy....

Q. How many $2k-$3k jobs do you have to do each year to make a living?
A. A LOT! The fixed costs of consultation, design, specification, sales call, procurement, receiving and accounts receivable are arguably the same for every job.

You open up your lighting business and focus solely on target marketing to the upscale properties in your area. You get a client that requires a relatively large lighting system and you do an excellent job installing only the finest quality components. Budget wasn't really an issue. They then have a party and invite their peers over... Everyone loves the lighting and wants to know who did it and how much it cost. Calls start coming in... you are busy....

Q. How many $20k - $30K jobs do you have to do each year to make a living?
A. Not so many. I would even suggest that the fixed costs of consultation, design, specification, sales call, procurement, receiving and accounts receivable are actually lower per job based on economies of scale.

The other critical factor here is component quality and cost. When selling to the mass market, you are generally going to be specifying and selling mid-level components, which is fine... they work and you have to be price conscious and competitive. BUT since we are working on margins (markup basis) the $ per component installed is relatively low. When you are selling to the upscale markets, you are generally spec-ing and selling top quality specification and architectural grade components. The cost of which is significantly higher, which is fine.... they work very well. AND because you are working on margin/mark-up, you as the contractor are doing much better on each system.

$50 widget x 1.3 = $65, or $15 Gross profit.
$100 widget x 1.3 = $130, or $30 Gross profit.
In each case the widget does the exact same function.
Difference is, on the upscale project you need many many more of the $100 widgets.

Great, so you knew all this already I bet! How do you convert it to target marketing... well that is another thread... but I would suggest that if you want to appeal to the upscale market in your area, you do not spend a lot of time and energy on developing financing programs, or by cross promoting manufacturers who are essentially promoting themselves in other venues or markets that you have no aspirations to. (Case point here would be Kichler, but that is also another thread for another day.)

Well time to hop off my soap-box for now... It might start warming up here soon! (-17.5 Celsius when I woke up this morning.... brrrrrrrr)

Have a great day.

The Lighting Geek
11-23-2007, 11:11 AM
James,

I think like you do but you said it better..LOL I have target marketed since the beginning. It takes time to build because people need to see your ad or truck, etc. at least 3-5 times before they take action. Unless they have a immediate need. On my 4th mailing of a card deck I recieved the most responses. They tell me all the time "I saw your ads and your trucks several times..." You are right on the money here. I do not have yellow page ads or newspaper ads, it hits the wrong people. My average started out at 20-25 lights 2+ years ago from marketing. Now I my average is 60-80 lights per job. I have bid on more 100 to 200 fixture than ever before. It is directly connected to who I market to. I believe that is why I use JDL credit so rarely. The people we all want have the money and writting a $10,000 to $50,000 check is not a hiccup. It is a great tool to help you get going, most most will find the need for financing changes as your business grows.

Pro-Scapes
11-23-2007, 01:18 PM
When I have used financing in the past for clients it was usually my design was twice what they could or were willing to pay at the time. Out of the 3 times we have financed all of them put at least half down and financed the balance.

I dont walk away from systems that are smaller than i would like to do. Just because someone has a smaller home or only a small area to light doesnt mean they shouldnt be able to get quality work performed. Nothing wrong with doing small projects that take 4 hours as long as it financially benifits your company.

Lite4
11-23-2007, 03:02 PM
I would have to agree with the target marketing, however there is one flaw in your logic as it relates to homeowners with money. Just because they have it doensn't necessarily mean they may want to spend it right away on lighting when they can put that same money in the market or real estate and have it work for them. The 6 months same as cash option is the one that is nearly always chosen by my clients if they choose financing at all. Look at it this way. If you have 30k you could either put it into the ground in lighting 'now', or in 6 months after puting that same $ in the market or real estate and making a profit on it. If it doesn't cost them anything to use it, why not be smart with your dough.

As far as compromising on design or price. Never, my prices are the same for the moderate households as well as the very wealthy. They either can afford it or not. I simply give them options on leveraging their money.

The Lighting Geek
11-23-2007, 03:40 PM
You are absolutely right on the smaller jobs. We done a ton of them too. They fit nicely between bigger jobs and when we get back ordered on materials. I never compromise price either. I am always putting the options out there, they just don't use it. It is a great tool, just like a demo, system warranty, spyder lift, or any other thing that separates you from the competition.

JDL Credit does cost you, the contractor, the % might be different by region. I am not sure. Just as proccessing credits does.

NightScenes
11-23-2007, 04:10 PM
This is something that I have thought about and would consider. I have to once again agree with James in that when your client base is the upper 10%, they would prefer to just write a check. I have only had 2 clients that have ever asked about accepting credit cards (they just wrote a check because I'm not set up for credit cards) and have never been asked about financing.

I see where a client may want to invest that money and pay later or even want to get some airline miles for their purchase, but I don't think that it's much of an issue for those with extreme wealth.

I do see a need for this service though for those like me (financially), if I wanted lighting. I would not be able to write a check for that amount of money myself, but I might be able to pay it off over 90 days. There is a whole mid level market where this would be very appealing.

klkanders
11-23-2007, 06:28 PM
I agree with everyone! :)
Having worked in the card business tho many of those big-shooter high-roller types wouldn't write a check if they could use a credit card that would give them something free! They have the money in the checking account...oh yes they do!.......but they whip that card out for anything and everything til they get the statement in the mail. Sometimes they even pay before getting the statement causing a credit balance tsk tsk ......can't handle the thought of paying one cent in finance charges ya know! Why write checks when they can charge and get free airline tickets on those vacations?
Funny...yes......but it happens everday!

INTEGRA Bespoke Lighting
11-23-2007, 06:37 PM
When I have used financing in the past for clients it was usually my design was twice what they could or were willing to pay at the time. Out of the 3 times we have financed all of them put at least half down and financed the balance.

I dont walk away from systems that are smaller than i would like to do. Just because someone has a smaller home or only a small area to light doesnt mean they shouldnt be able to get quality work performed. Nothing wrong with doing small projects that take 4 hours as long as it financially benifits your company.

Billy, don't get me wrong.... I don't walk away from smaller jobs either. If the client has a small job and wants great quality lighting I am more then happy to install it. These smaller jobs are excellent for filling in gaps between the larger jobs. As long as the clients are willing to spring for the best quality stuff, then I have no issues with doing the work.

I am not a lighting Snob... but I do know who I like to work for most.

Have a great day.