PDA

View Full Version : lighting styles for the great depression II


Mike M
10-09-2008, 12:19 PM
So, are S & H green stamps still around? I'm thinking maybe a flat rate per light, with a little bonus for each--get ten S & H green stamps for each brass fixture, etc.

Or maybe I should go back to the diversity thing, like filling my landscape trailer with loaves of bread and selling at street corners. A soup-and-bread thing might work good in the gated communities. Hand out my lighting business cards while I'm there: "I design and install value-based systems using real commodities."

JoeyD
10-09-2008, 04:17 PM
Maybe you can focus your lighting marketing campaign on lighting up Soup Kitchens and Welfare Offices!!! LOL Bad Bad Bad!

Things will turn around. Everyone just needs to hang tight!!

INTEGRA Bespoke Lighting
10-09-2008, 05:18 PM
Still Hanging tight Joey? I hope you guys are spending some time watching / listening to BBC, CBC, NPR, etc and getting a world view on this. (The mainstream media present such a narrow scope, hardly worth watching / listening to)

Iceland is reported to be near bankruptcy,
3 Major European Banks collapsed this past week,
The Asian markets are in free fall (China might not be in a position to buy any more US paper, or just might choose not to.)

Today was another no-joy ride on the markets and those in the know that I have talked with suggest that there is a lot more selling off that will come in the next few months. One of my 'guys' suggested we have not seen the tip of the iceberg in terms of the derrivatives markets revealing their leveraged exposure.

Interesting times indeed. Sit back and watch? No thanks. I just keep thinking of the thousands upon thousands of inefficient halogen lamps that are installed in lighting systems all around, and all those homeowners who are going to be looking for ways to reduce their electrical and maintenance bills. Here comes the LED guy... just in time to save you 80% off the power your lighting system requires. :) Oh and of course by going with LED LAMPS and not LED Fixtures, well we can just pop them in as a retrofit now can't we? Sweet.

Have a great day guys.

JoeyD
10-09-2008, 05:38 PM
I am still hanging tight, since I first posted that comment about an hour ago..........LOL

Mike M
10-09-2008, 05:58 PM
Go Joey!

I had to show a customer from a summer install how to turn off her system today without messing up the timer. She wanted to be "in" with the save energy/wall st. great depression thing. James, good luck selling "up grades" to people stuffing mattresses with money.

I wish I was closer to Canada, I'd take you up on the deer hunt.

Mike M
10-09-2008, 06:08 PM
Joey--soup kitchens, great idea--several paths for the long lines!

How about a shovel light, for burying money? Or light up bridges so people can see where to jump? lol

JoeyD
10-09-2008, 06:15 PM
LMAO!!! Scary times for sure!

lightsaber
10-09-2008, 06:40 PM
Did anyone see the commercial on TBS for a go green/energy saving program they are having during one of the playoff games. They are telling everyone to shut lights off during the game in hopes I assume it will catch on. They showed 3 houses with outdoor lighting and they shut them off. I guess that would cut down on maintenance re lamps.

JoeyD
10-09-2008, 06:49 PM
I didnt see that...........interesting..........

Malibu landscape
10-09-2008, 08:53 PM
I hope
Interesting times indeed. Sit back and watch? No thanks. I just keep thinking of the thousands upon thousands of inefficient halogen lamps that are installed in lighting systems all around, and all those homeowners who are going to be looking for ways to reduce their electrical and maintenance bills. Here comes the LED guy... just in time to save you 80% off the power your lighting system requires. :) Oh and of course by going with LED LAMPS and not LED Fixtures, well we can just pop them in as a retrofit now can't we? Sweet.

Have a great day guys.


You are going to have to change a very very large qty of those halogens a year to make any real money doing that.

If you are approaching past clients the number is finite. I know I don't have enough out there to make a killing and......

The cost to market and sell that service to new is the same whether you sell a high margin install or a much lower margin LED retrofit. To boot you've shot yourself in the foot with future maintenance if indeed the LED's have as long a life is is purported.

Affluent homeowners are still investing in their homes. That's where I'm concentrating my efforts.

INTEGRA Bespoke Lighting
10-09-2008, 10:07 PM
You are going to have to change a very very large qty of those halogens a year to make any real money doing that. You might be rather surprised... The sale of LED lamps can significantly improve your bottom line. They are a high value, high return, highly sought after product that requires no additional overhead. Crunch the numbers for yourself.

If you are approaching past clients the number is finite. I know I don't have enough out there to make a killing and...... Not everyone will, but if you approach your entire marketplace with a product that only you have access to, then you will find yourself picking up the service/maintenance and retrofit of the systems your competitors have installed. Makes for good business opportunities now and in the future.

The cost to market and sell that service to new is the same whether you sell a high margin install or a much lower margin LED retrofit. I dont understand what you are talking about here... I think you are assuming that the margin on LED lamps is less then on a new installation? Why would you assume that? Keep the same margins that you are accustomed to across the board.

To boot you've shot yourself in the foot with future maintenance if indeed the LED's have as long a life is is purported. Absolutely 100% not true! All lighting systems will still need regular maintenance no matter what light source you install. They need cleaning, aiming and there will still be a number of fixtures that use a wide variety of lamps that require service. I include servicing all of my clients 120V lighting when on site as an add on. Just because you switch over to LED lamps does not mean you will not be returning to offer your clients service.

Affluent homeowners are still investing in their homes. That's where I'm concentrating my efforts. Yes you are correct and focusing on the top tier clients is a good strategy both in good times and in challenging times. You will also find that most people, no matter what their socioeconomic profile, have an interest in maintaining the infrastructure that they have already invested in. LED lamps can offer you and your clients an efficient and effective alternative that saves them money and improves your sales.


Have a great day.

Malibu landscape
10-09-2008, 10:35 PM
Originally Posted by Malibu landscape
You are going to have to change a very very large qty of those halogens a year to make any real money doing that. You might be rather surprised... The sale of LED lamps can significantly improve your bottom line. They are a high value, high return, highly sought after product that requires no additional overhead. Crunch the numbers for yourself.

If you are substituting LED retrofits for new installs because of a downturn resulting in a lack of demand. Then you will be very disappointed in that you will no way be able to equal the gross profit of a design/build when compared to a simple retrofit.


If you are approaching past clients the number is finite. I know I don't have enough out there to make a killing and...... Not everyone will, but if you approach your entire marketplace with a product that only you have access to, then you will find yourself picking up the service/maintenance and retrofit of the systems your competitors have installed. Makes for good business opportunities now and in the future.

I can see the opportunity as an add on service but not for a stand alone profit center. There just simply isn't enough quality systems out there to support it.

The cost to market and sell that service to new is the same whether you sell a high margin install or a much lower margin LED retrofit. I dont understand what you are talking about here... I think you are assuming that the margin on LED lamps is less then on a new installation? Why would you assume that? Keep the same margins that you are accustomed to across the board.

This is self explanatory and requires no explanation. However....New ground up design installs are much larger projects thus a higher ticket thus opportunity for greater gross profit margins. For example It's going to be hard to justify charging $150 per fixture when the LED lamp costs let's say ($50). Furthermore this is an easy do it yourself project . There isn't much effort or skill required to pull out and MR-16 and insert an LED in it's place.

To boot you've shot yourself in the foot with future maintenance if indeed the LED's have as long a life is is purported. Absolutely 100% not true! All lighting systems will still need regular maintenance no matter what light source you install. They need cleaning, aiming and there will still be a number of fixtures that use a wide variety of lamps that require service. I include servicing all of my clients 120V lighting when on site as an add on. Just because you switch over to LED lamps does not mean you will not be returning to offer your clients service.

There are those customers outside of service agreements who call on an as needed basis those of which whose business will be lost or significantly diminished. There is a certian portion of your clients , mine and everyone else's who will not call for service unless bulbs are burned out. That is just the way that it is. Those on the service plan will recognize much lower cost of maintenance as a result of having LED's (again if in fact they do last as long as claimed without color or intensity loss). working for cost of labor alone without the ability to mark up materials will result in lower overall profitability.

Affluent homeowners are still investing in their homes. That's where I'm concentrating my efforts. Yes you are correct and focusing on the top tier clients is a good strategy both in good times and in challenging times. You will also find that most people, no matter what their socioeconomic profile, have an interest in maintaining the infrastructure that they have already invested in. LED lamps can offer you and your clients an efficient and effective alternative that saves them money and improves your sale

INTEGRA Bespoke Lighting
10-10-2008, 09:22 AM
If you are substituting LED retrofits for new installs because of a downturn resulting in a lack of demand. Then you will be very disappointed in that you will no way be able to equal the gross profit of a design/build when compared to a simple retrofit. If you are working through a challenging downturn in the economy then I would assume that new installations are down. Rather then simply sit at home, I am suggesting that adopting new LED lamp technology is one strategy to improve your sales and generate much needed cash flow. Obviously a new installation is going to generate more revenue and therefore gross profit then any level of service or re-lamping. But if those new installations are not there, then developing your service business is a smart idea. Some is better then none, and Some MORE is better then just a bit.

I can see the opportunity as an add on service but not for a stand alone profit center. There just simply isn't enough quality systems out there to support it. I guess it depends on your market... but where you are Located "Malibu" I would think there are many opportunities to gain service and maintenance clients.

This is self explanatory and requires no explanation. However....New ground up design installs are much larger projects thus a higher ticket thus opportunity for greater gross profit margins. Well not really... You may see more revenue and gross profit from a new installation, but that doesn't mean that your profit margins should be any more or less.

For example It's going to be hard to justify charging $150 per fixture when the LED lamp costs let's say ($50). Nobody is thinking that you would charge $150 per fixture to change lamps.... This is simply an opportunity to offer the marketplace an efficient and effective upgrade. Look at it as another tool for your kit.

Furthermore this is an easy do it yourself project . There isn't much effort or skill required to pull out and MR-16 and insert an LED in it's place. True, but you have to have access to the materials and the product knowledge do the retrofit properly. Also, I don't see many clients out there too interested in doing their own lighting sytem servicing.

Those on the service plan will recognize much lower cost of maintenance as a result of having LED's (again if in fact they do last as long as claimed without color or intensity loss). working for cost of labor alone without the ability to mark up materials will result in lower overall profitability. No it won't, you are making your profit upfront, now, today, on the installation of the LED lamp... instead of making that same profit spread over multiple service calls over multiple years... Think it through. Cash is King in a challenging economy... you want to maintain and enhance your cash flow when sales are slumping... that is today, this quarter, next fiscal year... not across the next 15 years. Offering higher value products, with the inherent ability to generate a higher profit margin, is a good way to improve your sales and cash flow in the current business cycle.

While new home construction is in a slump, there is still a relatively strong market for maintaining and even upgrading the systems that have already been installed. Make sure you develop a good strategy to inform your market that you are there to take care of things... offering small, efficient, money saving upgrades like LED lamps is one way you can differentiate your service from all the rest.

Malibu landscape
10-10-2008, 08:26 PM
James you make some good points. I don't agree with them all but I appreciate the time you have taken to share them.

David Gretzmier
10-11-2008, 01:49 PM
This back and forth is interesting but the main point is this- who is best positioned to handle a serious downturn in sales- the guy who has serious relamp and cleaning/foliage trimming revenue coming in, or the guy who has serious revenue coming in from LED cleaning and trimming away blocking foliage? The answer is obvious.

Homeowners are willing to pay for something if they are getting something. I cannot look a homeowner in the eye and charge them an exorbitant rate per hour for landscape labor maintenance. It feels unethical. But I believe it is ethical charging a high price for a lamp( bulb?) that has a better color,spread and effect and life than they could purchase at Lowes or Home Depot. if it is twice as good, twice the life, than I feel fine charging double what they would have paid locally for an inferior product.

Add that to the fact that no one really knows how long these LED bulbs( lamps?) will last in the real world- 1 year? 3 years? 8 years? I cannot in good conscience make a promise of how long they will last, and charge them a similar yearly maintenance price that I charge for halogen.

I'm glad folks like James are out there putting hundreds of these in and taking on the risk. I cannot financially do so. If I charge folks a premium for these things on the front end, and they start going out ( like all LED's have before) in one, two or three years, I have to replace them for free. I can hear homeowners now- "You said these would last for 3 years, 5years !" etc.

by the way, margin in accounting terms is expressed as a percentage of cost of sales/profit. to make the same "margin" on LED's given they cost 10 plus times what halogen's do, to make the same "margin" you need to make 10 times the profit. not possible. you could make the same gross profit in terms of dollars, maybe even a higher gross, but not percentage.

I think it is a harder argument to make that in a downward economy folks will pay more for a system that promises to save them money in the long run in electricity savings. Folks want to save money now.

Mike M
10-11-2008, 05:36 PM
Dave, has anyone called and said "hold" on the christmas lights this year (established customers)? I can't imagine this, but I'm curious about how holiday lighting is going to do this year. I would think people really value what you do and that Christmas is important for them, regardless of the economy, but I'm curious.

Malibu landscape
10-11-2008, 06:46 PM
Dave, has anyone called and said "hold" on the christmas lights this year (established customers)? I can't imagine this, but I'm curious about how holiday lighting is going to do this year. I would think people really value what you do and that Christmas is important for them, regardless of the economy, but I'm curious.


I was also wondering how the decorative lighting market would be affected.

Malibu landscape
10-11-2008, 07:27 PM
This back and forth is interesting but the main point is this- who is best positioned to handle a serious downturn in sales- the guy who has serious relamp and cleaning/foliage trimming revenue coming in, or the guy who has serious revenue coming in from LED cleaning and trimming away blocking foliage? The answer is obvious.

Homeowners are willing to pay for something if they are getting something. I cannot look a homeowner in the eye and charge them an exorbitant rate per hour for landscape labor maintenance. It feels unethical. But I believe it is ethical charging a high price for a lamp( bulb?) that has a better color,spread and effect and life than they could purchase at Lowes or Home Depot. if it is twice as good, twice the life, than I feel fine charging double what they would have paid locally for an inferior product.
Add that to the fact that no one really knows how long these LED bulbs( lamps?) will last in the real world- 1 year? 3 years? 8 years? I cannot in good conscience make a promise of how long they will last, and charge them a similar yearly maintenance price that I charge for halogen.

I'm glad folks like James are out there putting hundreds of these in and taking on the risk. I cannot financially do so. If I charge folks a premium for these things on the front end, and they start going out ( like all LED's have before) in one, two or three years, I have to replace them for free. I can hear homeowners now- "You said these would last for 3 years, 5years !" etc.

by the way, margin in accounting terms is expressed as a percentage of cost of sales/profit. to make the same "margin" on LED's given they cost 10 plus times what halogen's do, to make the same "margin" you need to make 10 times the profit. not possible. you could make the same gross profit in terms of dollars, maybe even a higher gross, but not percentage.

I think it is a harder argument to make that in a downward economy folks will pay more for a system that promises to save them money in the long run in electricity savings. Folks want to save money now.


David I'm having a rough time understanding statements I've highlighted above in red. Why should it bother you what you charge as long as you pass it by the client first and they agree to it. This type of albatross will hamstring you in business and severly limit and impede your profitability. What is expensive to me is a drop in the bucket to some of my customers. To them they may be laughing at how little I charge for all I know compared to the salary they command regardless of what they do. I don't mean to be condesending or insulting so please don't take it as such but you are exhibiting depression era mentality with that mindset. What you are also saying subliminally is that you don't believe that your work is worthy of top level compensation. The better books on selling say that before you can sell something to somebody. You've got to sell it to yourself first.