Pamela Cargill, principal at Chaolysti, a strategic consulting firm that helps residential solar installers operate more efficiently
By Pamela Cargill, Principal at Chaolysti
We’re getting ready to “cross the chasm” in mature solar markets like California and Massachusetts. But what got us here won’t get us there, so how do we open up new demographics of solar customers?
The National Renewable Energy Laboratory (NREL) recently presented a webinar “How to Get Those Considering Solar to Ultimately Make the Switch” highlighting findings from its multi-year Department of Energy grant-funded consumer study. The purpose of the study was to determine opportunities for the residential solar sector to increase lead generation and conversion rates. The study focused on understanding differences between solar “considerers” (those who have spoken with installers about solar but haven’t moved forward) and “adopters” (those who actually started a solar project).
Earlier this year, I explored the future of the residential solar value proposition.
We have nearly tapped out the very early market buyers. The tech enthusiasts and the visionaries have purchased rooftop solar if it was right for them. But very few pragmatists are jumping on board. Why?
Credit: Geoffrey Moore, Crossing the Chasm
In Crossing the Chasm, author Geoffrey Moore introduces us to the theory of innovations and proposes that there is a “chasm” between the early adopters of the product (the technology enthusiasts and visionaries) and the early majority (the pragmatists). Moore believes visionaries and pragmatists have very different expectations. He suggests techniques to successfully cross the “chasm” including choosing a target market, positioning your product, crafting the right marketing strategy and choosing the most appropriate distribution channel and pricing.
These skillsets mentioned above are generally not skillsets solar contractors have traditionally focused on building. They are “soft” skills, not technical skills like installation techniques and equipment integration know-how that have received the predominant share of focus in conference programs and other continuing education opportunities. Developing soft skills has not created much of a competitive advantage until now as margins in the industry are compressing while the cost of solar is continuing to decrease and consumer demand is turning back to direct ownership models.
NREL published a series of seven common mistakes solar installers make, as identified in this research. The remaining recommendations from the NREL study webinar centered on a distinct theme of developing non-technical skills.
- Don’t Give Up on Old Leads
According to the study, 85% of solar considerers are still potential customers. Contractors can use a CRM (customer relationship management) tool to track prospects and an email marketing tool to stay in touch. A wide variety of CRM solutions exist for general business purpose. Contractors at every stage of growth should be able to find an appropriate CRM. Today’s “no” might turn in to tomorrow’s “yes,” but contractors will never be able to reach back if they don’t keep track of who contacted them and understand why they didn’t proceed with a solar project. New financing, new product/service mix or a new program might be what that customer needed.
- Understand the Prospects’ Specific Concerns
Bottom line is listen first. The solar industry has been so focused on promoting “The Offer” (e.g. save 20% of your utility bill) that it has not focused on consumers and understanding their concerns in this process. Too many solar companies are more worried about structuring efficient sales funnels than creating useful experiences that invite prospective customers to develop trust and understanding around solar energy. Too many solar salespeople assume the prospect is motivated by or cares about the same things they do.
- Incorporate More Consultative Sales Tactics
Real sales training is nearly absent in the solar industry. Most sales training is focused on how to present the offer and how to use proposal generation and production/financial modeling tools. Very little time is spent on developing consultative techniques, role-playing or developing the sales operations infrastructure necessary to support consultative selling approaches. We need to learn how to listen, develop trust and ask for the right to get the customers’ business. The prospective customer doesn’t owe us anything because we know about solar technology.
- Get Third-Party Validation
Referrals are crucial sales tools and being able to check up on a business through a trusted network of friends, colleagues or reviews online helps develop trust in the mind of the prospective consumer. This means ensuring installed customers are happy and will leave you a review, and that you understand the value of reaching back out to ensure they’ve been satisfied. Which brings us to…
- Check in with Existing Customers
Are your current customers happy and satisfied? That’s when they are more likely to make a referral. Taking the time to do this seems counterintuitive. Why spend time with someone who is paid in full and we can no longer sell something to? Many contractors forget about a customer the minute the last invoice is paid. We spend lots of time and money trying to attract people who we have to convince about the benefits of not just solar energy but the integrity of our own company. Building a network of satisfied customers will deliver referrals, but it takes planning, coordination and the right set of tools to track these customers (See No. 1).
- Set Appropriate Expectations
Your promises don’t have to be extravagant. They just need to be consistent and honest about what to expect during the process of getting solar, including briefing the customer about potential delays due to permitting timelines and ensuring customer requests are honored. Customers expect that you know how to install PV systems. The wow factor is when you honor the expectations you set, especially around any more subtle matters around their home, like keeping gates locked, minding landscaping or not parking in certain places.
- Differentiate Yourself
It used to be enough to hang a shingle that you were “the solar guy” and consumers who were interested would find you. With increasing competition as the industry grows, how you’re defining yourself is what sets you apart from the pack—not by bashing your competitors, but by demonstrating your unique value, process, service, style, involvement in your community, etc. To do this, you have to set aside time from the day-to-day project activities to work on your business.
- Don’t Just Sell on Price
The industry has assumed for too long that price was the sole motivator for consumers. Consumers want to know about price because there is so little price transparency in the solar market coupled with costs coming down quickly in the last 10 years. Consumers have varying levels of risk and uncertainty tolerance when evaluating something like solar. For later adopters, this threshold will be higher. To overcome that, contractors must be able to demonstrate additional value and benefits to working with them and moving forward with a PV system. By listening to the consumers (See No. 2) and customizing the conversation and product/service mix to best fit their need, contractors can command a HIGHER price for their goods and services, a concept known as value pricing.
- Grow Your Business for the Long Term, Not Just the Immediate Sale
For years, the industry has been pursuing growth at any and all cost. This has encouraged sales organizations in the industry to make outrageous claims just to convince a prospect to sign up. Unfortunately, these customers are often marginal at best and can cause an organization to spend more money fulfilling the project than it’s worth. These customers are often unhappy and will not make referrals. Sometimes telling the consumer it wouldn’t be a good deal for them is the most appropriate action to take.
These recommendations are easier said than done for many contractors. It will require a greater focus on contractors’ willingness to develop their non-technical skills and step back from managing day-to-day activities to work on the business. The most successful contractors take time to work on their business, not just in their business. The reward, however, will be very clear—happier customers, lower customer acquisition costs and more clarity around business financials that can drive decisions around important investments that will ensure sustainable business operations no matter what changes come in this industry.