Strategies for Lowering the Cost of Acquiring Solar Customers

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A panel at the U.S. Solar Market Insight Conference discusses strategies for lowering customer acquisition costs.

 

 

Soft costs are the zombies of the solar industry — the topic that just won’t die. There’s good reason for that: soft costs are still rising as a percentage of total installation costs.

Customer acquisition is one of the more intractable soft costs. So it was fitting that the U.S. Solar Market Insight Conference devoted a panel to it.

 

While most agreed that policy affects customer acquisition costs, the panelists, guided by moderator Nicole Litvak of GTM Research, identified a few key areas of focus.

 

We must work together to educate consumers and brand solar

 

People are still confused about solar and think it’s expensive, noted Michael Mullen of Roof Diagnostics Solar. So customer education is crucial, and the industry needs to band together to create better marketing.

 

That means making solar fun, and advertising it on an emotional level. “Look at life insurance,” Bill Schuhof of SunRun said. “Most of us don’t find it inherently exciting. My conversation with my financial advisor was not about the details of the policy; it was about peace of mind…. We’re now selling the features and benefits. As an industry, we’re not doing a good job with why – what are you going to do with that extra 2 cents a killowat-hour.”

 

Schuhof continued, “Advertising creates preference. Successful companies these days have non-competitive channels like Home Depot. That won’t remain the case.” Preference, he said, will become a huge differentiator within three to five years as brands become more prominent and people hear about them from their friends and neighbors.

 

Mullen pointed out that we’ve just had the first quarter in which the U.S. installed more solar than Germany. Customer education, he believes, is not that complicated: “It’s still about saving money.”

 

He added, “All our companies need to cooperate. It’s a huge advantage when people see more solar around them.”

 

We need to try all of the above

 

Solar is still an “infant industry,” according to David Field of OneRoof Energy. Therefore, companies must use an “all of the above” strategy to get customers. Over time, a few strategies may become dominant.

 

All the companies represented are exploring a variety of partnerships. Retail partnerships have become popular, but Mullen noted that they have pros and cons: “You can market to all kinds of people. But it costs a lot to do that.” Plus, approaching people who may not already be interested means you work harder to educate them. “Some of the best salespeople already have financial relationships with homeowners,” Field said. A solar lease is a financial product.”

 

Another strategy is lead purchasing. Field agreed there’s value to buying qualified solar leads, but said it might be hard to sustain that cost. Still, it’s too early to tell how this might evolve, though SunRun, for one, doesn’t see lead purchasing as a long-term strategy. And Chris Stern of PURE Energies pointed out that they’d bought a lead company because it was expensive to buy leads.

 

Referrals are still a huge part of the equation. And though some companies focus on door-to-door sales more than others, the panelists acknowledged that Vivint has done a great job with that.

 

Technology is in, kitchen tables are out

 

In a world where people are used to doing everything online, solar is no exception. Field believes solar customers prefer buying online to both the phone and the kitchen table. Plus, as Stern said, “To get to the kitchen table, there are 50 steps.” So it makes sense to give customers a way to interact online.

 

You might wonder if selling solar online is the best way. Will customers understand what they’re getting?

 

The panelists agreed that technology can facilitate customers’ understanding. Stern noted, “You can buy a mortgage on the phone, and we’re selling a mortgage on your roof.” Technology can help customers compare their options, which can be confusing now.

 

Important in this effort, according to Stern, will be “software that keeps us from asking annoying questions to customers, like what’s your credit score, electric bill, etc.”

 

All agreed that technology that can streamline the solar buying process will be critical in lowering customer acquisition costs.