The cost of customer acquisition in the solar industry is high and continues to rise. In 2018 the Solar Energy Industries Association (SEIA) reported that customer acquisition costs had been steadily increasing over the previous four quarters, and two years earlier, GTM put the average cost of customer acquisition at $0.52 per watt.
This, in addition to increasing competition and market saturation, means that solar contracting companies want to use their most effective strategies when trying to win prospective customers (leads). In an effort to help contractors avoid pitfalls that could jeopardize solar sales, the National Renewable Energy Laboratory (NREL) conducted a study to comprehend why certain customers adopt solar while others don’t.
This series examines seven common solar sales mistakes NREL identified through its study, based on a conversation with one of the lead NREL researchers, additional related research, and real-world insights from solar contractors. In Part 1 of our 7 NREL-Backed Ways to Close More Solar Sales series, we explored the importance of quick solar lead follow-up. In this second article, we explore problems associated with assuming prospective customers share your opinion about solar.
About NREL’s Study
Funded by the Solar Energy Technologies Office at the US Department of Energy, NREL’s 2014-2016 Solar Energy Evolution and Diffusion Study (SEEDS) study was conducted by NREL researchers, members of the Lawrence Berkeley National Lab, and a number of academics in behavioral science and psychology. The team surveyed homeowners in four states, collaborated with approximately thirty solar contracting companies, and applied mathematical modeling and testing to their results.
The study sought to better understand the decision making process of potential residential solar customers in an effort to help solar industry professionals identify ways to reduce customer acquisition costs.
The Importance of Avoiding Assumptions
NREL’s study found that understanding the customer’s perspective is essential in a solar sales conversation. Doing this helps you refrain from making assumptions about the solar lead’s level of interest and makes you better able to address their needs.
Customers sometimes have concerns or misconceptions about solar. These may be feelings related to system aesthetics, installation and maintenance expense, or ROI. Ben Sigrin, one of the lead researchers on the study, explains that there is a lot of variation in how homeowners perceive solar, and that many have particular misconceptions about solar’s economics and backup capabilities. He says that consumers may have “a lack of understanding of how the economics of solar work: how much it costs, how much will be saved on their bill, what the payback period will be.”
Additionally, Sigrin states that “some consumers assume that solar will always provide backup power during a grid outage, and that’s not always true. They should be made aware of whether it is or isn’t.” Ultimately, it is important to ensure that your enthusiasm about solar doesn’t lead you to overlook these kinds of potential misconceptions or assume the customer shares your excitement about solar’s benefits.
Patrick Perry, Director of Sales at Momentum Solar—one of the fastest-growing solar companies in the nation, with an impressive 4,617% revenue growth over the last 3 years—agreed that it is important to be mindful of a customer’s misconceptions. Perry points out that consumers sometimes have misconceptions about solar partly because “internet research can provide some useful information, but also could provide inaccurate information as well.”
Perry explains that for his team, “providing clarity and perspective is our goal. Our approach is an educational one.” As a starting point, his team seeks to carefully “determine what the customer knows about solar, what their needs are, and where they got their information—whether it be from a friend or family or their own internet research.” By understanding this, Perry explains, they are then able to provide clarity to help the customer comprehend solar’s benefits.
Listening to Understand
Other experts in solar and sales emphasize the need to appreciate the customer’s perspective in sales conversations. Jim Jenal is the founder and CEO of Pasadena, California-based solar installation company and regularly writes about commercial solar and customer service. He talks about the importance of understanding where your solar lead is coming from: “knowing the concerns, wishes, and assumptions of the [prospect] allows you to anticipate their needs so you can offer them the best experience and clearest understanding of how solar can improve their bottom line.”
Ivan Misner, Founder of Business Network International, explains that a lot of selling has to do with finding what the customer wants. Misner states, “buyers are multifaceted, and when they shop, they weigh the many pros and cons of a potential purchase… Learning and adapting to the issues and whims of the buyer while moving the sale forward to a conclusion is a complex and intricate task – and it’s the responsibility of the sales professional to ensure it happens.”
An integral part of adapting your approach so as to guide the solar lead through this process is listening carefully to understand what factors the customer might be weighing regarding solar.
Listening is a key aspect of being able to effectively adapt in your solar sales conversation. Active listening is the art of asking thoughtful questions for true understanding and “making sure that you concentrate, respond, and remember what was heard.” Not only do you learn a customer’s perspective, you build trust by validating what they feel.
It is possible to help your sales team avoid the pitfalls of making assumptions in solar sales conversations. Training in how to anticipate and identify customer concerns or mistaken ideas about solar can help them address issues as they come up. Understanding the basic principles of active listening to build trust may also be beneficial, as might an approach that emphasizes clarity and education, like that of Momentum Solar. Whatever path you choose, avoiding jumping to conclusions in your solar sales conversations can go a long way towards success.
About This Series: 7 NREL-Backed Ways to Close More Solar Sales
Between 2014 and 2016 the National Renewable Energy Laboratory (NREL) conducted a Solar Energy Evolution and Diffusion Study (SEEDS) study. The study sought to better understand the decision making process of potential residential solar customers in to help solar industry professionals identify ways to reduce customer acquisition costs. Following completion of the study, NREL highlighted seven common solar sales mistakes identified in their research.
In this seven-part series, we delve into each of these seven mistakes in more depth, based on a conversation with one of the lead NREL researchers, as well as on-the-ground perspectives from solar contractors and exploration of related research.
Part 2. Avoid Lost Solar Sales by Understanding Leads’ Perspectives