This is the story of how Faze1 learned how to acquire a 5kW residential solar customer in Massachusetts for $1,250 or $0.25/watt. This is about 50% lower than the $0.49/watt that is typically referred to for average residential customer acquisition cost in 2014.
Faze1 used three strategies to achieve this goal, which we will describe in detail in this interview: mapping technology, predictive analytics, and software automation. They used mapping technology to pre-screen all 1.2 million single family detached homes in Massachusetts in order to narrow their search to the most attractive 25% of all roofs. They narrowed down the 300,000 homes with the best roofs by using predictive analytics to identify the homeowners that most closely matched the demographic characteristics of the existing 6,000 solar customers in Massachusetts. Lastly, they used software to automate the entire process.
What’s More Amazing?
Now any solar company operating in Massachusetts can use Faze1 software to quickly and easily grade your own leads to identify the best leads.
Faze1’s SunVIEW is faster, cheaper, and better than using Google Maps to screen potential solar customers.
With Faze1, you’ll be able to instantly get site suitability information (roof size, tilt, azimuth, usable solar sales, shading) and important demographic information (FICO score, house size in square feet, occupancy and ownership, expected yearly electric use in kWh, utility territory and bill, years in home, and more) so you can identify customers that are both willing and able to purchase solar. Click here to download Faze1’s complete data dictionary to see what you can learn about each of your solar leads.
Finding the best customers with the leads that you’re already generating will lower you customer acquisition costs because you’ll spend less time on bad leads.
Faze 1 vs. Google Maps = Faze1 Wins, Hands Down
And What’s Super Amazing?
Because you’re a HeatSpring reader, we’re giving away 30 free trials to residential solar companies that are located in Massachusetts. Insert your information below to sign up. These will go fast.
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Let’s Get into the Interview
This is an interview with the three members of the Faze1 team. Full disclosure: I’m a Faze1 advisor. The team members are Marc Guy, Elliot Goodwin, and Adam Hannah.
The interview tracks the story of Faze1 from the company’s beginning to where they are currently with SunVIEW. There are three significant stages to the history of the company that will be useful to anyone interested in product development and the solar industry and tell the story of an “okay” idea (sorry guys!) to an extremely valuable product.
- Marc and Elliot had early experiences doing statistical analysis with the Massachusetts Clean Energy on Solarize campaigns that showed them lead generation and project size doesn’t necessarily equal profits. You can see 2012 Solarize data here.
- How a used car salesman (yes, the stereotype is true) helped groSolar standardize and improve their sales process.
- How the team applied proven mapping technologies that were already being used in the other established industries to screen the 1.2 million single family homes to find the most attractive homes.
- Most solar companies focus on revenue instead of profits which mis-directs their marketing. They think they wanted more leads and site visits, but what they actually need is a more profitable way to process and screen their existing leads to find the most profitable ones.
3 Stages of Faze1 Product Development
Roughly speaking, Faze1 developed their Sunview product in three steps:
- Stage 1. Faze1’s initial goal was to use data to find the best customers and in Massachusetts and sell the list to EPCs. They found 30,000 of the best solar leads in the state, based on the characteristics of the existing 6,000 solar customers in Massachusetts, and the goal was to sell these leads to companies. This didn’t work. Why? The value of these leads is directly proportional to the ability of a company to process them. This ability was very low.
- Stage 2. The second step was create a direct mail campaign and market directly to those leads and sell site visits to EPCs. Faze1 was able to generate leads extremely effectively and found out that their site screening predictive model was effective. This allowed them to find customers very cheaply. They didn’t have the cash to sustain long direct mail campaigns, but they learned that their process and software worked very well.
- Stage 3. Faze1 decided to sell access to their model through a software product that EPCs can use to quickly, easily, and cheaply identify the best leads from the leads that they’re already generating.
In this interview, you will learn
- Why they planned on using data to understand the solar customer better than anyone else.
- How they started to answer the question “What are the data attributes of a solar customer that we need to understand better?”
- How their experience doing statistical analysis for the Massachusetts Clean Energy Center Solarize programs made it clear that data was not being used as effectively as possible within the industry.
- How they noticed that solar customers were only understood by the sales people who were talking with them and not by the numbers.
- How their first “ah-ha” moment was when they noticed that no one in the solar industry was using the Solarize program data to gather better information on solar customers.
- The few data points in the Solarize data that stuck out and made Faze1 believe they could use data better.
- How the Solarize data shows that proper qualification in the early stages of the solar sales process could substantially increases profits.
- How project size and profits were frequently negatively correlated in the Solarize data set; more customers doesn’t equal more profits.
- Why the correlation between grassroots generated leads and profits were negatively correlated for most companies.
- The single factor that most often explained whether lead generation was profitable or not.
- How a used car salesman helped groSolar standardize and improve their stales process from 2005 to 2009.
- How Faze1 transformed their early sales experience and Solarize analysis into the idea of creating and selling the best solar leads in Massachusetts.
- How Faze1 pre-screened the 1.2 million single family detached homes in Massachusetts to find the most attractive 25% of homes. (Note: This assumes no ground mounts)
- Why predictive analytics is key for identifying solar customers. Just having good site suitability doesn’t mean a home is a good candidate for solar.
- How the team combined predictive analytics of past Massachusetts residential solar customers with site suitability to find the best 30,000 solar customers in Massachusetts.
- Why they were not able to sell the list of 30,000 of the best potential solar customers to EPCs.
- Why the value of a lead is mostly based on the EPCs ability to process it more than anything else.
- Why the lack of solar awareness for specific solar companies gave Faze1 the confidence to create their own direct mail campaign.
- How Faze1 used proven mapping techniques from other industries to pre-process of all the 1.2 million single family homes before starting their direct mail campaign.
- Examples of other industries that are using mapping technology to provide bulk pre-processing of site suitability.
- How they scored all Massachusetts homes on a scale from 0 to 100 and how the top 30%, those with scores of 70 of greater, performed in the direct mail campaign.
- Why they selected direct mail, what they did, what happened, and what they learned from their campaign.
- What the industry benchmarks are for conversion for marketing, to a lead, to a site visit, and finally to a sale.
- The two critical pieces of information that they learned from running their direct mail campaign.
- Why the solar EPCs were wrong with what they wanted for marketing. They thought they wanted more leads and site visits, but what they actually needed was a more profitable way to process and screen their existing leads.
- How their lesson learned in their direct mail campaign create their current Sunview product.
- How experiencing SolarCity’s best-in-class solar screening process, in a Home Depot, using Google Maps showed the team that industry needs better and faster qualification.
- How having all of a customer’s site suitability data and consumer data, that you’d eventually get through conversation, before you talk with a customer will increase qualification efficiency and quality.
Question? Want to learn more?
- Leave a question or comment in the comment section if you have a question for the Faze1 team.
- Looking to start a solar business or expand an existing business into solar? RSVP here to get early access and a substantial discount to our Solar Startup Accelerator. You’ll create a 20-page business plan in 6 weeks with expert guidance and get all of the project management, planning, marketing, sales, and pricing tools you need to start a solar business quickly. We’re only providing 83 early access seats.
- Come see Faze1 at the NESEA show and connect with them. Use the discount code “HEATSPRINGBE14” to get 50% of the trade show. Register for the trade show here. With this discount the trade show will cost ~$13.
- If you want to be one of the first 30 people to get a free trial. Fill out the form below.
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