How Small Solar Companies Can “Out-market” Large Solar Installers with Deep Pockets with @SolarFred

We need to make sure that small solar companies can compete, be profitable, and grow in the solar industry. This means effectively marketing and selling against large solar installers that have huge budgets. If you’re currently creating a solar sales strategy and business plan, I’d suggest reading Keith Cronin’s list of solar sales best practices. If you’re a electrical contractor, or electrical distributor looking to optimize your solar website to generate more leads, check out our Website Optimization for Solar companies course.

Most people in the solar industry know Tor Valenza, known as SolarFred in the twitterverse. He runs UnThinkSolar.

I reached out to Tor to get his perspective on a number of marketing challenges that HeatSpring solar students, alumni, and readers are asking about. I’ve found his answers to be extremely useful, blunt, and honest. His perspective will be able to answer help your business.

Tor has a great perspective because he has worked extensively with both large companies (SolarCity) AND small companies (AEE Solar, SolarPowerRocks, 1BOG). Thus, his perspective on what small companies must do better is very useful because he knows what large companies do really well. If you want to read more of Tor’s perspective, you can view more of his articles on Renewable Energy World. If you have a question for Tor directly, we’ll be having a live Q+A on twitter on Friday at 12pm EST, we’ll be using the hashtag “solarQ+A”. I’ll be on @heatspring.

Here’s the interview:

What do the big solar companies (revenue >10million) do really well?

In terms of marketing, the big solar companies in the residential space know how to throw a lot of money at the internet and cast a wide net toward anyone who’s ever put “solar” into a Google search. That may include real solar prospects, or people who put in the word for “solar system, ” meaning the planets. There’s no real mystery to this type of shot-gun marketing beyond the visual banner image and the call to action within the banner. Google and other ad networks allow you to target a particular zip code, income, gender, an key search words, so those choices also require expertise, but nothing creative.

The other thing that the big companies have are no-money-down solar leasing/PPA materials. That’s very attractive to people today, given fears about depleting savings, tight credit, and underwater mortgages. With good graphics, basic finance information, and an online quoting system, the big companies have a website that is able to entice the visitors garnered from paid search engine marketing to inputting their contact info and get an official quote.

Finally, the big players are also fairly good at referrals. Once again, they do well because they have the money to offer $500-$1000 for every sold system that is referred by anyone who signs up. While $500-$1000 may appear to be a lot, that’s less than their customer acquisition costs using their shotgun approach to internet marketing. If their acquisition costs per customer were less, they wouldn’t be offering that much as a referral commission. If the referral fee is more than their customer acquisition costs… then someone in accounting is in trouble.

What are examples of small solar companies that are marketing as well as the big guys?

My poster child for a small solar company that takes advantage of a small marketing budget is a company that I know in the L.A. area.  They have videos, but they also have a very active blog, Facebook, and Twitter presence. The blog is filled with useful information about solar technology and incentives in the greater Los Angeles area where he serves. As a result, I’m told he receives a lot of customer referrals and brand loyalty. This type of marketing is less expensive than shot-gun paid internet search marketing, but it does take time and effort to build a great reputation that leads to strong referrals.

What tends to be the most valuable sales funnel that everyone tries?

If you have the capital, then clearly search marketing works, as well as having a solar lease or solar PPA financing partner. Big and small companies can use search, but the more you spend, the more effective you’ll be, whether that’s on Facebook or Google paid search.

Not sure you can call it a sales funnel, but having third party financing is increasingly important to converting leads. It’s always attractive to get something (cheaper utility bills via a solar PV system) for nothing (no-money down solar lease/ppa).  Regardless of whether you have marketing capital, customer referrals, whether incentivized or not, are the most valuable sales funnel. Motivate satisfied customers to recommend you to their friends, and the less you’ll need to spend on advertising. Your customers will do it for you and be far more influential than a Facebook or Google ad.

What have you noticed is a very valuable sales funnel/marketing activities that not many people do?

People don’t find enough co-marketing partners. Solar companies should look for partners that they genuinely support, and who also share your solar values. These opportunities don’t have to do anything with the environment or solar industry. For example, you could sponsor a little league team or the entire league. If you’re looking for families with homes, that’s a great way to brand yourself and plant the seed of solar in multiple neighborhoods. On top of buying their uniforms or equipment, or a billboard, offer discounts to any player’s family.

What are the most common mistakes established solar companies (in the business more then 5 years) make?

I think that’s going to be different for every business. Some companies are stronger in some marketing areas than others. That being said, many of these long-time pros don’t think about marketing their experience and “authority.” For any large purchase, people want to trust the brand. Saying that you have X number of installs on your website and other marketing materials shows that you have the experience to do a great, worry-free job. They can also provide info about what makes a good install and a poor one. That can inspire confidence that your system will work and that there will be no leaky roofs or failures. People will pay more for that higher level of experience and quality. You still have to be competitive with the less experienced installers, but if you highlight the difference between a bad install and a good one, many customers will feel that the cheaper ones will cost more in the long run, and go with an experienced installer

Same question above for new companies, been in business less then 5 years.

In general, younger solar companies don’t spend enough time marketing and building their referral networks. If you’re just starting out, then you’ve got to get your name out there, and you’ve got to find innovative ways to stand out and educate customers about solar and your particular service. Also, it’s important to have 1-stop financing partners that offer solar leases and/or solar PPAs or a set loan program, and to market this. For now, it’s an uphill battle to compete without a low-money down financing vehicle. If you’re not qualified to offer these programs because you don’t have enough installs, get qualified as soon as possible.  Beyond that, the more time you spend on building your authority through great customer service, honest testimonials, and photos/videos of successful installs, the more you’ll be trusted and stop the solar curious from seeking another quote.

From a marketing perspective, what is the advantage of being small, what is it hard for big companies to replicate?

The advantage of being small is that you can be as innovative as you want to be without committee interference. That applies to customer service, marketing, and the solar products you use. You don’t have to go through a committee to approve every ad and blog post or Twitter post. You just do it, try something new, and if it works, you repeat. If it doesn’t work, a small company can quickly try something else new without having to generate a report. Big companies have to go through a long approval process and just aren’t nimble when it comes to marketing, procurement, or any communication decision.

If I had an existing established construction business and I wanted to get into solar and grow that section to 1 million in sales within 12 month, what is MUST?

You must create a separate solar website and social networks. Right now, consumers want to go to a solar specialist, not a contracting generalist. The exception is when you’re already known as a green contractor that has a record for energy efficiency projects . The second must is to engage your existing/past customer base for leads and referrals. If you’ve built a house or redone a kitchen for someone, send them all a personal email or general e-newsletter talking about your new solar division, which is (hopefully) being run by a solar expert who has X many years in the field and done X number of installs. On top of that, you must have all the solar FAQs materials ready on your dedicated solar website.  Finally, you must have a referral incentive, as mentioned above, that is paid for every closed sale. Since you don’t yet know what your customer acquisition costs are for solar, mirror your competition’s offering.

What is the most important aspect of solar PR and marketing that companies should focus on and be asking about, but don’t?

To me, it really is all about effective, consistent communication with customers and the media. I think there are a lot of technically talented installers out there who are poor communicators. So, they should learn all they can about how to effectively use social networking tools and how to get attention through the press. However, there’s a difference between knowing how to mechanically use social media and to effectively use it. You have to know what you want to say and you have to say it creatively and with your own unique voice. The more companies focus on effective social media, the more good information will spread about your brand and the solar industry, degrading bad Solydnra publicity and long-time solar myths, such as it’s not affordable or that it needs batteries, which is not the case as long as most states have net metering.