Have you seen the stories about the residential solar downturn, especially in California?
Well, if there has been a slowdown in sales, it’s not because solar installers have gotten complacent or lazy. If anything, these days they seem to be hustling harder than ever.
Every solar installer we know from San Diego to Long Island seems to be as hungry for new customers as they ever were. And with customer acquisition costs still averaging $1,000 or more in residential solar, installers are looking to cut their costs for leads while getting better quality contacts, especially exclusive leads.
If you want leads that convert at a high rate, we always recommend generating leads yourself on your own website. Our uber-popular ebook Stop Buying Solar Leads and Start Making Your Own Better Ones will help you do that — download your own free copy now.
But as much as I believe in internet marketing, here I’m going to recommend an old-school strategy that was going strong long before the internet was a twinkle in Al Gore’s eye.
Why Solar Customer Referral Programs Are Awesome
Customer referral programs. Does your solar company run one? If not, you may want to start. Here’s why.
First, referral programs can be extremely effective. Baker Electric in southern California says they get 63% of their new customers from referrals. Can you say that about any other way of generating leads? Probably not.
Second, referral programs can be cost effective too. Compared to buying hundreds of leads from telemarketers that convert at a low rate, or running months of Facebook ads that only net a couple dozen requests for a free quote, it can be cheap to get leads from referrals.
Third, a solar customer referral program can build your brand and give you a competitive edge. While most of your competitors are probably still annoying homeowners with unwelcome door knocking and cold calls, you can recruit your satisfied customers to deploy a charm offensive to their family and friends.
And I don’t mean in a cheesy or even creepy way like in multilevel marketing. I mean in a natural and comfortable way, as trusted people talking with their friends about something they really believe in. So, while your competitors will be hated and reviled for their pushy and obnoxious sales tactics, if you let your customers do the talking for you, you’ll be loved and admired for your social finesse. That will certainly translate into more sales both now and in the future.
5 Great Ideas for Solar Customer Referral Programs
Both large national installers and regional and local solar companies offer referral programs. Most programs are simple, consisting of little more than a web page advertising a bonus for customers to refer their friends, along with an online form to enter the friend’s contact information.
1. Phone App
SolarCity’s Ambassador program offers a phone app that allows for people to enter referrals and track their progress all the way from first contact to proposal to sign up — and ultimately, to the original referring person qualifying for their referral bonus payment.
2. Competitive Referral Bonus
The most important part of any solar customer referral program is the bonus payment. For example, SolarCity offers a new customer free solar for a month plus a $200 bonus for for the person doing the referring, once the deal is signed of course.
That’s on the low side of referral bonuses, which can be as high as $1,500 (!) and seem to average about $500 according to my research. But I assume that SolarCity knows what they’re doing and that $200 is enough to bring in at least some sales. And since SolarCity’s Ambassador program seems fairly passive, aside from offering a few resources online, it appears that the referral bonus payments are the major expense of their program.
3. Small Pre-Closing Bonus
Other installers offer both higher referral bonuses and more active referral programs. Most referral programs only make bonus payments when a referral signs up for solar with the company. But Clean Solar in Northern California goes further to encourage people to send them referrals. They give customers a $25 gift card just for a referral who gets a free site survey/quote. After that, they pay $500 for a closed deal.
4. Help with Holding Events
Many other referral programs give customers help in reaching out to their neighbors, friends and family for referrals. For example, SunCraft Solar in San Diego will create a customized email text for a customer to send out to potential referrals.
But wait, there’s more. SunCraft also help hold events, whether at your home, your workplace or even your church. And SunCraft doesn’t just send a rep to speak to the group about the benefits of solar, as many solar companies will. This company goes above and beyond by helping you throw your party in style: they provide “wine and cheese” for a house party or even “hot dogs and soda” for a neighborhood BBQ.
5. Sales Collateral Just for Referrers
Northeast Solar in Massachusetts offers the usual $500 referral bonus. But they also offer a fact sheet that you can print out to help you talk about solar with your friends. It’s well enough designed and written that you can proudly leave it behind with your friend as your own sales collateral.
How To Start Your Own Solar Customer Referral Program
The companies above have found ways to make their referral programs more attractive to join and presumably, more effective. But if your solar company is just getting started, you don’t need all the bells and whistles at the beginning. Just start out with the basics:
- Put up a page on your website about your solar customer referral program.
- Explain why people would want to refer friends to your company — it should be a combination of doing good (ie, helping spread solar) and doing well (ie, a referral bonus of at least $300. But $500 is more competitive).
- Give advice on who might qualify as a good referral, for example, that they own their own home, have an electric bill of at least $150 per month and are interested in clean energy.
- Include an interactive contact form for the visitor to enter their friend’s contact information along with their own information, so that you can pay them a bonus if the friend gets solar.
- Clearly explain your basic terms and conditions. For example, that all referrals must be new leads not already in your system, that people can’t refer themselves, and that referral bonuses will be paid by check or gift card when the referred person signs up for solar, within a certain amount of time (eg, 30 or 60 days).
- Don’t go overboard with restrictions or you’ll scare people off. Put the legalese in fine print at the bottom of the page.
Once your referral page is published live on your website, get the word out in the usual ways. For example, you can publish a blog post about it, post your referral page on Facebook and LinkedIn or send out an email message to your list inviting your customers to join your referral program. You can even have a local college student or intern do a video about your referral program. The stars of these videos should be your satisfied customers, of course.
It’s not hard to get started. Once the word starts to spread, see if this strategy brings you better residential solar leads. If it’s working, then consider adding some of the extras like initial small payments for proposals or even help with holding events.
You just might find that your existing customers become your best salespeople.
— Erik Curren, Curren Media Group