To grow their businesses, solar installers need to convert more and more leads into solar projects. The challenge becomes finding quality sales leads.
When Ruben Ugarte, director of business development at Horizon Solar Power, attended LeadsCon, the biggest business-to-business conference for lead generation companies, he noticed firms specializing in lead generation for nose surgery, sun tanning, auto loans — just about everything under the sun, especially solar power.
“Literally every vendor was trying to do solar leads, or they were looking to get into it,” Ugarte said.
Lead generation is the business of securing contact information from people who might be interested in a particular product or service and selling it to providers of that product or service. It’s a booming industry. It’s also transitory. Firms jump from one market to another, depending on what’s “hot,” said Silas Ellman, co-founder and vice president of RGR Marketing. Right now, few markets are hotter than solar.
“There are a million guys who are lead generators — from a guy in his garage who is good at Facebook ads to lead-gen companies with hundreds of employees,” Ellman said. “If they can make more money in solar than what they were making doing mortgage refinance, or whatever homeowner vertical they were working on, they will jump immediately.”
When RGR Marketing got into the solar leads business, there were just a handful of experienced providers in the industry. Then, in early 2015, the market was flooded by new entrants, Ellman said.
“I’m sure some of them are legit and fine to work with, but a lot of them are just chasing the money, and it can be hard to find a trustworthy partner when a vertical like solar becomes so popular,” he said. “Solar buyers need to be very careful about choosing the right vendor.”
Experience with solar leads providers
Don Lossing, general manager of American Solar Energy, experienced the range in quality first hand. One company offered the Florida-based contractor exclusive leads for $50 each. To convince Lossing of their quality, the company gave him six sample leads for free.
“None of those was valid,” Lossing said. “Essentially, you called the six customers, and the first thing they said was, ‘How’d you get my number? I never applied for anything.’ It falls back on quality.”
Donald Powell, owner of Powell Energy and Solar, said he tried “just about every source” of lead generation. He says the results have been mostly disappointing, blaming the ease with which consumers can unwittingly trigger sales calls.
“A couple companies we dealt with have websites structured in such a way that almost guarantees that anyone who ventures in gets trapped into making a request without intending to do it,” Powell said. “Then the people that do answer your phone call oftentimes say they didn’t really want to do that — they were just surfing the web.”
The problem with leads is they can come from anywhere, and it’s anyone’s guess as to their quality. One expert interviewed called lead-generation quality “cyclical,” meaning a single lead-generation company can’t provide quality leads all the time. After all, there are only so many homeowners interested in going solar in any given area. Yet solar companies constantly need to fill their sales funnels. This is why solar installation companies often partner with more than one lead generation company simultaneously.
Omer Atesmen, president of lead generation company Clean Energy Experts, said there is some responsibility on the part of solar providers themselves once they get a qualified lead to effectively use it. He said solar companies should ask themselves two questions:
- How quickly do you follow-up on a lead?
- How many times do you follow-up before giving up?
“Even if you take the exact same lead, exact same quality control, and send them to two companies, you’ll have some companies perform well and some that don’t, based on sales effectiveness,” Atesmen said. Research supports this idea.
Velocify, a provider of cloud-based sales software, showed solar companies are letting sales opportunities slip through the cracks by failing to respond to all qualified leads by phone or e-mail — and enough times to gain traction.
Calling a new lead within one minute increases conversions by 391%, according to Velocify, Research conducted by Zogby revealed that most prospects expect to receive a callback within 24 hours.
Velocify also uncovered that the optimal number of call attempts is six. The reason is that 93% of prospects that eventually convert have been contacted by the sixth call attempt.
Finding quality solar leads providers
Ellman and others offered the following tips for contractors interested in purchasing leads from a third party:
Be inquisitive. A lead generation company should be able to answer every question quickly and in detail. “We are obviously not going to give away what is our secret sauce, but we will be very honest and straightforward — here are our pages, here’s how we drive traffic, here’s the messaging the consumer sees, and this is the best way to close a deal,” Ellman said.
Confirm TCPA compliance. The FTC continues to enforce the Telephone Consumer Protection Act, which was passed in 1991. In short, landing pages where consumers share their information with lead-generation companies must have certain disclaimers on them that will allow you, the lead buyer, to contact them in certain ways. Without these disclaimers, you could end up violating federal law.
Ask to see landing pages. “The solar company needs to make sure there aren’t false promises, like pay-no-money and pay-no-electric-bill-for-the-rest-of-your-life kind of promises,” Ellman said.
Find out how they drive traffic to landing pages. Companies can drive traffic using processes such as outbound emails, pay-per-click search, native advertising, social media and organic search. “Those are the more legitimate forms of traffic, and then there are cheaper ways, like co-registration paths,” Ellman said. Co-registration paths typically take the form of popups or emails that provide an incentive for filling out information. The incentive degrades the quality of lead, as the most in-demand solar consumer — someone with a certain amount of wealth — is unlikely to be swayed by incentives to share their personal information.
“The real issue is that most solar lead generation companies generate leads in a ‘spammy’ way, then sell them to as many solar installers as they can,” said Jamie Lakes, president of SolarReviews.com, a consumer reviews site for the solar industry, as well as a lead-generation firm. “This is why consumers are sometimes contacted by up to eight different solar installers. It is this sort of behavior that has given the solar industry a bad name for being rapacious marketers.”
Lakes said the Solar Energy Industries Association (SEIA) and SolarReviews.com have partnered to provide a more consumer-friendly service where the consumer has the option of selecting how many solar installation companies can contact them. They can also opt-out of being contacted at all. This process falls in line with SEIA’s consumer protection drive.
“Our approach is to offer the consumer as much education as we can before they have to make a decision about whether to request a quote, and if so from whom,” Lakes said.
Other lead-generations models are being tried by organizations like Pick My Solar, which has competing solar companies bid on projects, and Google’s Project Sunroof, which helps consumers compute savings from going solar and be contacted by solar installers — but only if they want to hear from them.
Referrals still key
Research conducted by Enphase, an inverter manufacturer, showed more homeowners decided who would install their solar based on trust (69%) than who had the lowest price (56%).
And when it comes to trust, the most trusted source is friends and family. That’s why a referral is the most powerful lead. More than 90% of 2016 Top Solar Contractors cite referrals as their top way to generate new sales prospects. Greenbelt Solar, let down by subpar lead generation efforts, focused on building up referrals by putting the customer first and placing an emphasis on quality.
“It took us a while to build traction with this philosophy, but we knew that it was the best way to stay in business and keep growing. It’s a marathon, not a race,” said Carey Ibrahimbegovic, CEO of Greenbelt Solar. “Now, as an established company, about 50% to 60% of our business comes from referrals from our passionate customers.”
Calling third-party lead generation a “block box,” Ryan Buege, director of sales and marketing at All Energy Solar, produces two-thirds of his company’s leads through efforts he can control.
“I’ve been doing this for eight years, working with leads through to the point of sale, and I can say there is always a good reason to be partnered with [lead-generation companies],” he said. “But at the same time, more than 50% of what we’re doing are things we can control: canvassing, direct mail, working community events.”
So, maybe the best thing to do when it comes to investing money in gaining leads, as it is with any investment, is to diversify — your lead generation suppliers and the type of efforts your making to secure leads.
The lead lifecycle
A non-scientific survey of 32 Twitter users showed residential solar acquisition costs can vary greatly.
One example of how lead generation works, step-by-step
- A curious could-be solar customer, Matt, clicks on an ad promising low-cost solar power.
- He is transferred to a landing page — essentially an attractive-looking webpage with a form on it — where he can input his information to receive an immediate solar quote.
- Should he do this, he will get an immediate quote, but the information is also collected by a lead generation company.
- The lead generation company may enrich or append certain data points for Matts profile. Does he own his home? Is there a non-shaded roof? Does he have public debts?
- Based on quality, Matt’s information is sold to local solar installers who are buying leads at a cost from $1 to $100 each.
- Solar installation companies call Matt. In a busy solar market, time is of the essence, and contractors will rush to call. Consumers can perceive this as being “bombarded by calls,” and so some lead generation companies limit how many companies can buy a single lead.
- If the solar companies are lucky, Matt was serious about wanting solar and will agree to meet with a sales representative. But more often than not, the Matts of the world are just curious.
- Solar companies say closing a residential sale, depending on the market and other factors, can cost thousands of dollars. That’s a lot of Matts saying “no thanks.”