By Kendall Hope Tucker, founder and CEO, Polis
An article about SolarCity and Vivint Solar featured in the Wall Street Journal last week surprised a lot of readers. Faced with innovative competition and increased market pressures, the two companies have eschewed current advertising logic in favor of a renewed focus on door-to-door sales. This shift in spending away from television ads to the ‘outdated’ domain of Willie Loman may seem like a bold move, but for an industry commonly assumed to be dying, door-to-door sales is growing a lot.
The solar industry’s re-emphasis on in-home interactions is just a piece of a larger trend. According to the Bureau of Labor Statistics most recently released occupational employment statistics, door-to-door sales has shown a 34% compound annual growth rate between 2011 and 2015.
Are you still surprised? It may be because of where you live. Most of this resurgence is taking place in the South and Midwest. (Although The BLS does not release employment data from all of their states.)
This all leads to the natural question, why are companies bringing back door-to-door outreach? Looking at the solar industry can give us some important insight. For companies like Vivint and SolarCity, the complex and costly nature of the sales process makes personalized interactions significantly more effective at generating revenue than generalized messaging communicated through electronic media. When households think about going solar, they need to understand tax incentives in their state, the strength and size of their roof, the amount of power it takes to meet their energy needs, and several other important factors that vary significantly between households. This makes it difficult to advertise on TV or on the internet, because each household’s situation is different enough to need different information and targeted sales pitches. Also, the cost and effectiveness of advertising on TV and the internet have made them less appealing channels in the last 5 years.
This logic and its effectiveness are apparent across the solar industry. All 20 of the largest 20 solar companies do residential sales. Vivint is the clear leader in this space, though, as they have acquired more than 2/3 of its customers through door-to-door sales. As Adam McClellan, their VP of East Coast sales told me in a call last week, “We’ve found that when selling home service products, the most effective place to do it is at the consumer’s home … While other companies wait for consumers to come to them, we go to the consumer, provide them value, and win.”
Door-to-door sales offers an efficient and cost effective strategy for solar companies looking for differentiation and sales success. A lot of work goes into training representatives and targeting prospective customers, but ultimately prospects who talk with door-to-door salespeople are more likely to remember a product and more likely to buy. As Oxford Economics showed in its study on face-to-face interactions, for every dollar a business spends on travel it earns an average of $12.50 in added revenue and $3.80 in new profits. Numbers like that are tough to beat. Maybe people should stop wondering why door-to-door is making a comeback and start asking themselves how to join in.
Kendall Hope Tucker is the Founder and CEO of Polis www.polisapp.com, a software and data company for organizations that do door-to-door outreach.