In a recent webinar Jim Jenal, founder and CEO of Run on Sun, discussed how to build a better relationship with clients. Here’s a recap. You can watch the full webinar here.
How to avoid a looming solar client crisis
Client confidence eroding
There is a looming crisis of confidence with clients in solar. Whether it is because of questionable financing schemes, shoddy work or outright fraud, confidence in the industry is at risk of eroding. There are news reports concerning these issues on a regular basis, which give ammunition to enemies of the solar industry and spark criticism from both sides.
Here are some examples:
Sunrun faces class action lawsuit over its marketing
Members of Congress and a utility question marketing practices of solar companies
Consumer complaints reveal solar companies ignoring ethics code
Epcon Solar to pay $40,000 in restitution to customers who filed a valid consumer complaint
Class action lawsuit claims solar panel installation companies lied about electricity cost savings
Verengo to pay out $2.3 million for violating rules of National Do-Not-Call Registry
Clients, not customers
Despite implementation of ethics codes and other attempts at self-policing, the solar industry has simply not created a sustainable environment for itself. If the industry does not act quickly to address this issue, it may face backlash such as burdensome regulations.
It may be beneficial for solar companies to change their mindset from having customers to having clients. A customer implies a transactional relationship, such as that between a customer and a fast-food restaurant employee. However, solar companies must provide a long-term view beyond the act of purchasing. They must have clients, which require a trust-based relationship.
Solar companies put equipment that is designed to last for 20 years or longer on people’s homes. Few entities have longer-term relationships. Clients need to rely on what solar installers are telling them about their systems. All too often, they are finding they cannot. This is a significant problem.
Developing a client focus must begin by building trust, and then enhancing that trust with every action thereafter. This implies being honest with clients even when it adversely affects your ability to close the sale, keeping clients informed of any changes and looking after their best financial interests. Here are five rules that Jim has put together to help build trust with solar clients.
Five rules for treating clients
1. Practice ethical lead generation. Rather than risking liabilities that could result from violating Do-Not-Call lists or sending salesmen door-to-door, focus on building a referral base. Help build a client’s trust by driving them to a company website full of referrals and educational content.
2. Perform honest site evaluations. Start with qualified personnel who are aware of the rules so they are not making promises that you cannot deliver, such as products that cannot be supplied or unrealistic savings. Also, keep in mind that in some instances you simply have to walk away, such as if a location makes solar useless. A missed sale is better than an angry client.
3. Provide comprehensive proposals that disclose all of the products that you are planning to install. Furthermore, outline all assumptions built into the proposal, including assumed utility rate increases and assumed performance of the system. It is then possible to provide a realistic performance model that can include a legitimate savings model tied to the client’s utility rate tariff.
4. Provide clients with an appropriately detailed contract that clearly states the products, price, start date and other details for the particular project. It should also outline any known contingencies and spell out a process for change orders. Contracts should evolve over time to adequately cover events that might arise and how they will be handled. Contracts should also change in the long run to reflect experience in the industry, protecting both you and your client. When it comes to the client signing the contract, send someone who completely understands the contract and can clearly explain what it means.
5. Execute the contract completely and transparently. To continually enhance the client’s trust, you should do what you said you would, when you said you would, for the price you gave. Changes may arise, but it is important to communicate these with the client and keep them in the loop. When the job is done, provide proper owner’s materials, including drawings, data sheets and warranty information.
There are lots of things that companies can do besides what is outlined here, such as improving training, safety procedures and warranty disclosures. However, operating by these rules is a good start to addressing the confidence crisis that the solar industry is facing.
Q&A with Jim
SPW: A lease contract can be confusing to customers. Are there some good resources to help a potential residential client prepare the lease and understand it better?
Jim: I think there are a lot of resources out on the web to help clients compare the financial benefits of different financing approaches. We have written about it on our blog, but other organizations offer fairly comprehensive calculators. These allow plugging in some of the assumptions made on your behalf with different financing options and provide a sense of how this affects your payback long term.
Somebody who is advancing a lease program to a prospective client ought to show them the lease as part of the proposal. Clients should understand the difference between what that system is going to cost through a lease or what it would cost with a cash purchase. Not everyone can afford to make a cash purchase, but having the disclosure so they understand what the differences are is helpful.
Tell Us What You Think!