These days the American solar industry is highly competitive. GTM points to “intense competition” as one cause of rising customer acquisition costs since installers "spend more money to win a bid." Addressing the competition is a necessary part of most solar sales conversations.
However, talking about the sales competition in your conversations with prospects takes careful thought. This is particularly true given the sensitivity of the subject and the fact that prospective customers may not yet be sold on solar itself, let alone who will install it. GTM reports, “solar companies are far more likely to lose considerers to uncertainty and doubt than to other competitors.”
Avoiding mistakes in your conversations with prospects, particularly with regard to how you discuss your sales competition, is important given the challenges of customer acquisition. In this article, Part 4 in our 7 NREL-Backed Ways to Close More Solar Sales series, we look at how to effectively address the competition in your solar sales conversations.
The NREL Study and This Series
In this Aurora Blog series, we examine seven common mistakes contractors make when selling solar. These mistakes were identified by the National Renewable Energy Laboratory (NREL) based on its 2014-2016 Solar Energy Evolution and Diffusion Study (SEEDS) study.
NREL’s 2014-2016 SEEDS study was conducted to ascertain why particular prospects adopt solar while others don’t, to provide solar contractors with insights to lower customer acquisition costs. It surveyed homeowners from four states who installed solar, considered solar, or did not consider solar, to understand factors that affected their decision making. It also included input from approximately thirty solar contracting companies.
In each article in this series, we share observations from an interview with one of the lead NREL researchers, as well as insights from the field and related research. In the first three parts of the 7 NREL-Backed Ways to Close More Solar Sales series, we focused on the importance of quick follow-up with solar leads, not assuming prospects share your opinions about solar, and not confusing customers with too many options.
Choosing the Right Time to Bring Up the Sales Competition
NREL researcher Ben Sigrin discusses the perils of criticizing the competition before the customer is completely sold on the idea of going solar. The researchers acknowledge the need to “sell against the competition” but state that “doing so when solar prospects are not fully engaged with solar will hurt not just your competitor, but you, too.”
He suggests that understanding the stages of a prospective customer’s decision-making process can help contractors address competition effectively. He describes the idea that awareness and interest come before the evaluation process, when customers weigh options like which contractors to go with.
Ushering a customer beyond the awareness stage means avoiding scare tactics. As Sigrin acknowledges, “no doubt, it's tempting to try to get to the customers first by spiking the other guys' offer with some good, old-fashioned F.U.D.—fear, uncertainty, and doubt.” But he emphasizes that using such tactics in your sales strategy is more likely to scare prospects away from going solar altogether.
Understanding The Customer’s Decision Making Process
Research has shown the value of knowing the customer decision making stages. The fundamental idea is that a consumer moves through various stages on their journey to making a purchase in a sales conversation. A funnel is a helpful metaphor for understanding how this process occurs. That’s because as consumers move through the stages, the number of viable customers decreases. The select ones that reach the bottom of the funnel have progressed to the point where they are ready to make a purchase.
The stages as they relate to solar are: awareness (about solar and what it can provide), interest (enthusiasm about the idea of going solar and/or feeling it is feasible for them), decision (assessing various vendors), and action (committing to buying a system). A final stage would be advocacy (acting as an ambassador for solar adoption).
In your solar sales conversations, try to get a sense of where your prospect might be. This can help you and the members of your sales team address their needs and avoid any missteps. This is particularly useful given that prospects are likely coming to the conversation from different points.
A Sales Strategy That Focuses on the Relationship
Studies reveal that it might be worthwhile to consider not bringing up competitors at all or avoiding being too negative. You may want to think about keeping the criticism brief and carefully consider how you want your team to approach the sales competition when they do discuss it.
Your team may want to focus more on establishing a positive relationship than disparaging competitors. “Your prospect doesn’t want to know why someone is bad; they want to know why you’re the person they should work with. By focusing your sales strategy on how you can help prospects achieve their goals, you’ll earn their trust and show them why nobody can compete with you,” according to LinkedIn.
Linda Richardson, founder of the sales training firm Richardson and author of numerous books on sales, describes two important aspects of selling against the competition. One is knowing how your offering differs from that of the competition so that a customer might find your product or service more attractive. The other is guiding the conversation with a prospect so that the superiority of your offering becomes clear.
Richardson recommends that you avoid bad mouthing a competitor because it can give the impression of pettiness, making your competitor look good in comparison. Instead, consider asking questions about your customer’s needs that get the prospect thinking about differences in how you and competitors would meet their needs, without criticizing the competitor.
Writing in Forbes, author and sales expert Ian Altman agrees that focusing on what the customer needs is more effective than bashing the sales competition. He emphasizes that you want customers “to select you because they feel you best understand their situation and they see you as most likely to deliver the best value”—not because they felt there were no other good options.
Solutions for Success
As a salesperson, learning how to understand where the customer is in the decision-making process is a good first step in finding the right time to address competition in the conversation. This might mean asking certain questions, or identifying signs that they have moved beyond the early stages and are ready for more detailed information about making the purchase. These signs could include asking questions about pricing and terms or what solar is capable of in some scenario related to their specific situation.
Whatever you choose to do, be cautious about disparaging the competition and focus on positively highlighting the unique value your company adds. This can go a long way towards avoiding missed sales opportunities.
About This Series: 7 NREL-Backed Ways to Close More Solar Sales
Between 2014 and 2016 the National Renewable Energy Laboratory (NREL) conducted a Solar Energy Evolution and Diffusion Study (SEEDS) study. The study sought to better understand the decision making process of potential residential solar customers to help solar industry professionals identify ways to reduce customer acquisition costs. Following completion of the study, NREL highlighted seven common solar sales mistakes identified in their research.
In this seven-part series, we delve into each of these seven mistakes in more depth, based on a conversation with one of the lead NREL researchers, as well as on-the-ground perspectives from solar contractors and exploration of related research.
Part 4. How to Effectively Address the Competition in Your Solar Sales
Subsequent articles coming soon!