Comparing solar referral program types (and how you should use them to win more deals)

No matter what business you operate, one sales strategy tends to outshine all the rest: referrals.  Relatively low cost and excellent for generating high-quality sales leads, a reliable stream of referrals can be a game-changer for any solar installation company.  Solar referral programs are a smart, low-effort strategy to boost sales for a more sustainable business.

As any sales professional will tell you, a warm lead is always better than a cold one, both because they are more likely to close and because the customer acquisition costs to woo them are usually lower.  Warm leads typically hear about your company via a friend, neighbor or coworker—people they trust.  However, when it comes to generating warm leads, timing is everything.  

Many solar installation companies wait until long after the installation is over to ask for a referral.  This is a mistake.  Forbes says (and we agree!) that the best time to ask for a referral is when your client is most excited about your product or service. This means there are many opportunities to generate referrals as your customers experience the highs of the solarcoaster.  

When creating a successful solar referral program, it’s also crucial that installers make it easy for their customers to refer others through an automated solar referral program.  Even better, installers should consider investing in a solar referral and customer experience portal where all the information they need about their installation project resides.  There are many benefits to a customer experience portal, all of which help boost referrals.  

First and foremost, customer experience portals help keep customers engaged and ensure your brand stays top of mind.  Your homeowners will also default to this portal throughout the installation process, checking on the status of their project, tracking project milestones, seeing what’s coming up next, and referencing their contract.  This can help free up your project managers to actually execute the project instead of getting bogged down with customer calls.  With transparency at its foundation, the portal also keeps homeowners updated, engaged, and excited about their project, leading to a better customer experience and likelihood of referrals.


At the end of the day, when a referral program is done well, customers create a snowball effect for future business, lowering the average cost of customer acquisition and improving the efficiency of your sales team.  If you’ve been struggling to get your referral program to generate the kinds of results you want, we want to share our thoughts on how solar referrals work, as well as how you can streamline the solar customer experience to drive referrals and improve communication.

The three main incentive types in a solar referral program

While most solar companies are aware of the value of solar referral programs, many struggle to generate the volume of referrals they need to scale their business.  The key things to focus on are:  Developing a competitive customer experience, designing attractive incentives, and making it simple to offer a referral.

Related: The cost of poor communication with solar customers

Let’s start with how to design an attractive referral incentive.  The three most-used types of referrals incentives are:

Single-sided 

A single-sided incentive is the most straightforward form of referral incentive, and it’s the easiest to manage.  A customer making a referral to another customer is provided with a reward.  Typically this is a monetary reward, but it can also be a free or discounted product/service or gift card to a retailer.  While single-sided referrals are common, they can be less effective than other types of incentives because there’s nothing in it for the referred customer, making it seem self-serving.

Double-sided

With a double-sided incentive, both the existing customer and the lead they refer receive a reward—but often only if the referred person becomes a customer.  This type of incentive can be compelling because both parties benefit from being a customer, but it does require more of an investment in both management time and costs.

No incentives

Of course, everyone loves getting a reward, but not all solar referral programs have to involve an incentive.  Many people are willing to recommend a business without getting anything in return, but only when they’ve had an exceptional experience.  These types of referrals are the most genuine, and despite the belief that only a perfect customer experience will result in a referral, customers often extend grace to companies that go the extra mile to rectify a problem.

Right-fitting your solar referral program

It is critical to tailor the solar referral program to your clientele; the right type of referral infrastructure can mean the difference between getting the majority of customers to participate or wasting your efforts.  What kinds of incentives do you feel will be of value to your customer base?  What can your company afford to offer referring homeowners, and how will you structure the program?  Will there be tiers, where the more they refer, the more they can “earn?”

Once you’ve designed your program, it is essential to effectively explain the details of the solar referral program to homeowners during the sales process versus waiting until after the installation.  Remember, many homeowners are most excited about their project at the outset.  Show them where in their portal or your website they can find the referral program details in writing and explain to them how they can get the most out of it.

As mentioned above, the way homeowners submit referrals should be as simple and streamlined as possible.  The more information they are required to provide, the less likely they are to participate. Determine what information is absolutely critical for your sales team to nurture that warm lead and leave the less significant details to the sales team to obtain.

As outlined by Harvard Business Review, customer referral programs should facilitate easier sales negotiations and increase loyalty from new customers, ultimately leading to higher margins.  If your solar company can successfully implement these strategies, you should begin to see improved team morale, lower customer acquisition costs, and enhanced overall revenue streams. 

Give customers the right tools for referrals

While you should introduce your solar referral program during the sales process, you’ll get the most return on your investment if you also periodically remind your customers to participate.  Especially when they reach exciting milestones, it’s important to reach out to homeowners and ask for referrals and reviews.  Many homeowners who would potentially provide a referral simply forget about the program without a company rep following up.

Related: 7 best practices for soliciting and generating great solar reviews

Keeping the referral program with all of the homeowner’s project details in a customer experience platform is the simplest way for customers to participate.  With everything in one place, they won’t have to access another system to make a referral. The fewer clicks and less red tape, the more likely they will participate on an ongoing basis.  Good customer experience platforms can also automate these referral reminders so your project managers and sales team members don’t have to lift a finger. 

Give your team the right tools for referrals, too

A simple fact of business is that you're never going to please every customer.  With a successful referral program, however, you'll put your sales team in an ideal position to maximize the long-term value of every happy customer.  Solar companies can expect to generate as much as 80% of referrals from only 20% of overall customers.  Of course, the key is ensuring a reliable stream of satisfied customers without using up the valuable time of forward-looking sales reps.

That's where a platform dedicated to the solar customer experience can give a solar operator a significant advantage in the customer satisfaction department.  This kind of platform can give customers all of their project information, documents, and even energy savings information in one location.

Without question, customer experience platforms are a win-win for solar businesses.  They provide on-demand information that saves the homeowner time and effort while making them feel well-informed, which can lead to more referrals.  The most sophisticated platforms will automate the referral requests, so the homeowner can manage their own referrals. 

 

Ultimately, growing the pool of happy and engaged customers with effective and continuous communication can dramatically increase the success of a referral program.  By incorporating a customer success portal into your operations, you can provide homeowners with the information they need and give them an easy outlet to provide referrals.  

Final thoughts on solar referral programs

In today's world, customers have more power than ever before.  While this can be intimidating for businesses, it also represents an enormous opportunity for any solar installer that can harness and direct a customer's influence.  With the ability to automate customer project details in an industry that often struggles to provide constant visibility, a solar installation company can stand out from the competition and increase the flow of warm leads by delivering an excellent customer experience.

Successful referral programs can also result in more efficient operations and lower costs.  While many solar companies fail to adapt to a world of constant feedback, forward-looking solar professionals can take advantage of industry trends, easily maintain customer engagement, and plant the seeds of a thriving referral program.

For more information about how Bodhi’s solar customer experience platform can lower customer acquisition costs and help you easily implement a successful solar referral program, schedule a demo today.

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