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We were recently talking to a solar business owner that was still stewing over a miscommunication that forced him to drop everything just to avoid a cancellation. He told us about how a salesperson had sold this homeowner on a specific panel model. They were great at sales in that they had done their research on what the customer needed — this really was the perfect panel model based on their energy goals and budget.
However, the salesperson had never been the best at inputting information into the company’s CRM, and this time was no exception. The salesperson didn’t record the specific panel information in the solar company’s software, and when the PMs got to the install, they slotted in their more popular panel model. The homeowner noticed, and as you would expect, it was a mess. The customer stopped the teams from working, they called their sales rep in a huff, and the whole project got delayed. Eventually, this solar business owner had to step in just to save the company from a canceled contract and one-star review.
In all of our years helping solar installers, we’ve found that few people get excited about data management. While logging customer and project data may be essential, it’s not viewed as something to invest in. Owners and operators would rather focus on bringing on more sales professionals or refreshing their referral structure. Put another way, for many solar businesses (especially young ones) data management is just a necessary evil, not a pathway to growing the business.
However, as the story above illustrates, data is the lifeblood of a business. It tells you how many customers you have, how they’re being serviced, and what still needs to happen. Important things can slip through the cracks if your data is not organized, making a big impact on a business’ bottom line. Without the right data infrastructure, there’s a risk of missing deadlines or making people unhappy — whether that be your homeowners, internal team members, or both groups.
Still, especially in a busy season, good data hygiene is often the first thing to go. That’s why we wanted to break down the real costs of poor data organization, so that even when business gets crazy, your team understands exactly what’s at stake when they deprioritize data.
Cost #1: You’re going to get paid later.
Bad data management means that day-to-day operations take longer than they should. The story we shared at the beginning of this blog is a perfect example of this. What started with a minor data entry issue spiraled into a delayed installation and hours of additional work for the company and owner as they tried to figure out what went wrong. Bad data can slow down your operations and ultimately push out your payday in very meaningful ways.
Bad data management also means that whatever software you have invested in can’t integrate with other systems as you build out your tech stack. Without interoperable softwares, your team will have to input the same information twice or even three times across all of the different systems. Skipping the double-data entry and instead trying to solve the issue by only giving certain systems a full view into the customer is unfortunately just an inefficient. Instead of inputting data twice, you’re instead just forcing your project managers to waste hours each week hunting across software tools for the information they need.
All of these slow-downs increase your time-to-install and cut into your margins. In contrast, if you can invest the time to get your team educated on proper data entry and data management, the choice can pay big dividends. After all, good data infrastructure means faster project execution and earlier payments, all of which net you more for your business.
Cost #2: You have to hire more people.
Another advantage of having organized data is that it’s easy to automate rote processes. As we touched on above, most solar businesses deal with dozens of minor communications that need to happen every week, but which add no real value to the customer relationship. Despite their low ROI, these rote phone calls or emails can easily gobble up half an hour a piece of your PMs or salespeople’s time. And a half an hour here and there can ultimately add up to hours of inefficiencies each week.
Poor data management means that these interactions need to stay manual processes, despite being the perfect candidates for automation. Because automation only works if it has the right data to feed it, a culture of poorly organized data means that you’re committing to these slower, manual processes indefinitely.
Without the benefit of automation to help you scale your operations, you’re instead going to have to continue to hire additional people to accomplish these tasks. With each new wave of growth, your headcount will have to increase accordingly. We’ve also seen how companies that don’t leverage automation have higher employee turnover rates. After all, employees don’t like having the same boring and rote conversations with homeowners either.
Bad data forces you to stay on the hamster wheel of hiring — always needing more people to join your team because of an increasing demand from homeowners and an inability to retain talent.
Cost #3: You're going to get more cancellations.
The inefficiencies we’ve touched on in the previous two costs also have implications for your customers. Especially in the early stages of a project, if a homeowner feels like their system isn’t moving forward quickly enough, they’re more likely to cancel.
Even if you have automations in place to try and help with these fragile early stages of the customer relationship, bad data management can undermine the efficacy of your software. With only poor data to draw on, whatever automations are in place for your business have a higher chance of going out with errors. If something has gone really wrong, the automation may not work at all. A customer may wait critical days for their proposal or even weeks for news of their permitting. By the time they get either of these updates, they may have already decided to stop doing business with you.
Cost #4: You're going to get bad reviews.
In the worst scenarios, poor data organization can continue to impact how your customers experience your business, even if they stay committed to seeing the project through. Here’s a scenario that we think many solar businesses can relate to:
Your project management team is overwhelmed. Because they only have the bandwidth to prioritize urgent customer communications or actual project updates, one of your homeowners hasn’t received an update in a week and a half. The project management team doesn’t worry about the lack of updates because they know there are no new updates; they’re still waiting for permitting to come back. However, the customer feels like they’re in the dark and, after trying to call and email their project manager and getting no immediate response, they decide to just leave a one-star review.
Almost every solar business that is stuck using manual processes has some version of this story. In fact, most solar businesses have this story play out on a recurring basis. Because they’re stuck doing everything manually, even the slightest period of crunch cascades into bad reviews and lower levels of referrals. Bad data management can force businesses into vicious cycles like this one, preventing the implementation of automation and causing your company’s customer experience to deteriorate.
Cost #5: You don't know when you're going to get into a cash crunch.
Your business runs on data. Your close rate and cancellation rate, your average contract size and employee retention rate are all vital metrics to keep track of as a leader in your solar company. They help you understand where you’re succeeding, where you need to improve, and what your runway is.
However, if your day-to-day data management is bad, you won’t be able to trust these higher-level metrics. And believe us when we say that it’s stressful running a business in the dark. We’ve worked with enough solar installers to say with confidence that your top competitors will have their data organization locked down, allowing them to identify areas of growth and where to double-down. If you don’t have good data, then you can’t compete. In fact, if your data management is really bad, you won’t even know the financial realities of your business — meaning you could suddenly be in a cash crunch without any prior notice or way of getting out of it.
That’s why you need to instill in your culture the importance of data, and therefore the importance of reliable, consistent data entry. It’s the daily data inputs that roll up to the business-level insights and keep your business afloat.
So what does great data management look like?
At the highest level, good data organization means developing standards for how you’d like your data managed. Each team should understand how often they should be updating the systems that touch their departments. Your standards should decrease variability. There shouldn’t be one project manager that is updating customer data daily while another only does it once a month. This kind of inconsistency makes ALL of the data in your system harder to trust and therefore less useful.
You should also develop standards around how data should be input. Where possible, it’s better to have set up your software systems to use drop-down lists or checkboxes — essentially any kind of data field that isn’t just a blank textbox. Smaller organizations tend to just read off of the homeowner contract, manually type stuff out of a contract with a homeowner and input it into a description box. This causes two problems: The first is that it increases the chances of human error when employees mistype something. (Imagine forgetting a zero in a contract….) Secondly, free-for-all description boxes increase your operational inefficiencies because even when the data is all correct, it’s harder to parse out the relevant information.
If you have standardized data practices, then you’ll also be able to more easily automate tasks and bring on additional, time-saving softwares. Good data management allows your software to interoperate with other technologies. This means your team should never need to input the same information twice. Instead the two softwares can do all the work, reading the data and cleanly copying it over to the other system.
Let Bodhi help
As a company made up of both solar and software experts, Bodhi understands exactly how solar businesses can leverage data to out-perform their competitors. Since our founding, we’ve been helping solar companies build a great solar software stack and evaluate the merits of a particular technology for their organization.
If you’re looking for advice on how to level-up your company’s data organization, or if you’re ready to take the next step and automate customer communications for better review and referrals, we’d love to talk. Schedule a demo or reach out below.
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