Who's heard this one before? A solar sales rep meets with a promising prospect to review a proposal for a residential solar array. The meeting goes from good to great when the rep learns the prospect is making a decision on solar imminently, and they already have another, higher priced, proposal in hand. The competing proposal describes a 7kw system with REC modules for $24,000 and a 6-year pay back. Our rep confidently proposes a 7kw system with REC modules for $21,000 and a 5-year payback, addresses all questions, and smugly leaves the meeting with full confidence they will close the deal with their lower price point. When the rep calls to follow up on Monday, they learn the prospect has chosen the first company, who proposed the higher priced system!
The salesperson can cry foul and demean the obvious trickery of the competition or could reflect on the precise reasons why the customer made that choice. Although the falling price of solar is good for all involved, it doesn’t always mean that the cheapest solar is what every customer chooses.
In this post, our fourth in the series The behavioral science of the solar consumer, we look to behavioral psychology to suggest the reasons why cheaper is seldom better. Then we provide 3 tips on unlocking the power of expectations to engage customers in a way that doesn’t commodify the transaction but rather supports higher prices.
Tip 1: Match a premium price with an (automated) premium experience
Imagine this scenario. A pot of coffee is brewed in a hotel kitchen. Half of the coffee is poured into a lever action dispenser and set in the lobby where guests can self-serve, help themselves to powdered creamer, crumpled napkins, and a smattering of stir sticks.
The other half of the pot of coffee is poured into an ornate carafe, accompanied with a curated set of aromatics, fresh cream in a handmade mug, raw sugar and several exotic spices you never associated with drinking coffee, and set in an outdoor patio with ambient music.
Which coffee do the guests rave about?
It turns out, according to experiments carried out by the noted behavioral psychologist Dan Ariely, that most people not only value the second cup of coffee more, but also happily agree to pay more for it. The coffee, even if left black, is perceived to taste better and be more pleasurable because of the effect the surrounding setting had on the experience. This is not a trick. The value of the coffee arises out of a larger context and is dependent on how the experience is delivered.
This example opens up a realm of options and strategies that a solar company can explore to mine value out of the composition of the customer experience.
Delivering a premium, white glove experience might sound expensive, but it doesn’t have to be.
To start, consider the sales presentation. Is the design of your website outdated? Does your salesperson meet your customers in jeans, a t-shirt, and baseball cap? Do they start emails and texts to your customers with “Hey….” Do you still show them a spreadsheet proposal?
Furthermore, there are tools these days that combine a premium customer-facing experience with built-in automations and AI to improve your back-office operations. Stella by Demand IQ uses AI to automate the lead gen and qualification process. Bodhi lets you offer a branded project tracking app to your customers, while also giving your operations team a solar project management tool to help them with their job. Bodhi is powered by automations and integrations with your CRM and other operational software. Scanifly not only allows you to double the number of site surveys that you can do in a day, but can also deliver interactive 3D models you can use to “wow” your customers.
To go back to Ariely’s coffee experiment, his point is that attention to detail can enhance the value the customer will place on their experience and that value can translate to higher sale prices.
Tip 2: Arm your customers with anecdotes they can relay
Ariely describes a series of taste tests between Coke and Pepsi. Participants are given a small, unlabeled cup of each soda, and asked to rate which one they like better. What the experiment found was that the participants rated Pepsi higher, but when the subjects were shown the brand of the soda ahead of time, Coke was preferred. The awareness of the brand actually changed the taste experience.
How can this form of associative pre-knowledge help us in solar? When a customer shares their experience with a company, they’re sharing much more than a referral and invitation to lower an electric bill. Take for example when your friend tells you about a great movie they saw recently, usually they share more details than the subject of the movie. They may add details about the dinner at the theater, the group of friends and how it was a relief from a busy day. Your understanding of the movie is now tied to your understanding of the broader experience your friend had. The associations tied to the movie experience have branded the movie for you.
The same scenario plays out in solar all the time. Your satisfied solar customer describes to a friend their choice in going solar and mentions your company’s name. What’s more, if the customer has access to the details of the system, the savings, the process, and a personable anecdote, then the prospect is armed with a knowledge of an experience to come. While a referral is more powerful, solar reviews can fill this role as well. After all, haven't you found in your own life that when a review tells the story of the person's experience, it's far more impactful than if they just said "XYZ company was great?"
Taken together, these stories are a type of conditioning that can affirm the positive messaging that a solar company works hard to earn. For this hard work, the solar company should realize a value — either in goodwill or price. Your new customer will actually feel the benefits even before they experience it and even more so when it is confirmed by their own experience. That confirmation has real value.
Tip 3: Choose the words you use with your customers wisely
Expectations also arise out of the actual details of the experience. Humans need narratives to put their experiences in context and thus to have something to relate to. Why do menus at fancy restaurants have more adjectives for the prepared dishes, or why does a good sommelier traffic in florid associations for a glass of wine? The words give us something to attach our experience to. The connotations can become real, validating our experience, which as Ariely writes, has a concrete affect on our pleasure center of the brain.
An additional fascinating experiment involving a series of word scramble tests demonstrated that the set of words presented to the participant has an impact on the subject’s attitude and disposition following the test. Words like kindness, politeness, empathy translated into behaviors that manifested these traits.
A solar journey is a ripe place to deploy these strategies. We need to give a customer details of the experience to help put it in context. Concepts and terms in solar technology are unfamiliar, the steps of the process are unanticipated and the outcome of a working system can seem novel. A solar company can lend a tone to the experience by using words, metrics, and infographics that steer the customer towards a particular experience.
Starting in the sales process, educational content can be delivered with relatable narratives. A proposal can feature the details of the system and impact transparently. The impact of the investment can be communicated in a way that describes the human experience, rather than simply as dollars saved.
Compare the difference between “100% Powered by the Sun” from simply “$ Saved.”
The direct approach of using specific words to condition the behavior of customers is also powerful. Avoiding words like immediate, automatic, and no-hassle in preference for words like sustaining, precise, sophisticated can help your customer relate to the value of your white glove service.
The process of scaling residential solar does not automatically translate into less expensive solar that is easier to deploy. Solar companies need multiple tools, like a solar project management app, that can help them protect their margin, while also delivering more value to each of their customers. As discussed, the experience of their customers is not simply objective, but is framed and conditioned by the expectations set before, during and after the experience. A solar company will do well to pay attention to the context, their brand and the words they use. Attention to these details translates to higher prices and better margins.
If you’d like to talk more about best practices in delivering amazing customer experiences, contact us.