The best referral sources for a solar company

Not all referrals are created equal, which is why we're sharing referral best practices
Author : 
October 7, 2022

Referral programs can be the bedrock of a thriving solar business.  Because they often cost less than other marketing initiatives, all while generating higher customer conversion rates than traditional ads, building a successful referral program is a program every solar company takes on at some point.   However, if you’re mid-way through that program and looking for the best referral sources for a solar company, it can be difficult to navigate the murky landscape of marketing statistics.  While we all know referrals are critical, tailoring a solar referral program to the strengths of a business is often easier said than done.

Still, there’s no doubt it’s worth the effort.  The opportunities for a solar company that can capitalize on positive customer sentiment are massive.  By aligning broader customer trends with industry-specific tailwinds, a solar company of any size can multiply its growth.  That’s why it’s vital to understand the value of tech integration in solar and work to stay ahead of customers.  Keeping up with referral best-practices, as well as solar customer trends, can directly lead to more new business, improved efficiency, and the maximizing of any solar company's potential.

The best referral sources for a solar company:  Personal referrals and trust reign supreme

Many summaries of consumer trends lead back to a now-dated 2011 Nielsen study, which maps out trust in brands and advertising.  While the study retains some value, a lot has happened in the last decade. The increasing footprint of social media effectively changed the entire game of attracting new customers.  Add to that the fact that any solar business will tell you that few industries have changed in the last decade more than solar, and it becomes obvious we need a more up-to-date understanding of referrals.

A much less-publicized 2021 follow-up Nielsen study shows what has changed and what has stayed the same for customer behavior.  Some of the key findings that have an impact on solar referrals include:

  • Roughly 9 out of 10 consumers trust referrals from people they know
  • 50% of respondents trusted personal recommendations more than any other form of advertising
  • Potential customers are roughly 2x as likely to take action following a personal referral
  • Anxiety is twice as high for customers purchasing a new brand

There is one important point that remains consistent from the older study to its updated release:  Personal referrals generate a staggering level of trust.  While other ad formats can still generate a significant amount of trust — especially among younger generations — really all other customer outreach pales in comparison to personal referrals.  A similar 2021 Statistica study validates this, with 89% of respondents stating that they most trust recommendations from a person that a prospective customer knows.

There is another telling detail that has a direct impact on a prevailing trend in the solar industry.  While listed above, it’s worth paying particular attention to.  In the updated Nielsen study, respondents showcased much more anxiety when trying a new brand — a trend that has more relevance for solar relevance.  

After all, nearly all solar customers will not only be new to the company, but they are also likely new to the product itself.   That’s why it’s even more important to build trust through personal referrals.  By successfully generating a stream of referrals, a solar company can start to overcome a critical hurdle that challenges the entire industry.

Related: Too many projects! What to do if success is killing your project managers

Building a great solar referral program

There are many different ways to implement a referral program, which is why you should match the details of the program to your solar customer base.  Still, whichever path a solar provider chooses, there are certain principles that you should always consider and follow, such as:

  • Don't overcomplicate a referral program
  • Don't be afraid to reiterate a referral program's features
  • Prioritize simple and effective customer communication
  • Integrate as much as possible to promote a positive customer experience
  • Offer more than one type of reward, if possible
  • Utilize all possible referral sources

One of the worst things a solar company can do is make a referral process too complicated; this is the route to turning happy customers into a dead-end for future business.  

Additionally, a solar provider needs to provide multiple opportunities for a customer to engage with a referral program, which may require follow-up interactions to ensure the program details are understood.  Customers should clearly understand whether a referral program is single-sided (just the existing customer receives a reward) or double-sided, as this will affect the entire customer outlook.

Prioritizing customer service and effective communication are also essential for any solar referral program.  Because of the lengthy installation process and the length of the investment, a solar customer needs to retain confidence long after making their initial purchase.  

To that end, integrating critical data and messages with the right software platform can simplify the process and help solar providers stay ahead of homeowner inquiries.  With an easy-to-use tech platform, homeowners can stay in the loop through automated touches, meaning project managers can spend less time dealing with past sales and repeated questions and more time completing installations and growing relationships.

Optionality and the value of multiple referrals

In addition to demanding consistent communication, the modern solar customer also requires flexibility in their solar offerings.  If two solar providers are roughly equal, the one offering flexible options in their referral program will have an edge.  

This is why many solar companies offer tiered rewards for referrals, which can generate good leads even if an existing customer doesn't directly lead to a new sale.  By helping initiate a customer to the brand, a solar provider can find qualified targets for pennies on the dollar compared with traditional ad formats.

Once you have a satisfied homeowner ready to participate in a referral program, encouraging multiple referrals can also lead to an enormous upside.  As Forbes points out in a summary of referral program benefits, a simple follow-up to let a homeowner know their business is appreciated can connect a company with multiple highly qualified prospective customers.  

Solar customers also tend to be motivated to help other homeowners join the renewable-energy revolution, giving solar providers ample incentive to guide enthusiasm toward additional referrals.

Other referral sources and trends to capitalize on

Even though a referral from someone a prospective customer personally knows is the clearest path to gaining trust, there are other ways to make a solar referral program hum.  

Beyond primary sources (direct contact among friends and family), the best referral sources for a solar company tend to be on social media.  Studies even show that more than half of social media users will share their purchases online, and even casual social-media acquaintances can lead to successful referrals.

Another relatively new development is the importance of social media influencers in attracting new business.  While studies show a primary-source referral is likely to have the greatest impact, an influencer can still generate a similar impact on a traditional advertising campaign.  

A solar company that provides a positive experience for a social-media influencer can see a significant boost in brand trust from its followers.  Within the expanded digital realm, a referral can be successful even without a direct personal connection.

The impact of Covid-19

We're also starting to see the real impact of Covid on referral programs and the solar industry.  Some studies show that referrals increased more than 400% during the pandemic, and the solar industry may have benefited from this growth in referrals.  Despite supply chain disruptions and other headwinds, the solar industry meanwhile saw a dramatic expansion during the pandemic.  In fact, even with a drop in the solar workforce in 2020, the industry experienced record growth, with new installations jumping 43% from 2019 levels in the United States.  By 2021, the growth rate was still a very respectable 19%.

Referral programs are important for keeping this upward trend alive.  Referral programs are clearly built to last in the digital age, creating the perfect fuel for the quickly expanding solar industry.

RELATED: 4 ways data monitoring can earn your solar business more money

Demonstrating tech competency on multiple levels

It’s important to keep in mind that a referral program is only as strong as your homeowners’ satisfaction levels.  That’s why it’s worth investing valuable time and resources into keeping homeowners happy.  After all, if a homeowner can't find a document or has to call customer service for a simple answer, they’re not being satisfied.  Worse still, the average customer service call takes between 15-30 minutes, meaning your company's efficiency takes a hit too.

Homeowners who choose solar power also tend to have high expectations for technology.  In their mind, they're participating in the wave of the energy future — so they expect a solar company to have a firm grasp on modern technology.  Being able to look at all relevant docs quickly, find real-time project updates, and easily check in on their solar monitoring system provides a huge boost of homeowner confidence well after the final panel is in place.

Solar companies that successfully integrate modern tech with good products create an excellent foundation for a referral program.  The most effective referral programs also provide automated reminders right along with other critical data.  That way, homeowners have access to their solar project information and can make referrals day or night, all  24/7 without stretching a solar provider's team or resources.

Referral troubleshooting and making adjustments

Residential solar is expected to triple in the U.S. by 2030.  Solar businesses that have the best customer experiences will be the best positioned to take advantage of this growth.  And if solar professionals want to stay ahead of the intense competition and capture their fair share of the 3x growth, it’s vital to generate positive reviews and referrals.

Of course, no matter how successful a referral program seems, solar providers should continue to evaluate their referral program as it grows.  As an example, simply referring a qualified homeowner — with no expectation of an immediate sale — might still be worth a smaller cash incentive.  You won’t know unless you experiment and evaluate.  Don’t be afraid to reward things beyond a confirmed sale.  Any feature that provides value to the business can be worth adding to the referral program.

To get to the best referral sources for your solar company, it's also helpful to go beyond basic word-of-mouth from friends and family and really take advantage of digital solutions.  Despite not being quite as valuable as a primary referral, secondary referrals generated from social-media acquaintances and influencers can still be very effective — especially for younger generations who are just becoming homeowners.  By being willing to honestly appraise a referral program and adjust as necessary, a solar provider will be able to capitalize on emerging trends.

To find out more about how Bodhi's solar business management software can level up customer satisfaction and streamline the referral process for your solar business, schedule a demo today.

The tips you need to stand out

Our monthly newsletter shares the best practices and tools to keep installers at the forefront of the bright world of solar
Subscribe to newsletter