How to start a solar referral program that works

7 practical steps to grow referrals according to the experts

As competition among solar companies increases and the well documented high cost of customer acquisition persists, solar business leaders around the nation are asking “How do we get more referrals?”  We’re sharing tips from industry experts on how to grow your business organically through referrals to stay at the forefront of the bright world of solar.

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The magic of a referral

Referrals pull my customer acquisition costs out of the stratosphere; without referrals my business is untenable to operate.

- Mark Swift, Owner at The Solar Professionals

Solar sales professionals know from experience that one specific type of lead rises above the rest to deserve their immediate and unwavering attention - a referral.  Solar pros won’t be surprised to hear that “Customers are 4 times more likely to buy when referred by a friend,” (Nielsen) and that’s because “word of mouth is the primary factor behind 20 to 50 percent of all purchasing decisions." (McKinsey)

Step 1:  Establish a customer-centric company culture

I’ve found that taking the time to really get to know a customer and understand why they are going solar is the foundation of a strong relationship and memorable 5-star experience.

- Marlaina Hunter, Customer Experience Manager at SunCommon

Work to develop a culture within your organization that values and respects your customers during both the pre-sale and post-sale stages of their journey.  Solar homeowners expect regular project updates, and once the project is commissioned, digestible performance summaries to validate their energy production versus their sales proposal.  If there is a handoff from sales to operations, ensure that your operations staff is empowered to represent your company well.  If you feel like you need to “shine a light” on how your customers at large perceive their experience with your organization, integrate and track Net Promoter Scores into your post sales process.

Step 2:  Set a goal & track your progress

Going solar is kind of like the joke 'How do you know if someone is a vegan?  They'll tell you!'  There's a window right after someone goes solar where they want to grab a megaphone to tell the world about it.

- Charlie Saginaw, Regional Account Manager at BayWa r.e.

To declare that your referral program “works,” it must be measurable.  A simple and valuable metric to determine how well you're doing on referrals is the ratio of “referrals per customer.”  Take your total number of referrals over a given time period, and divide it by your total number of new customers over that same time.  You should expect a lag between when customers close and when they begin making referrals.  To take that into account, offset the time period of referrals and new customers by the number of months it takes to go from contract to PTO.

Step 3:  Develop an incentive structure and amount

Some of our customers have been almost-offended when we’ve offered to pay them for a referral.

- JD Smith, Business Development Coordinator at Arch Electric

Offering an incentive to your customers is a critical component of a scalable referral program. Common referral incentive structures include:

Single-Sided - The individual who makes the referral is rewarded.
Double-Sided - The referring individual and the referred prospect are both rewarded.
Non-Monetary - The referring individual is incentivized by self-enhancement.
A gift, thank you note, or just the ability to broadcast their achievement may be enough to provide your Champion with the self-enhancement they desire.

Double-sided rewards are effective because it’s less likely to take away your champion's sense of self-enhancement if they know their friend is getting something of value as well.

Step 4:  Provide your Champions with tools to submit referrals

Customers want to make sure they're happy with the system before putting their word on the line.  A lot of our referrals come 1-2 years after the install was completed by maintaining good relationships with our customers.

- Jody Bannister, Client Support Specialist at AM Sun Solar

Ask, “How can I make it as easy as possible for my customers to send me referrals?”  Work to remove the barriers that may inhibit your customers from submitting referrals.  Do not assume that your glowing customer has your email address memorized, your phone number saved in their contacts, or even remembers the name of your company at the moment they want to provide the referral.

Effective referral tools include:​

  • A referral generation tool built into a customer experience platform like Bodhi®
  • A process that requires a sales rep to ask the customer to save their phone number to their contacts
  • Automated emails or texts with referral prompts sent at strategic times

Step 5:  Market your referral program and ask at the right time

At commissioning I hand-deliver the customer's project folder to them.  It's the best time to reinforce the relationship and ask if they know anyone else that I should be speaking with.

- Ryan Mosel, Director of Sales & Marketing at ATMA Energy

A referral program won’t do any good if your customers aren’t aware of it!  Take advantage of your existing website, social media channels, and email lists to inform your customer base of your great referral program.  Follow-up with your customers at positive milestones.  We’ve found the following times to be most effective:

  1. At contract signing
  2. After installation
  3. At commissioning
  4. After 1st electricity bill
  5. Project anniversaries

Step 6:  Segment and appreciate your Champions

I put myself in my customers shoes and ask 'How can I make my customer look good?' Once I prove that I’m responsive and an advocate for them, referrals often follow.

- Rachel Finn, Solar Sales Professional

View your referral champions from the lens of the 80/20 rule where 80% of your referrals will come from just 20% of your customers.  Identify the 20% of your customers who will generate the majority of your referrals and keep track of them.  Then show your appreciation to your Champions and provide them with a sense of fulfillment that a payment does not.  A short phone call as simple as “Hey Champion, thank you for sending your friend our way, they just signed their contract for an 8kw system, so we’re going to provide you X reward, and more importantly, your solar community grew by another house because of you.  Thank you!"

Step 7:  Make sure you have a follow up process that converts

People hate being sold to, but they love to buy things.

- Emmett Miranker, Head of Business Development at 17Terawatts

Generating a referral is half the battle, you still have to close it!  Develop an airtight sales process that is designed to prevent referral leads from “slipping through the cracks,” and also ensures a timely introduction from your company.  Acknowledge that your new sales prospect was a referral to re-up the trust inherent in a referral lead. Take a moment to mention your referral program here.  Ultimately, you will want this new prospect to send you referrals of their own, begin laying the groundwork immediately.

Are you ready to supercharge your referral program and grow your solar business?

Contact us. We'll be glad to help!