Ready To Get Real Time Qualified Solar Leads? Get Started
If you're a solar company looking to increase business in 2021, this is an article about how to buy solar leads.
As an industry, we caught a break last year extension of the ITC for two more years. But in 2023, it's going down to 22%, and then it's going away in 2024.
This is the year to increase your business. But, to do that, you need to understand how to find leads that turn into actual paying business. This is an overview of solar leads costs and the different lead programs currently in the market. My goal is to make the landscape of solar leads more understandable to increase the number of installs in 2021.
COST PER LEAD VS. COST PER CLOSED DEAL
Lead costs have skyrocketed this year - especially in the more competitive solar markets. Business is excellent; installs are up. So much that there are inventory shortages in some parts of the country. If you're in a competitive market such as the northeast or California, the cost for a closed deal often reaches $1,500. That's because lead generation in these markets is more costly as competition drives up online advertising prices.
Cheap leads are not usually very cheap. Successful solar companies measure the overall cost of their leads - including the reps’ time. However, counting just the cost-per-lead or even the cost-per-close and not the sales reps’ time to get each lead gives you a false picture.
If we measured the essential, we’d know the actual cost of sales reps chasing homeowners. They will do that more frequently if the leads are low quality. The last thing we want is to be chasing terrible leads. So our metrics need to change. We need to measure cost-per-acquisition rather than just the cost-per-lead.
Pricing “Per Lead”
In today’s market, the most common way to buy leads is “price per lead.” This year we have seen lead prices increase across the country but especially in the hottest solar markets. In competitive markets such as California, exclusive, qualified leads cost up to $300 per lead. On the low end, leads from offshore telemarketers might be had for as low as $25 per lead. Leads from India or the Philippines might look like a bargain, but there are usually other costs to those leads farther down the road. When buying solar leads, I recommend you set a “minimum standard” so you don’t fall prey to low-cost, low-quality lead providers.
A minimum standard for purchasing leads:
1. They are exclusive to your solar company.
2. There is some sort of screening process used to qualify them.
3. They are fresh, and you can call them within 5 minutes.
Many costs go into generating quality leads. However, cheaper homeowner leads usually carry a few extra hidden costs.
Things common to cheap leads:
• They may be classified as “exclusive leads” but are often sold to several solar companies simultaneously.
• Low-cost lead generators usually say it is a “qualified lead,” but the qualification might only be that there’s a phone number.
• Agencies generate these leads using aggressive, low-cost tactics - ads with deceptive copy or outbound offshore cold calling.
• They are not delivered “fresh,” and you can’t call them immediately.
Low-end lead generators focus on lead quantity instead of lead quality. As a result, you pay more than you anticipated, but the high cost is in your reps’ wasted time and low production. Usually, even if you could get these leads for nothing, they would end up costing you more because they cost you more on the back-end.
To change the industry culture that encourages unscrupulous leadgen practices, we need to ask a different question. We need to ask for the cost of the appointment, not just the cost of the lead. Thus, the primary metric when measuring the value of leads should be Cost-per-Appointment.
HOMEOWNER PRE-SET APPOINTMENTS
Anybody that has been in the solar industry for any length of time has heard of solar appointment setting lead generators. These legends claim that they have homeowners waiting to sit with your reps. They usually sell these appointments for $150 to $300. As a bonus, these appointments come with a refund policy if they don't sit. It sounds like a “dream come true.”
Most of these companies that offer homeowner appointments do business offshore - frequently in India or the Philippines. Calling thousands of homeowners each day, these offshore call centers use high-pressure tactics to get the homeowner to grant a sales appointment. Unfortunately, these call center “agents” often deceptively take an ambiguous response by the homeowner as confirmation for an appointment.
The second step for these pre-set appointments is for domestic lead agencies to purchase them in bulk and sell them to domestic solar installers. The lead agency usually represents these as pre-set appointments that their team produced. They “guarantee” a sit, or they will refund the fee. It’s an engaging offer, pre-set appointments, or your money back. Unfortunately, they don’t always work that way.
The quality of preset appointment leads is frequently low, with the homeowner not understanding what the appointment was all about. That’s because the offshore call center’s primary goal was to set an appointment - period!. Educating the target isn’t in the job description.
But a very real (and possibly a costly) problem is that these offshore call centers don't follow the Telephone Consumer Protection Act (TCPA). In the United States, calling these leads could put solar companies who work with them at serious risk. The U.S. government is serious about enforcing TCPA law. That is one battle where you don’t want to be on the wrong side.
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To give you an idea of how seriously the government takes its TCPA enforcement, look at this news article about Sunrun. The district court in California just settled a lawsuit with Sunrun for $5.5 million for TCPA violations. $5.5 MILLION!Check out the news here: topclassactions.com/lawsuit-settlements/tcpa/company-will-settle-sunrun-lawsuit-over-robocalling-for-5-5m/
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Buying appointments from call centers in India or the Philippines can be one of the least expensive ways to get customers. It doesn't cost very much to have an offshore call center cold call tens of thousands of homeowners each day with a predictive dialer and a list of phone numbers. But are they really that cheap? Most of the leads will be low quality and will waste your reps’ time. But the bigger danger is that you take on the legal risk of violating TCPA laws. The cost of violating TCPA laws can be catastrophic to your company.
APPOINTMENTS - THE GOOD KIND
There is a new trend in the appointment leads category. We have recently seen lead generation companies selling appointments that homeowners themselves have scheduled. The conversion rate for these leads is really impressive - about 70%! That is about 2-½ times the rate of traditional leads. Not many companies offer this service, but I am sure we’ll see a lot more of it.
The cost of a pre-set appointment? Usually, the cost per appointment is between $150 to $400. However, the cost of getting into legal trouble with the federal government TCPA violations is much higher.
LEADS FROM TELEMARKETING
Hundreds of industries use leads from telemarketing companies - from auto insurance to chiropractor services. This is interesting considering the increased litigation for violation of TCPA laws. But many leads are generated this way, and it is not going away soon. Lately, it has become more of a challenge because people have become increasingly protective of their privacy end personal time. Also, the government makes 4,000 - 7,000 TCPA claims against companies every year. Still, with all these risks, many solar installers continue to buy these kinds of leads.
THIRD-PARTY DOOR KNOCKING
Going door to door is one of the oldest methods to generate leads - feet on the ground, door-knocking. But, recently, we have been seeing a slightly different approach to the traditional door-to-door solar salesman. These new door-knockers aren’t solar company employees, but they work for leadgen agencies. So, as you might imagine, these are not solar industry geniuses. Instead, these “sales reps” have one goal in mind “Get an appointment - and don’t take no for an answer!” The only way these reps get paid is if they get an appointment - whether the homeowner wants one or not. They push the concept of “pushy salesman” to new levels.
Many municipalities require door-to-door salespeople to be permitted. This category of leadgen door-knockers rarely take the time to get permits. It is unusual for them to stay in one neighborhood for long. So, sometimes they are operating outside the law (which can come back and bite you), and almost always, they are overly pushy and make claims about services that solar companies can’t support. All just to get the appointment.
If you decide to work with a leadgen solar sales group that offers door-to-door sales, you might want to cover yourself. Here are some suggestions:
• Ensure the lead gen agency has a solid solar training program for their reps because they represent your company. Therefore, they need to set realistic expectations and distribute accurate solar information.
• If the targeted neighborhoods require permitting for door-to-door sales, make sure they are current on those permits.
• Find out how the reps are representing themselves to the homeowners. People are much warier of reps knocking on their door than just a few years ago. Are they operating under your name? Would you want them representing your company?
Read more about Successful Door-to-Door Sales and regulations from AllBusiness here.
AGED DATA LEAD SHEETS
Aged leads are a very low-cost type of leads who have been contacted several times in the past. Sometimes each lead has been contacted over a dozen times from different industries. These leads get passed from one industry to the next. Today it’s siding salespeople; tomorrow, roofers.
It is not unusual for solar companies with large call centers to buy aged leads and then use them when their agents have a lot of time on their hands.
Of course, every aged lead was new once, but sometimes that was a long time ago - sometimes up to a year ago. If you were to call (if the phone number still works), these homeowners usually will have been called many times and simply are not in the market for solar anymore. However, these leads are incredibly inexpensive - usually under a dollar per lead. The conversion rate is generally well under 1%. That means you will have to call hundreds of phones just to get a single appointment.
These lists are very discouraging for your call center staff. The success rate is next to zero. Because these homeowners have received dozens of calls in the previous couple of months from a variety of reps, they are often pretty annoyed by the time you get to them.
There are two types of solar companies that buy aged leads; large call centers with telemarketers who have a lot of downtime and new solar companies who don’t know better.
The problems people encounter with aged leads are:
• Homeowners claim that they have never been interested in solar and never submitted their information for information.
• Often, not a single good lead is in the entire aged lead list of thousands.
• Homeowners demanding removal from your list, and they might take action against you.
• Many homeowners are on the National Do Not Call (DNC) list - creating an expensive risk if they complain to the government. If you intend to use these leads, make sure you scrub the data to remove people on the DNC list. Use platforms such as Vortex by Redx.
• Unscrupulous law firms intentionally seed some lists with DNC numbers intending to sue companies who call those numbers.
OPT-IN WEBSITE LEADS
Opt-in leads are usually the highest quality homeowner lead with the highest conversion rate. Advertisers use a “funnel” - a sequence of marketing messages that identify, attract, educate and invite the homeowner to submit their contact information and get a call. These marketing stages are the “sales funnel,” and the survey is at the bottom of this funnel. Because lead generators nurture these leads throughout this journey, the lead will be looking forward to your call. As a result, conversations with homeowners who have asked for your call are much more productive.
Safer Leads
These leads are safer. The homeowner completed a short qualifying quiz or survey with a disclaimer. This disclaimer permits you to call for up to 90 days, even if their name is on the DNC list. For example, below is the disclaimer from one of Sunrun’s web properties.
Be careful not to get leads from a lead generator that doesn’t include the disclaimer on their webforms or attempts to minimize or hide it. They do this because it decreases the cost of their lead acquisition.
If you plan on buying opt-in web for leads:
• Research the lead generation agency. Make sure they have TCPA notice on any material that asks for lead contact information.
• Ensure that the leads come from properties they own or control and are not deceptive or misleading.
• Ask if these leads are exclusive and, if so, for how long. Many lead generators make more money by reselling these leads as “aged data” a month down the road A great test is to ask the leadgen if they have any “aged data” or “aged leads” available. If they do, there is an excellent chance that your leads will end up on the market while your reps are still working with them.
THE COST AND TYPES OF OPT-IN LEADS
Currently, solar companies are paying between $20 - $300 per lead for opt-in leads. Prices vary depending on the geographic region, qualification or screening, and the method used to generate the leads. Different lead sources generate various quality leads.
FACEBOOK VS. YOUTUBE LEADS
Facebook leads are usually less expensive because Facebook campaigns are easier to prepare and manage. Facebook ads are generally static pictures, and the funnel is short. These ads don’t educate or nurture the homeowner. Instead, Facebook uses “interruptive marketing” to pull the homeowner away from their intended activity - reading their Facebook timeline. It’s no wonder that most of the “no sits” in the solar industry result from Facebook’s interruptive marketing.
Comparing those ads to a YouTube ad campaign and you’ll understand the difference. YouTube campaigns are usually more expensive. Because YouTube ads are always videos, they are more costly to produce. These ads require a script, actors and typically involve a longer, more nurturing funnel. So it’s not unusual for a YouTube campaign to have a production fee and a longer commitment than Facebook ads. But the leads have a higher conversion rate and the homeowner is usually more educated and motivated.
At first glance, Facebook looks like a much better deal - lower lead cost, no setup fee, and a shorter contract. What could be better? But then, more frequently leads from a Facebook campaign don’t answer the phone, don’t remember asking for a quote, and don’t show up for their appointment. Consequently, the conversion rate is low. So the cheaper Facebook leads aren’t so inexpensive after all because of the lower conversion rate.
YouTube campaigns take more time and money to get started, but the quality of the leads is higher. More phones answered, more appointments set, more installs. Google owns YouTube, and YouTube campaigns use Google’s targeting. Google targeting is very powerful. When you measure the Cost-per-Acquisition, YouTube beats Facebook every time.
At Leads For Solar, we prefer YouTube over Facebook and in fact we hardly ever use Facebook. If you want to learn more about buying qualified solar leads from us fill out our form here!
TIPS FOR HANDLING INCOMING SOLAR LEADS
Solar installers who are accustomed to knocking on doors can find it challenging to transition to online leads. Here are some suggestions that might help.
Tip #1. Call leads within 5 minutes of the lead generation.
Call all leads immediately. Your chances of converting a lead drop to 25% when you call at the 10-minute mark instead of calling them before 5 minutes. And if you call the lead the next day, it is equivalent to a cold call. Check out this article from Vendasta on the response time for sales calls:
Tip #2 Hire an appointment setter to call leads immediately and follow up.
Every successful solar company has dedicated appointment setter(s) or inside reps.
Don’t waste your reps’ time by forcing them to chase leads.
Tip #3 Use a CRM to manage incoming leads and follow up.
Depending on your memory, notes in a notebook or recordkeeping on a spreadsheet is a recipe for wasting leads. CRMs also keep track of your key stats and measure your reps’ performance.
Tip #4 Follow up leads who don’t convert for up to 6 months.
The most valuable source of hot leads is those you couldn’t reach. There is gold in that list of leads you couldn’t reach. Don’t stop reaching out to them until they tell you to stop or they buy from you.
