Rising to the Top of The Solar Market with Advanced Media Planning

SETTING THE SCENE…

LIFE IN THE MID-‘00S

Your neighbor just got a Prius, gas prices have nearly quadrupled since the late ’90s, Hummers are given Viking funerals, war is waged in oil-rich countries, and Al Gore is trotting his inconvenient power-point presentation around the globe. “Going green” is no longer a call from the far left but a middle-class catchphrase.

Across the country hybrid cars were pulling into driveways and energy-efficient appliances were working hard in kitchens, but solar power was still too expensive to be a legitimate middle-class alternative to traditional electricity.

BEGINNINGS

PIVOTING FROM WINDOWS TO SOLAR

2008 was not a banner year for the window installation business. With home prices in free fall and consumer credit markets on ice, Jemstar Builders was close to going under. Enter Randy Bishop, former Principal at BearTree capital. In a tough credit market, Randy raised venture capital to fund the simultaneous turnaround of Jemstar.

Why would VCs pony up for a tanking window company?

Randy wasn’t anticipating a huge turnaround in the window installation business. He saw Jemstar’s infrastructure as the perfect platform to launch his new energy business based on his promise to, “Do good and do well.” Randy didn’t want his solar panels to be sold as a luxury item for the wealthy, he wanted to make solar power affordable for everyone.

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THE OPPORTUNITY

NEW TAX CREDITS SUPERCHARGE THE SOLAR MARKET

“The American Recovery and Reinvestment Act of 2009: Tax credits were expanded beyond the previous credit limit of $2,000. Paired with state incentives, in some locations the cost of a solar panels was cut nearly in half.” With a few strokes of the legislative pen, solar companies could now compete with the major utilities for the first time. As an early adaptor, Verengo’s infrastructure was miles ahead of the competition, but they needed an inbound strategy to accommodate the huge surge in interest. Competition was heating up. Roofers became solar installers and solar-power kiosks were sprouting up in Home Depots. By 2010, Verengo’s outbound telemarketing and referral strategy couldn’t accommodate the surge in consumer interest.In light of growing competition, how could Verengo take its message to a broader market?

VERENGO GETS A WINGMAN

Verengo had been around the agency block. They interviewed a slew of agencies and they all wanted the same things: big upfront fees, retainers for strategy development and analysis without any guaranteed results. Considered purchases, especially those in a relatively new market, were a high-risk product for advertisers. Why would any agency jump out on a limb to advertize a product without an established game plan?

Verengo was referred to Wingman by a advertiser that knew first hand its solid reputation for generating inbound leads for considered purchases. But did Verengo meet Wingman’s six crucial parameters to become a pay-for-performance client?

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STRONG MANAGEMENT TEAM

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INTERNAL COMMITMENT TO DATA AND ANALYTICS

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GOOD LEAD MANAGEMENT, CAPTURE & TELEPHONY SYSTEMS

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WELL DEFINED SALES PROCESS AND CONVERSION GOALS

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WILLINGNESS TO BE TRANSPARENT WITH DATA

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COMMITTED TO GROWTH VERSUS COMPLACENCY

FOR VERENGO, THE DEAL WAS A “NO-BRAINER.”

Confident that its ideas would generate leads, Wingman proposed a compensation model where they were only paid based on the amount of appointments generated. Wingman would work for no upfront fees and guaranteed that if it didn’t deliver Verengo could walk away at any moment.

“Wingman offered to put their skin in the game and be paid solely on performance.”

RANDY BISHOP

CEO Verengo

TWO-MINUTE BEGINNINGS

Wingman’s Principal/Creative Director, Rich Kagan, wasn’t afraid to advertise a product without an established strategy while being paid on performance. “We were excited to tap into a new market. We knew the homeowner audience and, from a media standpoint, what creative would resonate.” Part of finding the right message was selecting the correct channel. Kagan went with a two-minute radio strategy. Where most radio commercials run 30 to 60 seconds, Wingman’s long-running relationships with major market radio stations allowed it to buy up two-minute chunks of airtime. Wingman found success in the past airing two-minute spots that featured local air talent DJ interviewing the client or a spokesperson.

Kagan thought Verengo would be great a fit for the two-minute strategy. “Solar panels were perfect because it’s a high-end, considered purchase.” Although the airtime is twice as expensive, for a considered purchase, two-minute spots generate three to four times the calls of a 60-second spot. The two-minute strategy was also an effective idea because according to Kagan, “The public needed to be educated about the product. Solar had the perception of being too expensive and an unreliable source of power.” The longer the spot the more time to reverse previously-held assumptions about solar power. The technology had vastly improved and the cost – especially given the new government incentives – was much cheaper as well.

Traditionally, solar power advertising was focused on the aspirational aspects of being eco-friendly. Given the sea change in the marketplace, Kagan thought a new approach was necessary. “From the beginning we knew it was all about saving money. Going green was just icing on the cake.” Wingman had a media strategy and knew how to sell the product, but how were they going to make Verengo stand out in the sea of solar start-ups?

SOCIAL PROOF STRATEGY

After a competitive analysis, Wingman’s Principal, Steve Dubane, saw there was a huge hole in the solar advertising landscape. “Everyone else was using a generic announcer to read their radio spots.” Wingman knew its spots stand out from the crowd and the right celebrity could bring the brand credibility or social proof. Social proof was a big buzz term around the Wingman office. “The Psychology of Influence” by Robert Cialdini had been seen hopping from desk to desk. According to Cialdini, “When uncertainty reigns we are most likely to look to and accept the actions of others as correct.” Although solar power had dropped in price and improved in performance, uncertainty still reigned in the category.

Kagan devised a three-phase social-proof strategy:

1. CELEBRITY ENDORSEMENTS

Build Verengo’s credibility and stand out against generic, announcer spots

2. CUSTOMER TESTIMONIALS

Social proof that relates to middle-class homeowners.

3. INTRODUCE THE CEO

BuildVerengo’s credibility and stand out against generic, announcer spots

SOCIAL PROOF STEP 1

CELEBRITY ENDORSEMENT

After narrowing down a list of potential celebrities, one name was enticing, but risky, Ed Asner. Ed was best known as Lou Grant on “The Mary Tyler Moore Show” in the ’70s, but his career was still in full-swing. He had just played lead role in Disney’s “Up,” Carl Fredricksen. But Ed’s history of controversial political activism proved a gamble. Wingman decided to roll the dice on Asner, because even if his political activities turned some away, he had impeccable credibility as an environmental activist. Plus, his salty, non-conformist demeanor made him a great foil for the electric companies and he very rarely did endorsements.

While recording their first spots, there was a line in the copy where the DJ claimed that Verengo’s offer seemed to good to be true. Ed’s response was, “There is no catch!” which at first glance felt cliché to the Wingman Creative team. But Ed’s passionate, cranky delivery of the line brought an air of honesty to the spot. “There’s no catch!” would become synonymous with Verengo’s brand at the onset of the campaign.

PUBLIC NOTICE

The “Public Notice” spot was an extension of the advertorial formula that worked with the Ed Asner launch. The public is deluged with marketing messages and have become adept at tuning out advertising. The two-minute DJ interviews with Ed Asner worked well because they were advertorial. At first, they appeared to be station programming so people didn’t instantly tune out.

As Wingman expanded the campaign it wanted to bring Verengo to radio stations that didn’t have DJs or wouldn’t allow two-minute spot placement. At the time, Verengo’s zero-down solar offer was dependant on government rebates. The finite amount of government funding added a natural sense of urgency to the call to action. Wingman created a radio and TV campaign that encouraged listeners to call immediately so they wouldn’t miss the huge savings. That need, coupled with a tradition of utility public service announcements, made the “Public Notice” campaign a perfect advertorial vehicle for the zero-down offer. The “Public Notice” spot was so successful it’s still the control spot on 30% of stations.

SOCIAL PROOF STEP 2

CUSTOMER TESTIMONIALS

Wingman produced radio spots based on customer testimonials. The most intriguing was the story of Al Nagy. Al was a Verengo customer that generated so much power from his panels he got a $400 check from his electric company. Ed Asner to opened up the spot for continuity. On television Wingman ran a spot about panel installation on a home in San Pedro. The spot’s focus was how Verengo could install panels on your home in just one day.

SOCIAL PROOF STEP 3

INTRODUCING RANDY BISHOP

Giving a public company a human face can do great things for a brand. Wingman had great success using Sit ‘n Sleep’s CEO Larry Miller in their iconic commercials. After over 20 years, Larry has become synonymous with the Sit ‘n Sleep brand. The public face of a company brings credibility to the brand and builds trust with its consumers. Bringing these qualities to Verengo’s brand were essential in making it a successful in an up-and-coming category.

After two decades of running radio spots for mortgage companies, Wingman found there is no creative execution as effective as a spot featuring the head of the company. Entering phase three of the social proof campaign, Wingman introduced the audience to Randy Bishop, CEO of Verengo Solar. The commercials were educational in nature with Randy explaining how Verengo makes it easy to go solar for no money down (sound familiar?).

INITIAL OPTIMIZATION:

COST PER CALL

Once Wingman’s media buy began to air in Verengo’s target markets, it got to work optimizing the results based on cost-per-call. Where most agencies evaluate cost-per-call based on total spend divided by calls to the advertiser, Wingman evaluates cost-per-call by total qualified calls over sixty seconds in length. It’s tougher to optimize but higher call standards makes for better performing creative.

To track each qualified call, a unique 800 number was assigned to each station and commercial. Cost-per-call baselines were established for each market and control stations were established. Then new test stations were rolled out and evaluated against the performance of control stations. If a test station beat a control, it would “graduate” to control station status. Wingman then looked at each commercial on a station-level to see whether the one- or two-minute spots were performing better.

In the direct-response world, radio and TV commercials that generate calls are nice, but the only ones that actually matter are the ones that lead to sales. Wingman’s next step in optimizing the Verengo campaign was to track each call to an appointment, then sale. It turned out that many stations/creatives that seemed like rock stars based on cost-per-call were actually generating low-quality leads with poor conversion rates. On the flip side, we discovered that some stations/creatives that had been canceled based on high cost-per-call dollar amounts were converting to sales really well. So Wingman brought them back based on their solid cost-per-sale results.

TRACKING FROM CALL TO SALE

Each 800 number was paired with a unique destination number at Verengo’s in-house call center. As a lead matures through the sales cycle, Verengo updated the lead management system with the latest disposition and step in the sales process.

Verengo’s lead-management data was imported into Wingman’s media tracking system. Using the destination number and initial call date/time, Wingman’s system matched the lead to the 800 number dialed, the station/length/creative assignment at that point in time, and the exact spot time that generated the initial phone call. As a result, optimization has evolved from cost-per-call to cost-per-appointment; cost-per-demonstration; and, ultimately, cost-per-sale.

HOW COST-PER-SALE OPTIMIZATION DATA CONTRADICTED FOCUS GROUP LEARNINGS

As part of the optimization process, Verengo hired a focus group to evaluate its creative. The results revealed more about the importance of focus groups than the creative executions. The study revealed which spots were rated most and least likeable by their respondents. The spots had already been running on air and Wingman had considerable real-world data about their efficacy. Which spot do you think performed better?

(Click the images below to watch the TV spots and decide for yourself.).

1. ANIMATED ED

Likeable Among Consumers > Highest Cost Per Lead

2. THE REAL ED

Least Likeable Amongst Consumers > Lowest Cost Per Lead

When the study’s findings were matched with actual reporting, the spots that ranked high for likeability also had highest cost-per-sale and the ones deemed unlikeable had the lowest cost per sale. So likeability had nothing to do with the effectiveness of the spots. The research group also learned that people responded overwhelmingly negatively to our call to action, “solar rebates are ending soon” and suggested it be removed it from the commercials. Talk about missing the point. They’re supposed to dislike the fact that rebates are going away – the discomfort is what drives people to act.

RESULTS

Four years after Verengo engaged Wingman on a pay-for-performance basis the relationship has been a success. Verengo doubled the amount of installations every year and as of June 2014 has had over 12,000 successful residential solar installations. Verengo has grown from a leading installer in Southern California to becoming the number one residential solar specialist in the United States. At the end of 2013, they were named to Los Angeles Business Journal’s; “Fastest Growing Private Companies” list. Verengo has also become a defined, differentiated brand that people trust to install their solar panels. Why? The answer is simple, “There’s no catch!”

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Installations increased by 100%

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Ranked #1 Residential Solar Specialist
in the country

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Listed among LA Business Journal’s
Fastest Growing Private Companies

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Planted 600,000 acres of trees

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Took 240,000 cars off the road

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Saved Verengo customers $500m

ANOTHER SUCCESS METRIC WORTH MENTIONING

As of June 2014 Verengo’s solar systems have had the environmental impact of planting 600,000 acres of trees and taking 240,000 cars off the road, saving Verengo’s customers over 500 million dollars over the lifetime of their installed systems.

THE THREE BIG LESSONS

1. ANALYTICS IS KING

According to Rich Kagan, “The success of our relationship with Verengo has everything to do with our ability to track each sale down the funnel. When the client can’t provide sales data, we’re stuck in the superficial cost-per-lead layers. If we had made our creative decisions based on CPL we would have missed out on a huge amount of optimization.” The difference between CPL and CPS was the margin needed to price on performance. Wingman is prepared to track at the deepest levels so finding a client with analytics like Verengo is a rarity. Verengo’s willingness to be transparent with data and their commitment to growth versus complacency was also a huge part of the partnership’s success.

2. CONSIDERED PURCHASES REQUIRE EDUCATED CONSUMERS

Selling solar power relied heavily on educating consumers. Not only was solar a misunderstood product but the “zero-down” messaging was also unfamiliar territory to most consumers. Verengo Solar became a hybrid DR/branding campaign. Half of the messaging had to be dedicated to educating consumers about the product and zero-down installation. The other half had to be true direct-response advertising that lead to appointments and, eventually, sales. Limited government rebate finding was the DR hook we needed to create a real sense of urgency and it proved to work much better than any manufactured, cliché DR strategy.

3. THE ANTI-SPOKESPERSON AS SOCIAL PROOF (OR THE “ED-VANTAGE”)

Selling solar power relied heavily on educating consumers. Not only was solar a misunderstood product but the “zero-down” messaging was also unfamiliar territory to most consumers. Verengo Solar became a hybrid DR/branding campaign. Half of the messaging had to be dedicated to educating consumers about the product and zero-down installation. The other half had to be true direct-response advertising that lead to appointments and, eventually, sales. Limited government rebate finding was the DR hook we needed to create a real sense of urgency and it proved to work much better than any manufactured, cliché DR strategy.

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