Rising to the Top of the Solar Market
How Wingman’s media planning strategies grew Verengo Solar from a start-up to a leader in the solar industry
Setting the Scene
Life in the Mid-00’s
Verengo Solar entered the solar market in the mid-00’s. At that time, your neighbor probably just got a Prius, gas prices had nearly quadrupled since the late ’90s, Hummers were given Viking funerals, war was waged in oil-rich countries, and Al Gore was trotting his inconvenient power-point presentation around the globe. “Going green” was 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.
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 Venture Capitalists 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.
Expanding the message
New Tax Credits Supercharge the Solar Market
The American Recovery and Reinvestment Act of 2009: expanded tax credits 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 Solar’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 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 and retainers for strategy development and analysis, – without any guaranteed results. Considered purchases, especially those in a relatively new market like solar, were a high-risk product for advertisers. Why would any agency jump out on a limb to advertise a big ticket item without an established game plan?
Verengo Solar was referred to Wingman by an 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?
Wingman was willing to advertise a product without an established strategy while being paid on performance. Wingman was excited to tap into a new market. The agency already knew the homeowner audience and, from a media standpoint, what creative would resonate.
Part of finding the right message was selecting the correct channel. Wingman went with a two-minute radio spot strategy. Where most radio commercials run 30 to 60 seconds, Wingman found success in the past airing two-minute radio advertorials that featured local air talent DJ interviewing the company or a spokesperson.
Verengo would be great a fit for the two-minute strategy. Although the airtime is twice as long, and therefore twice as expensive, for considered purchases, two-minute radio spots generate three to four times the calls of a 60-second spot.
The two-minute strategy was also an effective idea because 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 provided ample 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 more affordable.
Traditionally, solar power advertising was focused on the aspirational aspects of being eco-friendly. Given the sea change in the marketplace, a new approach was necessary. 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 Solar stand out in the sea of start-ups?
Social Proof Strategy
After a competitive analysis, Wingman saw a huge hole in the solar advertising landscape. Everyone else was using a generic announcer to read their radio spots. Wingman knew its spots would stand out from the crowd if the right celebrity could bring the brand credibility. Social proof was a big buzz word around the Wingman office at the time. “The Psychology of Influence” by Robert Cialdini had been 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. Wingman devised a three-phase social proof strategy to build brand credibility for Verengo Solar.
three-phase social proof strategy:
Social Proof Phase 1
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 too 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.
The “Public Notice” spot was an extension of the advertorial formula that worked with the Ed Asner launch. The public has become adept at tuning out advertising. The two-minute DJ interviews with Ed Asner worked well because 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 dependent on government rebates. The finite amount of government funding added a natural sense of urgency to the call-to-action. Wingman created radio and TV campaigns 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 became the permanent control spot on 30% of stations.
Social Proof Phase 2
Wingman produced radio spots based on customer testimonials. The most intriguing was the story of Al Nagy. Al was a Verengo customer who generated so much power from his solar panels he got a $400 check from his electric company. Ed Asner opened up the spot for continuity.
On television Wingman ran a spot about panel installation on a home in San Pedro, California. The spot showcased how Verengo could install panels on your home in just one day.
Social Proof Phase 3
Giving a company a human face can do great things for a brand. Wingman had great success with Sit ‘n Sleep, whose CEO, Larry Miller, has become synonymous with the brand. The public face of a company brings credibility to the brand and builds trust with its consumers. Bringing these qualities to Verengo was essential in making it successful in an up-and-coming industry.
After two decades of running successful radio spots for considered purchases, Wingman believes there is no creative execution as effective as a spot featuring the head of the company. Entering phase three of the social proof strategy, 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?
Cost Per Call
Once the media buys began to air in Verengo’s target markets, Wingman got to work optimizing the results based on cost-per-call (CPL). Where most agencies evaluate CPLs based on total ad spend divided by the number of calls to the advertiser, Wingman evaluates the 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 radio station and TV 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 those that lead to sales. Wingman’s next step in optimizing the Verengo campaign was to track each call to an appointment, then to a 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, 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 matured 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 systems. Using the destination number and initial call date/time, Wingman 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 evolved from cost-per-call to cost-per-appointment, to cost-per-demonstration, and, ultimately, to cost-per-sale.
Cost-Per-Sale 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 likable 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?
Likeable Among Consumers > Highest Cost Per Lead
The Real Ed
Least Likable Among 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 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.
In four years Verengo had completed 12,000 successful residential solar installations and grew into the number one residential solar specialist in California. Why? The answer is simple, “There’s no catch!”
Installations increased 100% YOY
Ranked #1 residential solar installer
Top Fastest Growing Private Companies
– LA Business Journal
Planted 600,000 acres of trees
Took 240,000 cars off the road
Saved Verengo customers $500MM
The Three Big Lessons
Analytics is king
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, but finding a client with data management systems 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.
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’s ad strategy was 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 solicits immediate action – from calls 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.
THE ANTI-SPOKESPERSON AS SOCIAL PROOF
(OR THE “ED-VANTAGE”)
Credibility is a must to drive consumer engagement and build long term equity for a considered purchase. When it comes to selling big ticket items, celebrity endorsement can be a powerful social proof strategy. Actor Ed Asner lent his credibility as an environmental activist when we executed Verengo Solar’s radio and TV campaigns “take it to the electric companies.” Given Ed’s gruff personality he wasn’t an intuitive choice for such a sunny product, but he was a perfect fit as an anti-spokesperson. His endorsement played a major role in growing Verengo Solar from $9MM in sales to over $122MM.
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