Is groSolar's new ad campaign the right approach?

groSolar recently announced the launch of a new national advertising campaign that will feature images of real people in real life situations, rather than pictures of solar panels.  According to the company's press release, groSolar's objective is to "communicate the real value of clean energy choices."

This technique is especially common in the healthcare industry.  Doctors, hospitals, clinics, and other providers often show people living a happy, healthy life rather than say, open heart surgery in progress.

The questions is: would you select a surgeon based on pictures of happy people?  Does a value-oriented advertising campaign convince a skeptical audience to buy services from the advertiser?  My answer to these questions would be: not if the product or service is high risk…and solar is perceived as high risk.

Here's the reason why.

Solar requires a complex, information intensive and high risk purchase decision. (Note I said the purchase decision is complex and high risk, not the technology) A solar installation requires a good deal of work on the part of both the consumer and the provider. It is a product/service with a standard base of know-how, but totally customized and personalized. Buyers of solar power want a dealer/installer with a good reputation and would prefer to find one by means of a reference or referral. Information and dialogue are part of the purchase process.  There is the possibility of interaction after the system has been installed and the customer wants to be reassured that he or she can always ask for and receive additional help or information. If the solar installation goes bad, the customer is looking at losing thousands of dollars, the potential of roof damage/repair, time without electric power, and a significant disruption to their life.

With products that are more costly, complicated or high-risk, the customer has more at stake.  So all of the typical methods used in low-risk consumer marketing -- cosmetic factors, product/company name, package color and design, messaging, image, "feel good advertising," celebrity endorsements, logos or symbols to reinforce associations -- are totally ineffective.

The only way to market a high risk offering is with methods that reduce risk in the mind of the customer -- references from someone the customer trusts, professional affiliations, compliance with industry standards, a supporting infrastructure, evidence of expertise, product quality, and ongoing service.

groSolar's ad campaign may raise awareness for the solar industry in general, and that's a good thing. But if the company's goal is to convince customers to buy groSolar's products and services, then advertising is the wrong way to do it.


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Credibility and Market Leadership

The most important quality a growing solar company needs for rapid market access and positive competitive positioning is credibility. Credibility can be gained by inference, reference or evidence.

• Inference is often used by startups to gain recognition. Who invests in a company is often more important than how much is invested.  Much of the initial interest in Genentech was stimulated by the involvement of Kleiner, Perkins Caufield & Byers. Similarly, the interests of Venrock Associates and Sequoia Capital in Apple Computer provided "larger than reality" credibility. The quality of investors and directors, along with the backgrounds of initial employees say a lot about the company to the marketplace.
• Reference, or word-of-mouth, is the most important credibility-building tool an emerging company can use. Almost all computers, from personal to mainframes, are still bought because of word-of-mouth. All service-based businesses are word-of-mouth. And, in all segments of the high-technology industry, there are networks of analysts, industry experts, BOS and supporting product producers, and bloggers/journalists who spread the word.  Moreover, potential customers understand and rely on word-of-mouth to determine a new company's credibility.
• Evidence is the third factor that builds credibility. Satisfied customers are essential. But the most visible reinforcing evidence is growth and profits from the business. This falls under the category of "If you're so good, why aren't you making money?" Many solar companies suffer from lack of evidence of financial success because they believe only public companies disclose results.

Other kinds of evidence exist, of course. These include clearly differentiated product performance, market share growth, significant products, the quality of initial customers, and the company's alliance partners, along with the quality of investors. All of these can be tangible evidence of credibility.

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Branding Only Works on Cattle

I'm all in favor of promoting solar and raising awareness for renewable energy.  It doesn't matter if it's with buttons, bumper stickers, social media (twitter, facebook etc.), web sites or search engine marketing (seo).  The more the better.

But never forget that solar power is seen as a riskier than the alternative -- power supplied by the local utility.  This perception of risk comes from the fact that solar is more complex, installation is not as simple, solar costs more, and most solar dealers/installers are smaller, unknown companies (at least compared to the local utility).

So don't expect people to seriously consider buying solar based on a promotional button, twitter or bumper stickers.

Think of it this way:  If you had a serious heart condition and needed surgery, would you select a surgeon based on something you saw on a bumper sticker or read on Twitter?  I know I wouldn't.

I would look at a surgeon's reputation, ask for recommendations from other doctors, determine which hospital the surgeon is affiliated with, investigate the surgeon's credentials and formal training, and definitely talk with patients who have had a similar prognosis.

Solar isn't a life or death proposition like heart surgery, but the trusted sources of information needed by buyers to reduce risk when making a high-risk decision do not include promotional materials developed by the vendor.

Promotional content does NOT help the customer lower their perception of risk in buying solar. And branding only works on cattle.

Marketing solar (which is higher risk) the same way that Coke markets soft drinks (little or no risk) is one of the reasons the solar industry has such a hard time breaking into mainstream markets.


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Measuring Word-of-Mouth

Measuring word-of-mouth (WOM) results is not really very hard. It only becomes difficult if you try to use quantitative methods.

That's because WOM is a "qualitative" technique. Putting numbers on word-of-mouth communication is like using an apple to check the color of an orange.

To [qualitatively] measure the results of WOM marketing, just ask and answer the following questions:

1. Do prospective customers know: what makes your solar business different than all the others, and when you're the best supplier for the job?

2. Do members of the press (including bloggers) accurately reflect your competitive positioning and lend 3rd party credibility to it?

3. Do industry influencers understand your business strategy and support it to the press?

4. Does the target market see you as a reference source expert/counselor in the solar industry?

5. Do your business partners support your products and strategies?

6. Do your resellers (or channel partners) know where to spend their time, who to call on, and what to say?

7. Are key customers actively involved in testimonial marketing and serving as references?

I've been successfully using this 7-point checklist to evaluate WOM programs for many years. It's really not that hard. Really!

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Word-of-Mouth Communication pt2

The content of word-of-mouth communication for solar products -- once underway -- can be enhanced and mildly diverted by the solar supplier. But because it is essentially an underground communications medium, the content of word-of-mouth cannot be substantially changed or improved, once launched. Hence the need to be correct at the start, to assure that the power of word-of-mouth will not turn negative and then increasingly build negative perceptions.

The risk of negative word-of-mouth is always present, particularly for companies where products may be incomplete at introduction. Negative word-of-mouth is substantially stronger, and works substantially faster than positive word-ofmouth. Using a word-of-mouth based strategy for a new product that does not meet expectations will provide rapid and permanent failure.

For all of its difficulties and risks, word-of-mouth has one powerfully vital attribute: it provides a method for reinforcement that is substantially better than any other medium. There is substantial research on the learning process that says, in essence, that the identical message is only effective the first three times it is received. After three exposures, the recipient becomes saturated with the particular message and interest declines rapidly. It is this finding behind the use of changing messages in advertising, behind the campaign concept.

Word-of-mouth provides continually changing messages to maintain and even enhance learning. Word-of-mouth involves multiple sources (the people who talk about solar) with, by definition, multiple messages. People who are the sources of word-of-mouth customize the message to fit their circumstances and experience.

The value of this customization is that it avoids saturation by providing different messages about the same product, avoiding the saturation point of the same message, and stimulating and reinforcing continuing progress through the learning process. It is for this reason that word-of-mouth has such a powerful effect in quickly stimulating purchase behavior.

The infrastructure concept and infrastructure communications recognize this unique characteristic of word-of-mouth and are designed to keep different messages flowing.

Product introductions that recognize this stimulating word-of-mouth effect focus on effective, customized communications to different segments of the infrastructure primarily to assure that word-of-mouth reinforcement communications keep moving, keep evolving and keep on target. Such product introductions recognize the requirement for multiple messages to multiple segments, they understand and plan based on the infrastructure concept, for changing but consistent messages, and they appreciate the fact that word-of-mouth is outside the marketer's control.

In my next post, I'll talk about ways to measure the effectiveness of word-of-mouth marketing.


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Word-of-Mouth Communications Part One

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Word-of-Mouth Communication

The most likely way that information about a solar product can be effectively communicated is through word-of-mouth.

Word-of-mouth has these advantages:

• The source is seen as credible, particularly in comparison with advertising since the source is a person known to the recipient. Ads are known to be created by the advertiser. Today, even editorial endorsements have the "taint" of being created by "public relations" tactics and therefore have less credibility than word-of-mouth communication.

• Word-of-mouth often deals with awareness, interest, the source's trial experience and product benefits all at the same time. This can move the recipient rapidly through the stages of purchase decision making and often even creating a reason for purchasing, all in one "exposure."

• It appears to have a more permanent effect than most other communications channels

As a result, second only to the task of creating intangibles for solar products and companies is the challenge of finding the most effective way to generate positive and relevant word-of-mouth.

But because word-of-mouth communication is out of the "senders" control, the requirements for developing essential messages, positions and reasons for purchasing is substantially different than it is for, say, advertising.

Advertising is as direct as standing across a small creek from the prospect, and signaling via messages of the advertiser's design, based on assumptions about the recipient's needs. Advertising is direct, controlled and immediate.

Word-of-mouth, on the other hand, is like swimming 40 miles underwater in a decaying swamp, with the mandate that the swim must be completed by a large group of other people under no control of the starting swimmer, via strokes that cannot be prescribed, and on a time schedule that cannot be forecast. And to add more reality to the metaphor, none of the swimmers can see each other.

With an advertising campaign, the marketer determines message, positioning and purchase reasons only weeks or at most months in advance. If a particular advertisement or campaign does not work, it can be pulled and redesigned.

With word-of-mouth communication, however, the initial positioning and messages once started through the word-of-mouth channel (swamp?) are completely outside the sender's control. They are also outside easy measurement. Consequently, they must be designed at the outset to survive the trials of time decay and the communications quality deterioration through a series of people who invariably have motives other than the marketer.

It is for this reason that the initial positioning and message development effort in a solar company is so critical: the risk of failure is so high, coupled with the need for a "hardened" yet buoyant position and set of messages that will work continually.

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