Solmentum: Solar Meets Data Mining

Persuading consumers to pay for the luxury of having a solar rooftop is a challenge, and solar installers are experimenting with everything from advertising to social media to neighborhood meet-ups. But solar provider Solmentum thinks it has found a more efficient approach to reeling in customers: data mining.
Solmentum uses data mining to identify customers who’ll find going solar financially attractive, and also to maintain a close connection with these customers, similar how a real estate broker acts. “The idea was to develop a secret sauce to identify the homes that are perfect and target those homeowners and not waste your marketing efforts on the rest of the 90 percent,” says Jason Brown, CEO of San Francisco-based Solmentum: “We have a technique to identify individual homes that are ideal.”
Exactly where Solmentum gets that data to mine is less clear. Brown was reluctant to discuss where the company gets its data to make the formula work; however, the types of customers and relationship-building efforts Brown talked about indicate the Solmentum probably makes use of public records, commercially-available satellite images and social networking sites.
Social networking sites are a treasure troves of personal data that, if used well, can translate into huge profits. Protecting that personal data has led to battles among Internet companies, like the most PR flap between Google (s goog) and Facebook. At the same time it’s spearheading data mining, Solmentum also uses third-party software to do its sales and marketing.
So far, by using its data mining techniques, it has sold 5 MW of contracts to over 1,000 customers since its inception in 2009, Brown said. The company offers financing options from SunRun, which raises money from banks to pay for solar electric system installations and collects monthly fees from homeowners. Homeowners sign long-term contracts to pay for the solar electricity they use. Ownership of the equipment first goes to SunRun and then to the banks that can use it to reduce their federal income taxes. Solmentum hires installers such as PetersenDean to install the solar equipment on the roof.
Brown co-founded Solmentum the year he graduated from the University of Chicago’s business school two years ago. He and fellow business school grad and co-founder Jasper Platz lined up one of their professor and long-time solar industry observer, Travis Bradford, as an investor. Brown and Platz raised $325,000 to start the business, and their investors also include Ed Chandler, founder of Portage Venture Partners, as well as two general partners from Apex Venture Partners, Lon Chow and Armando Pauker.
Bradford told us that many marketing strategies center on a “shot-gun approach” in which marketers try to reach as many people in as little time as possible. That’s unfocused and doesn’t work well, particularly when you’re trying to convince people to either spend a lot of money upfront or commit to a long-term contract to buy solar electricity, Brown said. In general, people don’t feel compelled to change the source of their electricity overnight. “If you go for the shot-gun approach, then you scatter all those shots and hope you will hit something,” Bradford said. “We spend the time to get to know the customers in a way that most traditional marketing organizations wouldn’t be willing to spend.”
Cultivating and maintaining relationships involves doing things that a good real estate broker would do and they don’t have to be high-tech. Sending birthday wishes, stopping by to say hello and getting involved in the community are some of the things that can grease the relationship. Solmentum also hires people who make good teachers, Brown said, because a big part of the job is to educate consumers and get them to ask questions that will help Solmentum’s staff figure out how to make the sale.
Solmentum is doing business in three regions within California: San Jose, Bakersfield and Orange County. For San Jose, where people turn to air conditioning for relief in the summer, a homeowner who spends an average of $100 per month over a year would be a likely candidate to reach out to, Brown said. The much cooler climate of San Francisco, on the other hand, doesn’t produce as many good customer leads, he added.
Photo courtesy of Solmentum