SunPower wants to be the Dell of solar

SunPower plans to take a cue from Dell when it comes to selling solar. The company’s chief marketing officer, Erin Nelson, who held the same position at Dell, demonstrated a new online retail portal during the company’s annual analyst day Thursday and highlighted a new consumer marketing strategy for SunPower.

SunPower, which makes solar panels and develops power projects, has been selling its equipment through its network of installers in North America. Although the company doesn’t plan to employ its own installation crew, it wants to increasingly own the relationship with consumers as it moves into the business of selling home energy management equipment and software, which includes solar electricity and batteries to store it.

SunPower home installation

The concept of creating an online retail site isn’t new, but doing it well is tough. While there’s no shortage of online ads and websites to try to sign up solar customers, the most effective ways to get homeowners to sign contracts still involves a lot referrals from family and friends plus face-to-face sales. Leading solar installers such as SolarCity and Vivint Solar rely on sending their sales people to meet homeowners or flag down potential customers by setting up booths at Home Depot or BestBuy.

The need for in-person sales has been necessary because solar equipment and energy services are still pretty novel to the public, and it takes time to explain the various financing options. As consumers become more familiar with the products and services, as well as certain brands, they will be more willing to just by online.

A successful online retail site will help reduce the so-called “customer acquisition” cost, which refers to the money spent on attracting consumers’ attention, delivering the sales pitch and signing contracts with them.

SolarCity bought a sales and marketing firm, Paramount Solar, for $116.3 million last year because of Paramount’s expertise at using direct mail and online ads to reach consumers. In fact, direct mailing was more effective than online marketing, a Paramount executive told me then.

During a call with analysts to discuss its third-quarter earnings last week, SolarCity executives said they are focusing on creating “simple and frictionless” online process to sign up customers. Interestingly, both SolarCity’s chief operating officer, Tanguy Serra, and SunPower’s Nelson pointed to Amazon and Uber as examples of companies that have created superb online experience for their customers.

SunPower KB energy storage

SunPower is leaning on Nelson to create a user-friendly retail site. The basic set-up isn’t a new idea: by entering your address and some other personal information, you’ll be shown options for solar equipment and given estimates of solar electricity production from various systems and the likely energy savings. You can also choose to buy, get a loan or sign a lease before setting up an appointment for an installer to pay you a visit.

SunPower intends to collect data about each home’s major appliances and energy sources so that it could sell energy management services by operating those appliances and delivering energy savings.

SunPower plans to build a good number of social engagement features into the site. Nelson talks about creating milestones to generate the excitement of counting down to the day when the panels will go up on the roof (SolarCity’s Serra also talked about this idea last week). You can share those milestones on your social network and essentially become SunPower’s brand advocate. You get $500 for each person who chooses SunPower because of you.

SunPower also seems to be using behavioral science research that has been deployed by companies such as Opower to get consumers to reduce wasteful electricity consumption. SunPower’s retail site will show you how many neighbors have solar panels on their roofs because studies have shown that people take cues from friends and others around them about what to do and how to act, and then they measure how they stack up against others.

“For every 10 customers in the same zip code as you, you are 8 percent more likely to buy solar,” Nelson said during her presentation. “We want to keep people super engaged and excited. We want to drive that peer effect.”

The company plans to roll out the site in 2015. Part of its consumer marketing strategy will also involve recruiting more installers within its dealer network to agree to marketing plans that will essentially make those installers look a lot like they are part of SunPower.