Post by Joe Marhamati

Your CAC is $1,500+ and you can't figure out how to reduce it? After talking to 500+ solar installers, I can tell you exactly where your budget is bleeding. Most installers are spending $1,500+ per customer and think it's just the cost of doing business. It's not. It's three specific problems draining your budget every day. Here's how to plug each one: — Killer-1: You're losing referrals to manufacturers. When a homeowner submits a referral through the manufacturer's app (Enphase Energy, Tesla, etc.), that lead doesn't belong to you anymore. It belongs to the manufacturer. And they're going to sell it. Either back to you or to the highest bidder. This is why your referral CAC isn't $600-$800 like it should be. It's $2,000-$3,000 because you're buying back leads that should have been free. How to plug it: Own the customer relationship from day one. Give them your app, not the manufacturer's. Make it easy for them to submit referrals directly to you. That lead should be yours. — Killer-2: You're still buying leads. I've seen installers pay tens of thousands of dollars a month for leads that aren't even high-intent. There's a lot of deceptive advertising out there, and most of those leads cost you $2,000-$3,000 per closed customer. Meanwhile, referrals cost you 1/10th of that. If you cut your CAC from $2,000 to $1,000 by doubling your referral rate, that's a $0.10/watt savings. On a $25,000 system, that's $1,000 in your pocket instead of a lead vendor's. How to plug it: Stop buying leads. Rework your budget to assume 75% referrals. Cut conversion expectations on paid ads. Invest that money into delighting your existing customers so they send you more business. — Killer-3: You're not investing in service revenue. I met a solar company in Tucson with CAC under $800. Some of our customers got it down to $1,100, $1,000, and even $600. Everyone else I know is spending $2,000-$3,000+. How do they do it? Most of their marketing dollars go to a team that monitors every single system in their fleet. If there's a problem, they reach out to the customer and tell them proactively what they're going to do to fix it before the homeowner even knows there's an issue. (or they directly invest in Sunvoy) That delights customers. And delighted customers refer. A lot. Plus, they sell service plans and turn one-time customers into recurring revenue. That compounds over time. How to plug it: Launch a service plan. Monitor your fleet to delight customers, build trust and, use it as a marketing opportunity. Reach out proactively when there's an issue. Make your service division profitable while turning your customers into your marketing department. — You can't afford a $1,500+ CAC in a post-ITC world. But if you own the customer relationship, stop buying leads, and invest in service, you can cut that number in half. Maybe more. What's one thing you've tried to reduce CAC?