In an existing solar business, with established products, customers and competitors, the process of determining the intangible factors that influence purchasing decisions is relatively simple. It means asking customers (and others who influence the purchase decision) two basic questions:
1. What factors in the purchase and use of solar power are important to you? and,
2. How does our solar offering compare on these factors to other alternatives (including related but not directly competitive products)?
This type of research is easy to describe but difficult to do. In my experience, many research efforts fail to achieve adequate answers to the two questions.
When it does, however, the results can be dramatic. In one recent case, interviews with 200 solar/PV customers and potential customers found that users valued the reputation of the supplier, the service and support provided, prior interaction with the supplier, and industry standards or certifications as the most important intangible attributes of the product. In fact, the tangible characteristics (i.e. PV system specs) ranked no higher than sixth in the customer's ranking.
However, this company had based the majority of its marketing and sales messages on tangible product attributes: conversion efficiency, crystalline vs thin film, panel specs, inverter specs, and maximum power.
The research was commissioned only after a period of frustration and declining sales, and after two new competitors had made substantial early inroads into the company's customer base.
After the product perception research was completed and after the company's sales and marketing messages changed to reflect the results, revenues reversed their decline and climbed twenty-four percent the first year, gross margins tripled, and the market value of the company doubled. All of this occurred with only a slight increase in marketing expenditures, and with no change in the tangible product.
Not all cases are this positive, of course. But enough of them are to demonstrate the power of marketing product intangibles.
Simple in concept as this type of customer focused research is, it rarely appears in discussions about the solar industry. Determining product intangibles and converting the knowledge into messages and programs is easiest in an existing market where competition is strong, such as the example cited above.
The process also works in emerging businesses and in turn-arounds, but the situations are different.Labels: solar industry, solar product marketing, Warren Schirtzinger