The solar industry has been selling to an early market of innovators and early adopters for many years now. And there are still plenty of customers in the early market to sell to.
But most solar companies have their eye on a bigger prize -- solar's mainstream market -- a category that contains a whopping 84% of all customers. Because there are so many people in the mainstream market, winning their business is key to sustained profits and growth.
Customers exhibit purchase behavior over time that is different at each stage of a market's development. Innovators (about 2.5 percent of a market) are often fascinated with new technology. Early adopters (about 13.5 percent of the market) are less fascinated with technology but are often quick to see the potential benefits of something new. But the great majority of the potential market -- the remaining 84 percent -- is not fascinated with technology at all. In fact, the most substantial portion of a market are those who fundamentally dislike technology.
What are the characteristics of the customers who make up 84% of the solar market? Meet the gatekeeper of solar's mainstream market -- the early majority.
All mainstream markets begin with the early majority. They are the gatekeepers of the business rewards that lie ahead. These people do not want to be pioneers and will never be the first on their block to try a new technology like solar. They like to keep a low profile and their goal in life is to make incremental, predictable progress. (quantum leaps are for Evel Knievel)
The early majority shares some of the early adopter's ability to relate to technology, but ultimately they are driven by a strong sense of practicality. The word "risk" is a negative word in their vocabulary because it implies the chance to waste time and money.
When they buy they care about the company they are buying from, the quality of the product they are buying, and the reliability of the service they are going to get. They like to see competition and prefer to buy from the proven market leader. Members of the early majority tend to be vertically oriented, meaning they communicate more with others like themselves. References and relationships are very important to these people which presents a "catch-22" for solar vendors: the early majority won't buy from you until you are established, yet you can't get established until they buy from you.
In order to break into the mainstream market, solar vendors will need to re-orient their business practices to match the pragmatic and conservative characteristics of mainstream buyers. This means: facilitating referrals and references from someone the customer trusts, establishing then adhering to industry standards, emphasizing financial stability and product "intangibles" rather than technical specs, selling through channels that mainstream buyers are comfortable buying from, and offering turnkey systems that are designed for vertical markets.
Meeting the needs of the early majority is a strategic way of intervening in the solar market to create lasting change. There are many ways to affect markets on a short term basis -- advertising campaigns, government policy, subsidies, etc. -- but these techniques have no long-term positive impact on the market. Understanding mainstream buyer behavior and adapting your business practices accordingly will permanently change solar markets in ways that are sustained by natural market dynamics.
Related Articles:
Product Adoption Fundamentals
Solar in the Mainstream
Labels: solar industry, solar product marketing, technology adoption, Warren Schirtzinger