refer a friend cashback

[bando]

Those 2 referred vendors I got turned out to have the most competitive bids by far compared to the ones that I found by myself unreferred. I ended up going with the one referred to by my brother. Even if they had padded up my cost to pay my brother the referral fee (which I doubt because we compared notes closely), it's still the most competitive quote I received, so I don't see how I could lose going with the most competitive bid I could find.

your situation sounds like it worked out perfectly. i would do the same thing with anyone i cared about. no sense in your family or friends getting hosed just so you can earn a fee, but as long as you are in communication with them on the cost, it could be a win win situation.

i referred my sister to DirecTV and we both saved $100 in bill credits on our accounts. that referral program is easy because directv prices are all the same so there is no "getting hosed". with solar, the installers and bids vary so much so you don't really know. i don't know if i lucked out with my installation and how well it went, but not everyone is happy with their installer and it could very well be that two people have wildly different experiences. a $40,000 solar job is not a small expense, and it's like anything else you'd refer to a friend or relative - a realtor, contractor, etc. - if they end up not liking your recommendation, then it could be awkward.

that said, i have no problem telling people that ask about my experience and giving the installer 5 stars, however i don't expect anything in return. if it so happens that i am listed as the referral and earn money after the fact, then great. if not, no big deal.

[rebelrun7]

I could be totally off here but doubt it...maybe this thread is from awhile ago so things have changed. I have worked in sales in the solar industry for two years and most people do a PPA (power purchase agreement)..that means a set price per kilowatt hour. for solar electricity...Its much like direct tv in the fact that they have set prices. Solar company X charges 11 cents per kwh in MD no matter who got them the lead .The referral payouts are marketing expenses the that company pays out totally independent of the price of the solar..... for example say..you know a friend who might go solar and they get flagged down at home depot by a rep OR even call into the company to get a quote and then they decide to go solar..they will pay the same price of 11 cents per kwh..and you get paid a big fat 0...now if YOU refer your friend to the company they will still pay the same price of 11 cents per kwh but you will get paid say 200-500 depending on the solar company...bottom line is you should probably refer your friends and dont leave money on the table, Basically referral fees are a way of not having to pay salary and alot of money to sales reps..the referral pay out is to lower cost and save the company time

[J.P.M.]

I could be totally off here but doubt it...maybe this thread is from awhile ago so things have changed. I have worked in sales in the solar industry for two years and most people do a PPA (power purchase agreement)..that means a set price per kilowatt hour. for solar electricity...Its much like direct tv in the fact that they have set prices. Solar company X charges 11 cents per kwh in MD no matter who got them the lead .The referral payouts are marketing expenses the that company pays out totally independent of the price of the solar..... for example say..you know a friend who might go solar and they get flagged down at home depot by a rep OR even call into the company to get a quote and then they decide to go solar..they will pay the same price of 11 cents per kwh..and you get paid a big fat 0...now if YOU refer your friend to the company they will still pay the same price of 11 cents per kwh but you will get paid say 200-500 depending on the solar company...bottom line is you should probably refer your friends and dont leave money on the table, Basically referral fees are a way of not having to pay salary and alot of money to sales reps..the referral pay out is to lower cost and save the company time

I could be totally off here, but I doubt it... The last post to this thread was 2 1/2 yrs. ago and so it's been around longer than you've sold solar. Things have not changed all that much in 2 1/2 years except that maybe the bloom is off the leasing/PPA rose some. I'd suggest most residential solar is not PPA. Lease maybe, but not PPA.

Since most people, solar users or not, are less than clueless about solar, they have no idea if they got a good system/deal, or what kind of quality they did/didn't get. That makes the odds pretty slim of getting a valid opinion as to the worthwhileness of the referred vendor, except maybe that they smiled a lot.

If I have a brain and a balloon knot, why would I seek an opinion on a subject from someone who is as ignorant about the subject as I am ?

As for leaving money on the table, whether, PPA, lease or purchase, referrals are still the screw your buddy for 30 pieces of silver plan. That's one of the things that hasn't changed.

As for price, everything is negotiable. If I was a peddler (which I was in a former iteration of being a wage whore), I'd start high and add in the referral. It's always easier to come down than go up in price when you're on the on the selling side.

[rebelrun7]

I could be totally off here, but I doubt it... The last post to this thread was 2 1/2 yrs. ago and so it's been around longer than you've sold solar. Things have not changed all that much in 2 1/2 years except that maybe the bloom is off the leasing/PPA rose some. I'd suggest most residential solar is not PPA. Lease maybe, but not PPA.

Since most people, solar users or not, are less than clueless about solar, they have no idea if they got a good system/deal, or what kind of quality they did/didn't get. That makes the odds pretty slim of getting a valid opinion as to the worthwhileness of the referred vendor, except maybe that they smiled a lot.

If I have a brain and a balloon knot, why would I seek an opinion on a subject from someone who is as ignorant about the subject as I am ?

As for leaving money on the table, whether, PPA, lease or purchase, referrals are still the screw your buddy for 30 pieces of silver plan. That's one of the things that hasn't changed.

As for price, everything is negotiable. If I was a peddler (which I was in a former iteration of being a wage whore), I'd start high and add in the referral. It's always easier to come down than go up in price when you're on the on the selling side.

In this case my friend you are totally off...things have changed more than you realize. The price is not negotiable anymore at least in my company and the main competitors.. the same way the price of a candy bar at 711 is not negotiable. I put the deal in a computer system and the price is automatically generated... and where I live the price is 11 cents KWH this is compared to customers who are normally paying their utility company 15 cents per KWH with all extra charges included into the KWH rate. I.E. delivery and supply charges.

These days, not referring your friend is literally leaving money on the table. The price is fixed no matter who refers you...so let me give you an example. Let's say your friend Bob is interested in solar.. now you can refer him to a solar company and make the referral payout! Nice..OR you can think its a screw your buddy plan and do nothing. So in this case you do nothing and Bob calls into a solar company and goes solar. Bob is paying the exact same as he would if you referred him(11 cents)..only the salesperson on the phone got the referral payout.

As far as PPA vs Lease..My co-workers and I have helped thousands of people go solar with a PPA. I have seen one lease and a handful of cash purchases during my 2 years..so maybe there are more leases total than PPAs in existence... but PPAs are by far more popular right now and are easier for people to understand... just pay for the power that the panels produce at a cheaper rate then their utility charges with no install fees or upfront costs. If the home and homeowner qualify it is literally free money.

Is this starting to make sense? It is cheaper for the company to pay one of their customers a few hundred dollars per deal than it is to pay salary and commissions to a salesperson.

[NYHeel]

I agree on your point about referrals. They don't add to the cost of the system. This isn't based in any insider knowledge just common sense business knowledge. This is a very high margin business but it takes a lot of time and money to acquire customers. The cheapest way to get a customer or a lead is through referrals. Referrals have a much higher success rate and will likely need less time being sold. This all reduces the cost to acquire a customer. Your installer is thrilled to pay you a $500 referral fee for bringing them a new customer that will likely cost them half as much to sell to than a non-referred customer calling in.

[SunEagle]

I agree on your point about referrals. They don't add to the cost of the system. This isn't based in any insider knowledge just common sense business knowledge. This is a very high margin business but it takes a lot of time and money to acquire customers. The cheapest way to get a customer or a lead is through referrals. Referrals have a much higher success rate and will likely need less time being sold. This all reduces the cost to acquire a customer. Your installer is thrilled to pay you a $500 referral fee for bringing them a new customer that will likely cost them half as much to sell to than a non-referred customer calling in.

Hmm. I can get some extra points if I get someone to purchase a time share where they can get a deal.

Maybe you are not old enough to understand that the "get the friends and family to purchase" process usually ends up just putting more money into the pockets of the sales person and does not really save you anything.

[J.P.M.]

Is this starting to make sense?

No. Besides, we're talking about different things. I believe I understand reasonably well how the game is run. You seem to be all about money. I seem to have a different set of priorities. But, opinions vary.

[NYHeel]

Hmm. I can get some extra points if I get someone to purchase a time share where they can get a deal.

Maybe you are not old enough to understand that the "get the friends and family to purchase" process usually ends up just putting more money into the pockets of the sales person and does not really save you anything.

I never said that the price is lower because of the referral. Just that the referral fee isn't being tacked onto the price of the installation. I'm arguing that the cost of the project is not at all correlated to the referral fee.

[SunEagle]

I never said that the price is lower because of the referral. Just that the referral fee isn't being tacked onto the price of the installation. I'm arguing that the cost of the project is not at all correlated to the referral fee.

Maybe for your company but IMO that is not a true statement for all solar companies. No salesperson will ever present a "fixed" price because there will always be room to negotiate the final cost. Adding a little to the price due to a "referral" fee is pretty much common in the sales industry.

[solarix]

What is called "new customer acquisition" costs are a major part of the solar business. I think the current industry norm is around $2000 per customer when you figure in all the marketing costs of lead generation, sales materials, referral fees, etc etc. Its pretty amazing to find out what some companies will pay for a lead to a warm body. It is because the margins in the industry are still really quite good what with the 30% tax credit and because some companies (like SolarCity) are still in the grow at all costs mode and don't worry about profitability. As a result, the competition for new customers is fierce and all you poor souls out there that happen to type in "solar" on the internet get bombarded with pone calls.
I love paying referral fees. Its my cheapest and best way to find new, good customers. We are so tired of chasing down bogus, overpriced leads from the internet....

[J.P.M.]

Just that the referral fee isn't being tacked onto the price of the installation. I'm arguing that the cost of the project is not at all correlated to the referral fee.

Since there's probably no reasonably sure way for a customer to determine what goes into a price, I'd side with the opinion that the referral will tend to find its way into the price somehow, with maybe an upward adjustment to cover "admin. costs", or some other B.S. In any case, my bet is a referral fee paid to anyone won't lower a price.

In effect, and as a practical matter, I see the situation something like this: What happens most of the time is that the vendor winds up paying the solar ignorant customer a sum that amounts to something less than the average cost of lead generation. Great for the vendor - I get that - it's just business. Neither customer probably knows squat about what they're doing (which makes me wonder why anyone would put much value on an ignorant opinion). In the end the new customer, since the referring customer is as solar ignorant as the new customer, gets, at best, nothing of value (since, again, a referral probably won't lower a price), and the referring party gets to act like a Judas goat. The vendor wins. That's it. That's not bad for the vendor.

I'm not sure a lot of folks see beyond a $$ sign as to the consequences of their actions.

When I was a peddler, I learned to not buy or sell things to my friends. This referral, screw your buddy crap is an example of why.

Take what you want of the above. Scrap the rest.

[NYHeel]

What is called "new customer acquisition" costs are a major part of the solar business. I think the current industry norm is around $2000 per customer when you figure in all the marketing costs of lead generation, sales materials, referral fees, etc etc. Its pretty amazing to find out what some companies will pay for a lead to a warm body. It is because the margins in the industry are still really quite good what with the 30% tax credit and because some companies (like SolarCity) are still in the grow at all costs mode and don't worry about profitability. As a result, the competition for new customers is fierce and all you poor souls out there that happen to type in "solar" on the internet get bombarded with pone calls.
I love paying referral fees. Its my cheapest and best way to find new, good customers. We are so tired of chasing down bogus, overpriced leads from the internet....

Exactly this. It's far cheaper to pay a small referral fee than to acquire a new customer through other means.

[NYHeel]

Since there's probably no reasonably sure way for a customer to determine what goes into a price, I'd side with the opinion that the referral will tend to find its way into the price somehow, with maybe an upward adjustment to cover "admin. costs", or some other B.S. In any case, my bet is a referral fee paid to anyone won't lower a price.

In effect, and as a practical matter, I see the situation something like this: What happens most of the time is that the vendor winds up paying the solar ignorant customer a sum that amounts to something less than the average cost of lead generation. Great for the vendor - I get that - it's just business. Neither customer probably knows squat about what they're doing (which makes me wonder why anyone would put much value on an ignorant opinion). In the end the new customer, since the referring customer is as solar ignorant as the new customer, gets, at best, nothing of value (since, again, a referral probably won't lower a price), and the referring party gets to act like a Judas goat. The vendor wins. That's it. That's not bad for the vendor.

I'm not sure a lot of folks see beyond a $$ sign as to the consequences of their actions.

When I was a peddler, I learned to not buy or sell things to my friends. This referral, screw your buddy crap is an example of why.

Take what you want of the above. Scrap the rest.

I work in consulting and when we're pricing out a project for a client we try and factor in the costs to get the contract in place and perhaps some of the business development costs we may have to spend. When we know that those costs are minimal our pricing tends to come down. Now I'm not saying that some installer is going to lower their price because of a referral but I doubt they're going to raise it. They already load their pricing to account for sales time. The referral fee is just a part of that and usually a less costly part of that.

If I refer a friend to my solar installer I tell him everything I know. First I disclose that I get a referral fee. Then I'll tell him to get multiple quotes. I liked my installer but I'm only one data point. I also tell him as much about solar as I've learned over the last few months. It's certainly not everything but it gives him a start to do his own research. I have one friend who's considering buying a system but hasn't gotten to the point of getting any quotes yet. I told him all of this.

Lastly, I think it's different when you're recommending a service provider to somebody and when you're selling them a product. We've all come across a family member or friend who is doing one of those MLM things. It's always awkward having to pay the friends and family tax when you feel like you need to buy their crap product to be nice.

[J.P.M.]

I work in consulting and when we're pricing out a project for a client we try and factor in the costs to get the contract in place and perhaps some of the business development costs we may have to spend. When we know that those costs are minimal our pricing tends to come down. Now I'm not saying that some installer is going to lower their price because of a referral but I doubt they're going to raise it. They already load their pricing to account for sales time. The referral fee is just a part of that and usually a less costly part of that.

If I refer a friend to my solar installer I tell him everything I know. First I disclose that I get a referral fee. Then I'll tell him to get multiple quotes. I liked my installer but I'm only one data point. I also tell him as much about solar as I've learned over the last few months. It's certainly not everything but it gives him a start to do his own research. I have one friend who's considering buying a system but hasn't gotten to the point of getting any quotes yet. I told him all of this.

Lastly, I think it's different when you're recommending a service provider to somebody and when you're selling them a product. We've all come across a family member or friend who is doing one of those MLM things. It's always awkward having to pay the friends and family tax when you feel like you need to buy their crap product to be nice.

Not a rhetorical question, and not a knock, and nothing personal, but are you knowledgeable enough about residential solar to offer a reasonably accurate appraisal of the job you got - especially compared to other vendor's work. ? If so, do you think other solar users are as or more knowledgeable as you ? My guess as to the probability of a yes to both questions is relatively low.

This screw your buddy business is usually a case of the solar ignorant leading the solar ignorant. I follow the money for motive.

As something to consider only: I wonder how many people consider giving or at least sharing the referral fee to/with the mark. Such behavior might soften some of my cynicism a bit, not that my cynicism or opinion matters to anyone other than me.

Take what you want of the above. Scrap the rest.

[NYHeel]

Not a rhetorical question, and not a knock, and nothing personal, but are you knowledgeable enough about residential solar to offer a reasonably accurate appraisal of the job you got - especially compared to other vendor's work. ? If so, do you think other solar users are as or more knowledgeable as you ? My guess as to the probability of a yes to both questions is relatively low.

This screw your buddy business is usually a case of the solar ignorant leading the solar ignorant. I follow the money for motive.

As something to consider only: I wonder how many people consider giving or at least sharing the referral fee to/with the mark. Such behavior might soften some of my cynicism a bit, not that my cynicism or opinion matters to anyone other than me.

Take what you want of the above. Scrap the rest.

I think I'm moderately knowledgeable in that I know some of the issues to look out for but I wasn't on the roof checking every penetration they made. Probably above the level of ignorant but far below the level of expert. I'm fully aware that it's possible my installer cut some corners and I'm unaware. They did make a few minor mistakes along the way and were open and honest with me about it. Those mistake weren't huge deals but did extend the work out a little longer. There's also one other minor cosmetic thing that I'd probably do differently if I was doing the installation again. My point is that I've read a good amount of information and while I'm really far from a technical expert, I know a lot more now than I did when I started the process, mostly thanks to you and other knowledgeable members of this board.

I actually did offer to split the referral fee with my friend. It's not a huge sum of money (it's $500) and while it would be nice, I would never knowingly lead a good friend astray over a referral fee. Plus it's small enough to not even tempt me. He's somewhat interested in solar and is doing some of his own research on it. If he decides he wants to go ahead with it, he'll get quotes. Having one person who has a system that my friend can look at and ask questions about the installation couldn't hurt. Maybe he sees something he doesn't like and can now tell any installer to avoid doing that. Either way it's better than seeing nothing.