How an Orange County Solar Installer Improved Customer Acquisition

Company Overview

Our client, an Orange County-based solar installer, was founded in 2016, serving both residential and commercial clients across Southern California. By 2020, the company had completed over a thousand installations, experiencing rapid growth. However, the expansion exposed operational vulnerabilities, particularly in adapting to regulatory changes like NEM 3.0, which reduced the financial incentives for solar installations. Additionally, rising operational costs and customer acquisition costs (CAC) began to strain the business, affecting service quality and fulfillment.

Market Context and Challenges

The solar industry in California presents unique challenges, with high operational costs, complex regulations like NEM 3.0, and a competitive market. Our client had traditionally relied on a combination of Google ads, local advertising, and SEO to manage customer acquisition. These strategies became less effective over time, requiring significant manual effort to qualify leads and driving CAC to unsustainable levels. Meanwhile, delays in service fulfillment caused by increased demand further impacted customer satisfaction, threatening the company’s long-term growth prospects.

The combination of rising CAC, fulfillment bottlenecks, and inefficiencies in lead qualification made it clear that a change was necessary for the company to maintain its competitive edge and profitability.

The Solution

Facing escalating customer acquisition costs (CAC) and diminishing returns from traditional marketing, our client explored new options to enhance acquisition efficiency. Traditional methods demanded a high investment of time and resources to reach the right customers, often resulting in wasted spend on broad audiences. Seeking a more targeted approach, the client evaluated Home Connect’s data-driven outreach solution, designed to reach only qualified homeowners with zero waste.

Ultimately, the client integrated Home Connect, which provides precision-targeted outreach, focusing solely on high-potential homeowners. By acting as a data aggregator, Home Connect automated homeowner qualification and appointment booking, drastically lowering CAC and maximizing Return on Ad Spend (ROAS) by 2.5x. Leveraging AI for real-time message outreach, Home Connect engaged homeowners instantly and efficiently, reducing guesswork and ensuring meaningful connections. Trained on the client’s historical data, the AI platform emulated the onboarding of a seasoned team member. The entire setup; from data collection and AI training to campaign execution, was completed in under three weeks, enabling the client to quickly realize benefits and start achieving superior results.

Marketing Expenditure and Customer Acquisition Efficiency

Before adopting Home Connect, our client’s annual marketing spend totaled $396,000, which was allocated across various channels such as Google Guaranteed Ads, Facebook Ads, SEO, and local sponsorships. On average, the client spent $33,000 per month on marketing. Despite this investment, the customer acquisition cost (CAC) remained high, averaging $1,500 per closed deal.

With this level of spend, the client completed a total of 264 annual sales transactions, averaging 22 sales per month. This inefficiency highlighted the need for a more cost-effective solution to reduce CAC and improve overall profitability.

Figure 1: Monthly Marketing Spend Distribution Across Channels

This pie chart provides a breakdown of the client’s monthly marketing spend across various channels, reflecting the allocation of funds prior to adopting Home Connect. Key areas of spend include Google Guaranteed Ads, Angi, SEO, Facebook Ads, Google Search Ads (PPC), YouTube Ads, Direct Mail, and Local Sponsorships.

This visual highlights the significant investment in diverse channels that contributed to a high customer acquisition cost (CAC) of $1,500, emphasizing the need for a more efficient allocation strategy like Home Connect.

Figure 2: Customer Acquisition Cost (CAC) and Marketing Spend as a Percentage of Revenue for Traditional Marketing vs. Home Connect

The left chart illustrates the significant reduction in CAC from $1,500 (traditional marketing) to $254.23 (Home Connect). The right chart compares the marketing spend as a percentage of total revenue, with traditional marketing representing 4.5% of revenue and Home Connect reducing it to just 0.76%.

In contrast, the Home Connect solution streamlined the client’s marketing efforts, reaching 10,000 homeowners monthly at a significantly lower cost. Over the course of the campaign, the following metrics were achieved:

• Reach: 10,000
• Opportunity: 982
• Conversions: 196
• Closed Deals: 59

Key Terms:

Reach: The total number of unique homeowners exposed to the campaign, representing your overall visibility.

Opportunities: Qualified homeowners who responded, indicating significant interest and potential for service engagement.

Conversions: Homeowners who booked an appointment, either for service or a sales consultation, moving from expressed interest to a confirmed business opportunity.

Financial Outcomes and Comparative Profitability

The campaign generated a total revenue of $1,966,647, with Home Connect reducing the client’s CAC from $1,500 to $254.23 per closed deal. Additionally, the clients budget of $15,000, represented just 0.76% of revenue in marketing spend, compared to 4.5% with traditional methods.

Figure 3: Gross Profit Comparison for Traditional Marketing vs. Home Connect

‍This chart compares the gross profit generated from traditional marketing methods and the Home Connect campaign. While traditional marketing resulted in a gross profit of $131,998, Home Connect significantly increased gross profit to $589,994.

Results and Impact

The integration of Home Connect yielded immediate improvements in the client’s customer acquisition process. CAC dropped dramatically from $1,500 to $254.23 per deal, enabling the client to generate more revenue while spending less on marketing. However, the increase in demand created new challenges: the company struggled to fulfill the surge in appointments and closed deals, which led to delays in service delivery and a drop in customer satisfaction.

This case highlights the importance of not only optimizing customer acquisition but also ensuring that operational capacity can scale with growth. For the solar industry, where both regulatory hurdles and customer acquisition are key concerns, balancing these factors is crucial to maintaining long-term success.

Future Considerations

To fully capitalize on the efficiency gains from Home Connect, the client must now focus on scaling its operations to meet increased demand. Key priorities should include refining fulfillment processes, expanding service capacity, and investing in infrastructure to maintain high levels of customer satisfaction.

By continuing to leverage Home Connect’s data and automation while enhancing their fulfillment operations, the client can sustain profitability and growth in the highly competitive solar market.

References

Bojerski, M. (2024). How an Orange County Solar Installer Improved Customer Acquisition.

Home Connect Publishing

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