The Curious Case of the Chocolate Cake Close
Vice President, Sales Residential, HelioPower
In the Ugly Side of Solar series I’ve covered shoddy solar power installations, ugly installations, and shaded installations. Part four covers something more insidious and is perhaps the ugliest side of all. Part four is about the growing trend of less than professional sales tactics in the solar power industry.
“Sales Tactics” details a disturbing recent trend, the employ of unprofessional, and what I would deem, unscrupulous, sales and business practices. You know the kind I mean. You’ve seen the results of this approach to business on the 10 o’clock news. The headlines paint the stories: the contractor who takes a huge deposit and doesn’t complete the work; and/or does a horrible job after a protracted and nightmarish experience, and/or charges the customer twice as much as a reputable contractor to perform the same job in the name of ‘superior service’ or some other excuse while performing a less than stellar installation.
Ugly Solar part four is an exposé of some of the oldest and most popular tricks in home selling tactics now being applied to solar. Before you say, “I’m too smart to fall for any of those tricks,” please read on. Sadly I see and hear of people falling for these tricks every day as some new entrants into the industry bring them to the solar business. These tactics are used to endear and close deals at prices significantly higher than those offered in the competitive marketplace and to intimidate those who try to cancel later.
I will illustrate how these tricks work through a parable I call ‘The Curious Case of the Chocolate Cake Close.’
Once there was a pleasant retired couple who wished to go solar. It’s possible that they became interested in solar after receiving a direct mailer or perhaps speaking with a door-to-door canvasser. However it happened, they invited a solar contractor into their home. The salesman was pleasant. He took photos with their dog (Trick #1: Make friends with the family dog. If the dog trusts you, the deal’s as good as inked). The salesman pitched his pitch. He told the couple he had already contacted the utility and received their utility information and therefore the system he was proposing would suit their needs perfectly (Trick #2: Without a signed third party authorization form, no one except the customer can access his utility information, but most folks are unaware of this and will think you have an ‘in’ at the utility). The salesman completed his exciting solar pitch and then pressed for the sale. Unfortunately for the salesman, the couple wanted some more time to think about it, so he created more time. He stuck around for the next five hours endearing himself to them (Trick #3: If you refuse to leave on your own, customers will often acquiesce and sign a contract just to get you out of their house. Stay ten hours if you have to).
Throughout the five hour courtship, the salesman made multiple phone calls to his manager. “Good news!” the salesman exclaimed, “If you let us put a sign in your yard my manager will knock $1,500 off your solar power system!” “Even more good news, if you sign today we can give you an additional discount!”(Trick #4: The more phony calls you make to your manager the better. It gives you the appearance of advocating on behalf of the customer. Trick #5: hyper-inflated pricing makes discounting easy!). Feeling the deal (and his commission) slipping away, the salesman tried a Hail Mary. “What’s your favorite dessert?” he asked. “We love chocolate cake,” the couple replied. “Great! I’ll be right back,” the salesman announced, and much to the couple’s surprise, the salesman went to the store and bought a chocolate cake. “What a nice man,” the couple thought, “he sure is a thoughtful fellow.”
The salesman returned a short while later with a chocolate cake (Trick #6: never underestimate the endearment forged by breaking bread with someone). After enjoying some of the cake with the old couple, the salesman inked the deal and went on his way with a $1,000 deposit and a $2,500 postdated progress payment (Trick #7: the more skin someone has in the game, the less likely they are to cancel after they’ve come to their senses. Of course, as you may know, in California collection of this second payment at the time of contract signing is illegal. Don’t let that stop you though, just have your customer postdate the check to cover your tracks).
That would’ve been the end of the story in most cases (slick salesman gouges unwitting retirees), but this couple began to have buyer’s remorse after the transaction begin to sink in. Because they never received a second bid, they wondered if they had gotten a good deal on their solar electric system. After several weeks of wondering, pondering, and evaluating their decision to go solar with the chocolate cake salesman, they decided to get a second opinion. What they discovered shocked them.
The second salesman arrived with little fanfare and no chocolate cake. He performed his site evaluation and presented his solar power system proposal to the couple. The system was larger (by almost 1,000 watts); included an electrical service upgrade; and was $29,000 cheaper. Let me say that again, the system was $29,000 cheaper. For many people, that’s a year’s salary.
They’d been had! How could that sweet salesman with his delicious chocolate cake do this to them? They trusted him. Their dog trusted him. At this point, the old woman began to cry. She and her husband were so upset that they immediately canceled their contract with the first salesman and signed up for the far cheaper system with the second salesman.
Almost immediately, the first salesman began calling them at home in earnest saying, “I’ll see you in court! You’re on the hook for a 20% restocking fee! Do you really want to lose $8,000? You’re in for a nasty lawsuit now!” (Trick #8: there’s nothing like the threat of a lawsuit to get folks to see things your way). After rebuffing the chocolate cake salesman by phone multiple times, the couple thought they were free and clear, but they were wrong! Mr. Chocolate Cake himself came a knock, knock, knockin’ at their front door not 30 minutes later (Trick #9: if the threat of a lawsuit doesn’t work by phone, try it in person). The couple, visibly shaken and physically shaking, asked the second salesman, who was still at the house, to confront chocolate cake guy who suddenly wasn’t so sweet anymore. After an unpleasant and highly charged exchange, chocolate cake guy was sent packin’. Salesman number two, believing he had done a good thing by saving these retirees $29,000 on a 25% bigger solar panel system went on his way with contract in hand. Plus, he had the added privilege of singlehandedly dispatching the evil sales guy face-to-face, toe-to-toe.
Unfortunately though, no good deed goes unpunished as they say. Within 36 hours, the old couple canceled their contract with the second salesman. Why? The threats of lawsuits had intensified over the ensuing (pun intended) hours. Additionally, the first company offered to match the second company’s price. That’s right. Miraculously, Company A found $29,000 of ‘extra money’ in the job after the couple received a second bid and attempted to cancel (Trick #10: If all else fails, match the competitor’s price and offer to drop the lawsuit if the customer agrees to cease all communication with Company B).
Company B, now well aware of the underhanded sales techniques being plied on the couple, calls the couple one last time to try to talk sense to them. “After what you’ve been through: price gouging; slimy sales tactics; and threat of lawsuit would you recommend Company A to your friends, neighbors, or family?”
“No we wouldn’t,” the couple answers.
“If you wouldn’t recommend them,” salesman B continues, “why would you still proceed with them while you still have a chance to get out in one piece?”
“We wouldn’t,” the couple replies, “But we’ve never been to court before, and we’re afraid of being sued.”
“Their legal case seems frivolous to me,” says salesman B, “Don’t let them strong arm you into doing something you don’t want to do. Is this someone you really want to do business with?”
With one last futile effort, the couple cancels with Company A, but this time the cancelation lasts only 18 hours, as chocolate cake guy arrived in person the very next morning to defend the deal with his volatile combo of price reductions and lawsuits (Trick #11: Intimidation is a wonderful customer motivator).
I wish I could say that this parable was only that, but it’s a true story based on actual events. In fact, further research on Company A uncovered a consistent pattern of price gouging and abuse. Prices averaging $13/DC watt are the norm for these slick operators. Since the average price of solar in California has fallen below $7/DC watt, Company A’s systems are overpriced by an average of 55%. In the retirees’ example, the difference was $29,000. That’s some expensive chocolate cake!
So how do you protect yourself from being suckered, then threatened and abused when you call the conman on his con? Follow basic common sense principles:
- Always get a second bid. Always, always, always!
- If you live in California check the solar company out the same way I did, in CSI’s public database: http://www.californiasolarstatistics.ca.gov/application/search/
You can see how many installations a company’s done, in which cities, what types of equipment they sell, and even the prices they’re charging, plus a whole lot more!
- If you’re paying more than $7/DC watt, chances are you’ve been had, although some exceptions apply to ground mounted systems, reroofs, service upgrades, or specialized custom installation work. In any case, start asking some hard questions when the price exceeds this level.
- Remember, in California you have three business days to cancel a contract if you get cold feet later. If you sign on Friday, you have until the following Wednesday at midnight.
- If a contractor collects more than $1,000 at contract signing, report them to the California State Licensing Board: www.cslb.ca.gov
- If a contractor threatens you with a lawsuit and you’ve done nothing but cancel your contract prior to work commencing, don’t capitulate — call a lawyer!
- If a contractor suddenly drops his price by tens of thousands of dollars to keep your business, can this guy really be trusted to do quality work? Can he be trusted at all?
- If a salesman offers you chocolate cake, offer him the door.
If there is a silver lining here, it’s that the couple saved a pile of money in the end by engaging Company B. Whether they’ll end up getting what they paid for we may never know. I’m sure the chocolate cake salesman still has a couple more tricks up his sleeve. What’s your favorite dessert?
You can reach Scott Gordon directly at [email protected]