Architecting HelioPower: Blue Ocean Strategies for a Red Ocean Market
For those of us in the rooftop solar business, the above quote from www.blueoceanstrategy.com sounds all too familiar. Costs of sales and marketing in the rooftop market have grown tremendously. In the case of the Great Whites of the ocean, like SolarCity, these costs represent staggering percentages of revenue. Potential customers are bombarded with phone calls, mailers, emails, door knocks and kiosks at favorite shopping venues. How can the customer differentiate between all of the circling sharks, drawn by the blood trace of another potential kill?
The answer is, of course, that it is difficult for the average consumer to do so. As a result, they often buy on price or fall prey to aggressive sales practices. Not only is the industry creating a sour taste in the mouths of many customers, there is also a race to the bottom, with the Great Whites willing to lose money on a deal just to demonstrate growth. This has created a feeding frenzy of sharks that end up cannibalizing their own profits and business health. Yikes!
The answer that my team has concluded is that we must find and operate in a blue ocean – and not be like the sharks driven by their hunger for prey.
When I took over the Presidency, I found a few organizational islands. This caused organizational friction that created a drag on efficiencies. More importantly, decision-making was compartmentalized and customer care was beginning to suffer. Not only were market forces squeezing our margins, but also our own internal desire to swim with the sharks was adding to the blood to the water.
I knew this was unsustainable and we did not want to continue to patrol the red ocean in which we were swimming. It was time to change and find a blue ocean. We already had many pieces in place, but I had to get the team aligned around our new strategy.
The first, and most important, concept we established was to clearly define the red ocean. We determined that large marketing and sales driven companies almost exclusively occupied the red ocean. Many of who did not even construct their own projects. So, we decided not to be that kind of company.
We also knew that we were not just a solar company. We provided a suite of integrated products and services through a consultative process to reduce our customers’ electric bills. In addition, customer’s still sought us out to build their projects due to our reputation for high quality and no cut corners. We have some of the best engineers and techs in the business. These were key differentiators that we had to leverage.
The first outcome, which I wrote about in a prior article, was to refresh HelioPower’s mission and vision and to align the company around those.
Next, we consolidated departments around more natural and customer-facing processes, flattened the organization, and pushed decision-making down to empower the team to delight their customers. As you might imagine, there was fall-out from all of these organizational changes and several people were asked to leave or left on their own accord since they did not like the new, emerging culture. I saw this as healthy.
In the period of several weeks, we had transformed the Company into a leaner, more agile, and customer-centric team – all of the way from the tip of the spear in sales to the customer call center and to the back-office.
So, are we yet swimming in a blue ocean? Not entirely, maybe more like purple. Are we able to better differentiate ourselves? You bet! Have we improved the customer experience? Absolutely!
We still do significant sales and marketing. However, we have chosen to do it more organically and in alignment with our vision and mission. This means that we have a very expansive web site, filled with very informative content. We publish articles weekly to expand the knowledge of our customers. We train our sales team to be true energy consultants and give them the tools to be trusted energy advisors. As a result, we have minimum spend at very modest cost to revenue ratios. For example, we do not bid up ad words like the sharks do.
Further, we are able to clearly differentiate ourselves in the market place. Customers resonate with the fact that we have multiple, cost effective ways to solve their energy cost problems. They also appreciate the attention to detail and the quality that we put into their projects. Our margins have improved due to the product and services mix at our disposal and that we are more efficient in delivering those solutions.
Finally, the customer’s experience has measurably improved. We consistently beat Service Level Agreements and customer testimonials are pouring in.
Cultural change, integration, and institutionalization is a process and it takes time. We are still on our journey to that blue ocean. But, unlike the past, the destination is well defined and everyone is rowing in the same direction to get there.