Staying agile in a competitive market can be a challenge, says our latest guest Paul Dailey, the Director of Product and Market Strategy at Outback Power. Over the past five years, Paul has been focused on transitioning to new technologies and growing Outback’s available market. Paul talks about marketing in a growing industry and the importance of establishing a value proposition as customers’ options expand in the solar panel and equipment industry.
Adapting to Rapid Market Expansion with Strategic Content Marketing Transcript:
Announcer: You’re listening to The Kula Ring, a podcast made for manufacturing marketers. Here are Carman Pirie and Jeff White.
Jeff White: Welcome to The Kula Ring, a podcast for manufacturing marketers brought to you by Kula Partners. My name is Jeff White and joining me today is Carman Pirie. Carman, how are you doing, sir?
Carman Pirie: I’m doing well. Doing well. And good to be with you again.
Jeff White: Yeah. Yeah. Looking forward to this conversation. I think it’s really interesting.
Carman Pirie: Yeah. Look, you know, a lot of manufacturing marketers, one of the kinds of ties that bind in some way or kind of patterns that you see, of course, is that a number of them have to sell through channel environments, and market through a channel, and in some ways a bit disconnected from the end-user of the product in some way. And I think that can present some interesting challenges for the typical marketing playbook if you will, and I’m excited for today’s guest to take us through. And yet another great guest on the Kula Ring from a cool business that does some interesting stuff. So, yeah, that’s kind of neat, too. We can geek out about that a bit.
Jeff White: Always enjoy that side of things. So, joining us today is Paul Dailey. Paul is the Director of Product and Market Strategy at Outback Power. Welcome to The Kula Ring, Paul.
Paul Dailey: Well, thank you, guys. I appreciate the opportunity to join you.
Carman Pirie: Paul, it’s awesome to have you on the show. Outback Power, tell us or tell our listeners about Outback Power, what you all do there, and a bit about your role, if you would.
Paul Dailey: Yeah, so starting with the company, Outback Power was formed back in 2000, 2001, basically to serve the off-grid solar community. So, these are the folks that wanted to live somewhere that didn’t necessarily have power lines and access to power, and so the typical thing up to roughly that point was people would put a fairly expensive solar PV panel out there. They’d usually have a car battery or something that they’d use to charge it, and then they’d have to get all DC loads. And so, Outback’s original products were, first of all, a charge controller to help keep that battery healthy, and then an inverter to provide 120-volt, 60-hertz AC power that could run normal appliances.
Since then, we’ve grown it out to not just the off-grid space, but also the… We pioneered the solar backup space back in like 2010 when we came out with our Radian product line. And now, of course, that’s what everyone in our industry talks about, is solar plus batteries. We’ve been doing that a very long time and strove to make a difference in people’s lifestyles, as well as obviously the climate change movement, right? This is the best alternative to generators that are sucking up diesel fuel and putting more carbon in the atmosphere.
Jeff White: I have to imagine that your batteries made, and your platform made things a lot safer, too, over a couple of car batteries strung together.
Paul Dailey: Oh, yes.
Jeff White: So, tell us about… Go ahead.
Carman Pirie: Well, Paul, I mean how long have you been with the business, and kind of where did you come to it from?
Paul Dailey: Yeah, so I’ve been in the industry for a similar amount of time, and I came to Outback via their number one distributor, so I was working for AE Solar, which was acquired by Sunrun, which is a name probably more people know about, and came to Outback back in 2016, so I’ve been there roughly five years. And you know, my role since I was hired was to shepherd the product line and kind of make the transition into newer technologies, newer platforms, and growing our available market.
Carman Pirie: So, you switched teams a bit. I mean-
Paul Dailey: I just went up the channel, you know?
Carman Pirie: Now you know the channel so well, having worked in it with their biggest distributor. That’s a great coup, I would think, for Outback Power.
Paul Dailey: Yeah. It was pretty good because that gave me insight into what our first tier of customers needs. And people often don’t think about whether a distributor has needs that are different from say an installer, or a homeowner because a distributor cares about things like how many SKUs they have to stock, and how long till they can be on a shelf, and how it’s packaged. A lot of that doesn’t matter much to the company that’s installing the product, let alone the homeowner who’s using it for the next 10, 15 years.
Jeff White: So, who’s your primary? You know, when you think about how you go to market, obviously they’re all important in different ways, but where do you start?
Paul Dailey: Well, the challenge is you kind of have to start everywhere at once. It used to be, back when this was a very niche industry, you could just go to the distributor and once you convinced the distributor that you had the product for them, they would just offer it to their customers and it was kind of the only game in town, so it didn’t matter. If you build it, they will come. And as the market has evolved and more players have gotten into it, you not only have to convince the distributors that your product is worthwhile, but you also have to convince at least that first tier of installers, because the distributor wants to know, “Okay, if I stock this, is someone gonna buy it?” Right? They don’t want stuff sitting on their shelf. That’s their cash that’s tied up.
And the installers want to know that the homeowners will buy it from them. And that’s changed, as well. I would say as recently as four or five years ago, most homeowners would basically just tell the installer, “Hey, whatever you think is the best thing.” This is a product similar to an air conditioner, or heat pump, or furnace. Most homeowners aren’t saying, “Hey, I want Trane, or Lennox, or whatever.” They’re saying, “Yeah, whatever you sell, just give me the most efficient one, or the cheapest one,” or whatever their metric happens to be.
And that’s evolved in our industry because of the high profile of certain companies. You’ve got these household electronic companies getting into it, like LG and Panasonic. You’ve got Tesla getting into it. And it’s ironic for us, as we came from being that established brand in the industry to, “Okay, now everyone recognizes these other brands because they’re involved in so many other things that get a lot more publicity.” So, it’s you’ve gotta establish that value proposition and fortunately for us, a lot of the installers are still in the industry that was in it 10, 15 years ago, and they know our products, and they like our products, and so it’s the challenge is that a lot of the growth is coming from newer installers that didn’t do anything with batteries five years ago. But now it’s all to do with batteries, and so they’re learning about it, and we’ve gotta get ourselves in front of them.
Carman Pirie: I mean, look, it’s a really interesting marketing challenge, this notion of the extent to which you pull or seek to create a bit of a pull demand, if you will, from the homeowner.
Jeff White: Push demand from the distributor.
Carman Pirie: Yeah.
Jeff White: Awareness from the installer.
Carman Pirie: And then both from the installer. And then you have the added dynamic, of course, of sometimes building a brand to those homeowners is a bit of a challenge, because you get a bunch of do-it-yourselfers out there that you don’t want to deal with as a brand, but if you’re talking to them directly, they kind of start trying to deal with you, right? I guess I wonder, Paul, have you… I appreciate that it’s certainly evolved over time and it’s a very dynamic situation. Do you have closed-loop analytics at all around this to be able to understand, if you will, almost like the percentage of the business that comes from the three, like comes from pull, comes from the installers, comes from a push? Do you have a sense of the influence there?
Paul Dailey: It’s mostly anecdotal. So, I just got back from one of our most important trade events, which is the North American Board of Certified Energy Practitioners, right? So, it’s a small show. There are like 500 attendees. But each and every one of them is or represents an installer, a potential customer, who’s using products like ours. And you know, so we talk to those people at shows, and they tend to tell us, “Oh, yeah. We’ve heard of you. We haven’t used your stuff,” Or, “Hey, we use your stuff all the time, we love it,” or, “We used it. We had XYZ problem.” So, we get a lot of that kind of feedback, but once you sell something to a distributor, very few distributors are willing to take the time to give you point of purchase information.
So, if you’re lucky, they might tell you what zip code it shipped to. They’re not gonna tell you who they sold your product to and kind of where it got installed. Some other folks in our industry have implemented basically involuntary tracking, so as soon as you plug that product in, it shows up on the internet and they know exactly where it is. We have something similar, but it’s entirely voluntary, and because we serve that large off-grid segment, most of those guys are off the grid because they want to be off the grid. They don’t have internet connections. You know, they don’t want the man messing with their stuff. So, there’s always that challenge and that market is not reported on much because it is so hard to gather data and it’s such a niche that nobody really knows how big it is, but everyone’s pretty sure it’s not that big, right?
So, it’s just that size where people don’t want to invest in the tools to go find out more about it, and so again, we have to manage with anecdotal data. On the distributor side, we obviously know because we sell to them, we know which distributors are doing the most business, and kind of where they are, and what geographies they serve, but our top five or six biggest customers are national. They ship products all over the country or even all over the hemisphere. And so, we don’t necessarily know. We may ship it to California. It might get installed in Maine and we won’t know anything about that unless that person in Maine joins our monitoring platform and we can see it show up there.
Jeff White: I have to think, you know, as competitors like Tesla, big brand recognition amongst consumers, move into a space like this, where you guys have been quality and a premium product leader for so long, dedicated group of distributors and installers and things like that, how do you… What are you providing, if anything, to your installers to help defend their choice to the end consumer? What are you doing there?
Paul Dailey: So, that’s been the focus a lot more in the last say three or four years than it was before. And you know, I went down to a video production company a year or two ago and had them come up with some really nice, kind of TV-quality ad spots, and we never put them on TV, but what we’re doing is we’ll take those, we’ll put in appropriate interstitials for the product, and then give that to the installers as a sales tool, right? So, when that installer comes, and the way Tesla works is they have a very captive installation network. It’s pretty unlikely we’re ever gonna sell something to a Tesla installer because they have to be loyal to Tesla. That’s part of the deal.
But that also means most of the market is still available to us and not available to Tesla. You know, so we want those guys to be able to compete, and by giving them these kinds of tools, they can go to a homeowner and say, “Hey, yeah, I know you’re thinking about this thing, but here’s what we have from Outback and here’s why it’s better and more robust and more reliable,” and so forth. But it’s really about arming them as the installer having that kitchen table conversation.
Carman Pirie: And I would have to think that not only does the kind of the marketing tonality of the communications and kind of who the recipient of it is, not only does that change over time as this market’s matured, but I would have to think that the products that fit with the market have evolved, as well. Do you find yourself introducing a more standardization of product, trying to keep costs down as these new competitors are entering, or what’s the dynamic in that space?
Paul Dailey: You know, I’m pretty sure we hold the record for having the oldest products that are still available, which is simultaneously an honour and a shame. It’s an honour because the products and platforms that we built 10, 15 years ago are versatile enough to keep working in the current environment. At the same time, we have several new platforms in development that we’re preparing to launch, and as you say, it’s really about getting to that Pareto, right? Our original platforms were kind of these erector sets that the installer could make do virtually anything, where the newer products are like, “Here’s the system in a box. It does this set of things well. If you want to do this other thing that you used to do with certain combinations of our old stuff, you’re kind of still stuck with combinations of our old stuff.”
But that 80, 90% of what people want is in the new box, at a lower price, that’s much easier to put in.
Carman Pirie: I would be curious because as we look at this kind of three groups, kind of what you think your most successful initiative has been with each of the groups. What do you think you’ve done that’s resonated with the residential side, and maybe created the most pull? What have you done that you think has connected with installers the best and similarly for distributors? Is there kind of a… Do you have a list of home runs here, Paul?
Paul Dailey: I don’t know if there’s much that I would qualify as a home run. I came from Sunrun, so a home run there is a little more dramatic. And it kind of skews your perspective on it. But you know, we got some solid doubles and triples, right? And I think again, some of the video content that we’ve done has been pretty helpful for homeowners. We’ve done a lot with social media, so we have a very strong LinkedIn presence. We’ve run a lot of Facebook campaigns. And we’ve got a lot of content on YouTube, and so as you mentioned earlier, there is a certain DIY crowd, and we’ve got a lot of stuff out there that they often take advantage of whether we want them to or not.
And that content not only comes from us, it also comes from our installers. So, on that side, we have a pretty robust installer, what we call a user forum, so there’s a website that our installers can get to where they talk to each other, and it’s very lightly moderated by my team. And you know, we’ll chime in occasionally when they’ve got specific technical questions or, “Hey, can I do this,” kind of questions. But by and large, it’s the installer community supporting one another and it’s really interesting to go through and read some of those conversations that they’re having. “Hey, I’m in this high elevation place and I’ve got to do this and that to make this work properly,” and, “Oh, have you tried these other kinds of off-the-shelf balance the system things?” Those kinds of conversations are helpful.
And there’s just a ton of content that I guess not only our team has done, but our installer community has done on YouTube and these sorts of videos. We had an installer a few years ago put in an off-grid system for Governor Jerry Brown from California, right around the time that he was leaving office, and it was a beautiful system with several of our inverters stacked together and was something that’s a difficult and challenging system for someone to take on and build this out. But you know, he made all these wonderful videos about it, and a lot of them still get quite a bit of play. And so, we see things like that, and just that community of installers has been very mutually supportive, right? They call us and they want t-shirts or hats or something. Yeah, we’re gonna take care of them.
And you know, if they have the occasional brand, you know we’re gonna support them. And at the same time, they’re proud to be Outback installers, and that they know this stuff that’s kind of an expert brand in that way, which again, helps a lot in that segment. And I think what we’re trying to do as we grow is make it less expertise required, for obvious reasons, but without losing that kind of pride of craftsmanship that our installers often have.
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Carman Pirie: Now, do you have a kind of a brand-level certification for the installers at all? Or anything of that nature?
Paul Dailey: That’s something that we’ve internally talked about quite a bit, and I think it just comes down to when we’re going to do it. We want to make sure that it’s staffed and resourced appropriately, so for those that ask, we usually say, “Hey, it’s coming.” I don’t have a date yet, but the benefits of something like that are pretty obvious, and we are looking at how we want to structure something like that.
Yeah. I mean, it’s not like we don’t train, though. We spent a lot of time… Pre-COVID, obviously, we would go to hotels in different cities and towns and do day-long or maybe two or three-day-long training. So, we have what we called our Energy Storage for Solar Professionals training, so the idea there was if you had someone who was installing just standard PV systems that don’t have a backup, they could come to one of our classes and get most of what they need to start doing battery systems. And then we expanded that, so it was kind of soup to nuts on how to size, install, how to sell it, all those kinds of things that let them make that leap. So, as I said, we never had a bona fide, like, “Hey, this is a certified installer,” beyond that training, but the training did… We did have a certificate with it that said, “Hey, they’ve been through this training. We’ve spent several days with them. They know this stuff.” And then the rest comes down to their local licensing requirements.
Jeff White: Like one rubber stamp logo away from having a certification. That’s all you really need. You just gotta name it.
Paul Dailey: Yeah. Yeah. Of course, a lot of that changed during COVID. We had to do more of it virtually and it’s harder to do that kind of training virtually because part of the advantage before was we would bring equipment and people would get hands on it. We’ve got a training center down here in Phoenix where people come, and they can actually lay hands on the equipment and wire things up and we can make extreme scenarios to test them. We’re looking forward to being able to use that stuff again, as well.
Jeff White: I would imagine.
Carman Pirie: There are so many questions I have here. So, I guess I’m gonna change gears a little bit. I want to just kind of hone in on this notion of the do-it-yourselfer challenge, because we’ve encountered this in a number of other kinds of similar products that have that target the homeowner, but they have to be installed by a professional and sold through a distributor. And in each case, there’s been a do-it-yourselfer problem. You know, in one instance I can think of, the product used to be sold through Home Depot, and because that’s where all the do-it-yourselfers go, they just stopped listing it through Home Depot.
So, there’s been a number of ways I’ve seen people kind of deal with this challenge, and then as I think of Outback, I can’t help but think that there’s a component of the do-it-yourselfers that are… Well, candidly, preppers. Which, I mean, those are… That’s a-
Jeff White: Dedicated.
Carman Pirie: I met this amazing guy in Las Vegas just before COVID who was a serious prepper and it was like that’s the biggest introduction I’ve ever had into that thinking like it was a crash course, and so you know, that’s a passionate kind of subgroup. You can’t really snub them in some way, right? Because they would have some influence, I would think, in some instances. So, I guess how have you navigated that space?
Paul Dailey: Yeah, and you’re right, the prepper community is a pretty significant market segment for us because our brand and our products are premium. “You can survive on this kind of backup mode for as long as the sun rises,” right? Because you can recharge those batteries each day from your PV array. And that makes it a popular product among these guys that are like preparing for the zombie apocalypse, and you know, kidding aside, there’s… We had a customer that was an installer out in I think West Virginia, and one of his customers actually paid him in gold Krugerrands.
Jeff White: Wow.
Paul Dailey: Right. You know, so it’s serious. And you know, some of these guys will try to do it themselves. The challenge with do-it-yourselfers isn’t do-it-yourselfers, per se, it’s that there’s a pretty wide mix of qualifications when you’re talking about a do-it-yourselfer.
Carman Pirie: It’s hard to support them with a product that’s particularly custom, yeah.
Paul Dailey: Exactly. So, you know, one of the things we’ve done is try to simplify things. We put a lot of support materials out there. But you know, if you read the codes and standards and stuff that applies to our equipment and applies to installing our equipment, there are all kinds of things. Qualified persons only. If you hire someone, they’ve gotta have certain licenses, usually an electrician or something similar, and if you’re gonna touch that stuff yourself, it’s like it’s a little bit more involved than installing a ceiling fan. You’ve gotta know what you’re doing.
Jeff White: Which it should be noted, that is not a lot of fun. I installed two this summer alone, again, and you’re hanging upside down. They’re heavier than they should be. Yeah. No, it’s not worth it. Hire an installer, folks.
Carman Pirie: Citizens against ceiling fans. I didn’t know this is where we were going.
Jeff White: Sorry.
Paul Dailey: Yeah. But you know, this is a lot more challenging than that, right? Because you’re interfacing with your home’s electrical system. You’re interfacing with the utility grid. You’ve gotta have permission from the utility. You’ve gotta have a building permit for it, typically, and to get those permits, most homeowners in most places can get the permits themselves, because this is America and by golly, if you want to hurt yourself in your own home, that’s your right. So, that’s typically allowed. The challenge we have, of course, is they call us and we’re like, “Okay, so Ohm’s law,” and they’re like, “What?”
Jeff White: I forgot about that in grade 10 physics.
Paul Dailey: Yeah, and they’re like, “Okay, well, you gotta have the neutral wire.” “Which one’s that?” Like, “Okay.” There are DIYers that are very qualified and perfectly capable, but there’s a lot of them that frankly get in over their heads, and what often happens is it creates some nice business for a local installer to come in and clean up the mess. And they usually end up paying as much or more than they would have for that installer just to install the system.
Carman Pirie: Yeah. Look, I’ve looked at your website here as we’re chatting even, and I’m just looking at the, “For Homeowners,” component, and quite honestly, I think you speak to them at a… You know, you meet them at a level, like you’re not speaking down to them. If you’re honest and exploring a do-it-yourself approach, or as a homeowner you’re interested, you’re talking to them as though they’re intelligent and they understand this, and if they don’t, it’s gonna be obvious I think to them at some point that maybe they need to phone a friend.
Paul Dailey: Yeah.
Carman Pirie: Yeah. I just like how you’ve done it without… Because I’ve seen the other way, where it’s like-
Jeff White: Completely dissuade them.
Carman Pirie: Yeah. Thou shalt not pass kind of thing.
Paul Dailey: Yeah. And you know, as the safety guy, I would like to do that sometimes. But that’s a pretty significant portion of our business, and at some level, we have to accommodate it. Now, what works pretty well is we do have certain distributors and even sub-distributors that specialize in these DIY guys and the thing that separates the wheat from the chaff among those distributors are the ones that have large technical support teams, they make more margin on the product often than we do, but they plow that into really good support, and so they’ll sell it to a customer at retail but then that customer calls them, not us. And they can explain things much better at a customer neophyte level than our folks would, because our folks are expecting to talk to an electrical contractor, or an electrician, or a solar installer, or someone that’s got some experience.
Carman Pirie: I like that notion of components of the distribution channel being kind of better suited to dealing directly with DIYers and kind of leaning into that a bit. I haven’t heard that expressed in that way from other folks that have shared a similar problem, to be honest.
Jeff White: Yeah. Normally they either try and avoid it entirely or-
Carman Pirie: Or just deal with it as it comes.
Jeff White: Yeah. And some have, depending on the technical nature of a product, some will actually begin to spin up new products that are a bit more DIY-focused and maybe not quite as powerful as the stuff that the installers can do. It sounds like you’re doing a bit of that anyway.
Paul Dailey: Yeah. At the end of the day, we’re trying to make it easier for the installer, which by extension would make it easier for a DIY. But you know, officially we don’t condone DIY, but we also recognize there’s really not much we could do about it, and so at the end of the day, we want everyone to be safe and successful in their installations and try to provide the necessary levels of support for that.
Carman Pirie: This has been a really, I think, cool and fascinating conversation, Paul. I’ve really enjoyed it. I wonder as we kind of come to a close here, you’ve really been riding this wave for a while. You’ve seen a lot of change in this emerging category and now with the kind of the entrance of very dominant consumer brands into the space. For people that find themselves in a similar kind of channel sales challenge, I wonder if you have any kind of parting advice as we call it a day here?
Paul Dailey: Well, one of the exercises that we do that I found incredibly helpful is doing a customer journey map, but doing it at every level, right? So, you do a customer journey map for the homeowner. You do a customer journey map for the installer. You do a customer journey map for the distributor. Because I said before, they all have very different needs and different things are gonna make them successful, and you need to understand what each of those is so that everybody benefits throughout the channel. And I think we mentioned Tesla earlier, and as a distributor, one of the real challenges with Tesla was that they basically published their factory gate price. So, they say, “Oh yeah, the power wall costs X.” That’s what the installer pays for the power wall. And so, the homeowner is expecting basically the installation to be free, and you know, there’s no markup on the product, and so it puts both the distributor and the installer in a real spot, because there’s nothing they can do to kind of match the normal way things are done, where you say, “Hey, we publish an MSRP, and we sell at various discounts of that based on where that person is in the channel, their volume, et cetera.”
And it gives them the flexibility to decide whether they want to be a high-service outlet or a low-cost outlet.
Jeff White: The idea of producing a journey map at every level of your different personas and different customer groups I think is really great advice. There’s an awful lot of organizations that should be looking very deeply into that and digging in with the people who are involved in each of those levels and understanding their needs. I think that’s a-
Carman Pirie: Yeah, and if you don’t do that, you may not notice the nuance around something like the challenges that Paul just articulated with Tesla and the pricing. So-
Jeff White: Yeah. And it also helps to illuminate that we need to generate some content at this point in the journey map so that we can alleviate these objections or whatever. It seems like not everybody sees it as important work, but I think it’s fundamental to being able to sell and market your product well.
Paul Dailey: Yeah, you’ve gotta think about the whole channel holistically. If you just do all your advertising, and all your marketing, and all your product design for end customers, you’ll reach a certain level of success because there’s enough pull demand, but you’ll be much more successful if you also think about how you’re packaging it for distribution, how you’re managing your pricing structures, how you’re managing channel conflict. All of these kinds of things are gonna come up and if you don’t plan for them, they’re just gonna whack you upside the head when you least expect it.
Jeff White: That is an excellent way to leave the show. Thanks very much for your insight, Paul. It’s been a great conversation.
Paul Dailey: Thank you. I enjoyed it, as well.
Carman Pirie: All the best.
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Paul DaileyDirector of Product and Market Strategy
Paul Dailey has spent his 20+-year career developing, marketing, and deploying distributed generation technologies, from micro-CHP to solar + storage, that provide homes and businesses greater control over where their energy comes from and how they use it. In the course of that work, Paul has interacted with countless solar installation and O&M professionals across the spectrum and continually translates their input into new products and services as well as improvements that help make local control of energy more accessible for everyone. Paul is also active in the development of codes and standards for energy storage and serves as Chair of the battery safety standards working group for the Sustainable Energy Action Committee. Paul holds a Bachelor’s degree in Mechanical Engineering and an MBA from Washington State University.