COMPANY OVERVIEW
TTC Energy Joint Stock Company (TTCE) – A member of TTC Group
Founded in February 2017 and situated at 253 Hoang Van Thu Street in Tan Binh District, HCM City, TTCE is an energy subsidiary of TTC Group, which boasts over 40 years of diverse operational experience across sectors like Energy, Real Estate, Sugarcane, Education, and Hospitality The group comprises four corporations, one sectoral committee, and more than 150 subsidiaries with a workforce exceeding 10,000 employees In the energy domain, Gia Lai Electric Joint Stock Company (GEC), a prominent member with over 25 years of experience, focuses on developing energy projects, including wind, hydropower, biomass, and notably solar power, aiming for 1,000MW capacity by 2022 Additionally, TTC Group is actively investing in solar rooftop projects through TTCE, which leads Vietnam's solar rooftop power market.
Future through
In Vietnam, electricity consumption has consistently outpaced GDP growth, prompting the government to target a 14% annual increase in electricity output from 2015 to 2030 TTCE’s renewable energy initiatives play a crucial role in achieving this goal, as the company focuses on investing in clean, green energy to foster sustainable development Balancing environmental concerns with economic growth is essential for a safer and more prosperous future in the country.
Mission
By utilizing efficient resources and maximizing value for shareholders, customers, and employees, we aim to "bring prosperity to customers." Our commitment to creating sustainable green energy sources not only enhances community well-being but also fosters economic development while prioritizing environmental protection.
Vision
TTC Energy aims to be the premier private investment organization in Vietnam's renewable energy sector by prioritizing exceptional product quality and superior service standards The company provides optimal solutions for power savings, enhancing economic value while minimizing production costs Additionally, TTC Energy focuses on delivering high-quality, sustainable technology solutions that boost competitiveness for businesses.
Core Values
TRUSTWORTHY - TTCE has extensive experience in implementing projects nationwide and internationally Inheriting from TTC Group and GEC, TTCE provides professional services through leading engineering teams with more than
TTCE is dedicated to ensuring optimal system performance through comprehensive after-sales services and maintenance We guarantee operational excellence and offer genuine warranty devices, emphasizing the importance of high-quality equipment and technical processes to meet our customers' needs effectively.
TTCE prioritizes quality as essential for delivering the core values of its products and services Collaborating with esteemed global partners, TTCE offers top-tier equipment while ensuring customer service that is tailored to meet the unique needs of each client.
Manpower and Company Structure
As of the end of 2018, TTCE employed approximately 60 individuals, structured into various departments: 4 members of the Board of Directors, 15 employees in the sales and marketing department—predominantly young and inexperienced—13 in the technical department, and 10 in financial accounting, administration, human resources, office management, and internal audit, along with around 18 sales collaborators.
Business Area
TTCE provides comprehensive rooftop power solutions, encompassing design surveys, procurement, installation, testing, operation, and maintenance The company specializes in supplying, constructing, and installing rooftop solar systems across a diverse range of projects, including commercial centers, convention centers, hotels, resorts, residential areas, apartment buildings, office buildings, industrial parks, export processing zones, factories, cold storage facilities, parking lots, hospitals, and private households.
Biggest Customers & Competitors
TTCE’s biggestcustomers (Fig.1.3) are mostly the big enterprises like Saigon Co.op,
Nguyen Kim, BigC, MM Mega Market,
Vinmart / Vincom, Lottemart, Novaland and cooperating with business associations and industrial parks to expand relationships and access to businesses.
Source: TTCE’s Market Analysis Report
As of December 2018, TTCE emerged as the leader in total installed capacity within the solar energy market, boasting over 15MWp In comparison, its closest competitors include SolarBK with approximately 6MWp, Redsun at 1.5MWp, and Vu Phong with 400KWp, highlighting TTCE's significant advantage in the industry.
Rooftop system’s equipment
The primary components of a solar rooftop system are solar panels and inverters, which are predominantly imported from countries such as Canada, Germany, Japan, the United States, Singapore, and South Korea, as they are not manufactured in Vietnam.
Operation Principal of Solar Rooftop
Solar panels: Also known as the photovoltaic (PV) installed on the roof for capturing and converting solar energy into direct current (DC) power.
Inverter: Inverter device for converting
DC power from PV to alternating current (AC) power, then supplying power for the whole project.
TTCE collaborates with leading global suppliers Sharp from Japan and ABB from Switzerland, both of whom have over 30 years of experience in manufacturing solar energy equipment, including solar panels and inverters.
Source: TTCE’s Market Analysis Report
PROBLEM CONTEXT
Why using solar rooftop power?
Long-term economic benefits include significant reductions in electricity costs and consumption over 25 years, alongside a decrease in CO2 emissions Enhancing electricity efficiency ensures optimal power delivery for equipment, contributing to sustainable energy practices.
Solar rooftop power offers significant non-economic benefits beyond its economic value, including enhancing brand positioning and improving competitiveness It adds value to organizations by obtaining LEED certification, aligns with the trend of adopting high technology and renewable energy sources, and fulfills social responsibilities related to energy savings and environmental protection Additionally, it contributes to a cleaner, greener working environment and enhances the aesthetic appeal of enterprises from an aerial perspective.
Booming solar rooftop power in Vietnam
In response to the emission scandal at the Formosa Ha Tinh steel plant and growing criticism of Vietnam's reliance on coal-fired thermal power, the Vietnamese government is prioritizing the development of renewable energy Prime Minister Nguyen Xuan Phuc emphasized the importance of environmental protection over mere economic growth Since April 2017, Vietnam has witnessed a surge in solar power projects, highlighting the country's commitment to sustainable energy solutions.
"golden" time for the renewable energy industry in general and solar power in particular to develop strongly.
According to data recorded from EVN (2), with the annual growth rate of electricity consumption (Fig.2.3) in the period 2016-2020, ranging from 10.3% to
Vietnam's electricity industry is projected to grow at a rate of 8% annually after 2020, leading to an anticipated production of 278 billion kWh This figure is expected to double by 2030, raising concerns from the Ministry of Industry and Trade about potential power shortages in the country following 2020.
Domestic and foreign investors have many reasons to boldly enter the renewable energy industry.
Vietnam has a potential for solar energy, when the average solar energy radiation is about 4.3 kWh/m2, the number of sunny days averages about 2,000 hours/year.
From Da Nang to the southern regions, solar radiation levels range from 4.5 to 5 kWh/m², with an average of 2200 to 2500 sunny hours annually This makes the implementation of solar power in these areas highly effective.
The Prime Minister's Decision 11/2017/QD-TTg has significantly boosted solar power projects in Vietnam by exempting them from import taxes on production goods, as well as land use, land lease, and water rent fees It establishes a feed-in tariff of 9.35 cents/kWh (2,086 dong) for solar projects that achieve commercial operation by June 30, 2019 Additionally, the decision facilitates net metering for rooftop solar systems, allowing excess electricity generated to be purchased by Vietnam Electricity (EVN).
Why solar rooftop power not really interested by Vietnamese people?
Despite government support through various decisions and circulars, including Decision No 02/2019/QD-TTg promoting solar rooftop power purchases by EVN, only 1,800 households in Vietnam have adopted solar rooftop installations, achieving a total capacity of approximately 30 MW over the past two years, as reported by Vietnam News on March 15, 2019.
Many consumers, both households and businesses, lack a clear understanding of rooftop solar power, including its features and benefits Additionally, the significant initial investment—approximately 25,000,000 VND per kWh—poses a barrier, especially when compared to traditional electricity, which requires no upfront costs and only bills based on actual usage These factors contribute to the general disinterest in adopting solar rooftop power.
PROBLEM IDENTIFICATION
Symptom Analysis
The revenue not fully reached in 2018
In the TTCE’s 2018 performance report, it was noted that while the capacity signed exceeded 110% of the planned target, revenue only reached 84% This indicates that although there is a desire for solar rooftop power, many customers face budget constraints and have unclear installation plans, highlighting a gap between demand and financial feasibility for clean energy solutions.
The contracted capacity has surpassed the initial targets, yet revenue remains below expectations due to lengthy sales cycles, often taking over six months to a year to close deals Additionally, rooftop power installation projects typically extend beyond two months, with some contracts signed in late 2018, resulting in revenue recognition occurring in 2019.
The interview with Mr Chau – CEO: “Through the company's report, it shows that the revenue failed in 2018, could you explain more about it?”
In 2018, the company’s revenue fell short of expectations, highlighting a need for management to enhance their efforts in addressing this challenge The sales team, crucial for promoting the company's products and services, has underperformed recently, which is a significant concern that requires immediate attention.
Mr Chau believes that the sales team's performance over the past year has been lacking, which is concerning since the company's revenue heavily relies on this group Effective revenue management is crucial for the company's operations, as emphasized by Ronald Huefner, who states that "Revenue management should be an intentional and high-level management activity." Therefore, TTCE's management must implement targeted strategies to enhance the sales team's performance and meet revenue goals, addressing key issues that require attention for improvement.
Potential Problems
Based on the observed symptoms, potential issues may stem from the company, the salesperson, the product, or the customers Conducting interviews and analyzing company data will help investigate these underlying causes.
3.2.1 Customers not overwhelmed by salesman’s performance
Most failed deals, as outlined in the TTCE's internal procedures, occur at the second milestone due to sales representatives lacking confidence in articulating key product features, system operating principles, and the fundamental functions of essential equipment such as solar panels and inverters This lack of clarity often leads to customer confusion and diminishes their overall conviction in the product's value.
In 2017, only 18% of approached customers signed contracts, with 43 out of 238 engaging clients finalizing agreements This trend continued in 2018, where the conversion rate dropped to 17%, as only 51 out of 292 contacted customers signed contracts.
The below answer by a customer (Manager of GigaMall HCM) showing the TTCE’s fail in persuading customer.
Facing a monthly electricity bill exceeding 1 billion VND for our commercial center, my company is keenly interested in implementing a solar rooftop system We believe that utilizing solar power could lead to significant cost savings However, after several discussions with your sales team, we still find the overall benefits and efficiency of the solar power system unclear and remain confused about its full value.
TTCE lacks a strategic sales plan targeting its customer base, primarily consisting of large enterprises The company's market coverage is limited, as most customer acquisitions rely on the connections of the TTC Group's chairman According to the 2017-2018 company deal reports, only 19% of contracts were secured directly by TTCE employees, while a significant 81% were obtained through introductions from TTC Group.
2017, and the corresponding number for 2018 was 25% and 75%
To achieve target revenue for high initial investment products like those offered by TTCE, it is essential to develop specific and optimal sales strategies tailored to the target customers.
An interview with the CEO – Mr Chau again: “As the new-established company, what is the strategic sales plan for TTCE’s target customers?
An effective strategic sales plan goes beyond mere documentation; it must be grounded in practical experience and direct customer engagement Despite being a leader in the rooftop power industry, TTCE has relied heavily on existing relationships within the TTC Group for customer acquisition As we continue to refine our marketing strategy after nearly two years of operation, we are committed to deeply understanding our target market Our goal is to finalize a robust strategy that delivers exceptional value to our strategic customers.
3.2.3 Time consuming for closing a deal
The sales team's progress chart (Fig 3.5) indicates that the duration from initial contact to deal closure typically spans six months to over a year This suggests a lack of a strategic selling process at the management level, leading salespeople to operate independently Consequently, deal closures often remain unpredictable, as customers take their time to express genuine interest and finalize contracts, especially in new industries with unfamiliar products, where cautious investment decisions are paramount.
The analysis of company data indicates that the contracting process for target customers can be lengthy, with AON taking nearly two years and still in negotiation Other clients, such as Galaxy, Coopmart, Viettien, and DeHues, have taken between five months to a year to finalize contracts This trend highlights the cautious and thoughtful approach both household and business customers take when investing in this product.
Figure 3.6 – Summary of Approaching History of Some Target Customers
3.2.4 Specificity of initial investment cost of solar rooftop power
The high investment costs in solar energy systems are primarily due to the necessity of importing specific products and key equipment, such as solar panels and inverters, which constitute approximately 70% of total investment expenses.
Figure 3.7: Example of Initial Investment Cost of a Solar Rooftop Project
In an interview with Mr Quang, CEO of Vinh Quang Seafood Exporter, he shared his perspective as a customer of TTCE regarding the initial investment cost of a solar rooftop power system He emphasized that while the upfront costs may seem significant, the long-term savings on energy bills and the environmental benefits make it a worthwhile investment for businesses Mr Quang highlighted that adopting solar energy not only enhances sustainability but also contributes to reducing operational costs over time.
As a seafood exporter, I proudly invest in solar rooftop systems, despite the uncertainty surrounding their long-term efficiency, which typically becomes evident after approximately 15 years The initial investment is significant, costing around 25 million VND per kWp, or about 10 square meters of panels, posing a challenge for businesses with limited financial resources Nevertheless, I chose to proceed with this investment to promote sustainable energy solutions.
TTCE’s system because I think that the company system price is reasonable and a bit high just due to the specific characteristics of the product at the moment.”
And being confirmed by Mr Chau – CEO as following:
The pricing of TTCE's system is competitive compared to its rivals However, the necessity to import key components, such as solar panels and inverters, which represent approximately 70% of the total investment, results in higher overall system costs This trend is common within the solar power industry.
A price comparison reveals that TTCE offers a competitive rate of approximately 17,300 million VND per 1 kWp, significantly lower than Vuphong's 30,000 million VND per 1 kWp and Dat Tech's 6,000 million VND per 1 kWp, while also being more affordable than the 27,933 million VND per 1 kWp charged by other competitors.
Vu Son Solar faces a challenge with high initial investment costs, as imported equipment constitutes about 70% of the total expenses This significant financial barrier often leads to customer hesitation in making investments However, this issue is rooted in the nature of the product rather than being a fundamental business problem.
3.2.5 Little insight into core product values
Asked Mr Truong – TTCE’s salesman: How do you convince customers through the values of solar rooftop power system? Being replied that
Problem Validation
3.3.1No tactics to accelerate sales performance
In "Secrets of Great Sales Management: Advanced Strategies for Maximizing Performance," Robert A Simpkins emphasizes the importance of targeting potential customers in a meaningful and differentiated manner to enhance purchase rates and convert prospects into actual buyers Understanding that the buying process is primarily driven by emotions, sales professionals must recognize that while feelings motivate purchases, reasoning serves merely as justification for those decisions With this insight, it becomes crucial to assess how many of the 100 customers who express interest ultimately make a purchase, highlighting the need for effective sales strategies that resonate emotionally with potential buyers.
As stated by Mr Richard Woodward (7) - Business development trainer and facilitator in the US: Strategic sales plans is “key drivers to increase sales".
Boosting sales is a primary objective for many solo entrepreneurs at the beginning of the year Implementing strategic sales plans significantly enhances your likelihood of obtaining the necessary business to meet this year's goals.
The CEO of TTCE has acknowledged that the company lacks a strategic approach to boost sales performance, resulting in the sales team operating without clear guidelines or direction from management Despite having a large potential customer base, the sales staff often lack confidence during customer interactions, leading to an unfocused presentation of products that leaves customers feeling confused and unconvinced Consequently, the absence of a targeted sales strategy is identified as the primary issue affecting sales effectiveness.
In "Proactive Selling: Control the Process - Win the Sale," William Miller emphasizes that establishing a structured sales process is essential for managers to enhance revenue and streamline business operations Sales representatives must adhere to this standardized process to effectively convert potential customers into actual buyers, ensuring that it aligns with the specific goals of sales management activities.
As a research by the Sales Management Association (9), it is about 90% of all companies that apply the proper and steered sales process were graded as the highest in performance.
The above numbers expose that two key sales constraints – revenue and performance – have a tendency to go significantly up if a company takes on a standardized sale process.
The sales process can be quite challenging, as a standardized approach often leads to increased revenue However, each company and product requires unique sales process steps to effectively optimize product information and deliver value to customers.
To achieve business goals and target revenue, it is essential to implement effective marketing tools alongside a standardized sales process According to Rowson and Pauline, marketing activities serve as vital connections between businesses and their target customers, delivering value to customers while receiving equivalent value in return Accurately identifying the needs and desires of target customers is crucial for ensuring that these needs are met through comprehensive and effective marketing strategies.
TTCE has not prioritized its sales strategy and marketing efforts, which Mr Chau, the CEO, acknowledges as a significant issue that the company is currently addressing This lack of focus on essential business processes is identified as a fundamental problem for TTCE.
3.3.2 No actionable guide to gaining insight into customer’s expectation
Rory Sutherland highlighted in his TedTalk that our perception of food quality is often influenced by the environment in which we consume it For instance, one might overlook unpleasant odors and messy surroundings in a noodle shop while still savoring a delicious bowl of Pho Similarly, after cleaning a car, drivers often feel a renewed sense of ease, even if they aren't consciously aware that the maintenance has altered their driving experience This illustrates a gap in our perceptions, where external factors can significantly impact our enjoyment and satisfaction.
Awareness of value is a customer perspective on the value of the product to them.
Value perception is primarily driven by customer satisfaction rather than market prices, reflecting how customers assess the benefits they receive from a product This indicates that understanding product value is more critical than merely focusing on product quality By effectively influencing customer perceptions of value and optimizing their experience, businesses can ensure customer satisfaction while maximizing profitability.
According to Publilius Syrus, core product values should reflect the price customers pay, prompting the question of how to define and measure these values Research by Christian Jarrett highlights that painkillers, despite being of similar quality, are perceived differently by consumers, suggesting that our understanding of a product can significantly influence its perceived value.
Despite the thorough analysis of the economic benefits of solar power, Vietnam has yet to install any solar systems, making it challenging to demonstrate these advantages over a long-term period of 15 years This presents a significant hurdle for the sales team, as they must effectively communicate, educate, and persuade customers to invest in solar power systems.
According to William and John, authors of the book “Understanding the dynamics of the value chain” (14), there is always a correlation between value chain, competitiveness and profitability:
Value factors significantly influence a company's productivity, encompassing cost, quality, response time, and flexibility, particularly in relation to customer relationships and revenue growth To develop an effective strategy, companies must identify and prioritize their specific value factors Organizations excelling in multiple value dimensions tend to experience faster revenue growth compared to their competitors.
Identifying key factors that drive the success of business activities is crucial for companies aiming to overcome challenges and achieve revenue growth Among these factors, the cost and quality of solar rooftop systems play a significant role and should be closely examined However, the novelty of this technology presents a challenge, as there is currently a lack of concrete data to validate its effectiveness.
Page 31 of 95 efficiency, because after at least 15 years of installation, the actual product efficiency can be measured against the cost as well as other value chains that products bring.
Understanding what buyers truly desire and how they make decisions is crucial for marketers seeking actionable insights into customer expectations This responsibility falls on TTCE’s marketing team, as they aim to alleviate customer skepticism regarding the value of solar rooftop power systems.
According to Professor Hai and Ha from the Department of Corporate Finance at the Academy of Finance, R&D activities play a crucial role in enhancing competitive advantages, elevating business positioning, boosting export activities, and supporting overall growth and development Many Vietnamese businesses, due to their size, do not have dedicated R&D departments; instead, these activities are often integrated into other areas such as production or sales Nevertheless, incorporating R&D into the business's development strategy is essential for sustained success.
The importance of main problem
A highly effective sales force is crucial for any company aiming to boost sales and maintain competitiveness According to Andris A Zoltners, Prabhakant Sinha, and Sally E Lorimer in "Building a Winning Sales Force," achieving and sustaining sales force effectiveness is vital for a company's overall success, yet it remains a persistent challenge.
CAUSE VALIDATION
Potential Causes
4.1.1Undistinguished sales organization – Customer’s suspicion on product values
Research indicates that understanding consumers' values and beliefs is crucial for analyzing their purchasing decisions Enduring beliefs, such as valuing the environment, significantly impact pro-environmental behavior These values shape individuals' beliefs and influence personal norms, ultimately driving consumers toward environmentally friendly choices.
Values serve as guiding principles for shaping attitudes and actions, but they do not always translate into actual behavior Individuals' attitudes impact their thoughts and feelings, which in turn affect behaviors like purchasing decisions Therefore, marketers should focus on altering consumers' attitudes to effectively influence their decision-making and behavior.
Mr Chau emphasizes that product value is crucial for customers' purchasing decisions, particularly regarding TTCE's innovative solar power rooftop products With a 25-year life cycle and significant initial investment, potential buyers tend to deliberate carefully before making a purchase Additionally, as these solar products are relatively new to the market, customers often lack sufficient information and experience, which can lead to hesitation stemming from an unclear understanding of the product's value.
TTCE's management has not prioritized a strategic sales organization for potential customers, which is crucial for the sales team's revenue generation Currently, salespeople operate independently, relying on personal methods and the reputation of TTC group leaders to close deals, as most potential customers are introduced through these leaders This indicates a lack of a structured sales process, which is still in development, as confirmed by CEO Mr Chau in a recent interview.
“Do you agree with the idea that - Development must also include systems and processes, not products only And how is TTCE doing this?"
Leveraging the strong support and reputation of TTC Group, we have successfully established ourselves as a leading player in the solar rooftop power market, achieving an impressive 15MW capacity installed However, the incompletion of our marketing activities, sales processes, and R&D efforts has impacted our revenue growth.
In 2018, we recognized the need to enhance our management strategies and processes urgently We focused on optimizing our marketing and R&D activities to ensure exceptional service performance and foster long-term, productive business operations.
In an interview with Mr Chau, he highlighted the significant benefits of solar rooftop power for customers, encompassing both economic and non-economic values Economically, customers can experience reduced electricity expenses, lower CO2 emissions, and optimal energy sources for their equipment Non-economic benefits include enhanced brand positioning, added value for stakeholders, staying ahead in the renewable energy trend, fulfilling social responsibility through energy savings and environmental protection, and creating a cleaner, greener work environment Additionally, installing solar panels on corrugated roofs can minimize noise, lower temperatures, and extend the roof's lifespan by reducing internal heat Despite these advantages, many customers have yet to fully recognize the value of solar rooftop power.
Page 37 of 95 some of them still hesitate to make decision to purchase the solar power rooftop system.
Despite TTCE's position as a leader in the solar rooftop power industry, its lack of a strategic sales process has led to customer confusion regarding product value, contributing to difficulties in customer persuasion To address this challenge, alternative solutions will be explored in the following section.
Poor internal cooperation between marketing team, technical team and sales team
John Care and Aron Bohlig emphasize that integrating technical expertise into sales activities can significantly enhance sales efforts To achieve successful persuasion, effectively demonstrate products, and foster strong customer relationships, it's crucial to combine the efforts of marketing, technical, and sales teams Without this collaboration, customers may feel confused and disengaged from the products Mr Truong notes that the TTCE teams have not executed these strategies comprehensively or effectively.
4.1.2 The absence of marketing tools – Neglect of R&D activities
The Malcom Baldridge Quality Award criteria emphasize the importance of market orientation and research and development activities in fostering long-term supplier-customer relationships By focusing on these elements, businesses can enhance revenues and minimize costs by avoiding the expenses associated with acquiring new customers to replace those lost.
Building a tactical sales process, along with effective sales and marketing strategies and persuasive R&D efforts, will clearly articulate the product's value and benefits for customers This approach not only fosters customer trust but also establishes a competitive advantage for the company's products and services.
Creative use of marketing tools would be essential in enhancing specific marketing objectives such as positive customer perception of quality and positive evaluation of experiencing product (27)
Research in marketing indicates that inconsistent product performance during various consumption experiences heightens customer uncertainty This uncertainty diminishes the trust customers place in their previous expectations about the product Consequently, from the customer's perspective, the perceived value of the product serves as a key indicator influencing their expectations regarding its performance.
Mr Châu emphasized that R&D activities and the provision of marketing tools are essential for the sustainable growth of enterprises These elements enhance technological capabilities, align with market trends, accelerate development, and boost competitiveness Consequently, the lack of effective marketing tools or R&D initiatives significantly hinders salespeople's ability to persuade customers.
Building customer trust in solar rooftop products requires a collaborative effort among the marketing, sales, and technical teams Effective marketing activities and technical analysis are essential to convey the economic and non-economic benefits of these products By working harmoniously, these teams can educate customers on the value of solar rooftop power, emphasizing its environmental advantages and significant financial savings This challenge extends beyond the teams involved, reaching management levels as well, highlighting the need for a unified approach to gain customer acceptance and trust.
4.1.3 Causes belonged to the industry
Price is a crucial element in the marketing mix, as it is the only factor that generates revenue, while all other elements incur costs (Kotler & Armstrong) It represents the amount at which a product, service, or idea is offered for sale, irrespective of its perceived value Pricing decisions must take into account customer and competitor responses, as customers often view price as a reflection of quality Typically, consumers assess the cost based on the benefits they anticipate from the product, leading them to compare various offerings Consequently, price and quality significantly influence their purchasing decisions.
Validating Main Causes
4.2.1Undistinguished sales operation / No making the strategic sales organization
To establish a strategic sales organization, it is essential for the organization to undergo specific changes, as highlighted by Nigel Piercy and Nikala Lane in their literature on strategic customer management.
Nigel Piercy and Nikala Lane emphasize that a strategic sales organization excels in managing customer relationships and creating unique customer value They outline essential responsibilities for such organizations, which are illustrated in a chart detailing the key steps for developing a compelling sales strategy within a business: involvement, intelligence, integration, internal marketing, and infrastructure.
To effectively align sales operations with the company's strategic direction, the sales organization must be central to the overall business and marketing strategy This involves elevating sales beyond mere transaction management to actively contribute to revenue generation and becoming a key partner in shaping essential business strategy decisions.
Customer intelligence is essential for developing strategic resources that enhance value-driven strategies targeting specific customers Effective marketing sensing has become a crucial step in building and improving strategic competencies, moving beyond traditional surveys to ensure that managers gain a deep understanding of their customers and market dynamics.
Integration of cross-functional correlations is vital for enhancing processes that create and deliver advanced value propositions to customers It is crucial to manage the interfaces between objectives and business units, as these directly impact the services and values perceived by customers Achieving a total alignment around customer value is essential, yet it has proven to be challenging within traditional functional organizations.
Internal marketing involves leveraging sales resources to effectively "sell" to customers across functional and divisional boundaries within the organization and with partner enterprises, ensuring seamless value delivery High-end service and responsiveness to customer demands require more than just rhetoric; they necessitate thoughtful improvement and management strategies.
To enhance competitive advantages and meet customer relationship needs, companies must develop robust infrastructure that includes structured processes, evaluation systems, and compensation frameworks Investments in development and training should focus on fostering relationships and partnerships, moving away from outdated transactional approaches.
Thus, the undistinguished sales operation or no making the strategic sales organization is one of the main causes of failing in convince customers by TTCE salesperson.
4.2.2 The absence of long-term competitive advantages
No marketing tools and R&D activities
In their book "R&D Decisions – Strategy Policy and Innovation," authors Alice, John, and Stephen highlight the crucial role of research and development (R&D) in influencing enterprise performance and overall economics They emphasize that R&D is fundamental for long-term growth and technological innovation, which in turn fosters competitive advantages and effective customer service strategies to maintain market share Additionally, the patents and inventions derived from R&D efforts not only safeguard a company's competitive edge but also enhance brand value over time.
Research and Development (R&D) is a crucial component of business success Therefore, the R&D initiatives at TTCE must be prioritized to enhance effectiveness Addressing this issue is essential for achieving the desired deal closing rate.
In an interview with sales staff member Ms Mai Thao, she noted that the absence of R&D activities at TTCE, as mentioned by her manager Ms Phuong, significantly impacts the company's ability to close deals effectively.
I completely agree with her perspective Taking SolarBK as an example, this R&D-focused company consistently updates its technology and services to enhance competitiveness Their R&D department is equipped with modern facilities and a robust network infrastructure to support efficient operations Notably, SolarBK has developed the Solar System Operation Center (SSOC™), a pioneering solution in Vietnam that enables customers to monitor and control their clean energy systems online, created by local engineers This innovation suggests that if TTCE's sales team utilizes intelligent devices, it could significantly boost both product competitiveness and sales success rates.
Taking the real cases of products of Apple or another branch like Trung Nguyen, as below:
Despite the absence of Apple products like the iPhone and iPad in TV ads or newspapers, the brand remains highly recognizable due to its effective marketing and research and development strategies Apple has mastered the art of marketing, creating compelling conditions that persuade consumers to believe in the value and benefits of its products This self-conviction among a vast number of consumers in Vietnam and globally underscores the powerful impact of Apple's branding efforts.
To make informed purchasing decisions, consumers must seek product information prior to official releases Companies like Apple and Trung Nguyen excel at creating unique and appealing values through strategic investments in research and development (R&D) Effective R&D is essential for achieving long-term competitive advantages, as it should focus not only on product innovation but also on understanding the market, customers, and competitors Additionally, development should encompass systems and processes, rather than solely concentrating on products.
So, another main cause leading to the fail of TTCE’s sales person in persuading customers is the neglect of marketing tools and R&D activities.
After analyzing and validating causes as above, the final roof causes making salespeople unsuccessful in convincing customers as below (Fig.4.5):
The final cause and effect map
ALTERNATIVE SOLUTIONS
5.1Alternative solution 1: Conduct the strategic sales organization to enhance product values, internal combination, customer’s perception and sales effectiveness.
Fayol emphasizes that a well-structured sales strategy is crucial for improving internal collaboration, enhancing product value, fostering positive customer perceptions of quality, and elevating the overall sales effectiveness.
Figure 6-1 from Andris A, Prabhakant Sinha, and Sally E Lorimer illustrates the essential interconnection among the five key dimensions of sales organization success, highlighting how these elements collectively contribute to overall effectiveness and performance in sales management.
“Results” at the end of the chart shows that the sales force activities generate the customer results, and the customer results effectuate the company results.
According to Figure 6-2 from Andris and his co-authors, the sales system's effectiveness is driven by five key types of sales effectiveness drivers, each playing a crucial role in the sales organization Definer drivers focus on establishing the organizational structure and defining salesman duties, while shaper drivers emphasize the importance of recruiting, training, and coaching sales personnel Additionally, enlightener, exciter, and controller drivers relate to the performance activities carried out by salespeople, all contributing to overall sales success.
A successful sales system, as illustrated in Figure 6-3 by Andris and his co-authors, relies on effective sales drivers that yield results It is important to note that both company performance and customer satisfaction are influenced not only by the sales team but also by various external factors and the overall company environment.
The successful sales system (Fig 5.3) mainly focus on the below five dimensions of sales organization success:
- Are the company goals being targeted across product lines? (Company results)
- Are the customers’ demands being satisfied? (Customer results)
- Are the salesmen taken on the appropriate activities? (Activities)
- How acceptable are the salesmen? (Salesmen)
- Is the company performing greatest practices together with every of the sales effectiveness drivers? (Sales effectiveness drivers)
5.2Alternative solution 2: Technology Modernization Application
To build customer trust and convey the true value of solar rooftop systems, it is essential to focus on the service accompanying the product Research by Tahir H, Waggett C, and Hoffman A highlights that a well-packaged service significantly enhances customer satisfaction and delight Furthermore, psychological insights indicate that customer satisfaction is closely linked to perceptions of price fairness, underscoring the importance of transparent pricing in fostering trust.
To effectively serve our customers, it is essential to deliver thorough and precise information that spans from the broader aspects of energy and technological advancements to the specific details of implemented projects, highlighting their economic efficiency and the positive impacts on environmental sustainability.
The most effective way to connect enterprises with customers can only apply
A solar rooftop application for smartphones can serve as an effective sales tool to enhance selling activities and promote the value chain of solar rooftop power systems This application will provide customers with essential information, preliminary indicators, and a simulation of the installation process Additionally, it will facilitate customer transactions, manage project information, and offer support for the operation and maintenance of solar rooftop power systems.
Organizations must effectively create and manage change to differentiate between success and failure, as highlighted by S.S Iyer The shift in competitive advantage now lies in the strategic use of information, technology, and human resources to deliver value to customers Future enterprises will prioritize customer satisfaction and delight by adopting a creative approach and focusing on the customers' perspectives.
To achieve high revenue, businesses must implement a well-defined sales strategy that guides their sales activities An effective sales strategy should prioritize the development of professional, unique, and convenient sales tools, alongside robust research and development efforts This focus will enhance customer retention, build trust, and ultimately ensure customer satisfaction and confidence in their purchasing decisions.
Focusing solely on strategic sales organization while neglecting the development of sales tools and R&D activities will hinder salespeople's ability to fully convince customers, leading to ineffective sales efforts and failure to meet revenue targets.
To enhance TTCE's long-term performance, it is essential to integrate the two proposed solutions to effectively communicate the value of the solar rooftop power system to customers This approach will foster customer trust, enabling salespeople to confidently persuade clients, leading to quicker purchase decisions.
The Company should collaborate with local banks to establish Memorandums of Understanding (MOUs) for long-term partnerships Additionally, focusing on developing system leasing packages rather than selling can provide a viable solution to alleviate financial challenges for customers.
The action plans for the best proposed solution are detailed in the following part.
ACTION PLANS
Following the model of Andris and his co-authors, the strategic sales organization for TTCE is proposed as below:
To effectively educate and persuade customers about the benefits of solar rooftop systems, it is essential to focus on two key types of strategic customer segmentation By highlighting both the economic advantages, such as cost savings and increased property value, and the uneconomic benefits, including environmental impact and energy independence, we can create a compelling case for adopting solar energy solutions This dual approach ensures that we address the diverse motivations of potential customers, ultimately driving greater interest and investment in solar technology.
Segmentation 1 : Customers using electricity in business field.
- Focusing mainly on commercial malls, entertainment centers, building rentals, supermarkets, restaurants, hotels, resorts, apartments, Having large roof area, the high power demand and high power chasing price from EVN.
- Selling and leasing solutions of the system are equally available, payback fast, efficient and high investment.
- Educating and persuading customers on cost savings and value-added benefits for brands like: LEED certification, Lotus, EDGE.
Segmentation 2 : Customers using electricity in production field.
- Focusing mostly on industrial parks, manufacturing factories, warehouses, sea-food companies with large cold storages areas and high power consumption demand.
- Taking the priority for selling the system, the backup for leasing.
- Educating and persuading customers on cost savings and value-added benefits for brands like: LEED certification, Lotus, EDGE.
Figure 6.2 – Corporate Events to be implemented
- Strong networking with VIP guests
- 75% and 79% customers show great interest in TTCE products from 2019-2022 and 2022-2025 respectively.
- 70% and 76% customers who come to the event will agree to have meeting with TTCE from 2019-2022 and 2023-2025 respectively.
- 50% and 78% customers who attent the meeting will agree to install TTCE’s solar rooftop system and will close the deal and sign contracts from 2019-2022 and 2023-2025 respectively.
For an event team of around 15 people:
- Marketing sub team: 4 people with tasks:
+ Brand the event, publicity, promotion (online and offline)
- Logistics sub team: 8 people with tasks:
- Communication sub team: 3 people with tasks:
TTCE primarily depends on the esteemed reputation of the TTC Group to attract customers, with minimal focus on sales tools or R&D initiatives Given that TTCE targets large companies and savvy investors, it is crucial to develop and incorporate sales tools into smart devices that are practical and easily accessible for educating and persuading potential clients Consequently, the software product "Application of Information Technology for Solar Rooftop Power" has been researched, developed, and implemented to meet these needs.
Figure 6.3 - Value chain of rooftop solar power of TTCE
TTCE is dedicated to enhancing convenience and support for everyone in the solar rooftop power value chain by developing an IT application that meets all related needs.
Figure 6.4 – IT Application for Selling the Solar Rooftop System
Building customer trust and comprehension of the solar rooftop system's values is essential The service accompanying the product significantly enhances customer satisfaction and delight, ensuring a more rewarding experience.
- Along with psychology showing that satisfaction positively correlates with price fairness perceptions;
We deliver thorough and precise information about solar energy, covering everything from macro trends to micro details, including technological advancements, implemented projects, economic benefits, and positive environmental impacts.
- Connecting enterprises with customers easily by the "Information technology application" installed in smart devices;
- Popularizing the value chain of solar rooftop power system to customers clearly and completely;
- Providing updated solar information; preliminary indicators and simulating the installation process;
- Providing interface for customer transactions; project information management, customer support and operation and maintenance of solar rooftop power system.
- Expanding the market, thereby increasing the number of customers signing installation contracts, product lease contracts;
- Increasing cohesion between the company and customers, cooperation between the company and the supplier.
- Reduce marketing costs, construction supervision costs and repair warranty, business management costs.
- Increase brand identity and enhance brand image in the market, thereby creating competitive advantages compared to competitors.
- Be proactive in finding and storing information about customers returning from the application.
Customers can access comprehensive product information and applications for on-site solar PV technology through the app This platform showcases installed projects and features an interactive map highlighting locations where TTCE has implemented solar rooftop systems, positioning the company as a leader in solar rooftop power both domestically and in neighboring countries Additionally, the app serves as an effective channel for introducing sales and marketing programs to customers.
The solar rooftop power system offers customers detailed operational data, including generating capacity and output over various timeframes—daily, monthly, and yearly This information enables customers to gain a comprehensive understanding of the system's benefits, particularly in terms of reduced monthly electricity costs Key metrics for analyzing the effectiveness of the solar rooftop system include total investment cost, expected first-year revenue, projected revenue over 25 years, cash flow, internal rate of return, payback periods (both discounted and non-discounted), depreciation expense, and total savings over 25 years.
Overall cost, Human resource and Timeline
The total cost for the application is approximately 2.74 billion VND, with a development timeline of 9 months The initial 2 months will focus on collecting and inputting necessary data for the system Following this, the IT company will spend 5 months developing the software based on TTCE requirements and customer data, simultaneously running it in a simulated environment The final 2 months will be dedicated to trial testing with real customers, leading to the official market launch of the application as a product support solution after the 9-month preparation period.
Figure 6.5 - Overall cost, Human resource and Timeline of Application for smart devices
TTCE enhances the connection between companies and customers, fostering collaboration with suppliers and providing a competitive edge This approach boosts goodwill, strengthens brand identity, and improves brand image, ultimately leading to improved financial and market performance for the firm.
The app will enable TTCE to proactively gather and manage information about returning customers, allowing the company to identify and assess potential customer segments effectively This solution will facilitate targeted consultations with customers familiar with the system, empowering TTCE to actively explore valuable insights for informed investment decisions.
The app offers a range of integrated utilities, including payment processing, system management, and incident alerts, serving as a reminder for both TTCE and customers during system issues or late payments This functionality is expected to contribute to a projected revenue growth rate, as illustrated in Figure 6.6.
Figure 6.6 - The forecast revenue growth
At present In the future
Business customers Individual and household customers
- Working with local banks for signing MOU for long-term cooperation so as to get preferential interest rates to support customers.
- Developing the leasing packages instead of selling only so as to increase potential customers.
- By all means to make customers easier when deciding to invest in products and the company also to win their hesitation.
CONCLUSION
The Vietnamese electricity industry faces significant challenges in ensuring supply, particularly since 2020, with no new energy sources developed Solar rooftop power projects have emerged as a promising solution to alleviate this pressure Although still relatively new, solar rooftop technology in Vietnam holds great potential but is met with various challenges To encourage customer adoption and trust in these products, a strategic sales organization is essential, combined with advanced technology and financial support solutions This approach aims to optimize sales activities, deliver value to customers, and achieve targeted revenue for businesses.
SUPPORTING DOCUMENTS
(Description of coding from answer)
In 2018, the company's report indicated a decline in revenue, highlighting challenges faced by TTCE's sales team in effectively persuading customers to buy products Several factors may contribute to this issue, including market competition, inadequate sales strategies, and potential disconnects between customer needs and the products offered.
In 2018, revenue fell short of expectations, highlighting a critical area for management to address The sales team, as the primary channel for promoting the company's products and services, has not delivered satisfactory performance, necessitating a focused effort to enhance their effectiveness.
I think this issue may come from multiple sides such as salesmen, the company and also customers.
Salesmen often struggle to convince customers due to several key characteristics, including inadequate selling and presentation skills, limited product knowledge, and a lack of ability to effectively orient customers These factors can significantly impact their success in closing sales and building customer relationships.
TTCE's recruitment and training process significantly impacts sales performance, as well as the crucial role customers play in this dynamic A customer's purchasing decision can greatly influence a salesperson's ability to successfully persuade and close deals.
Potential problems can emerge from
+ Salesmen: personal characteristic s such as selling skills, presenting skills, product knowledge, customer orientation
+ Company: recruitment and training process
Salesmen often struggle to convince customers due to various characteristics, including their selling and presenting skills, product knowledge, and ability to guide customers effectively Additionally, the recruitment and training processes at TTCE may contribute to these challenges Moreover, customers themselves significantly influence sales performance, as their purchasing decisions can greatly impact a salesman's success in closing deals.
Q1: As the new-established company, what is the strategic sales plan for TTCE’s target customers?
An effective strategic sales plan goes beyond mere documentation; it should be grounded in practical experiences and direct customer engagement Despite the high costs of rooftop investments due to imported equipment, building a robust sales strategy is essential After nearly two years of operation, we continue to refine our sales organization to better serve our target customers While TTCE leads the rooftop power industry, many of our recent customers have come through established relationships with the TTC Group.
“After nearly 2 years of operation, we have been still under completion the strategic sales organization for our target customers.”
Q2: From the interview with Mr.
Chau, we have identified several key issues contributing to sales failures, including the characteristics of salesmen, the recruitment and training processes at TTCE, and the factors influencing customers' purchasing decisions.
TTCE’s sales manager, do you have any idea about these factors?
During my working period, I have witnessed that my employees had trouble with their persuasion to customers.
Specifically, I think the reasons may come from salesmen characteristics such as their
Sales performance can be significantly impacted by the characteristics of salespeople, including their presentation and selling skills, as well as their product knowledge and customer orientation Furthermore, factors such as the company's recruitment and training processes, along with the customer's purchasing decisions, also play a crucial role in influencing overall sales outcomes.
Additionally, there are also other factors such as company’s recruitment and training process or customer’s purchase decision influencing to sales performance.
So, I quite totally agree with Mr.
Q3: About salesperson’s characteristics, can you share with me the actual situation at TTCE in detail?
Our sales organization is divided into two key components: sales and pre-sales The sales team focuses on persuading customers, while the pre-sales team provides essential technical information and addresses customer inquiries about the product Through my experience with various real cases, I've observed that while salespeople excel in communication, they often lack sufficient technical knowledge Conversely, pre-sales professionals possess strong technical skills but face challenges in selling and presentation abilities.
To successfully secure deals, salespeople must effectively orient customers towards our products and persuade them of their value However, many in the sales department still need to enhance their presentation and selling skills, deepen their product knowledge, and improve their customer orientation techniques to effectively convince clients and win contracts.
+ Salespeople lack technical knowledge, orient customers
Pre-sales struggle with selling and presenting skills
Salespeople often excel in communication but lack sufficient technical knowledge of the products they sell Conversely, pre-sales employees possess strong technical expertise but struggle with sales and presentation skills To successfully close deals, salespeople must effectively guide customers in understanding our products and convincingly present their benefits Currently, many salespeople have yet to reach this level of proficiency.
TTCE, having launched over a year ago with an innovative product, faces challenges in recruiting sales personnel to meet industry standards The company's unique position in the market complicates the hiring process, as finding qualified candidates who align with its specific needs proves to be a significant hurdle.
In the competitive sales industry, it is essential for sellers to demonstrate the value of their products by addressing customer concerns effectively Achieving this requires deep product knowledge, which is why we focus on hiring sales professionals with strong engineering backgrounds.
However, it is not easy for us In fact, sales people who well communicate may be not so strong at technical knowledge.
Conversely, people with technical background may not be good at all skills to become salesmen.
Therefore, TTCE’s recruitment criteria is not well matched in reality.
+ Recruitment process is not well matched with reality
We focus on hiring salespeople with engineering expertise, but this presents challenges Often, strong communicators lack technical knowledge, while those with a technical background may not possess the necessary sales skills.
Therefore, TTCE’s recruitment criteria is not well matched in reality”.
Q5: As a sales representative, are you satisfied with HR department role during recruitment process?
I think HR has worked quite well during the recruitment process.
The HR department addressed all my inquiries, ensuring clear communication between both parties However, my former colleague expressed dissatisfaction with the HR's handling of the interview process Before departing from his sales role at TTCE, he revealed his surprise at the stark differences between the job orientation and the actual work environment, including challenges and the commission policy.
+ Ex- employee complained HR department about not offering enough information for candidates