Salesman’s fail in persuading customers using solar rooftop power at TTC energy JSC

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Nguyen Thi Phuong Yen SALESMAN’S FAIL IN PERSUADING CUSTOMERS USING SOLAR ROOFTOP POWER AT TTC ENERGY JSC MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2019 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Nguyen Thi Phuong Yen SALESMAN’S FAIL IN PERSUADING CUSTOMERS USING SOLAR ROOFTOP POWER AT TTC ENERGY JSC MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: LE THI THANH XUAN Ho Chi Minh City – Year 2019 LIST OF TABLES Figure 1.1 TTCE’s Organization Chart Page Figure 1.2 TTCE’s Services Page Figure 1.3 TTCE’s Biggest Customers Page Figure 1.4 TTCE vs Competitors Page Figure 1.5 Solar Rooftop System Page Figure 1.6 Strategic Suppliers Page Figure 2.1 Economic Value of Solar Energy Page Figure 2.2 Uneconomic Value of Solar Energy Page 10 Figure 2.3 Renewable Target for 2020, 2025 and 2030 Page 11 Figure 3.1 Summary of Installed Capacity & Revenue in 2017 & 2018 Page 13 Figure 3.2 Selling Stages Page 15 Figure 3.3 Summary of Deals Approached & Won in 2017 & 2018 Page 15 Figure 3.4 TTCE’s salesman won deals Page 16 Figure 3.5 Actual Selling Steps Page 18 Figure 3.6 Summary of Approaching History of Some Target Customers Page 19 Figure 3.7 Example of Initial Investment Cost of a Solar Rooftop Project Page 20 Figure 3.8 Price Comparison Page 21 Figure 3.9 Percentage of Firms Utilizing Guided Sales Processes Page 26 Figure 3.10 Correlation between value chain, competitiveness and profitability Page 28 Figure 3.11 Compare the electricity cost by using solar energy system and EVN’s supply Page 30 Figure 4.1 Comparison of Main Equipment Page 38 Figure 4.2 The Initial Cause and Effect Map Page 40 Figure 4.3 Certain changes of Sales Organization Page 41 Figure 4.4 Steps of building the sales organization Page 42 Figure 4.5 Final Cause and Effect Map Page 45 Figure 5.1 Relationship among the dimension of sales organization success Page 46 Figure 5.2 The sales system Page 47 Figure 5.3 How a successful sales system function Page 48 Figure 6.1 The strategic sales organization for TTCE Page 51 Figure 6.2 Corporate events to be implemented Page 53 Figure 6.3 Value chain of rooftop power of TTCE Page 55 Figure 6.4 IT Application for Selling the Solar Rooftop System Page 55 Figure 6.5 Overall Cost, Human resource and Timeline of Application for smart devices Page 58 Figure 6.6 The Forecast Revenue Growth Page 59 TABLE OF CONTENTS Executive Summary CHAPTER 1: COMPANY OVERVIEW 1.1 TTC Energy Joint Stock Company (TTCE) – A member of TTC Group 1.2 Future through 1.3 Mission 1.4 Vision .4 1.5 Core Values 1.6 Manpower and Company Structure .5 1.7 Business Area 1.8 Biggest Customers & Competitors 1.9 Rooftop system’s equipment CHAPTER 2: PROBLEM CONTEXT .8 2.1 Why using solar rooftop power? 2.2 Booming solar rooftop power in Vietnam 10 2.3 Why solar rooftop power not really interested by Vietnamese people? .12 CHAPTER 3: PROBLEM IDENTIFICATION .13 3.1 Symptom Analysis .13 The revenue not fully reached in 2018 .13 3.2 Potential Problems 14 3.3 Problem Validation .24 3.4 The importance of main problem .32 CHAPTER 4: CAUSE VALIDATION .33 4.1 Potential Causes 33 The initial cause and effect map 40 4.2 Validating Main Causes 41 The final cause and effect map 45 CHAPTER 5: ALTERNATIVE SOLUTIONS 46 CHAPTER 6: ACTION PLANS 51 CHAPTER 7: CONCLUSION 60 CHAPTER 8: SUPPORTING DOCUMENTS 61 References: 79 Appendix 82 Page of 95 Executive Summary Solar rooftop power basically is not completely the demand, customers want to be the smart and clean consumers but their installation plan are still very ambiguous This is a big challenge in the industry and at TTC Energy JSC (TTCE) as well In 2018, the contracted capacity exceeded the target However, the revenue was under the targeted plan which is the symptom in connection with such a series of many potential problems such as: Customers not overwhelmed by salesman’s performance; No strategic sales organization; Time consuming for closing a deal; Little insight into core product values by salesman; No sales tools, R&D neglect; No experienced sales resource in the industry; High initial investment cost in the industry As a new established company, TTCE’s salesman mostly sells freely on their own ways, closing the deals mainly thanks to the reputation of the TTC group's leaders because most potential customers are introduced by the TTC group leaders Customers somehow confuse and hesitate in their decision Thus, the fail in persuading customers using solar rooftop power at TTCE is the main problem in relation to low salesman performance Due to the main causes are as of no strategic sales organization and neglect in developing sales tools and R&D activities, the best proposed solution to improve the TTCE’s low salesman performance should combine related activities, organize sales activities in consistent with marketing strategies, company strategies and together with developing advanced information technologies like: an application for smart devices to introduce all information of solar rooftop power from survey to procurement, installation, testing and operation in order to transfer best values of solar rooftop power system towards customers and to completely win customers' trust, then they confidently make a quick purchase decision Page of 95 CHAPTER 1: COMPANY OVERVIEW 1.1 TTC Energy Joint Stock Company (TTCE) – A member of TTC Group Established in February 2017 and located at 253 Hoang Van Thu Street, Ward 2, Tan Binh District, HCM City, TTCE is a subsidiary in energy of TTC Group which has been over 40 years of operational experience in fields such as Energy, Real Estate, Sugarcane, Education and Hospitality, consists of 04 Corporations, 01 Sectoral Committee and more than 150 subsidiaries with over 10,000 employees Particularly in the energy sector, Gia Lai Electric Joint Stock Company (GEC), a leading member company with more than 25 years, has been investing in building energy projects: wind power, hydropower, biomass power and especially solar power plants with target of 1,000MW by 2022 Besides solar power plants invested by GEC, TTC Group has also been investing in solar rooftop power projects, provided by TTCE which currently is the leading in solar rooftop power market in Vietnam 1.2 Future through In recent years, the growth of electricity consumption in Vietnam has always doubled the growth rate of gross domestic product TTCE’s renewable energy development projects will contribute to realizing the target of increasing electricity output to 14% per year in the period of 2015 - 2030 of the Government Energy is a very practical industry for Vietnam's economy in the integration process Investing in clean green energy, TTCE is aiming for a sustainable development In order to move forwards a safer and more prosperous future, there is only one way to balance the environmental issues and economic development at the same time 1.3 Mission Using efficient resources and optimizing added value for Shareholders, customers and employees, "Bring the prosperity to customers" Creating a green energy source to enrich the community life and economic development in parallel with environmental protection 1.4 Vision “Becoming the leading private investment organization in renewable energy in Vietnam” TTCE differentiates from product quality to the leading service standards TTC Energy offers the optimum solution for power savings, increasing the economic value, while still reducing production costs, providing quality and long-term technology solutions and increasing competitiveness for business 1.5 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 30 years of experience RESPONSIBILITY - TTCE provides after-sales services and maintenance during system operation TTCE commits operational performance and genuine warranty devices TTCE focuses on technical processes, equipment quality to optimize system performance and meet the desired needs of the customers QUALITY - TTCE determines quality as a prerequisite for delivering core values of products and services TTCE provides equipment from prestigious partners all around the world TTCE provides quality customer services that meets the needs of each individual 1.6 Manpower and Company Structure Up to the end of 2018, TTCE’s total manpower is about 60 employees organized as shown in the following structure (Fig.1.1), including: 04 members of Chairman and the Board of Directors, 15 persons of sale & marketing department mostly the young & the inexperienced, 13 persons of technical department and 10 persons of financial accounting, administration, human resource, office, internal audit, and around 18 sales collaborators Figure 1.1 – TTCE’s Organization Chart Source: TTCE’s Annual Report 1.7 Business Area TTCE currently offers the full rooftop power services Figure 1.2 – TTCE’s Services from design survey, procurement, and installation to testing, operation and maintenance (Fig.1.2) TTCE supplies, constructs and installs the rooftop solar system on the roof of various projects from commercial centers, convention centers, hotels, resorts, residential areas, apartment buildings and office buildings to industrial parks and export processing zones, factories, cold storage, parking lots, hospitals and even Source: TTCE’s Marketing Report households 1.8 Biggest Customers & Competitors TTCE’s biggest customers (Fig.1.3) are Figure 1.3 – TTCE’s Biggest Customers 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 Based on data in the market analysis report of TTCE (Fig.1.4) in December 2018, compared to current the rivals i.e SolarBK, Vu Phong, Redsun, DAT solar, AEEC, etc, TTCE's total installed capacity accumulated up to 2018 is leading with more than 15MWp currently while only about 6MWp of SolarBK, 1,5MWp of Red Sun, 400KWp of Vu Phong,… Figure 1.4 – TTCE vs Competitors 1.9 Rooftop system’s equipment The two main equipment types of solar rooftop system are the solar panels and inverter which are not manufactured in Vietnam and almost imported from oversea countries: Canada, German, Japan, the US, Singapore, Korea… Operation Principal of Solar Rooftop System (Fig.1.5) Solar panels: Also known as Figure 1.5 – Solar Rooftop System the photovoltaic (PV) installed on the roof for capturing and converting solar energy into direct current (DC) power Source: TTCE’s Marketing Report Inverter: Inverter device for converting DC power from PV to alternating current (AC) power, then supplying power for the whole project (29) Kotler P, Armstrong G (eds.) 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CAUSE VALIDATION The following validations will identify the causes of sales failure in persuading customers investing in solar rooftop power system 4.1 Potential Causes 4.1.1 Undistinguished