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, Ward 2, Tan Binh District, HCM City, TTCE is a subsidiary of TTC Group, which boasts over 40 years of experience across various sectors including Energy, Real Estate, Sugarcane, Education, and Hospitality The group comprises four corporations, one sectoral committee, and more than 150 subsidiaries, employing over 10,000 individuals In the energy sector, Gia Lai Electric Joint Stock Company (GEC) has been a key player for over 25 years, focusing on the development of energy projects such as wind, hydropower, biomass, and notably solar power, with a goal of reaching 1,000MW by 2022 In addition to GEC's solar power plants, TTC Group is also investing in solar rooftop projects through TTCE, which currently leads the solar rooftop market in Vietnam.
Future through
In recent years, Vietnam's electricity consumption has consistently outpaced its gross domestic product growth, prompting the need for sustainable energy solutions TTCE’s renewable energy initiatives aim to boost electricity output by 14% annually from 2015 to 2030, aligning with government targets As Vietnam integrates into the global economy, investing in clean energy is crucial for sustainable development To ensure a safer and more prosperous future, it is essential to balance environmental concerns with economic growth.
Mission
By leveraging efficient resources and maximizing value for shareholders, customers, and employees, we aim to "Bring prosperity to customers." Our commitment to creating sustainable energy sources not only enhances community well-being but also drives economic growth while prioritizing environmental protection.
Vision
TTCE aims to be Vietnam's premier private investment organization in renewable energy, setting itself apart through superior product quality and exceptional service standards TTC Energy delivers optimal power-saving solutions that enhance economic value, lower production costs, and offer high-quality, sustainable technology solutions, ultimately boosting business competitiveness.
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 delivering exceptional after-sales services and maintenance throughout the system's operational life We guarantee reliable performance and authentic warranties on our devices By prioritizing technical processes and equipment quality, TTCE ensures optimized system performance that aligns with our customers' specific needs.
TTCE prioritizes quality as essential for delivering the core values of its products and services Partnering with esteemed global suppliers, TTCE ensures top-notch equipment Additionally, TTCE is committed to providing exceptional customer service tailored to meet the unique needs of each individual.
Manpower and Company Structure
As of the end of 2018, TTCE employed approximately 60 individuals, structured as follows: 4 members on the Board of Directors, 15 staff in the sales and marketing department, primarily consisting of young and inexperienced personnel, 13 in the technical department, 10 in financial accounting, administration, human resources, office management, and internal audit, along with about 18 sales collaborators.
Business Area
TTCE provides comprehensive rooftop power services, 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, hotels, resorts, residential areas, office buildings, industrial parks, and even households.
Biggest Customers & Competitors
TTCE’s biggest customers (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
As of December 2018, TTCE has established itself as a market leader in installed solar capacity, boasting over 15MWp, significantly surpassing competitors such as SolarBK with approximately 6MWp, Redsun with 1.5MWp, and Vu Phong with 400KWp, according to the TTCE market analysis report (Fig 1.4).
Source: TTCE’s Market Analysis Report
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
Source: TTCE’s Marketing Report Figure 1.4 – TTCE vs Competitors h
TTCE partners with leading strategic equipment suppliers, Sharp from Japan and ABB from Switzerland, both of which have over 30 years of experience in manufacturing solar energy equipment, including solar panels and inverters.
Source: TTCE’s Market Analysis Report Figure 1.6 - Strategic Suppliers h
PROBLEM CONTEXT
Why using solar rooftop power?
Long-term and sustainable economic benefits include significant reductions in electricity costs and consumption over a span of more than 25 years This approach not only lowers CO2 emissions but also enhances electricity efficiency, ensuring optimal power delivery for equipment.
Solar rooftop power offers significant non-economic benefits alongside its economic advantages It enhances brand positioning and boosts company competitiveness while creating added value through certifications like LEED (Leadership in Energy & Environmental Design) Additionally, it aligns organizations with the growing trend of adopting high technology and renewable energy sources, fulfilling social responsibilities related to energy conservation and environmental protection.
Page 10 of 95 creating a better working environment (green and clean), more beautiful (viewed from above) for the enterprises.
Booming solar rooftop power in Vietnam
In response to the emission scandal at the Formosa Ha Tinh steel plant and growing criticism of its reliance on coal-fired power, the Vietnamese government is prioritizing the development of renewable energy Prime Minister Nguyen Xuan Phuc emphasized that environmental protection must take precedence over economic growth Since April 2017, Vietnam has seen a significant surge in solar power projects, reflecting this renewed commitment to sustainable energy solutions.
"golden" time for the renewable energy industry in general and solar power in particular to develop strongly h
Between 2016 and 2020, electricity consumption in Vietnam grew at an annual rate of 10.3% to 11.3%, according to data from EVN It is forecasted that post-2020, this growth rate will decline to 8% per year, leading to an expected electricity production of 278 billion kWh, which is anticipated to double by 2030 Consequently, the Ministry of Industry and Trade has expressed concerns that Vietnam may face a power shortage after 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
In particular, from Da Nang to the South, the solar radiation is much better and is about 4.5 - 5 kWh/m2 The average number of sunny days is 2200 - 2500 h
Page 12 of 95 hours/year Therefore, the application of solar power in these areas will be 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 per kWh for solar projects that achieve commercial operation before June 30, 2019 Additionally, the decision facilitates net metering for solar rooftop systems, allowing excess electricity generated to be purchased by Vietnam Electricity (EVN) if it exceeds the amount consumed.
Why solar rooftop power not really interested by Vietnamese people?
Despite government support and guidance through various decisions and circulars, including Decision No 02/2019/QD-TTg on purchasing solar rooftop power 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.
The lack of consumer understanding regarding rooftop solar power is a significant barrier to its adoption, as many households and businesses are unfamiliar with its product characteristics and benefits Additionally, the initial investment required—approximately 25,000,000 VND per kWh—poses a challenge, especially when compared to traditional electricity, which incurs no upfront costs until the monthly bill arrives based on actual usage These factors contribute to the general disinterest in solar rooftop power among potential users.
PROBLEM IDENTIFICATION
Symptom Analysis
The revenue not fully reached in 2018
In the 2018 performance report by TTCE (Fig 3.1), it was noted that the capacity signed for solar rooftop power exceeded the planned target by 110%, yet the revenue achieved was only 84% This discrepancy highlights that while there is a demand for solar energy, many customers face budget constraints and have unclear installation plans, despite their desire to adopt clean energy solutions.
The contracted capacity has surpassed expectations, but revenue has not met projections due to lengthy sales cycles, often taking over six months to a year to close deals Additionally, rooftop power installation typically requires more than two months, with some contracts signed in late 2018 resulting in revenue recognition 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?” h
In 2018, the company's revenue fell short of expectations, highlighting the need for management to intensify their efforts in addressing this issue The sales team, being the primary channel for promoting the company's products and services, has not delivered satisfactory performance recently, which is a significant concern for the overall growth and success of the business.
Mr Chau believes that the sales team underperformed last year, which significantly impacts the company's revenue, a critical factor for effective operations Ronald Huefner emphasizes that “Revenue management should be an intentional and high-level management activity,” indicating that TTCE’s management must implement targeted strategies to enhance sales performance and meet revenue goals Addressing key issues is essential for driving improvement in this area.
Potential Problems
The symptoms observed may indicate potential issues involving the company, the salesperson, the product, or the customers To investigate these underlying causes, it is essential to conduct interviews and analyze company data for further validation.
3.2.1 Customers not overwhelmed by salesman’s performance
The TTCE's internal procedures indicate that many failed deals occur at the second milestone, primarily due to salespeople's lack of confidence in articulating product characteristics, system operating principles, and the fundamental functions of key equipment like solar panels and inverters This lack of clarity can lead to customer confusion and a failure to fully convince them of the product's value and benefits.
In 2017, only 18% of the approached customers signed contracts, with 43 out of 238 agreeing to terms This percentage decreased slightly to 17% in 2018, where 51 contracts were signed from a total of 292 customers approached.
The below answer by a customer (Manager of GigaMall HCM) showing the TTCE’s fail in persuading customer
My company, facing monthly electricity bills exceeding 1 billion VND for our commercial center, is keen on 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 ourselves unclear about the overall efficiency and benefits of the solar power system.
TTCE lacks a strategic sales plan targeting its customer base, primarily consisting of large enterprises The company's market reach is limited, relying heavily on relationships established by the chairman of TTC Group According to the company deal won reports from 2017 to 2018, only 19% of contracts were secured directly by TTCE employees, while a significant 81% were obtained through introductions by TTC Group.
2017, and the corresponding number for 2018 was 25% and 75%
To achieve target revenue for high-investment products like those offered by TTCE, it is essential to establish specific and effective sales strategies tailored to 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 transcends mere documentation; it must be grounded in practical experiences and direct customer engagement, especially given the high costs associated with rooftop investments due to imported equipment After nearly two years of operation, we are still refining our marketing strategy for our target customers Despite TTCE's status as a leader in the rooftop power industry, most of our clients have come to us through our relationship with TTC Group We now possess a deep understanding of the market and our target audience, allowing us to swiftly develop an effective strategy that delivers maximum value to our strategic customers.
3.2.3 Time consuming for closing a deal
The sales team's analysis, illustrated in Chart Fig.3.5, reveals that the sales cycle typically spans six months to over a year from initial contact to deal closure This indicates a lack of a strategic selling process at the management level, resulting in salespeople operating independently Consequently, closing deals becomes unpredictable, as it relies heavily on customer interest and readiness to sign contracts, particularly in new industries and with new products, where customers tend to be cautious about their investment decisions.
The company data summarized in Figure 3.6 indicates that the negotiation process with target customers has been lengthy, with AON taking nearly two years to pursue and still ongoing Other clients, such as Galaxy, Coopmart, Viettien, and DeHues, have taken between five months to one year to finalize their contracts This trend highlights the cautious and thoughtful approach both household and business customers take when investing in this product.
3.2.4 Specificity of initial investment cost of solar rooftop power
The high investment costs associated with solar energy systems are primarily due to the need for specific products and the importation of key equipment, such as solar panels and inverters, which constitute 70% of the total investment.
Figure 3.6 – Summary of Approaching History of Some Target Customers
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 Company, he shared his insights as a customer of TTCE regarding the initial investment cost of a solar rooftop power system Mr Quang emphasized the long-term benefits of adopting solar energy, noting that the initial costs are offset by significant savings on electricity bills and reduced operational expenses over time He also highlighted the importance of sustainability in the seafood industry, suggesting that investing in renewable energy aligns with both environmental goals and business growth.
As a seafood exporter, I proudly stand out as one of the few investing in solar rooftop systems While the exact efficiency of these systems remains uncertain and can only be evaluated after approximately 15 years, the initial investment is significant—25 million VND per kWp for just 10 square meters of panels This cost poses a considerable challenge for businesses lacking financial strength, yet I have committed to this purchase, recognizing its long-term benefits.
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:
TTCE's system pricing 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 prevalent in the solar power industry.
When comparing prices, 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 In contrast, Dat Tech presents the most affordable option at 6,000 million VND per 1 kWp, while another competitor is priced at 27,933 million VND per 1 kWp.
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, it is important to note that this high cost is a characteristic of the product itself rather than a business-related issue.
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 h
Problem Validation
3.3.1 No tactics to accelerate sales performance
In "Secrets of Great Sales Management: Advanced Strategies for Maximizing Performance," Robert A Simpkins explores effective strategies for targeting potential customers in a meaningful way and increasing purchase rates He emphasizes the importance of understanding that the buying process is primarily emotional, with feelings driving purchasing decisions while reasoning serves to justify them This insight raises critical questions for sales professionals: How can we convert prospective customers into actual buyers, and when is the right time to close a sale? Ultimately, it is essential to analyze the conversion rate of inquiries to actual purchases, as many customers may hesitate before committing to a purchase.
As stated by Mr Richard Woodward (7) - Business development trainer and facilitator in the US: Strategic sales plans is “key drivers to increase sales"
To boost sales, many solo entrepreneurs set clear objectives 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.
In the TTCE case, the CEO has acknowledged that the company lacks a strategy to boost sales performance, resulting in the sales team operating without clear guidelines or direction from management Despite a large potential customer base, sales representatives often lack confidence during customer interactions, leading to an unfocused product presentation that leaves customers feeling confused and unconvinced This absence of a strategic sales organization targeting specific customers is identified as the fundamental issue affecting sales effectiveness.
William Miller, in his book "Proactive Selling: Control the Process - Win the Sale," emphasizes the importance of establishing a standardized sales process for managers to enhance company revenue and streamline operations Adhering to this sales process is essential for salespeople to effectively convert potential customers into actual buyers, ensuring that sales management activities align with specific objectives.
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 h
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 challenging, as a standardized approach often leads to increased revenue Each company and product necessitates unique sales 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 Marketing activities serve as crucial bridges between businesses and their target customers, providing value to customers while receiving equivalent returns According to Rowson and Pauline, the key to success lies in accurately identifying the needs and desires of target customers and ensuring that these are met through comprehensive marketing strategies.
The sales strategy and marketing activities at TTCE have not received adequate attention, which Mr Chau, the CEO, acknowledges as a critical issue facing the company This lack of focus is identified as a fundamental problem that needs to be addressed for the company's growth and success.
3.3.2 No actionable guide to gaining insight into customer’s expectation
Rory Sutherland highlighted in his TED Talk that our perception of food quality is often influenced by the environment in which we consume it For instance, one might enjoy a bowl of Pho in a noodle shop despite noticing unpleasant odors and a messy floor This phenomenon is akin to the feeling of driving a freshly cleaned car; the experience feels different due to our subconscious perceptions, even if we aren't fully aware of the reasons behind it.
Awareness of value is a customer perspective on the value of the product to them
Value perception is primarily about meeting customer needs rather than just market prices, as it reflects customers' overall assessment of a product based on their experiences This indicates that the perceived value of a product can surpass its actual quality By effectively influencing customers' perceptions of product value and enhancing their experience, businesses can ensure customer satisfaction while maximizing profitability.
According to Publilius Syrus, core product values should align with the price customers are willing to pay This raises the question of how we define and measure these values Research by Christian Jarrett on painkillers reveals that, despite all pills being of similar quality, our perceptions significantly influence their effectiveness Understanding these dynamics is crucial for both consumers and marketers in evaluating product value.
While the economic benefits of solar power have been thoroughly analyzed, Vietnam currently lacks installed solar systems To fully understand these advantages, it is essential to evaluate them over a 15-year period rather than just one month or one year This presents a significant challenge 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 company productivity, particularly through cost, quality, response time, and flexibility, which directly impact customer relationships and revenue growth By strategically selecting their value factors, companies can enhance their performance Organizations excelling in multiple value dimensions tend to experience accelerated revenue growth compared to their competitors.
Identifying key factors that contribute to the success of business activities is crucial for companies aiming to overcome challenges and drive revenue growth Among these factors, the cost and quality of solar rooftop systems play a significant role and must 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 29 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 The TTCE marketing team must address these concerns to alleviate any doubts customers may have regarding the value of solar rooftop power systems.
According to Professor Hai & Ha from the Department of Corporate Finance at the Academy of Finance, R&D activities in enterprises play four crucial roles: enhancing competitive advantages, elevating business positioning, boosting export activities, and supporting overall growth and development In Vietnam, many businesses lack dedicated R&D departments, often integrating these activities within existing functions like production or sales Nevertheless, R&D should be a fundamental component of any business's development strategy.
The importance of main problem
A successful sales force is crucial for companies to boost sales and maintain competitiveness According to Andris A Zoltners, Prabhakant Sinha, and Sally E Lorimer in "Building a Winning Sales Force," achieving sales force effectiveness is vital for organizational success However, sustaining a high-performing sales team presents ongoing challenges.
CAUSE VALIDATION
Potential Causes
4.1.1 Undistinguished sales organization – Customer’s suspicion on product values
Research indicates that understanding consumers' values and beliefs is crucial in analyzing the factors that influence their purchasing decisions Enduring beliefs, particularly those related to environmental values, significantly impact pro-environmental behavior These values shape individuals' beliefs and personal norms, ultimately guiding consumers towards environmentally friendly choices.
Values serve as guiding principles for shaping attitudes and actions, yet they do not always translate into actual behavior Individuals' attitudes impact their thoughts and emotions, which in turn affect behaviors like purchasing decisions Consequently, marketers should focus on altering consumers' attitudes to effectively influence their decision-making processes and behaviors.
According to Mr Chau, product value is a crucial factor influencing customers' purchasing decisions Specifically, TTCE's solar power rooftop products are relatively new in the market, featuring a 25-year life cycle and significant initial investment costs This prompts customers to deliberate carefully before making a purchase Additionally, the novelty of solar power rooftop products means that many customers lack sufficient information and experience, leading to hesitation stemming from a limited understanding of the product's value.
In addition, the strategic sales organization for potential customers which TTCE's management level has not really focused on, but this is the vital guideline for the h
Page 34 of 95 sales team to achieve revenue TTCE’s salesman is currently selling rely on actual situations, every salesman sells by his own way, closing the deal mainly thanks to the reputation of the TTC group's leaders because most potential customers are introduced by the TTC group leaders It shows that the company has no strategic sales process which still have been under preparing as confirmed by Mr Chau – CEO in the below interview:
“Do you agree with the idea that - Development must also include systems and processes, not products only And how is TTCE doing this?"
We are currently leveraging the strong support and reputation of TTC Group to establish ourselves as a market leader in solar rooftop power, achieving an impressive installation capacity of 15MW However, the incompletion of our marketing activities, sales processes, and R&D efforts has hindered 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 superior service performance and foster long-term, productive business operations.
Mr Chau emphasizes that solar power rooftops offer significant benefits for customers, encompassing both economic and non-economic values Economically, customers can reduce electricity costs, lower CO2 emissions, and provide an optimal energy source for their equipment Non-economically, these rooftops enhance brand reputation, create added value for stakeholders, align with technological and renewable energy trends, fulfill social responsibilities, and improve the working environment Additionally, installation on corrugated roofs can mitigate noise, lower temperatures, and extend roof lifespan while absorbing solar energy to decrease internal heat However, despite these advantages, many customers have yet to fully recognize the value of solar rooftop power.
Page 35 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 sales activities lack a strategic approach, leading to customer confusion about product value This misunderstanding is a significant factor in the company's challenges in effectively persuading customers Consequently, the following section will explore alternative solutions to address this issue.
Poor internal cooperation between marketing team, technical team and sales team
Selling activities require thorough analysis to integrate technical expertise, offering significant advantages at every stage of the sales process Effective planning and execution of persuasion techniques, product demonstrations, and customer relationship management are crucial for enhancing customer engagement and addressing hesitations, while also considering competitive dynamics A cohesive collaboration among marketing, technical, and sales teams is essential; otherwise, customers may become confused and lose focus on the products However, as noted by Mr Truong, TTCE teams have not yet implemented these strategies comprehensively and 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 R&D activities in implementing effective marketing strategies By focusing on increasing revenues and minimizing costs, businesses can avoid the expenses associated with acquiring new customers to replace those lost This approach encourages suppliers to foster long-term relationships with their customers.
Developing a strategic sales process, alongside impactful sales and marketing efforts, and integrating persuasive research and development activities, will distinctly clarify the product's value insights and enhance customer value.
Page 36 of 95 gain the trust from customers and create the competitive advantages of company 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 fluctuations in product performance during various consumption experiences heighten customer uncertainty This uncertainty diminishes the trust customers place in their previous expectations of the product Consequently, customers begin to view product value perception as a key indicator of anticipated product performance.
Mr Châu emphasized that R&D activities and the provision of marketing tools are crucial for the sustainable development of enterprises These elements enhance technological capacity, align with market trends, accelerate development, and boost competitiveness Consequently, the lack of marketing tools or R&D efforts significantly contributes to the challenges salespeople face in persuading customers.
Building customer trust in solar rooftop products and services requires a collaborative effort between marketing, sales, and technical teams Effective marketing activities and technical analysis are essential to communicate the economic and non-economic benefits of solar energy By working together harmoniously, these teams can educate customers on the value of solar rooftop power, highlighting its environmental benefits and significant financial savings This challenge extends beyond the teams involved; it also requires commitment and support from management to foster a trusting relationship with customers.
4.1.3 Causes belonged to the industry
According to Kotler and Armstrong, price is the only element in the marketing mix that generates revenue, while all other elements incur costs It represents the amount for which a product, service, or idea is exchanged, independent of its perceived value Pricing decisions should take into account customer and competitor reactions, as customers often view price as a reflection of quality They evaluate costs based on the perceived benefits of the product, and with various options available, price becomes a key factor in their purchasing decisions Ultimately, both price and quality play significant roles in consumer choice.
Validating Main Causes
4.2.1 Undistinguished sales operation / No making the strategic sales organization
According to Nigel Piercy and Nikala Lane in their work "Strategic Customer Management: Strategizing the Sales Organization," establishing a strategic sales organization requires the organization to undergo specific changes first.
Nigel Piercy and Nikala Lane highlight that an effective strategic sales organization excels in strategic customer management and creating unique customer value They outline essential responsibilities for such organizations, which include involvement, intelligence, integration, internal marketing, and infrastructure, as illustrated in their summarized chart These steps are crucial for establishing a compelling strategic framework within an enterprise.
To effectively align sales operations with the company's strategic direction, the sales organization must be central to the business and marketing strategy This approach elevates sales beyond mere transactional tasks, transforming it into a vital partner in shaping critical business strategy decisions necessary for revenue generation.
Customer intelligence should be developed as a strategic resource essential for formulating effective strategies and creating added value for target customers Enhanced marketing sensing has become a crucial step in building and advancing strategic competencies, moving beyond traditional survey methods to ensure that managers gain a comprehensive understanding of their customers and markets.
Integration of cross-functional correlations is crucial for enhancing processes that create and deliver advanced value propositions to customers By effectively managing the interfaces between objectives and business units, businesses can improve the services and values perceived by customers, fostering a total alliance around their offerings.
Page 43 of 95 customer value is a command but one which has proofed deceptive in the traditional functional organization
Internal marketing involves leveraging sales resources to effectively "sell" the customer by bridging functional and divisional boundaries within the organization, as well as collaborating with partner enterprises, to ensure seamless value delivery High-quality service and responsiveness to customer needs require more than mere rhetoric; they demand comprehensive improvement and strategic management.
To effectively manage sales and enhance customer relationships, companies must develop a robust infrastructure that focuses on building competitive advantages This includes designing organizational structures, evaluation systems, and compensation plans that prioritize relationship-building and partnerships over outdated transactional approaches Additionally, investing in development and training is crucial to align with these modern relationship dynamics.
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
According to Alice, John, and Stephen in their book “R&D Decisions – Strategy Policy and Innovation,” research and development (R&D) decisions are crucial as they significantly impact enterprise performance and the economy R&D serves as the foundation for long-term growth and technological innovation, enabling companies to gain competitive advantages and develop customer service policies that safeguard market share Additionally, patents and inventions derived from R&D not only enhance product competitiveness but also contribute to long-term brand value.
R&D is a crucial component of business success, and at TTCE, prioritizing R&D activities is essential to enhance the targeted deal closing rate.
In an interview with sales staff member Ms Mai Thao, she highlighted that the absence of Research and Development (R&D) activities at TTCE, as noted by her manager Ms Phuong, significantly impacts the company's ability to close deals effectively.
I completely agree with her perspective SolarBK, as an R&D-focused company, continuously enhances its competitiveness by adopting advanced technology trends and services The R&D department is well-equipped with modern facilities, and a robust network infrastructure supports efficient operations Notably, SolarBK has developed the Solar System Operation Center (SSOC™), a pioneering solution created by Vietnamese engineers that enables online monitoring and control of clean energy systems This innovation not only benefits customers with intelligent controllers and auxiliary devices but also significantly boosts the competitive advantage for sales representatives, ultimately increasing the likelihood of closing deals.
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, which involves creating appealing conditions that lead consumers to self-persuade about the brand's value As a result, many consumers in Vietnam and globally have embraced the benefits and values associated with the Apple brand.
Therefore, consumers need to find information about products before they are officially offered For that reason, currently Apple or Trung Nguyen all have in h
Page 45 of 95 common is capable of creating new values - practical benefits but different and attractive This is only possible when the enterprises know the right investment for R&D activities Only true R&D is the driving force for long-term competitive advantages and achievements Research is not just for product, it must start from the market, customers and competitors Development must also include systems, processes, not products only
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 h
ALTERNATIVE SOLUTIONS
5.1 Alternative 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 by Andris A, Prabhakant Sinha, and Sally E Lorimer illustrates the essential relationship among the five dimensions that contribute to the success of a sales organization.
“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
The sales system illustrated in Figure 6-2 by Andris and his co-authors identifies five key drivers that significantly impact sales effectiveness within an organization Definer drivers focus on establishing the organizational structure and defining salesman duties Shaper drivers enhance sales performance through recruitment, education, training, and coaching Additionally, enlightener, exciter, and controller drivers relate to the performance activities carried out by salespeople, all contributing to the overall effectiveness of the sales organization.
A successful sales system, as illustrated in Figure 6-3 by Andris and his co-authors, relies on effective sales drivers that yield positive outcomes However, it is important to note that the performance of a company and its customers is influenced not only by the sales team but also by various internal and external factors.
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) h
- How acceptable are the salesmen? (Salesmen)
- Is the company performing greatest practices together with every of the sales effectiveness drivers? (Sales effectiveness drivers)
5.2 Alternative solution 2: Technology Modernization Application
To build customer trust and convey the value of solar rooftop systems, it is essential to emphasize the importance of service in enhancing customer satisfaction Research by Tahir H, Waggett C, and Hoffman A indicates that a well-packaged service alongside the product significantly contributes to customer delight Furthermore, psychological insights reveal that customer satisfaction is closely linked to perceptions of price fairness, underscoring the need for transparent pricing strategies in the solar energy market.
To ensure customer satisfaction, it is essential to deliver thorough and precise information about the energy sector, encompassing everything from macro trends to micro details This includes insights into technological advancements, implemented projects, economic efficiency, and the positive impacts on environmental enhancement.
The most effective way to connect enterprises with customers can only apply
A solar rooftop application for smartphones can enhance selling activities by promoting the value chain of solar rooftop power systems to customers This app will deliver essential information, offer preliminary indicators, and simulate the installation process Additionally, it will facilitate customer transactions, manage project information, and provide ongoing support for the operation and maintenance of solar rooftop systems.
According to S.S Iyer, the ability of organizations to effectively create and manage change determines their success or failure This shift in competitive advantage emphasizes the strategic use of information, technology, and science over merely controlling physical resources.
To ensure customer satisfaction and delight, future enterprises must adopt a creative approach to their business, prioritizing the perspective and needs of their customers By focusing on generating value for clients, these organizations can foster stronger relationships and enhance overall customer experience.
To achieve high revenue, businesses must implement a specific sales strategy that guides their sales activities An effective sales strategy focuses on creating professional, unique, and convenient sales tools, along with robust research and development efforts This approach not only enhances customer satisfaction but also fosters long-term relationships, reinforces trust, and instills confidence in customers' purchasing decisions.
Focusing solely on strategic sales organization without investing in developing sales tools and R&D activities will hinder salespeople's ability to fully persuade customers, leading to ineffective sales efforts and failure to meet revenue targets.
To enhance TTCE's long-term performance, it is crucial to integrate the two proposed solutions, effectively conveying the value of the solar rooftop power system to customers This approach aims to build strong customer trust, enabling salespeople to persuade potential buyers, leading to quicker purchasing decisions.
The Company should partner with local banks to establish Memoranda of Understanding (MOUs) for long-term collaboration Additionally, focusing on the mass development of leasing packages rather than outright sales can effectively address financial challenges, providing customers with better solutions.
The action plans for the best proposed solution are detailed in the following part h
ACTION PLANS
Following the model of Andris and his co-authors, the strategic sales organization for TTCE is proposed as below: h
This article emphasizes two key types of strategic customer segmentation to effectively educate and persuade potential clients about the benefits of solar rooftop systems, highlighting both their economic advantages and non-economic values.
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 h
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 h
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 established reputation of the TTC Group to attract customers, with minimal focus on sales tools or R&D initiatives Given that TTCE's target audience consists of large corporations and savvy investors, it is essential to develop and implement sales tools that are practical and easily accessible for educating and persuading clients To address this need, TTCE has researched and developed a software product called "Application of Information Technology for Solar Rooftop Power."
Figure 6.3 - Value chain of rooftop solar power of TTCE
TTCE is dedicated to enhancing convenience and providing comprehensive support to everyone in the solar rooftop power value chain by developing an innovative IT application that meets all related needs.
Figure 6.4 – IT Application for Selling the Solar Rooftop System
Building customer trust and understanding of the values of solar rooftop systems is essential The combination of quality service with the product significantly enhances customer satisfaction and delight.
- Along with psychology showing that satisfaction positively correlates with price fairness perceptions;
- Providing customers with complete, comprehensive and accurate information from the macro to the microcosm of the solar energy, the technological progress and the h
Page 56 of 95 projects that have been implemented, the economic efficiency and positive changes in environmental improvement;
- 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
The app offers comprehensive product information and applications for on-site solar PV technology It serves as a platform to showcase installed projects, featuring an interactive area map that highlights locations where TTCE has successfully implemented solar rooftop solutions.
The leading unit in solar rooftop power in the country and its neighboring regions is showcased on page 57 of 95 This platform serves as an effective channel for introducing sales and marketing programs to potential customers.
The solar rooftop power system offers customers valuable operational data, including generating capacity and output metrics for daily, monthly, and yearly performance This information allows customers to gain a comprehensive understanding of the system's benefits, particularly in reducing monthly electricity costs Key metrics for evaluating the effectiveness of a solar rooftop system include total investment cost, expected first-year revenue, projected revenue over 25 years, cash flow, internal rate of return, non-discounted and discounted payback periods, depreciation expense, and total savings over 25 years.
Overall cost, Human resource and Timeline
The total cost for the application development package is approximately 2.74 billion VND, with a projected launch 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 testing it in a simulated environment The final 2 months will involve trial testing with actual 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 cohesion between companies and customers, fostering collaboration with suppliers and providing a competitive edge This approach strengthens goodwill, brand identity, and brand image in the marketplace, ultimately leading to improved financial and market performance for the firm.
The app will enable TTCE to proactively gather and store information on customers returning from the application This solution allows TTCE to identify and assess potential customer segments, engage with informed customers, and actively explore data to inform investment decisions.
The app offers a range of integrated utilities, including payment processing, system management, and incident alerts, serving as reminders for both TTCE and customers during system issues or delayed 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
- 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
At present In the future
Business customers Individual and household customers h
CONCLUSION
The Vietnamese electricity industry faces significant pressure to ensure supply, particularly since 2020, as new energy sources have not been developed In this context, solar rooftop power projects emerge as a viable solution to alleviate some of this pressure Despite its potential, the solar rooftop market in Vietnam encounters various challenges To effectively promote this technology, it is crucial to build customer understanding and trust through strategic sales organization, advanced technology, and supportive financial solutions These efforts aim to optimize sales activities, deliver value to customers, and help businesses achieve their revenue targets.
SUPPORTING DOCUMENTS
(Description of coding from answer)
In 2018, the company's report indicated a decline in revenue, primarily attributed to the inability of TTCE's sales team to effectively persuade customers to make purchases Several factors may contribute to this issue, including inadequate sales strategies, lack of product knowledge among sales personnel, and insufficient customer engagement techniques.
In 2018, revenue fell short of expectations, highlighting the need for management to intensify their efforts to address this challenge The sales team, crucial for promoting the company's products and services, has underperformed recently, necessitating a focused strategy to enhance their effectiveness.
I think this issue may come from multiple sides such as salesmen, the company and also customers
Salesmen often face challenges in convincing customers due to several key characteristics Essential factors include their selling and presentation skills, in-depth product knowledge, and the ability to effectively guide customers through the buying process These elements play a crucial role in determining their success in sales.
The recruitment and training process at TTCE could significantly impact sales performance Additionally, customers play a crucial role in influencing sales outcomes, as their purchasing decisions directly affect the success or failure of sales representatives in convincing them.
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 key characteristics such as inadequate selling and presenting skills, limited product knowledge, and a lack of customer orientation Additionally, the recruitment and training processes at TTCE may contribute to these challenges Furthermore, customers significantly influence sales performance, as their purchasing decisions can greatly impact a salesman's success in closing deals.
Page 62 of 95 to purchase products
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 must be grounded in practical experiences and direct customer engagement, especially given the high costs associated with imported rooftop investment equipment After nearly two years of operation, we are still refining our strategic sales organization to better serve our target customers Despite TTCE's position as a leader in the rooftop power industry, a significant portion of our customer base has been acquired through our connections with 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 factors influencing customers' purchase decisions Addressing these areas is essential for improving our ability to effectively persuade customers to buy our products.
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 influenced by several factors, including the characteristics of salespeople, such as their presentation and selling skills, as well as their product knowledge and customer orientation Additionally, the effectiveness of a company's recruitment and training processes, along with the customer's purchasing decisions, also play crucial roles in shaping overall sales outcomes.
Page 63 of 95 presenting, selling skills or lack of product knowledge and the way they orient customers
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 segments: 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 various real-world experiences, I've observed that salespeople excel in communication but often lack sufficient technical knowledge Conversely, pre-sales staff possess strong technical expertise but face challenges in selling and presentation skills.
To successfully close deals, salespeople must effectively guide customers in understanding our products and persuade them of their value Currently, many in the sales department lack the necessary skills in presentation, selling techniques, and product knowledge It is essential for sales professionals to enhance these abilities and improve their customer orientation to secure contracts successfully.
+ 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, it is essential for salespeople to effectively guide customers in understanding and appreciating the value of our products Unfortunately, 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 qualified sales personnel to meet its hiring standards.
In the competitive marketplace, it is essential for sellers to demonstrate the value of their products by addressing customer hesitations effectively Achieving this requires in-depth 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 strong engineering knowledge, but this presents challenges Often, individuals who excel in communication may lack technical expertise, 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 questions to ensure mutual understanding; however, my ex-colleague expressed dissatisfaction with the interview process Before departing from his sales role at TTCE, he revealed his shock at the realities of the work environment, noting that the job orientation, challenges faced, and commission policies were not as expected.
HR department about not offering enough information for candidates