COMPANY OVERVIEW
TTC Energy Joint Stock Company (TTCE) – A member of TTC Group
Founded in February 2017, TTCE, located at 253 Hoang Van Thu Street, Tan Binh District, HCM City, is a subsidiary of TTC Group, which boasts over 40 years of experience across various sectors including Energy, Real Estate, 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 diverse energy projects such as wind, hydropower, biomass, and notably, solar power plants, aiming for a capacity of 1,000MW by 2022 Additionally, TTC Group is actively investing in solar rooftop power projects through TTCE, which leads the solar rooftop power market in Vietnam.
Future through
In recent years, Vietnam's electricity consumption has consistently outpaced its gross domestic product growth, prompting initiatives like TTCE's renewable energy projects These efforts aim to achieve the government's target of a 14% annual increase in electricity output from 2015 to 2030 As Vietnam integrates into the global economy, investing in clean energy is vital for sustainable development Balancing environmental concerns with economic growth is essential for a safer and more prosperous future.
Mission
By utilizing resources effectively and maximizing value for shareholders, customers, and employees, we aim to "bring prosperity to our customers." Our commitment to creating sustainable energy solutions fosters community enrichment and economic growth while prioritizing environmental protection.
Vision
TTCE aims to establish itself as the premier private investment organization in Vietnam's renewable energy sector By focusing on superior product quality and top-tier service standards, TTC Energy delivers optimal solutions for energy savings that enhance economic value, lower production costs, and offer sustainable technology solutions This approach not only ensures high-quality outcomes but also boosts competitiveness for businesses in the industry.
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 optimal performance and authentic warranties on our devices, emphasizing the importance of technical processes and equipment quality Our commitment ensures that we meet our customers' needs effectively while maximizing system performance.
TTCE prioritizes quality as essential for delivering the core values of its products and services By collaborating with prestigious global partners, TTCE ensures the provision of top-notch equipment Additionally, TTCE is committed to offering exceptional customer service tailored to meet the unique needs of each client.
Manpower and Company Structure
As of the end of 2018, TTCE employed approximately 60 staff members, structured as follows: 4 members on the Board of Directors, 15 individuals in the sales and marketing department—primarily young and inexperienced—13 technical staff, and 10 employees handling financial accounting, administration, human resources, office management, and internal audit, alongside around 18 sales collaborators.
Business Area
TTCE provides comprehensive rooftop power services, including design surveys, procurement, installation, testing, operation, and maintenance The company specializes in supplying, constructing, and installing rooftop solar systems across a wide range of projects, such as commercial centers, hotels, resorts, residential areas, office buildings, industrial parks, factories, hospitals, and even individual 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 leader in the market with a total installed capacity exceeding 15MWp, significantly outpacing its competitors such as SolarBK, which has approximately 6MWp, Redsun with 1.5MWp, and Vu Phong at 400KWp, according to the market analysis report of TTCE (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
TTCE collaborates 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
PROBLEM CONTEXT
Why using solar rooftop power?
Long-term and sustainable economic benefits include significant reductions in electricity costs and consumption over 25 years, leading to decreased CO2 emissions and enhanced electricity efficiency This approach ensures optimal power delivery for equipment, promoting both environmental sustainability and cost savings.
Solar rooftop power offers significant non-economic benefits beyond its financial advantages It enhances brand positioning and improves company competitiveness while creating added value through LEED certification By adopting high technology and renewable energy sources, organizations stay ahead of trends and fulfill social responsibilities such as energy conservation and environmental protection Additionally, solar rooftops contribute to a cleaner, greener working environment and enhance 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 its reliance on coal-fired power, the Vietnamese government is prioritizing the development of renewable energy sources Prime Minister Nguyen Xuan Phuc has emphasized that environmental protection must take precedence over mere economic growth Since April 2017, Vietnam has witnessed a 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
Data from EVN indicates that electricity consumption in Vietnam experienced an annual growth rate of 10.3% to 11.3% from 2016 to 2020 It is projected that post-2020, this growth rate will decrease to 8% per year, leading to an electricity production target of 278 billion kWh, which is expected to double by 2030 Consequently, the Ministry of Industry and Trade expresses concerns about a potential power shortage in Vietnam 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
The region from Da Nang to the South experiences optimal solar radiation levels of approximately 4.5 to 5 kWh/m², along with an impressive average of 2,200 to 2,500 sunny hours per year Consequently, implementing solar power in these areas is expected to yield significant effectiveness and benefits.
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 Additionally, it establishes a feed-in tariff of 9.35 cents per kWh (2,086 dong) for solar projects that achieve commercial operation by June 30, 2019 The decision also facilitates the implementation of net metering for rooftop solar systems, allowing excess electricity generated to be sold back to Vietnam Electricity (EVN) when production exceeds consumption.
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, generating a total capacity of approximately 30 MW over the past two years, as reported by Vietnam News on March 15, 2019.
The limited understanding of rooftop solar power among consumers, ranging from households to businesses, is a significant barrier to adoption Many customers are unfamiliar with the product's characteristics and the benefits it offers Additionally, the initial investment required for solar rooftop systems, averaging around 25,000,000 VND per kWh, poses a challenge, especially when compared to traditional electricity usage, which incurs no upfront costs.
PROBLEM IDENTIFICATION
Symptom Analysis
The revenue not fully reached in 2018
According to the TTCE's 2018 performance report, the capacity signed for solar rooftop power exceeded the planned target by reaching over 110% However, revenue only reached 84%, indicating a disconnect between customer demand and budget constraints While many customers aspire to utilize clean energy, their installation plans often remain unclear and underfunded.
The contracted capacity has surpassed expectations, but revenue has not met the planned targets due to lengthy sales cycles, often taking over six months to a year to close deals Additionally, rooftop power installation typically takes more than two months, resulting in some contracts signed in late 2018 being recorded as revenue 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 did not meet its revenue targets, highlighting the need for management to enhance their efforts in addressing this issue The sales team, crucial for promoting the company's products and services, has underperformed recently, which is a concern that requires immediate attention.
Mr Chau believes that the sales team underperformed last year, which is concerning since the company's revenue heavily relies on their efforts Effective company operations hinge on robust revenue management Ronald Huefner emphasizes that "Revenue management should be an intentional and high-level management activity," highlighting the need for TTCE's management to implement targeted strategies to enhance sales performance and meet revenue goals Addressing key issues is essential for driving improvement in this area.
Potential Problems
Based on the observed symptoms, potential issues may arise from the company, the salesperson, the product, or the customers Conducting interviews and analyzing company data can help identify the underlying causes of these problems.
3.2.1 Customers not overwhelmed by salesman’s performance
The TTCE's internal procedures indicate that a significant number of failed deals occur at the second milestone, primarily due to sales personnel lacking confidence in articulating the product's characteristics and operational principles This deficiency can lead to confusion among customers regarding the main equipment, such as solar panels and inverters, as well as the overall value of the product, ultimately resulting in customers not being fully convinced.
In 2017, only 18% of approached customers signed contracts, with 43 out of 238 engaging in agreements This percentage slightly declined to 17% in 2018, where 51 out of 292 customers signed contracts.
The below answer by a customer (Manager of GigaMall HCM) showing the TTCE’s fail in persuading customer
Our company, facing monthly electricity bills exceeding 1 billion VND for a commercial center, 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 ourselves unclear about the overall benefits and efficiency of the solar power system.
TTCE lacks a strategic sales plan targeting its customers, primarily large enterprises, and relies heavily on the relationships of the TTC Group's chairman for client acquisition This has resulted in limited market coverage, as evidenced by the company's deal reports from 2017 to 2018, which reveal that only 19% of contracts were secured directly by TTCE employees, while a substantial 81% were facilitated through introductions by the TTC Group.
2017, and the corresponding number for 2018 was 25% and 75%
Especially for products with high initial investment cost as of products of TTCE, specific and optimal sales strategies for target customers should be inevitably
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, especially given the high costs associated with rooftop investments due to imported equipment After nearly two years of operation, we are finalizing our marketing strategy tailored to our target customers Despite TTCE's position as a leader in the rooftop power industry, many of our clients have come to us through our connection with the TTC Group With a deep understanding of the market and our customers, we are committed to developing the most effective strategies that deliver exceptional value to our strategic clients.
3.2.3 Time consuming for closing a deal
The sales team's analysis reveals that the average duration from initial contact to deal closure spans six months to over a year, indicating a lack of a strategic selling process within the company's management Currently, sales representatives are navigating the sales journey independently, leading to unpredictable deal closures that depend heavily on customer interest This challenge is exacerbated in new industries and with new products, as potential clients are particularly cautious when making investment decisions.
The data summary (Fig 3.6) reveals that the negotiation period for securing contracts with target customers has been extensive, with AON taking nearly two years and other clients like Galaxy, Coopmart, Viettien, and DeHues requiring between five months to a year to finalize agreements This indicates that both individual and business customers exhibit a high level of caution and careful consideration when investing in this product.
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 essential equipment, such as solar panels and inverters, which represent 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 on the initial investment cost of a solar rooftop power system as a customer of TTCE He emphasized the long-term benefits of solar energy, highlighting that while the upfront costs may be significant, the savings on energy bills and the positive environmental impact make it a worthwhile investment Mr Quang believes that transitioning to solar power not only enhances operational efficiency but also aligns with sustainable business practices, ultimately contributing to the company's growth and competitiveness in the seafood export industry.
As a seafood exporter, I am proud to be among the few investing in solar rooftop systems While the exact efficiency of these systems remains uncertain, their benefits will only become clear after approximately 15 years However, the initial investment is significant, costing around 25 million VND per kWp, which translates to about 10 square meters of solar panels, making it a considerable financial commitment.
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 offers a competitive system price compared to its rivals, but the overall investment cost remains high due to the necessity of importing essential equipment like solar panels and inverters, which typically constitutes 70% of the total investment This trend is common 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 at 30,000 million VND per 1 kWp, and higher than Dat Tech at 6,000 million VND per 1 kWp Additionally, TTCE's price is more affordable than Vuphong's, which stands at 27,933 million VND per 1 kWp.
Vu Son Solar faces a challenge with high initial investment costs, as approximately 70% of the total investment is allocated to imported equipment This significant expense often leads to customer hesitation in making investment decisions, highlighting the unique characteristics of the product rather than any underlying business issues.
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
To successfully convert over 90% of our customers into contract signers, it is essential that our sales, technical, marketing, and service teams collaborate closely, supported by strategic direction from top management Many customers possess only a basic understanding of rooftop systems, lacking knowledge about their properties, values, and benefits, which presents a significant challenge for us.
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 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 purchasing process is largely driven by emotions, he highlights that feelings motivate buying decisions, while reasoning serves merely to justify them This raises the critical question: of the 100 customers who express interest in making a purchase, how many ultimately follow through?
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 enhance sales performance, resulting in a sales team that operates without clear guidelines or direction from management Despite having a substantial potential customer base, sales representatives often lack confidence during customer interactions, leading to an unfocused product presentation This confusion leaves customers feeling uncertain and unconvinced, highlighting the need for a well-defined sales strategy targeting specific customer segments as the fundamental issue affecting sales success.
William Miller, in his book "Proactive Selling: Control the Process - Win the Sale," emphasizes the importance of establishing a structured sales process to enhance company revenue and streamline operations For sales professionals, adhering to this standardized process is essential for converting potential customers into actual clients A well-defined sales process not only aligns with the specific goals of sales management but is also crucial for achieving consistent results.
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 Each company and product requires a tailored sales process 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 vital connections between businesses and their target customers, providing value to customers while receiving equivalent value in return Understanding and accurately identifying the needs and desires of target customers is crucial, as it allows companies to tailor their marketing strategies to meet these demands effectively.
The sales strategy and marketing efforts at TTCE have not received adequate attention, as acknowledged by CEO Mr Chau, who stated that the company is currently working to address these issues This lack of focus is identified as a core problem for TTCE.
3.3.2 No actionable guide to gaining insight into customer’s expectation
Rory Sutherland highlighted in a TED Talk that our perception of food quality is often influenced by our environment For instance, one might enjoy a bowl of Pho in a noodle shop despite noticing unpleasant odors and litter on the floor Similarly, after cleaning a car, drivers often feel a renewed sense of ease while driving, even if they aren't consciously aware that the cleanliness affects their perception This illustrates the gap in our perceptions and how external factors can shape our experiences.
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, as it reflects how customers assess the benefits they receive from a product This indicates that the perceived value of a product often outweighs its quality By effectively influencing customers' feelings about product value and enhancing their overall experience, businesses can ensure customer satisfaction while also maximizing profitability.
According to Publilius Syrus, core product values should reflect the price customers pay, raising the question of how to define and measure these values Research by Christian Jarrett on painkillers reveals that despite all pills being of similar quality, consumer perception plays a crucial role in their effectiveness Understanding these dynamics is essential for businesses aiming to align their product values with customer expectations.
Despite the analyzed economic benefits of solar power, no solar systems are currently installed in Vietnam, making it essential to evaluate these advantages 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 a company's productivity, particularly in terms of cost, quality, response time, and flexibility, which directly impact customer relationships and revenue growth To develop an effective strategy, companies must identify and prioritize their unique value factors Organizations excelling in multiple value dimensions are likely to experience accelerated revenue growth compared to their competitors.
Successful business activities hinge on various critical factors, with a particular focus on those that effectively address revenue growth challenges Companies must identify and evaluate these factors to ensure their relevance and utility Notably, cost and efficiency play a pivotal role; after 15 years of implementation, the actual efficiency of a product can be assessed in relation to its cost and the additional value it contributes to the overall value chain.
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 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 status, boosting export activities, and supporting overall growth and development In Vietnam, many businesses lack dedicated R&D departments due to their size, 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 highly effective sales force is crucial for any company aiming to boost sales and maintain a competitive edge However, as highlighted by Andris A Zoltners, Prabhakant Sinha, and Sally E Lorimer in "Building a Winning Sales Force," sustaining top-tier sales performance presents ongoing challenges that every organization must navigate to ensure long-term success.
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 These values, which represent enduring beliefs about what is desirable or good, include a strong emphasis on environmental concerns Environmental values significantly impact pro-environmental behaviors, as they shape individuals' beliefs and personal norms, ultimately guiding consumers toward more sustainable choices.
Values serve as guiding principles for attitudes and actions, yet they do not always dictate real-life behavior Individuals' attitudes shape their thoughts and emotions, which in turn impact behaviors like purchasing decisions Therefore, marketers should focus on altering consumers' attitudes to effectively influence their decision-making processes and behaviors.
According to Mr Chau's interview, product value is a crucial factor influencing customers' purchasing decisions Specifically, TTCE's solar power rooftop products are relatively new to the market, boasting a 25-year life cycle and requiring a significant initial investment As a result, customers are likely to deliberate carefully before making a purchase Additionally, the novelty of solar power rooftop products means that many customers lack sufficient information and experience, which can lead to hesitation stemming from a limited 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, sales representatives rely on their individual approaches and largely depend on the reputation of TTC group's leaders to close deals, as most potential customers are referred by them This indicates a lack of a cohesive sales strategy, 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?"
We are leveraging the strong support and reputation of TTC Group to establish ourselves as a market leader in solar rooftop power, achieving an impressive installed capacity of 15MW However, the lack of completed marketing activities, sales processes, and research and development efforts has hindered our revenue growth.
In 2018, we recognized the need to enhance our management strategies and processes, as well as our marketing and R&D activities, to ensure optimal service performance and sustain long-term, productive business operations.
According to Mr Chau, solar power rooftop systems offer numerous benefits to customers, including significant economic advantages such as reduced electricity expenses and lower CO2 emissions, which in turn decrease related costs Additionally, these systems provide an optimal electricity source for various equipment Non-economic benefits include enhanced brand positioning, added value for stakeholders, and alignment with trends in high technology and renewable energy They also fulfill social responsibilities related to energy savings and environmental protection, while improving the working environment and aesthetics Furthermore, installing solar panels on corrugated roofs can help minimize noise, lower temperatures, and extend the roof's lifespan, although some customers still hesitate to invest in solar rooftop systems.
While TTCE currently leads the solar rooftop power industry, its lack of a strategic sales process and unclear sales operations hinder customers' understanding of product value, contributing to difficulties in customer persuasion This article will explore alternative solutions to address these challenges.
Poor internal cooperation between marketing team, technical team and sales team
John Care and Aron Bohlig emphasize the importance of integrating technical expertise into sales activities, highlighting that a well-planned approach to persuasion, product demonstration, and customer engagement is essential for success Effective collaboration among marketing, technical, and sales teams is crucial to prevent customers from feeling lost or disconnected from the products However, Mr Truong notes that the TTCE teams have not executed 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 research and development activities in fostering long-term supplier-customer relationships By focusing on increasing revenues and reducing costs, businesses can avoid the expenses associated with acquiring new customers to replace those they have lost.
Developing a strategic sales process, coupled with impactful sales and marketing efforts and compelling R&D initiatives, will clearly articulate the product's value and its benefits to customers This approach not only fosters customer trust but also establishes a competitive edge 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 variations in product performance during different consumption experiences heighten customer uncertainty This uncertainty diminishes customers' trust in their previous expectations regarding the product Consequently, from the customer's perspective, the perceived value of the product serves as an important indicator of anticipated performance.
Mr Châu emphasized the critical role of R&D activities and marketing tools in ensuring sustainable business development These elements enhance technological capabilities, align with market trends, accelerate growth, and boost competitive advantage Consequently, the lack of effective marketing tools or R&D initiatives significantly hampers sales efforts and customer persuasion.
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 solar energy By educating customers about the value of solar rooftop power, including its environmental advantages and significant financial savings, companies can foster trust and acceptance This presents a considerable challenge for marketing teams, emphasizing the need for a unified approach to successfully communicate these benefits.
4.1.3 Causes belonged to the industry
Price is a crucial element of the marketing mix, as it is the only component that generates revenue, while all other elements incur costs (Kotler & Armstrong) It represents the amount for which a product, service, or idea is exchanged, independent of its perceived value When making pricing decisions, businesses must consider customer and competitor reactions, as customers often view price as a reflection of quality Typically, customers assess the cost based on the perceived benefits they receive from the product With numerous options available, price becomes a key factor influencing their purchasing decisions, alongside quality and other considerations.
Validating Main Causes
4.2.1 Undistinguished sales operation / No making the strategic sales organization
According to the literature "Strategic Customer Management: Strategizing the Sales Organization" by Nigel Piercy and Nikala Lane, establishing a strategic sales organization requires the organization to implement specific changes internally.
According to Nigel Piercy and Nikala Lane, an effective strategic sales organization excels in strategic customer management and creating unique customer value They outline key responsibilities for such organizations, which include involvement, intelligence, integration, internal marketing, and infrastructure, as essential steps for establishing a compelling strategic framework within an enterprise.
To effectively align sales operations with the overall business and marketing strategy, the sales organization must be positioned at the core of the company This approach elevates sales beyond mere transaction handling, transforming it into a vital partner in shaping key strategic business decisions essential for revenue generation and enterprise success.
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 have a comprehensive understanding of their customers and markets.
Integration of cross-functional correlations is crucial for enhancing processes that define, develop, and deliver superior value propositions to customers Effectively managing the interfaces between objectives and business units that influence customer value is essential, yet it has proven challenging within traditional functional organizations.
Internal marketing involves utilizing sales resources to effectively "sell" the customer across functional and divisional boundaries within the organization, as well as with partner enterprises, to ensure seamless value delivery To achieve high-end service and responsiveness to customer demands, businesses must go beyond mere rhetoric and focus on comprehensive improvement and management strategies.
To effectively manage sales and enhance customer relationships, companies must develop robust infrastructure that includes well-defined structures, evaluation systems, and compensation strategies Investing in employee development and training is essential for fostering relationships and partnerships, moving away from outdated transactional approaches By aligning these elements, businesses can build competitive advantages and better meet customer needs.
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,” Alice, John, and Stephen emphasize that research and development (R&D) decisions are crucial to enterprise performance and overall economic health R&D serves as the foundation for long-term growth and technological innovation, enabling companies to establish competitive advantages and develop customer service strategies that safeguard market share Additionally, the patents and inventions resulting from R&D not only protect these competitive advantages but also enhance brand value over time.
R&D is a crucial component of business success, and at TTCE, it is essential to prioritize R&D activities Addressing this key issue is necessary to achieve the desired 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 pointed out by her manager Ms Phuong, significantly impacts the company's ability to close deals effectively.
I completely agree with the importance of R&D in enhancing competitiveness, as demonstrated by SolarBK As a leading R&D-based enterprise, SolarBK consistently integrates advanced technology trends and services The company’s R&D department is equipped with state-of-the-art facilities and a robust network infrastructure to optimize work efficiency Additionally, SolarBK has developed the innovative Solar System Operation Center (SSOC™), created by Vietnamese engineers, which enables customers to monitor and control their clean energy systems online This highlights that if TTCE’s sales team utilizes intelligent devices to support their sales efforts, it can significantly enhance both the product's competitive advantage and the seller's success rate in closing deals.
Taking the real cases of products of Apple or another branch like Trung Nguyen, as below:
Apple's brands, including the iPhone and iPad, are highly recognizable despite minimal advertising on TV or in newspapers, primarily due to effective marketing and robust R&D efforts The essence of Apple's marketing strategy lies in creating attractive conditions that lead consumers to recognize the unique values and benefits the brand offers This self-conviction among consumers, both in Vietnam and globally, stems from Apple's ability to deliver practical and appealing innovations Such success is rooted in strategic investments in R&D, which not only drive long-term competitive advantages but also focus on understanding market dynamics, customer needs, and competitor landscapes Effective development encompasses not just products, but also systems and processes, ensuring a comprehensive approach to innovation.
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
5.1 Alternative solution 1: Conduct the strategic sales organization to enhance product values, internal combination, customer’s perception and sales effectiveness
Fayol emphasizes that a creatively organized sales strategy is crucial for improving internal collaboration, enhancing product value, fostering positive customer perceptions of quality, and elevating the overall effectiveness of sales.
According to Figure 6-1 from Andris A, Prabhakant Sinha, and Sally E Lorimer, there is a crucial 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
According to Figure 6-2 from Andris and his co-authors, the sales system significantly influences sales effectiveness through five key drivers, each playing a crucial role in the sales organization The "Definer drivers" focus on establishing the organizational structure and defining salesman responsibilities, while the "Shaper drivers" emphasize the importance of recruiting, educating, and training sales personnel.
According to Figure 6-3 from Andris and his co-authors, a successful sales system relies on effective sales drivers that yield positive results However, it's important to note that both company performance and customer satisfaction are 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)
- 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 quality alongside the product Research by Tahir H, Waggett C, and Hoffman A indicates that a well-packaged service enhances customer satisfaction and delight Additionally, psychological insights reveal that higher satisfaction levels are linked to perceptions of price fairness, reinforcing the need for transparent pricing strategies in promoting solar solutions.
To effectively serve our customers, it is essential to deliver thorough and precise information that encompasses the entire spectrum of energy, including technological advancements, implemented projects, economic efficiency, and the positive impacts on environmental sustainability.
The most effective way to connect enterprises with customers can only apply
A smartphone application for solar rooftop systems can enhance sales activities by promoting the value chain of solar power solutions to customers This app will offer essential information, preliminary indicators, and a simulation of the installation process Additionally, it will facilitate customer transactions, manage project information, and provide ongoing customer support, as well as operation and maintenance services for solar rooftop systems.
Organizations that effectively create and manage change can distinguish themselves between success and failure, as noted by S.S Iyer The competitive advantage has shifted from merely controlling physical resources to strategically utilizing information, technology, and human resources to deliver value to customers To foster customer satisfaction and delight, future enterprises must adopt a creative approach to business, prioritizing the customer’s perspective in their strategies.
To achieve high revenue, businesses must implement a specific sales strategy that guides their sales activities An effective sales strategy prioritizes the development of professional, unique, and convenient sales tools, along with research and development initiatives This approach not only enhances customer satisfaction and confidence in their purchasing decisions but also fosters long-term customer relationships and reinforces trust.
Focusing solely on strategic sales organization while ignoring the development of sales tools and R&D activities can hinder a salesperson's ability to fully convince customers, leading to ineffective sales efforts and unmet revenue targets.
To enhance TTCE's long-term performance, it is essential to integrate the two proposed solutions, effectively conveying the value of solar rooftop power systems to customers This approach will build trust and enable salespeople to confidently persuade customers, leading to quicker purchasing decisions.
The Company should collaborate with local banks to establish Memorandums of Understanding (MOUs) for long-term partnerships Additionally, it is essential to focus on developing system leasing packages rather than solely selling products, as this approach will alleviate financial challenges and provide effective solutions 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 energy efficiency, and the uneconomic values, including environmental impact and energy independence, businesses can create a compelling case for adopting 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 TTC Group's reputation to attract customers, showing little interest in developing sales tools or R&D activities Given that TTCE's target audience consists of large companies and savvy investors, it is essential to research and implement sales tools that are practical and easily accessible for educating and convincing these customers As a solution, the software product "Application of Information Technology for Solar Rooftop Power" has been researched, developed, and applied to meet this need.
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 their needs.
Figure 6.4 – IT Application for Selling the Solar Rooftop System
Building customer trust and ensuring a comprehensive understanding of the benefits of solar rooftop systems is essential The integration of exceptional service with the product significantly enhances customer satisfaction and creates additional delight, ultimately fostering a positive experience.
- Along with psychology showing that satisfaction positively correlates with price fairness perceptions;
We offer customers detailed and precise information on solar energy, covering everything from macro trends to micro-level insights This includes advancements in technology, implemented projects, economic benefits, and the positive impacts on environmental sustainability.
- 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
Discover comprehensive product information and applications for on-site solar PV systems, showcasing the leading solar rooftop power solutions in the country and its neighboring regions This platform also serves as an effective channel to promote sales and marketing initiatives to customers.
The solar rooftop power system offers customers detailed operational data, including generating capacity and output metrics on a daily, monthly, and yearly basis This information enables customers to gain a comprehensive understanding of the system's benefits, particularly in reducing monthly electricity costs Key performance indicators such as total investment cost, first-year expected revenue, 25-year revenue projections, cash flow, internal rate of return, non-discounted and discounted payback periods, depreciation expense, and total savings over 25 years allow for straightforward analysis of the system's effectiveness.
Overall cost, Human resource and Timeline
The total cost for the required application 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, while simultaneously running it in a simulated environment The final 2 months will involve trial testing with real customers After this comprehensive 9-month preparation period, the application will officially be launched as a market-ready product.
Figure 6.5 - Overall cost, Human resource and Timeline of Application for smart devices
TTCE enhances cohesion between companies and customers, fosters collaboration with suppliers, and provides a competitive edge This approach strengthens goodwill, brand identity, and market image, ultimately leading to improved financial and market performance for the firm.
The app will enable TTCE to proactively gather and store information on returning customers, allowing for targeted engagement with potential customer segments This solution empowers TTCE to consult with informed customers, facilitating the exploration of valuable insights to enhance decision-making.
The App offers a range of integrated utilities, including payment processing, system management, and incident alerts, serving as a valuable reminder for both TTCE and customers when issues arise or payments are delayed 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