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

Solar rooftop power basically is not completely the demand, customers want to be the smart and clean consumers but their installation plan are still very ambiguous. This is a big challenge in the industry and at TTC Energy JSC (TTCE) as well. In 2018, the contracted capacity exceeded the target. However, the revenue was under the targeted plan which is the symptom in connection with such a series of many potential problems such as: Customers not overwhelmed by salesman’s performance; No strategic sales organization; Time consuming for closing a deal; Little insight into core product values by salesman; No sales tools, RD neglect; No experienced sales resource in the industry; High initial investment cost in the industry. As a new established company, TTCE’s salesman mostly sells freely on their own ways, closing the deals mainly thanks to the reputation of the TTC groups leaders because most potential customers are introduced by the TTC group leaders. Customers somehow confuse and hesitate in their decision. Thus, the fail in persuading customers using solar rooftop power at TTCE is the main problem in relation to low salesman performance. Due to the main causes are as of no strategic sales organization and neglect in developing sales tools and RD activities, the best proposed solution to improve the TTCE’s low salesman performance should combine related activities, organize sales activities in consistent with marketing strategies, company strategies and together with developing advanced information technologies like: an application for smart devices to introduce all information of solar rooftop power from survey to procurement, installation, testing and operation in order to transfer best values of solar rooftop power system towards customers and to completely win customers trust, then they confidently make a quick purchase decision.

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-

Nguyen Thi Phuong Yen

SALESMAN’S FAIL IN PERSUADING CUSTOMERS USING SOLAR ROOFTOP

POWER AT TTC ENERGY JSC

MASTER OF BUSINESS ADMINISTRATION

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-

Nguyen Thi Phuong Yen

SALESMAN’S FAIL IN PERSUADING CUSTOMERS USING SOLAR ROOFTOP

POWER AT TTC ENERGY JSC

MASTER OF BUSINESS ADMINISTRATION

SUPERVISOR: LE THI THANH XUAN

Ho Chi Minh City – Year 2019

LIST OF TABLES

Figure 2.3 Renewable Target for 2020, 2025 and 2030 Page 11 Figure 3.1 Summary of Installed Capacity & Revenue in 2017 & 2018 Page 13

Figure 3.3 Summary of Deals Approached & Won in 2017 & 2018 Page 15

Figure 3.6 Summary of Approaching History of Some Target Customers Page 19 Figure 3.7 Example of Initial Investment Cost of a Solar Rooftop Project Page 20

Figure 3.9 Percentage of Firms Utilizing Guided Sales Processes Page 26 Figure 3.10 Correlation between value chain, competitiveness and profitability Page 28 Figure 3.11 Compare the electricity cost by using solar energy system and EVN’s supply Page 30

Figure 4.4 Steps of building the sales organization Page 42

Figure 5.1 Relationship among the dimension of sales organization success Page 46

Figure 5.3 How a successful sales system function Page 48 Figure 6.1 The strategic sales organization for TTCE Page 51

TABLE OF CONTENTS

Executive Summary 2

CHAPTER 1: COMPANY OVERVIEW 3

1.1 TTC Energy Joint Stock Company (TTCE) – A member of TTC Group 3

1.2 Future through 3

1.3 Mission 4

1.4 Vision 4

1.5 Core Values 4

1.6 Manpower and Company Structure 5

1.7 Business Area 6

1.8 Biggest Customers & Competitors 6

1.9 Rooftop system’s equipment 7

CHAPTER 2: PROBLEM CONTEXT 8

2.1 Why using solar rooftop power? 9

2.2 Booming solar rooftop power in Vietnam 10

2.3 Why solar rooftop power not really interested by Vietnamese people? 12

CHAPTER 3: PROBLEM IDENTIFICATION 13

3.1 Symptom Analysis 13

The revenue not fully reached in 2018 13

3.2 Potential Problems 14

3.3 Problem Validation 24

3.4 The importance of main problem 32

CHAPTER 4: CAUSE VALIDATION 33

4.1 Potential Causes 33

The initial cause and effect map 40

4.2 Validating Main Causes 41

The final cause and effect map 45

CHAPTER 5: ALTERNATIVE SOLUTIONS 46

CHAPTER 6: ACTION PLANS 51

CHAPTER 7: CONCLUSION 60

CHAPTER 8: SUPPORTING DOCUMENTS 61

References: 79

Appendix 82

Executive Summary

Solar rooftop power basically is not completely the demand, customers want to be the smart and clean consumers but their installation plan are still very ambiguous This is a big challenge in the industry and at TTC Energy JSC (TTCE) as well In 2018, the contracted capacity exceeded the target However, the revenue was under the targeted plan which is the symptom in connection with such a series of many potential problems such as: Customers not overwhelmed by salesman’s performance; No strategic sales organization; Time consuming for closing a deal; Little insight into core product values

by salesman; No sales tools, R&D neglect; No experienced sales resource in the industry; High initial investment cost in the industry

As a new established company, TTCE’s salesman mostly sells freely on their own ways, closing the deals mainly thanks to the reputation of the TTC group's leaders because most potential customers are introduced by the TTC group leaders Customers somehow confuse and hesitate in their decision Thus, the fail in persuading customers using solar rooftop power at TTCE is the main problem in relation to low salesman performance Due to the main causes are as of no strategic sales organization and neglect in developing sales tools and R&D activities, the best proposed solution to improve the TTCE’s low salesman performance should combine related activities, organize sales activities in consistent with marketing strategies, company strategies and together with developing advanced information technologies like: an application for smart devices to introduce all information of solar rooftop power from survey to procurement, installation, testing and operation in order to transfer best values of solar rooftop power system towards customers and to completely win customers' trust, then they confidently make a quick purchase decision

CHAPTER 1: COMPANY OVERVIEW 1.1 TTC Energy Joint Stock Company (TTCE) – A member of TTC Group

Established in February 2017 and located at 253 Hoang Van Thu Street, Ward 2, Tan Binh District, HCM City, TTCE is a subsidiary in energy of TTC Group which has been over 40 years of operational experience in fields such as Energy, Real Estate, Sugarcane, Education and Hospitality, consists of 04 Corporations, 01 Sectoral Committee and more than 150 subsidiaries with over 10,000 employees Particularly in the energy sector, Gia Lai Electric Joint Stock Company (GEC), a leading member company with more than 25 years, has been investing in building energy projects: wind power, hydropower, biomass power and especially solar power plants with target of 1,000MW by 2022 Besides solar power plants invested

by GEC, TTC Group has also been investing in solar rooftop power projects, provided by TTCE which currently is the leading in solar rooftop power market in Vietnam

1.2 Future through

In recent years, the growth of electricity consumption in Vietnam has always doubled the growth rate of gross domestic product TTCE’s renewable energy development projects will contribute to realizing the target of increasing electricity output to 14% per year in the period of 2015 - 2030 of the Government Energy is a very practical industry for Vietnam's economy in the integration process Investing

in clean green energy, TTCE is aiming for a sustainable development In order to move forwards a safer and more prosperous future, there is only one way to balance the environmental issues and economic development at the same time

1.3 Mission

Using efficient resources and optimizing added value for Shareholders, customers and employees, "Bring the prosperity to customers" Creating a green energy source to enrich the community life and economic development in parallel with environmental protection

1.4 Vision

“Becoming the leading private investment organization in renewable energy in Vietnam” TTCE differentiates from product quality to the leading service standards TTC Energy offers the optimum solution for power savings, increasing the economic value, while still reducing production costs, providing quality and long-term technology solutions and increasing competitiveness for business

1.5 Core Values

TRUSTWORTHY - TTCE has extensive experience in implementing projects nationwide and internationally Inheriting from TTC Group and GEC, TTCE provides professional services through leading engineering teams with more than

30 years of experience

RESPONSIBILITY - TTCE provides after-sales services and maintenance during system operation TTCE commits operational performance and genuine warranty devices TTCE focuses on technical processes, equipment quality to optimize system performance and meet the desired needs of the customers

QUALITY - TTCE determines quality as a prerequisite for delivering core values

of products and services TTCE provides equipment from prestigious partners all around the world TTCE provides quality customer services that meets the needs of each individual

1.6 Manpower and Company Structure

Up to the end of 2018, TTCE’s total manpower is about 60 employees organized as

shown in the following structure (Fig.1.1), including: 04 members of Chairman and

the Board of Directors, 15 persons of sale & marketing department mostly the young & the inexperienced, 13 persons of technical department and 10 persons of financial accounting, administration, human resource, office, internal audit, and around 18 sales collaborators

Figure 1.1 – TTCE’s Organization Chart

Source: TTCE’s Annual Report

1.7 Business Area

TTCE currently offers the full rooftop power services

from design survey, procurement, and installation to

testing, operation and maintenance (Fig.1.2) TTCE

supplies, constructs and installs the rooftop solar

system on the roof of various projects from commercial

centers, convention centers, hotels, resorts, residential

areas, apartment buildings and office buildings to

industrial parks and export processing zones,

factories, cold storage, parking lots, hospitals and even

households

1.8 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

Based on data in the market analysis report of TTCE (Fig.1.4) in December 2018,

compared to current the rivals i.e SolarBK, Vu Phong, Redsun, DAT solar, AEEC, etc, TTCE's total installed capacity accumulated up to 2018 is leading with more than 15MWp currently while only about 6MWp of SolarBK, 1,5MWp of Red Sun, 400KWp of Vu Phong,…

Figure 1.2 – TTCE’s Services

Figure 1.3 – TTCE’s Biggest Customers

Source: TTCE’s Market Analysis Report

Source: TTCE’s Marketing

Report

1.9 Rooftop system’s equipment

The two main equipment types of solar rooftop system are the solar panels and inverter which are not manufactured in Vietnam and almost imported from oversea countries: Canada, German, Japan, the US, Singapore, Korea…

Operation Principal of Solar Rooftop

System (Fig.1.5)

Solar panels: Also known as 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

Figure 1.5 – Solar Rooftop System

Source: TTCE’s Marketing Report Figure 1.4 – TTCE vs Competitors

TTCE’s strategic equipment suppliers (Fig.1.6) are Sharp and ABB which comes

from Japan and Switzerland, are the leadings over the world in manufacturing solar energy equipment of solar panels and inverter with more than 30 year experience

Source: TTCE’s Market Analysis Report Figure 1.6 - Strategic Suppliers

CHAPTER 2: PROBLEM CONTEXT 2.1 Why using solar rooftop power?

Economic values:

Long-term and sustainable economic benefits (Fig.2.1): Reducing electricity costs

electricity consumption for more than 25 years, reducing CO2 emissions for more than 25 years, improving electricity efficiency, providing optimum power for equipment

Uneconomic values:

In addition to economic values, the solar rooftop power also brings many other

important non-economic benefits (Fig.2.2): Enhancing the brand position,

improving the company competitiveness, creating the added values for organization through LEED certificate (Leadership in Energy & Environmental Design), getting ahead of the trend of using high technology and renewable energy sources, completing social responsibilities (energy saving, environmental protection) and

creating a better working environment (green and clean), more beautiful (viewed from above) for the enterprises

2.2 Booming solar rooftop power in Vietnam

According the FAI News and CafeF.vn (1), the Vietnamese government places more emphasis on developing renewable energy after the emission scandal of Formosa Ha Tinh steel plant and a wave of criticism of Vietnam's heavy dependence on thermal power plants (using coal) The Prime Minister Nguyen Xuan Phuc once affirmed that it would not be for economic growth but must be paid strongly attention for the environment protection And it is true that booming solar power projects has been occurred in Vietnam from April 2017 This is the

"golden" time for the renewable energy industry in general and solar power in particular to develop strongly

According to data recorded from EVN (2), with the annual growth rate of

electricity consumption (Fig.2.3) in the period 2016-2020, ranging from 10.3% to 11.3% It is predicted that after 2020, this growth rate will be 8% per year, corresponding to the electricity industry will ensure 278 billion kWh of electricity production and this figure will double by the year of 2030 Therefore, the Ministry

of Industry and Trade is worried that after the year of 2020 Vietnam will fall into power shortage

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

hours/year Therefore, the application of solar power in these areas will be highly effective

And the most important reason is that the Prime Minister has issued the Decision 11/2017/QD-TTg (3), allowing solar power projects to be exempted from import tax on goods for production It also allows the exemption from land use, land lease, water rent and electricity buyer The Decision also stipulates the feed-in-tariff of 9.35 cents/kwh (2,086 dong) for solar projects certified the commercial operation date before 30th June 2019 The Decision of the Prime Minister also stated that solar power projects on the roof are implemented the power compensation (net-metering) using a two-way meter system It means that if the electricity output of solar rooftop system generated is greater than the amount of electricity consumed, the redundant capacity amount will be bought by Vietnam Electricity (EVN)

2.3 Why solar rooftop power not really interested by Vietnamese people?

Even being supported and instructed by the Government through Decision No 2068/QD-TTg, Decision No 11/2017/QD -TTg, Circular 16/2017/TT-BCT, especially the Decision No 02/2019/QD-TTg dated 8th January 2019 on buying solar rooftop power by EVN, according to Vietnam News on 15th March 2019 (4), only 1,800 households in Vietnam have participated in solar rooftop power installation with about total capacity of 30 MW during the last 2 years

The cause is due to rooftop power is too new for consumers, most customers from households to businesses do not have a certain understanding of this product both

in product characteristics, product values and values bringing to them as well In addition, when using the solar rooftop power, customers have to spend an initial investment, for example: approximately 25,000,000million VND / 1kwh on average, this is not a small amount of investment compared to the traditional electricity usage which costs no initial investment until customers receive the

CHAPTER 3: PROBLEM IDENTIFICATION 3.1 Symptom Analysis

The revenue not fully reached in 2018

As shown below in the TTCE’s performance report of 2018 (Fig.3.1), the capacity

signed in 2018 was reached, exceeding the planned 110%, but the revenue of 84% was not fully reached The fact shows that solar rooftop power sometimes is not completely the demand, customers need but they don’t have budget, they want to

be the clean users but their installation plan are still very ambiguous

The contracted capacity has reached and exceeded the plan, however, the revenue has not reached the plan since the salesman often spends more than 6 months on average to one year or more to finalize the deal with customers, the rooftop power installation activities usually lasts more than 2 months and some contracts were signed in November and December of 2018, so the revenue booking will be recorded for 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?”

“Yes, revenue in 2018 had not reached the plan This is an issue that the management level must work harder to solve I am extremely interested in sales team, they are the main channel to publicize the company's products and services to customers, but they had not performed well during the past time.”

As Mr Chau's opinion, the salesman in the past year had not performed well, but the company's revenue depends mainly on this group And how the company operates effectively depends on the revenue management According to Ronald Huefner (5) “Revenue management should be an intentional and high-level management activity”, thus TTCE’s management level has to take specific strategies in order to improve salesman’s performance and achieve the target revenue Some following problems should be considered for the improvement

3.2.1 Customers not overwhelmed by salesman’s performance

According to the TTCE’s below internal procedures (Fig.3.2), most of the failed

deals is stopped at the 2nd milestone where salesman is not fully confident in explaining product characteristics, operating principles of the system, basic functions of the main equipment (solar panels, inverter) as well as the benefits of product value, thus they sometimes make customers confused and customers are not completely convinced

According to the percentage of customers signed contracts compared to customers

reached (Fig.3.3) only 18% in 2017 (approached 238 customers but only 43 of

them signed contracts), and only reached 17% in the year 2018 (approached 292 customers but only 51 of them signed the contract)

The below answer by a customer (Manager of GigaMall HCM) showing the TTCE’s fail in persuading customer

“With the monthly electricity bill of more than 1 billion VND for a commercial center, my company is also very interested in solar rooftop system, since we suppose that cost saving by using solar power could be, and after a few times discussed with your sales, the full picture of solar power values is still in vague We still have been very confused about the efficiency and other values of the whole system.”

3.2.2 No market penetration strategy

There is no sales strategic plan for target customers, most of TTCE's customers are large enterprises, approaching customers thanks to the relationship of chairman committee of TTC Group, and so TTCE’s market coverage is not wide As shown

in the company deal won reports of 2017 – 2018 (Fig.3.4), the proportion of

customers signed contracts founded by TTCE employees only accounted for 19%, while the contracts signed through introduced by TTC Group accounted for 81% in

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 certainly does not only exist on paper, plans, or reports and

generally the rooftop investment cost is still quite high because of main equipment imported,

so a strategic sales plan must be built through practical experiences and directly touching customers After nearly 2 years of operation, we are still under completion the clear marketing strategy for our target customers In fact, in recent times, although TTCE is the leading company in rooftop power industry, most customers have signed with us coming from the relationship with TTC Group Currently, we understand the market and deeply understand our target customers, so we will immediately complete the best and most effective strategy for our strategic customers so as to bring the best values to our customers”

3.2.3 Time consuming for closing a deal

Through the actual selling activity progress, the sales team comes up with the

below chart (Fig.3.5), it usually takes from 06 months or even one year or more

from the beginning of access to the deal closing date This shows that the company management level has not had the strategic selling process, the salesman is now selling on their way Closing a deal mostly cannot be controlled, it can drift freely until customers feel really interested and want to sign a contract, even this is the new industry, new products and the customers are seriously cautious before making investment decisions

From the company data as shown in the below summary (Fig.3.6) of periods from

approaching date to contracting date of some target customers; It has been taking nearly 2 years for pursuing AON and currently still under negotiation It also took from 5 months to one year for another customers like Galaxy, Coopmart, Viettien and DeHues to sign the contracts This shows that customers not only households but business customers also are very cautious and considerate when investing in this product

3.2.4 Specificity of initial investment cost of solar rooftop power

Due to the product specificity and main equipment of the whole system (solar panel and inverter) must be imported, which accounts for 70% of investment costs, thus

making investment costs high, taking below example (Fig.3.7)

Figure 3.6 – Summary of Approaching History of Some Target Customers

Source: TTCE’s Annual Report

Figure 3.7: Example of Initial Investment Cost of a Solar Rooftop Project

Source: TTCE’s Internal Quotation

An interview with a customer – Mr Quang – CEO of Vinh Quang Seafood Exporter Company: “As the TTCE’s customer, how do you think about the initial investment cost of solar rooftop power system?”

“I have to affirm that I am one of the few seafood exporters investing in the solar rooftop system Although nobody knows exactly how the system efficiency actually ensure us, only after about 15 years of investment can be seen But frankly speaking, the investment amount

of the system is too high, 25 million VND / 1kwp equivalent to 10m2 panel, not a small

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:

“Compared to the price of competitors, the system price of TTCE is not high However, due

to the characteristics of the system, the main equipment (solar panels & inverter) must be imported which usually accounts for 70% of the investment amount, leading to the system investment cost high – This is the general trend of the solar power industry.”

Taking into account of the price comparison (Fig.3.8), TTCE's price is not high, it

costs about 17,300 million vnd/1kwp for TTCE, 30,000 million vnd /1kwp for Vuphong, 6,000 million vnd /1kwp for Dat Tech and 27,933 million vnd /1kwp for

Vu Son Solar Since the main equipment imported accounting approximately 70%

of the investment cost and making the initial investment cost is quite high, that makes customers hesitate in investment Thus, this is the specificity of the product, not the business problem

3.2.5 Little insight into core product values

Asked Mr Truong – TTCE’s salesman: How do you convince customers through the values of solar rooftop power system? Being replied that

“ I really know whenever our customers are completely convinced by the values of the system means that almost over 90% of them will intend to sign contracts – However, to succeed in convincing them is a close combination process requiring related departments

to work closely together: sales team - technical team - marketing team - service team and even the strategic direction by the top management In addition, our customers have almost only a preliminary concept of rooftop system, very few of them have a deep understanding

of properties, values and all the its benefits This is also a big challenge for us."

In fact, in any business activity, not just the rooftop itself, the close and smooth combination of the relevant departments will always create a positive result, according to Mr Truong, the internal cooperation of TTCE has not been strongly built and that has affected the company's revenue

As answered in the above interview with Ms Phuong – Project Development Manager, the R&D activities of TTCE are mostly unfocused on, currently from the BOD, BOM to lower level staff only have mainly focused on closing the deals by all means, but they unintentionally forget that the R&D activities neglect, which can be seen as one of marketing tools, leads to the competitive disadvantages effecting the deal closing as well

3.2.7 No experienced sales resource in the industry

Being asked: “What do you think about TTCE’s salesmen capacity?”, Mr Chau - CEO replied:

“In this industry, sellers are expected to show customers that their investment is worthy by explaining all their hesitation The only key to do that is to have strong product insight So, we prioritize to recruit salesmen who are knowledgeable at engineering However, since this is an entirely new field, it is impossible for us to recruit good experienced salesmen with strong technical background In fact, salesman 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.”

Specifically, TTCE requires the candidates in sales position who have at least 5 years in high value engineering sales position, major in business, have communication skills, presenting skills, can work under pressure, and have knowledge of relevant juridical issues in solar rooftop industry However, in reality, TTCE can only recruit sellers with sales experience in various areas or even

no sales experience, good communication skills, good appearance but lack of knowledge about solar rooftop industry

The interview with the Project Development Director, Mr Nguyen Le Hung:

“What issues sales team may struggle with?”

“Dealing with many real cases, I can see that salespeople usually well communicate but do not have enough basically technical knowledge of solar rooftop product In contrast, pre-sales employees are strong at technical products but struggling with selling and presenting skills Besides, to win the deal, I think sellers have to know how to orient customers with our products and convince them In fact, TTCE salesman have not achieved to that level Generally, people at sales department need to improve more in their presenting as well as selling skills, product knowledge and also the way they orient customers to convince them and win the contract”

TTCE salespeople are required to obtain technical knowledge as well as selling technique that may attract customers and convince them to purchase products

However, in reality, it’s quite hard for Mr Hung to choose successfully these types

of salesmen like that

Another interview with Ms Mai Thao – Sales Representative of TTCE to approach her sale experience:

“With more than 1 year experience in selling this product, it is unfortunate that I have not reached any contract I realize that customers are much hesitant and considerate before deciding to invest, mainly because this is a new product and somehow the market price of rooftop initial investment cost is quite high, the rest because TTCE does not have an effective

& comprehensive tool for sales team, like me, if I have comprehensive technical knowledge with deep understanding of the product insight I will not be embarrassing to convince customers.”

3.3 Problem Validation

3.3.1 No tactics to accelerate sales performance

According to Robert A Simpkins in “Secrets of Great Sales Management: Advanced Strategies for Maximizing Performance” (6) How to target potential customers in a meaningful and differentiated way? How to increase the purchase rate? How to turn prospective customers into real customers? How to know when

to close sale? People are generally hesitant because the purchasing process is largely based on emotion Feelings motivate us to buy something Reasoning is just what we justify the decision to buy something Of the 100 customers who contact

you to purchase, how many people actually 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"

“Increase sales is the stated goal of many soloists at the start of the year Having strategic sales plans maximizes your chances of securing the business you need to get on track for achieving this year's targets”

But in the TTCE case, as confirmed by the CEO, the company has not yet developed a tactics to accelerate sales performance The sales team only sells according to what they know, without the guideline or the orientation by the management board, although the TTCE’s potential customer volume is very big, thus when salesman works with customers they are usually lacking in confidence,

so the product is unfocused, the customers feel lost and are not completely convinced Therefore, the absence of strategic sales organization for target customer is proposed as the root cause of the problem

According to William Miller, the author of the book “Proactive Selling: Control the Process - Win the Sale” (8), building a sales process is one of the things that every manager needs to build in order to optimize the company's revenue as well as to make the business operate more smoothly and systematically Salesman has to follow the sales process in order to turn potential customers into real customers A standardized sale process is compulsory and meets the specific objectives of sales management activities

As a research by the Sales Management Association (9), it is about 90% of all companies that apply the proper and steered sales process were graded as the highest in performance

The above numbers expose that two key sales constraints – revenue and performance – have a tendency to go significantly up if a company takes on a standardized sale process

In addition, sale process is very challenging due to a standardized sale process generating more revenue Each company and each product applies different sale process steps to optimize product information and values for customers

Thus, together with a standardized sale process, marketing tools or activities which

is an indispensable factor should be implemented effectively According to Rowson and Pauline (10), marketing activities are seen as bridges between businesses and target customers These bridges are responsible for giving values to customers and receiving other commensurate values The key to achieving the company's business goals or target revenue is to correctly identify the needs and desires of the target customers, thereby finding ways to ensure that the needs and wants of customers through effective marketing tools or activities should be done completely

However, both sales strategic process and marketing activities at TTCE have not been seriously focused Mr Chau – CEO also affirmed that the company has been under completion these things Thus this is proposed as the TTCE’s fundamental problem

3.3.2 No actionable guide to gaining insight into customer’s expectation

Rory Sutherland said in a speech at TedTalk (11) “We can't distinguish the quality

of the food and the environment where we eat it.” It's like when you walk into a noodle shop if you notice you will see a lot of moldy smells, and full of tissue paper on the floor But sometimes you don't pay attention to this and still enjoy a bowl of Pho in a delicious manner Those of us who have all noticed this phenomenon, that after cleaning the car, when driving, you always feel much easier

to drive And what is the reason for this? Unless after you finish changing the oil or maintaining the car, you will have a different feeling when driving But you are not fully aware that it is because there is always a gap in our perceptions

Awareness of value is a customer perspective on the value of the product to them

It is not nearly as much related to market prices and depends on the satisfying customer needs on the products Value perception is a general assessment of product use by customers based on what they receive This shows that the product value insight is higher than the product quality Therefore, we take the opportunity

to influence customers on how they feel about product values as well as optimize the customer experience in a way that really satisfy customers and we remain maximizing profitability

The Sententiae by Publilius Syrus (12) also stated "Core product values must be worth the amount of money customers pay" So, how to define values? Can we measure that values? The Research on painkillers by Christian Jarrett (13) indicated that whether painkillers are actually more effective at reducing pain In fact, they're all the same quality pills, but we all have a better understanding of this drug than the other

As mentioned above, the economic values of solar power has been specifically analyzed, but no any solar system has been installed in Vietnam currently, so how

to see clearly these benefits, not after 1 month or 1 year but 15 years, because of the systematic products This is a big challenge for the sales team to communicate, educate and convince customers to invest in the solar power system

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:

The value factors can be tied to the company productivity through the dimensions

of cost, quality, response time and flexibility - in particular, the relationships between customers and the company's revenue growth Companies must choose their own factors to make a strategy Companies that do well on many value factors will grow their revenue at a faster rate than other companies

How factors contribute to the success of business activities Which factors are more important? Companies must identify factors that must prove their usefulness in solving business challenges, especially revenue growth The factors of cost and quality of the solar rooftop system need to be focused and correlated However, due

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

What buyers really want and how they make decision are questions which marketers need to take deep consideration in order to have actionable guidance to gaining insight into customer’s expectation This is also the responsibility to TTCE’s marketing team in order to take away the customer’s suspicion on values

of solar rooftop power system

3.3.3 R&D neglect

According to Professor Hai & Ha - Department of Corporate Finance, Academy of Finance (15) R&D activities in enterprises have four basic roles: Boosting the competitive advantages; Increasing the position of the business; Increasing export activities for businesses; Supporting the growth and development for businesses Most Vietnamese businesses, due to their particular size, R&D activities do not have a specialized department but are often integrated into one of the business's parts such as production department, sale department, However, this is one of main activities should be always set in the development strategy of the business

3.3.4 High Initial Investment Cost

As an article of Asia News Monitor; Bangkok [Bangkok]22 Mar 2019 - Vietnam: High cost casts a shadow on solar power (16), The price of solar rooftop investment

is not small, from VND 25 million to VND 30 million for every 10 m2 of panel, this is the main reason why customers are hesitant to invest in the system

But based on the below chart from the Vietnam Electricity (EVN), customers can save 70% cost whenever investing in solar rooftop power system during 25 years

3.3.5 No experienced sales resource in the industry

According to Adele Revella, the author of the book namely “Buyer Personas: How

to Gain Insight into Your Customer's Expectations, Align Your Marketing Strategies, and Win More Business” (17) sales closing is extremely important in the sales process, it determines whether your sales transaction is successful or not Many salespeople perform very well in the previous stages such as product introduction and offering, but at the time of sale finalization they seem embarrassing The main reason is that the salespeople are trained and understand the product/ service information provided by the company, so they fully grasp the active position in the first stage of the communication process However, later on when customers "counter" with a series of questions or queries outside the pre-set knowledge that make salespeople face difficulties and quickly get clumsy in front

of customers That means salesperson does not fully understand who is his customers, what do they need and obviously salesman cannot gain customer’s expectation

Adele Revella also stressed that consumers are very careful when buying products and they have a lot to consider when spending money like: Wondering whether this

is really a need? This is a wise decision? Therefore, salespeople need to fully complement their knowledge so that the deal ends well

As Solomo stated “Don’t let opportunity slip away” (18) How to seize the opportunity to close sales is completely a must for any salesman Solomo explained that in the sales process, if you understand the needs of your customers and easily help them understand the products you are selling can entirely meet their needs, the

"closing deal" is not necessary But if you are constantly hesitant about how to

"closing deal", you should probably review the strategy of determining the customers' needs, what is the strategic sales plan and how to educate the benefits, values of your product or service

All the necessary qualities along with the practical experience of salespersons who especially sell systemic products like solar energy, are difficult to find in Vietnam because this industry has been familiar with consumers a few years ago

3.3.6 Main problem

Solar rooftop electricity is a relatively new industry in Vietnam today, consumers have been only known to rooftop power for the past 2 years Although the advantages of solar rooftop power have been acknowledged, so far, the number of installed solar rooftop power projects is very unobtrusive Almost companies on solar rooftop power have been operating and building the most optimal business model to attract customers As confirmed by Mr Chau – CEO of TTCE as below, it can be seen that the salesman of solar rooftop power has not succeeded in persuading customers which is also the main problem of TTCE being solved

“TTCE is the leading company in the solar rooftop power installation service, but in the past 2 years we have been operating and building Currently we are still completing in terms

of organization as well as people The main problem we really care about is the salesman

force - They are the main force for the company success, but they still have not completely persuaded customers.”

3.4 The importance of main problem

Problem definition: “A winning sales force will enable every company to drive sales and stay competitive Sales force effectiveness drives every company's success, but keeping a sales organization at the top of its game is a constant

challenge”, according to Andris A Zoltners, Prabhakant Sinha, and Sally E

Lorimer through Building a Winning Sales Force (19)

CHAPTER 4: CAUSE VALIDATION

The following validations will identify the causes of sales failure in persuading customers investing in solar rooftop power system

4.1 Potential Causes

4.1.1 Undistinguished sales organization – Customer’s suspicion on product values

According to the research (20), the author stated that consumers’ values and beliefs need to be considered when examining the influences that affect their purchasing decisions Values are enduring beliefs that a given behavior is desirable or good and include valuing the environment Environmental values play a primary role in pro-environmental behavior: values affect people’s beliefs, which then have influences on personal norms that lead to consumers’ pro-environmental behaviors (21) Values are regarded as principles that guide the formation of attitudes and actions, although values do not always lead to behavior in real life That is, people’s attitudes affect their thoughts (the cognitive function) and feelings (the affective function), and thus influence behavior such as purchasing behavior This implies that marketers should seek to change consumers’ attitudes so that they can influence consumers’ decision making and behavior

In contrast, from the interview with Mr Chau, he also mentions product value is one of the most important elements that customers consider for their purchase decision In specific, about products of TTCE, this is a very new product for the market in our country, its life cycle is 25 years and the initial investment value is large Therefore, customers tend to think carefully before deciding to buy Besides, because solar power rooftop products are still very new to customers, they do not have much information or experience about products, so it is easy leading to hesitate due to lack of understanding about the value of products

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

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?"

“I agree so At the moment, we are taking the advantage of big support and reputation from TTC Group to grab the market first and now we have done it successfully - We are now the leading unit on solar rooftop power with 15MW capacity installed However, due to the incompletion of marketing activities, selling process, R&D activities…making the revenue in

2018 was not fully reached Thus we urgently have been completing the most effective management strategies and processes, activities of marketing & R&D for the best performance service and long-term & productive business operation.”

From the interview with Mr Chau, he states that solar power rooftop can bring to customers a lot of value or benefit such as economic values, non – economic values and some other values Some economic values that customers possibly gain are reducing electricity expenses, reducing the amount of CO2 thus reducing the expenses to solve this amount of emissions, providing optimal source of electricity for equipment… Some non – economic value for customers are enhancing brand position; creating added value for customers, partners, shareholders and communities; get ahead of the trend of using high technology and renewable energy sources; completing social responsibility (energy saving, environmental protection); creating a better working environment (green, clean), more beautiful (viewed from above)… Some other values are installation on corrugated roof can help reduce noise, reduce temperature, and protect roof life; absorbing solar energy thus can help reduce internal space heat… Despite the value that TTCE’s product

some of them still hesitate to make decision to purchase the solar power rooftop system

Even it is true that TTCE is now the leading in solar rooftop power industry, the selling activities without any strategic process or the undistinguished sales operation making customers not understanding the product values which are considered as one of main causes for the fail in persuading customers Therefore, in the next part, some alternative solutions will be figured out for this issue

Poor internal cooperation between marketing team, technical team and sales team

According to John Care and Aron Bohlig (22), selling activities should have the analysis and brings out how the technical background can be added incalculable advantages to sales efforts at every step How to plan and perform the perfect persuasion, prove the products effectively, make the customer relationship, customer engagement, grasp hesitations and rivals that should have the effective combination of involved teams: marketing, technical and sales, if not customers may feel lost and get unfocused on products From Mr Truong’s opinions mentioned above, TTCE teams have not performed these things in the comprehensive and effective way

4.1.2 The absence of marketing tools – Neglect of R&D activities

Malcom Baldridge Quality Award criteria (23), implementing the marketing concept via market orientation and R&D activities (24), increasing revenues and reducing costs through avoidance of the cost of acquiring new customers to replace lost ones (25, 26), all drive suppliers toward long-term relationships with customers

It is evident that building a tactical sales process in combination with effective sales and marketing activities and together with persuasive R&D activities will clearly define the insight values of the product and the values for customers and thereby

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)

Many studies in marketing suggest that the variability in product performance across different consumption experiences increases customer uncertainty This uncertainty leads to decreased reliance on prior expectations of the product In this situation, from the customer’s point of view, product value perception is considered

as a cue in their expectations of the product performance (28)

As Mr Châu mentioned above R&D activities, equipping marketing or promotional tools, play a fundamental role for the sustainable development of enterprises which are reflected in many aspects such as: Enhancing technological capacity, catching up with market trends and promoting speed up the development and ensuring the increase of competition for businesses Thus, the absence of marketing tools or R&D activities is another important cause making the fail in persuading customers by salesman

On the other hand, only salesman himself has hardly created customer trust about its products and services Economic and non-economic profits, as well as product values need to be convinced through marketing activities, technical analysis and together with selling strategies which mean that the combination between marketing team, sales team & technical team must be close and in a harmonious way in order to educate customers have full knowledge of solar rooftop power values and gain their trust Customers then will accept solar rooftop powers not only the green, clean, and environmentally friendly factors but also the big financial savings These kinds of things are not only a big challenge for marketing

4.1.3 Causes belonged to the industry

High initial investment cost

According to Kotler and Armstrong (29), price is the only element in the marketing mix (7Ps) which produces revenue and that all the other element represent cost Price is the amount for which product, service or idea is exchanged, or offered for sale regardless of its worth or value to potential Pricing decision should consider customer and competitor reactions In formal uses, customer will generally perceive price as an indicator of product or service quality and will normally evaluate the cost in terms of perceived benefit derived from the consumption of the product that entrepreneur offers In most cases, customers have the opportunity to choose from a variety of offering and thus price will be one of the comparative indicators upon which their purchase decision will be based, (30) Price and quality may be among the factors that consumers consider when making purchase decision (31) The compatible relationship between price and quality has been highly considered by customer (32) and can create satisfaction Customers who are highly satisfied are much less ready to switch to either new product or supplier High satisfaction can create an emotional affinity with the brand, not just a rational preference, which resulting in making purchase decision more times and engaging loyalty to organization

From the following internal sources (Fig 4.1), TTCE has established itself with high quality, high price and good product The main equipment of TTCE’s solar rooftop system like solar panel and inverter which are imported from famous branding such as Sharp (Japan) and Solar world (Germany) Origin from famous brand will provide long life product cycle and efficiency