selling lap 129 performance indicator: se:106 keep it real...

�Keep It Real—in Sales LAP: SE-129-SP © 2007, MarkED

LAPLeadership, Attitude, Performance ...making learning pay! Selling LAP 129 Performance Indicator: SE:106

Keep It Real—in Sales

Avoid common pitfalls

Know when to say NO

Put your standards to the test

Selling Ethics

�LAP: SE-129-SP © 2007, MarkED Keep It Real—in Sales

The Right and Wrong of It

Say you’re a salesperson working on commission, and you want the customer you’re talking with to purchase the prod-uct you’re selling—right away. The prod-uct is a car, and you don’t want the cus-tomer to wait another week, because if s/he does, you won’t get the commission when you need it, which is now!

You also know something the customer doesn’t. This car will be discounted start-ing next week, as part of an end-of-the-year sale.

What should you do? Should you let the customer know the discount is com-ing, so s/he can take advantage of it? Or, should you prioritize your own interests?

You can make the right decision by applying your selling ethics.

Explain the importance of ethics in sales.

Describe how salespeople can behave ethically.

What are ethics?As the basic principles that govern behavior, ethics are not laws. Laws are enforced by governmental statutes. Ethics go beyond laws (and rules and regula-tions) to the heart of a situation. At the center of everything you do is whether your actions are right or wrong according to your moral standards (your ethics). If a law says, “Only cross the street at a crosswalk,” but you see someone injured on the other side of the road, you might feel that it’s important to cross quickly to help the other person. In this case, your moral standard of helping others outweighs your desire to obey the law.

For every complex problem, there is a simple

solution that is wrong.—G. B. Shaw,

Irish critic and poet

Imagine you want to sell your old microwave oven (that still works), but you know that lately it has had some electrical issues. Would you disclose those is-sues to a potential buyer? And, would your answer be the same if the buyer were your best friend? Your responses reveal your selling ethics, the principles that guide your sales behavior. Your selling ethics emanate directly from your own personal ethics.


Whether or not legal issues are involved, a high level of ethics will compel you to behave in a truthful way—meaning that what you say and do will reflect reality. This is an important point. Nothing you do ethically will be imagined, false, or sneaky. You’ll conduct yourself honestly, even when people aren’t looking. And, you’ll adhere to your moral principles in spite of temptations or pressures to do otherwise. In short, you’ll “keep it real.”

Why are ethics important in sales?Salespeople are on the company’s “front lines” and often create the first impres-sion people receive of the business. This first impression is important to the company’s leaders and stakehold-ers because it affects profitabil-ity. Customers often use this first impression to decide whether or not (or how much) to purchase from the company.

From the first impression onward, many customers evaluate the com-pany’s ethical standards. If customers suspect they are dealing with dishonest people, they will not remain custom-ers for very long. Customers do not want to be scammed, and business stakeholders do not want their money or interests put at risk by suspicious actions.

Customers are not usually willing to give a busi-ness, or its salespeople, a second chance to make up for an error, especially if it is the result of unprofes-sional behavior. A customer who is promised a $10 rebate on a set of computer speakers will not be happy when that rebate request is rejected by headquarters later on—even if the mistake costs the customer only a few dollars. After the slip-up, the customer will likely take his/her business elsewhere.

In light of this, salespeople should acknowl-edge that trust is the foundation in any relation-ship, especially customer relationships. When customers know that they can rely on the truthful-ness of a particular salesperson, they trust what that person is telling them. In today’s business environment, more emphasis is being placed on building relationships with customers—making it even more important for salespeople to establish trusting relationships through truthful behavior.

What happens when the level of ethics is low? When salespeople cross the moral “line,” negative events can follow. The business can experience legal issues, which can be costly and can promote a negative image of the company. Customers who

learn of the legal issues (and see the negative public image) can begin to distrust the company. They can stop buying the company’s products, ending their support of the company altogether. Consequently, the company’s profits can decrease. What’s even more disheartening is that the unethi-cal behavior of just one salesperson can trip the entire downward spiral. The risk of these negative events underscores the need for a high level of ethics in every selling situation.

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Drawing the Line

SummaryEthics are the basic principles that govern your behavior. They go beyond laws to the heart of a situation. With a high level of ethics, you’ll conduct yourself honestly, even when people aren’t looking. Ethics are highly valued in selling. Customers do not want to be scammed, and stakeholders do not want their money or interests put at risk. Trust is the foundation for a good customer relationship. Salespeople who behave unethically break that trust—and risk bringing negative consequences on themselves and their companies.

1. What are ethics?

2. How are ethics different from laws?

3. Why do customers want salespeople to behave ethically?

4. Why do stakeholders want salespeople to behave ethically?

5. Name one negative event that can result from unethical sales behavior.

How can salespeople behave ethically? Ethical sales behavior begins with knowledge. Salespeople need to know what a ques-tionable activity is. Then, they need to determine how to handle the “iffy” situation, based on their own personal code of ethics.

EthicalBehavior

UnethicalBehavior

KnowledgeAs a salesperson, you need to know where the “line” is drawn before you can determine how close to the line you want to position yourself. Think of levels of ethics as points along a continuum, with illegal action at one end—assuming for this purpose that illegal action is unethical. Some salespeople will feel comfortable placing themselves right next to the illegal activity, as long as they don’t cross the line. Other salespeople will not feel comfortable being anywhere near the illegal aspects of selling.

Illegal activities. What are the selling “no-no’s”? Here is a brief list:

•Misrepresenting the truth (telling a bold-faced lie)

•Saying something unfair or untrue about another business (either out loud or in writing)

•Saying something unfair or untrue about another company’s product

•Participating in bribery (offering/receiving something in return for business or products)

Although gold dust is precious, when it gets in your eyes, it obstructs your vision.

—Hsi-Tang Chih Tsang, renowned Zen master


•Neglecting to provide accurate information to customers

•Unfairly competing within the marketplace, such as:

uMaking price deals

uRequiring exclusive dealership

uTying-in sales (making the purchase of another product mandatory)

uRequiring reciprocity (doing business only with those who buy from you)

Who is legally responsible for all of these things? The busi-ness is, of course—but so are the salespeople themselves. The legal liabilities incurred from participating in these activities can cost the company a lot of money and can ruin the careers of the salespeople involved. In short, stay away!

Questionable activities. Not every situation is clearly right or wrong. Some situations are questionable, and salespeo-ple tend to judge these situations differently—according to their own personal ethical standards. Common sales-related ethical issues can be grouped according to a salesperson’s customers, competitors, employers, and coworkers. Let’s take a look at each.

•Customers When dealing with customers, salespeople must be cau-

tious with: gift-giving, entertaining, answering questions, communicating product information, and maintaining confidences.

Gift-giving is one of the most widely disputed ethical issues in sales. It’s illegal to offer or accept a bribe. But, at what point does a gift become a bribe? Is it okay to give holiday gifts to clients? Is it appropriate to send promotional items to potential customers? What about larger gifts that “obligate” a customer to buy from your company? Ultimately, how much giving is too much?

In certain industries, and within certain businesses, there are gift-giving guidelines. These guidelines typi-cally allow salespeople to offer inconsequential gifts, if any at all. Some businesses even put a dollar-amount cap on the client gifts permitted. In spite of this, there are salespeople who try to “stretch” the meaning of inconsequential by: (a) giving valuable samples to customers or (b) crediting customers for damaged merchandise that hasn’t really been damaged. These two practices are typically viewed as inappropriate.

Entertainment is another hot-button topic in sales ethics. Just as gift-giving can be monitored closely, so can entertaining customers. In certain industries, it’s generally accepted that salespeople will entertain clients as part of the relationship-building process. In

Imagine you’re listening to George explain the features and benefits of a multi-function printer, but he relates some incorrect informa-tion by mistake. As a salesperson, George is legally liable for his communication errors. A mess-up can be considered negligence, especially if George does not display reason-able care.

But, how does a mistake like this stack up ethically? Do you think negligence is wrong?

You probably would think so if you sus-pected George made up his sales presen-tation as he was speaking. Would you feel

differently, however, if you knew that George had received the incorrect information from someone who owned that particular model, from his own sales manager, or from the manual sent with the product?


other industries, especially where contracts are awarded, entertaining can be viewed as favoritism or bribery. It’s difficult to know what to do, sometimes. A golf outing can turn into a legal fiasco very quickly.

children. Since withholding information could be con-sidered misrepresentation or negligence, salespeople should resist the temptation to tell only part of the story. In the same vein, they should also avoid exaggerating the product’s benefits. Saying, “You can clean anything with this product,” goes beyond the cleaner’s actual capabilities. This, too, could be considered misrepresentation.

Because building relationships and communicating go together, it’s important for salespeople to carefully guard what customers tell them in confidence. Spreading information that is not intended for others’ knowledge can tear down a relationship and hamper communication in the long run. It’s generally expected that salespeople will ask a customer’s permission before sharing his/her confidential information. It’s also expected that salespeople will not share company secrets to make a sale.

•Competitors Some salespeople are tempted to “do what it takes” to

cripple their competitors. They tamper with competitors’ products and relocate (or even hide) those products on store shelves. Unfair competition is illegal, but little things can go unnoticed. It takes a salesperson with high ethical standards to avoid sabotaging a competitor’s opportunity to make a sale.

In the same way, salespeople with a high level of ethics will not belittle the competition in the presence of customers. It’s one thing to relay the facts (which speak for themselves), but it’s another to cast a shadow on the reliability of another person or company. Sales-people should exercise caution when discussing their competitors.

Another issue is answering questions without really knowing the answers. When this occurs, salespeople are actually guessing, not relaying facts. Salespeople who try to appear knowledgeable when they’re actually uncertain risk crossing into the legal issues of misrepresentation and negligence. Imagine how you’d feel if you discovered that the answer a salesperson gave you was incorrect. You wouldn’t trust the accuracy of his/her statements in the future.

Along the same lines is communicating product information. Some salespeople are tempted to withhold negative product information—to avoid turning the customer away from a purchase. When trying to sell a household cleaner, for example, it might be easy not to mention that the cleaner is hazardous to plants, pets, or

To se

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t is rig

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do it is want of co

urage.

—Confucius, Chinese

philosopher

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•Employers Employer-employee relationships operate in two direc-

tions—from the employer to the employee and from the employee to the employer.

Some questionable employer activities include:

? Putting unreasonable pressure on salespeople (by setting out-of-reach quotas, for example)

? Neglecting to assign/pay the commission due when a territory is split and distributed among salespeople (especially when one salesperson has worked the area for a long time)

? Being a poor role model for ethical sales behavior

? Looking the other way when staff members behave unethically

certain employees might want to manipulate the contest for their own personal gain. They might declare sales that were completed at the end of the previous month as completed at the beginning of the current month. If it’s only a matter of one or two days, no one will notice, right? Is it okay to adjust the sales dates if no customers are harmed in the process?

Another situation sales coworkers may encounter is their own influence on each other. Is it right to encourage someone else to behave unethically? If another person performs an unethical activity you’ve suggested, you’re not responsible, right? What about keeping unethical behavior “under the table”? Should a sales employee tell the proper authorities about things that might hurt the company’s sales overall?

Questions frequently arise in the course of examin-ing ethical issues. What helps the most is having an ethical standard by which to measure each questionable activity.

Management is doing things right; leadership is doing the right things.

—Peter F. Drucker, American management expert

Sales employees can be involved in questionable activities, too. These include misusing company property (such as driving the company car to personal events), fudging expense accounts, working a second job (or going to school) on company time, and taking customer records when leaving the company.

•Coworkers In employee-to-employee relationships, such as between

salespeople within the same company, a salesperson might be tempted to behave in an overly competitive way. When a sales department holds a contest, for example,

Personal code of ethicsYour ethical standard is your personal code of ethics. Ethical sales behavior, then, flows directly from this personal code. In other words, what you do with ethical situations in your personal life determines what you’ll do in sales situations.


1375 King Avenue, P.O. Box 12279, Columbus, Ohio 43212-0279 Ph: (614) 486-6708 Fax: (614) 486-1819

Details: www.Mark-ED.org Copyright ©2007, by Marketing Education Resource Center®

Consider your individual ethical standards. Are you comfort-able with locating yourself right next to the legal or moral “line”? Or, do you prefer to be further away? Your comfort level reveals your level of ethics.

So, how high are your ethics? To find out, think about how you conduct yourself as a salesperson. Who are you really? Are you an honest salesperson—someone to be trusted? Or, do you try to manipulate potential customers into doing what you want? During a sales presentation, do you stick with the facts? And, do you consistently report your sales expenses accurately when no one else is looking? Now, think about your response to ethical sales issues. When you face an “iffy” situation, do you ask yourself, “What can I get away with?” or “What is required of me?” Or, do you ask, “What is the right thing to do?”

Consider which sources influence you the most. Does your culture affect your choices? Do you follow in the footsteps of your parent or guardian, or do you imitate another role model? And, what about the company you work for? Do your company’s policies or sales managers influence you at all?

Finally, look at what determines your final decision. Do your ethical decisions rest on what’s best for the moment—or what’s best, period? In other words, are you more inclined to decide according to the situation at hand or according to your personal code of ethics, regardless of the circumstances?

Taking a good long look in the ethical “mirror” can be very revealing. Just as it’s important to check your physical appearance before you start your day, it’s important to examine your personal ethics before you begin a career in sales. Keep in mind that you are the one who can make a difference in your firm. Every ethical sales depart-ment is made up of ethical salespeople. Will you be one of them?

SummaryTo behave ethically, salespeople need to know which activi-ties are illegal and which are questionable. Then, they need to determine how to handle an “iffy” situation when it arises, based on their own personal code of ethics.

1. Identify two illegal activities salespeople should avoid.

2. Give an example of a questionable sales activity involving customers.

3. Give an example of a questionable sales activity involving competitors.

4. Give an example of a questionable sales activity involving employers.

5. Give an example of a questionable sales activity involving coworkers.

6. Describe the relationship between ethical sales behavior and a salesperson’s personal code of ethics.

®

Take inventory of your personal ethics. Rate yourself on a scale of 1–5, with 1 being right next to a legal or moral “line.” Is the number you assign to yourself a high one? On a sheet of paper, write down three ways you can improve your personal-ethics number. Now, apply those three things to your next selling situation.

4.5 2.8 3.5 5

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