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Leadership, Attitude, Performance
Selling LAP 129
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Performance Indicator: SE:106
Keep It Real—in Sales
Selling Ethics
Avoid common pitfalls
Know when to say NO
Put your standards to
the test
Keep It Real—in Sales
LAP: SE-129-SP © 2007, MarkED
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 product you’re selling—right away. The product is a car, and you don’t want the customer to wait another week, because if
s/he does, you won’t get the commission
when you need it, which is now!
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 issues 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.
You also know something the customer
doesn’t. This car will be discounted starting next week, as part of an end-of-theyear sale.
What should you do? Should you let
the customer know the discount is coming, 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 regulations) 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
LAP: SE-129-SP © 2007, MarkED
Keep It Real—in Sales
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 impression people receive of the business.
This first impression is important to
the company’s leaders and stakeholders because it affects profitability. 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 company’s ethical standards. If customers
suspect they are dealing with dishonest
people, they will not remain customers 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.
In light of this, salespeople should acknowledge that trust is the foundation in any relationship, especially customer relationships. When
customers know that they can rely on the truthfulness 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
Customers are not usually willing to give a business, or its salespeople, a second chance to make up
for an error, especially if it is the result of unprofessional 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.
$10 Rebate
on L abTech
Computer Spe
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Just mail the UPC co
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sales receipt to the m
anufacturer.
Keep It Real—in Sales
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 unethical 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.
LAP: SE-129-SP © 2007, MarkED
Summary
Ethics 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.
Although gold dust is precious,
when it gets in your eyes, it
obstructs your vision.
—Hsi-Tang Chih Tsang,
renowned Zen master
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.
Drawing the Line
How can salespeople behave ethically? Ethical sales behavior
begins with knowledge. Salespeople need to know what a questionable activity is. Then, they need to determine how to handle
the “iffy” situation, based on their own personal code of ethics.
Ethical
Behavior
Unethical
Behavior
Knowledge
As 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)
LAP: SE-129-SP © 2007, MarkED
Keep It Real—in Sales
•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 business 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 salespeople 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 cautious with: gift-giving, entertaining, answering questions,
communicating product information, and maintaining
confidences.
Imagine you’re listening to George explain
the features and benefits of a multi-function
printer, but he relates some incorrect information 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 reasonable care.
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 typically 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
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?
But, how does a mistake like this stack up
ethically? Do you think negligence is wrong?
You probably would think so if you suspected George made up his sales presentation as he was speaking. Would you feel
Keep It Real—in Sales
LAP: SE-129-SP © 2007, MarkED
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.
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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 You can clean the spots
off a leopard with new
and improved Zip!
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LAP: SE-129-SP © 2007, MarkED
children. Since withholding information could be considered 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. Salespeople should exercise caution when discussing their
competitors.
Keep It Real—in Sales
•Employers
Employer-employee relationships operate in two directions—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
Management is doing things right;
leadership is doing the right things.
—Peter F. Drucker,
American management expert
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 examining ethical issues. What helps the most is having an
ethical standard by which to measure each questionable
activity.
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,
Keep It Real—in Sales
Personal code of ethics
Your 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.
LAP: SE-129-SP © 2007, MarkED
Consider your individual ethical standards. Are you comfortable 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 department is made up of ethical
salespeople. Will you be
one of them?
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
Summary
To behave ethically, salespeople need to know which activities 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.
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LAP: SE-129-SP © 2007, MarkED
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It Real—in Sales
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