Understanding Ethical and Professional Responsibilities in Selling

Take the Money and Run? Assume you are a new sales rep for Ag Way. You have been calling on a very important customer who is on the verge of making a large purchase order with you. This order will allow you to meet your sales goal for the year and make a very favorable impression on your supervisor, which in turn will result in you receiving a $1000 cash bonus. It has just been brought to your attention that a competitor’s product has just become available in the market and this product is more likely to solve your customer’s problems. Do you have an obligation to tell your customer about this? If you do tell your customer and they do not place their expected order, you will not likely earn the $1000 cash bonus. What is the best course of action for you to follow?

Sales Riddle “I guarantee,” said the salesman in the pet shop, “that this purple parrot will repeat every word it hears.” A customer bought the bird, but found that the parrot wouldn’t speak a single word. Nevertheless, what the salesman said was true. How could this be?

Making ethical decisions in selling . . . Is a daily reality and challenge (as it is in many other professions (e.g. doctors, lawyers, teachers). Often involves ethical and economic tradeoffs. From an economic perspective, may not always be best in the SR, but almost always will be best in the LR

Observations on (Un) Ethical Behavior Corporate examples Enron (late 1990’s). Largest U.S. company to ever go bankrupt after pursuing a failed ‘hi risk/hi growth at any cost’ strategy. Prudential (1995). Agents misled customers. $2 billion class action settlement, $35 million fine, over 1000 agents fired. Edward Jones (2003). Several of their brokers encouraged customers to buy mutual funds of companies that provided them with revenue sharing kickbacks. Resulted in a $75 million fine. Typical survey results Half of U.S. workers admit doing something unethical or illegal on the job. Growing % of Americans view lying and cheating as acceptable behavior. 40+% of U.S. college students admit plagiarizing or cheating on tests.

Examples of unethical temptations for a salesperson Make exaggerated claims to counter exaggerated claims of a competitor Offer a customer an unauthorized ‘gift’ in return for their business Conceal information from a customer in order to get their business and to meet your sales’ goals Put non business-related expenses on your expense account Divulging confidential information about one customer to another in order to facilitate a sale

“When we rationalize a decision we have made, or an action we have taken, we often give creditable, although often untrue, reasons. It is an instinctive response driven by a need for psychological self protection.” Barbara Toffler, Tough Choices

Common Reasons (Excuses) for Unethical Behavior ‘Everybody’ else is doing it. It’s not that big of a deal. It’s necessary (the ends justify the means). It’s not going to hurt anyone. It’s for the benefit of the company or somebody else. I deserve it. It’s legal. Nobody will know.

Ethics in Selling Successful professional salespeople adhere to a strict code of selling ethics. Ethical selling decisions based on truth, honesty, integrity, and moral judgments (i.e. right vs wrong) are essential for long-term relationships that can only be maintained through mutual respect and trust.

Laws Pertaining to Sales (abided to by a professional salesperson) Contracts Price competition Credit reporting Debt collection Uniform commercial code (sales) “Cooling off”

Guidelines for Making Ethical Decisions (Sears) Is it legal? Is it consistent with company beliefs/values? Is it right/appropriate? Is it okay for others to know about this? Is it going to make me feel bad?

Gift Giving Recommendation in Sales Do NOT give before the sale is made Do NOT attach any ‘strings’ Keep it simple and insignificant, yet thoughtful, so it can’t be construed as a bribe Do make sure it is within company policy

Your Choices if Asked to Act Unethically Do it  ignore your own values & moral judgment  likely to feel guilty and lose self respect Don’t do it  voice opposition and try to change policy  leave/quit  get fired

Standards of Professional Conduct (National Association of Sales Professionals) Ethics and professionalism: I will act with the highest degree of professionalism, ethics and integrity. Representation of facts: I will fairly represent the benefits of my products and services. Never mislead, misrepresent, or build false expectations Confidentiality: I will keep confidential information about my customers confidential.

Standards of Professional Conduct (National Association of Sales Professionals) Conflicts of interest: I will disclose potential conflicts of interest to all relevant parties and, whenever possible, resolve conflicts before they become a problem. Responsibility to clients: I will act in the best interest of my clients, striving to present products and services that satisfy their needs. Responsibility to employer: I will represent my employer in a professional manner and respect my employer’s proprietary information. Remain loyal Practice ‘we’, not ‘they’ Support total marketing effort Do not ‘bad mouth’ the competition

Standards of Professional Conduct (National Association of Sales Professionals) Responsibility to the public I will serve as a model of good citizenship and be vigilant to the community effects of my products and services. Legal responsibility I will observe and obey all laws that affect my products, services, and profession. Responsibility to self I will maintain an ongoing program of professional development Professional growth is never ending (technical knowledge, selling skills, people skills, etc.) Strive for balance in professional and personal lives (and don’t let either jeopardize my effectiveness in carrying out my responsibilities)

Ethics in Selling - Quotes “A salesperson’s ethics and values contribute more to sales success than do techniques or strategies.” Ron Willingham, Integrity Selling “We keep our promises. In all our activities, we adhere to the highest standards of ethical conduct.” Mission & Values statement Minnesota Life Insurance Co.

Thoughts on Salespeople “I see them everywhere, and I have come to understand they are among the bravest of us. They face on a daily basis what we all dread the most: flat, cold rejection . . . Most of them may not have ever imagined they would end up doing precisely this. But as long as there is life and as long as there are businesses, there will be salespeople.” - Bob Green

Remember, professional selling is problem solving and helping others – “I will have more fun and enjoy more success in my personal life when I stop trying to get what I want and start helping other people get what they want.” NK philosophy statement sales training 1993 “The only ones among us who will be really happy are those who have sought and found how to serve.” Albert Schweitzer “Success has nothing to do with what you accomplish for yourself, it’s what you do for others.” - Danny Thomas

Because the customer has a NEED, we have a job to do Because the customer has a NEED, we have a job to do. Because the customer has a choice, we must be the BETTER CHOICE. Because the customer has sensibilities, we must be CONSIDERATE. Because the customer has an urgency, we must be QUICK. Because the customer is unique, we must be FLEXIBLE. Because the customer has high expectations, we must EXCEL. Because the customer has INFLUENCE, we have the hope of MORE customers. BECAUSE of the customer, WE exist! - Executive Speechwriter Newsletter, Vol. 10, No. 5