Sales Ethics: It’s Not An Oxymoron

Corporations Today

Corporations, by charter, are immortal Corporations have multiple relationships

that they are unlikely to keep secret very long– www.sec.gov/edgar.shtml

Magnified for media companies, because revenue depends on:– Advertisers– Subscribers/Audience size

Advertising Is Vital

Large advertisers such as Verizon, P&G, GM, and Coca-Cola will be around for decades

It’s not smart business to bite the hands that will feed your company for the next several decades

Don’t lie to them or cheat them– Customers don’t buy from people or

companies they don’t trust

Other Reasons?

What are some other reasons for not biting the hands that feeds you?

Current Headlines

The press loves stories about corporate dishonesty– Enron scandal– WorldCom– Ogilvy & Mather over-billing the government’s

Office of National Drug Control– Bear Stearns hedge fund managers lying to

investors– Goldman Sachs cheating customers

What’s Going On?

Greed– Wrong incentives

People go along with unethical behavior because:– “No one will know”– “If I don’t take their money someone else will”

Rationalization

Criminals and other sociopaths typically rationalize their behavior with the last one (“if I don’t take their money, someone else will”)

A salesperson for a major media company forged a client’s name on a contract so revenue would be recognized, but got caught when the client got a bill and said, “We didn’t sign anything!”– “I won’t get caught.”

Three Reasons

There are many reasons for unethical behavior, but three common ones are:– Strong tendency to bow to authority and follow

orders: “just following orders.”– Strong tendency to do what peer group does—

social pressure and conformity: “everyone does it.”

– An absence of clearly defined and communicated standards: “nobody told me.”

Bow to authority Give up their individual free will and autonomy and turn

their conscience over to someone else- Won’t work – Nazi’s at Nuremburg trials

Cave in to peer pressure in order to conform Negate their free will and autonomy and hand over

individuality to the crowd- Won’t work – you have a conscience, the crowd doesn’t

Absence of standards Organizations must create and communicate ethical

standards to trump the “nobody told me” copout- Copout won’t work – we all know what we’re supposed to

do

Examples?

Can anyone think of any other examples of recent ethical lapses?

Why?

Sociopath, narcissist, excessive greed, or other personality defects?

Perhaps due to extreme pressure from management

Perhaps because of an absence of clearly defined and communicated standards or a code of ethics

Ethics

Clearly defined standards of right and wrong set out by written codes or standards by a company

Individual standards of right and wrong based on:– Deep-seated personal values– Accepted beliefs and modes of conduct by

groups in which people choose to work and play

Ethics

With heightened press coverage of business scandals…

The public has become increasingly concerned about ethical behavior…

Now, more than ever is the time to follow Peter Drucker’s sage advice…

“It is more important to do the right thing than to do things right”

Salesperson’s Five Areas of Ethical Responsibility

1 To consumers– Customers buy a product or service.– Consumers use a product– In some businesses (retail, utilities,

transportation, e.g.) the customer and the consumer are the same

– In other businesses (CPG, media, e.g.) they are different

Audience/readers/subscribers = consumers Advertisers = customers

Salesperson’s Five Areas of Ethical Responsibility

1. To consumers (audience/subscribers)– Put consumers first– Don’t lie to them– Don’t sell them shoddy products– Don’t sell unsafe products– Don’t accept advertising for products you

wouldn’t recommend to a relative

2. To their conscience– Doing what’s right according to one’s own

moral standards– “There is no pillow as soft as a clear conscienc

e”– Doing the right thing increases self-esteem,

self-image, and self-confidence– Greed is a cancer that will kill a person’s and a

company’s reputation and eventually kill the organism

– Some people are unethical because they believe they won’t get caught

– But they are playing an ethical lottery with the odds of losing extremely high

– Doing the right thing every business day is the only sure way of not getting caught and of maintaining a reputation and the self-esteem that goes along with an excellent reputation

3. To customers– Customers (advertisers) don’t buy from people

and companies they don’t trust– “Under-promise and over-deliver”– Don’t sell customers:

Something they don’t need Something they can’t afford Something that doesn’t work

– Don’t accept advertising: That is in bad taste That hurts a customer’s image That is misleading

– Salespeople shouldn’t: Give kickbacks Use bait-and-switch tactics Let customers feel like they lost a negotiation Reveal information before a campaign runs or

reveal competitive information

– Salespeople shouldn’t: Promise what advertising itself cannot deliver

– The media can deliver potential exposure to an audience

– Can’t promise results--too many uncontrollable factors Promise something they can’t realistically deliver:

– Promotions– Merchandising– Tickets– Position– Placements– Completion schedules

4. To the community– The global community

The world community, society “Do no harm” “Suppose everybody in the world did this?”

– The business community To maintain faith in the free-market system Investors, regulators, general public “Suppose everybody in business did this?”

– An industry community The advertising-supported media

– Americans get their news and often their values, beliefs, and attitudes from the media

– The media can alter people’s view of the world and their prejudices

– Salespeople have a responsibility to keep the media free by fueling it with advertising

– Protecting democracy

– A local community Don’t foul your nest or cheat your neighbor Broadcasters get licenses to serve the community

5. To their company– Salespeople represent their company to

customers– Especially with intangible products, a

salesperson is the surrogate for the product– The salesperson is the company in the eyes of

a customer– Therefore, a company’s credibility depends on

the salesperson’s credibility

Rewards to salespeople often unwittingly reinforce doing the wrong thing:– Compensation systems often reward getting

orders regardless of what is best for customers– Contests often reward non-customer-centric

behavior– Bonuses for making budgets regardless of

what is reasonable can cause unethical sales practices

CFOs or top management sometimes recommend accounting practices that “preserve a company’s assets”

Too often they have the wrong assets in mind

A company’s and a salesperson’s most precious asset is an excellent reputation

Protect this reputation by always doing the right thing

The Ethical Hierarchy

The Five Cs– Consumers– Conscience– Community– Customers– Company

Ethics Check

Is it legal?– Laws– Regulations– Company policy

Is it fair?– To both sides– To all stakeholders

What does my conscience say?

Ethics

The New Golden Rule– Do unto customers as they would have others

do unto them (not you). Kant’s Categorical Imperative

– Act on the premise that the choices you make will become universal law – for all people for all time.