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
• Size of the audience
– Subscribers
Advertising
• 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.
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 – Nazis 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.
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 Vs. Morals
• Ethics are clearly defined standards of
right and wrong set out by written codes
or standards set by an organization or
profession.
• Morals are 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
• Morals are related to personal character
and belief as to what is right and wrong
(internal).
• Ethics are the proper behavior regarding
the social system where morals are applied
(external).
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 your conscience
– Doing what’s right according to one’s own
moral standards
– “There is no pillow as soft as a clear
conscience.”
– 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.
– Native advertising?
– 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 of 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?”
– The 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
– The local community
• Don’t foul your nest or cheat your neighbor.
• Broadcasters get licenses to serve the community.
5.
To your 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
1.Consumers
2.Conscience
3.Community
4.Customers
5.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.