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Ethics in Sales

13 June 2008 · Comments

A recent post by Colin WIlson – Are You Lying Comfortably – got me thinking about ethics in sales.

It’s something people new to, or outside of sales often worry about. How ethical is it to “manipulate” people with salesmanship to buy a particular product or service?

I think one of the toughest areas is in the choice of what you sell. By this, I don’t mean choices over whether you sell cigarettes, alcohol or sex products (although your ethical stance there is important, of course). What I mean is selling something you know your customer doesn’t really need.

There’s really a scale here.

Selling something you know your customer doesn’t need is, in my view, clearly unethical. A professional salesperson has a responsibility to ensure that he or she only sells what their customer will genuinely benefit from – or at the very least, if a customer is intent on buying something they don’t really need then the salesperson should warn them of that.

At the other end of the scale, selling something that your customer really needs, where your product is clearly the best available solution for them is unquestionably ethical.

But there’s a potentially grey area in between. What if the client needs your product, but you know of a competitors product which meets that need even better? Do you tell them about the competitors product that’s a better fit – or keep quiet and just sell yours?

That’s a tricky call. I know many salespeople who would say that as long as you “do no evil”, as long as the customer benefits from your product – then it’s not your duty to tell them about the better product they could get. That isn’t my view – but I’m OK with it. The customer still benefits – and really, it’s their responsibility to find the very best product for themselves.

Personally though, If I believe a competitor has a better product, then I’ll recommend my customer gives it a look over. I just don’t feel right if I know there is a better solution out there but I withold that information.

In the end, I believe this stance actually helps me. As a consultant, one of the critical success factors for me to win and keep clients is to establish a deep trusting relationship. How can I hope to do that if I deliberately withold important information from my client? I believe that my honesty in this helps deepend the bonds of trust with clients – and helps win me further work.

But at the end of the day, whether it benefits me or not, it just feels right. And that’s perhaps the biggest benefit of all.

Ian

PS My friend Karl Goldfield highlights a couple of really interesting new ventures he’s got involved with over on his Startup Sales Mentor blog. One is an email marketing company called messageslinger who are currently offering a great deal for triallists of their new platfrom. The other is an online marketplace for outsourced or freelance work called ki-work. Definitely worth checking out if you’re a freelancer.

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Author: Professional Services Marketing & Sales Expert Ian Brodie

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  • Ian

    I'm pleased I got you thinking. In my job of helping sales people become more effective, I see helping them to... think... as my primary deliverable. Sure, I can give them my product... the methodology, the process, the tools... but it is the helping them to 'think' is where the real value is derived.

    There are a lot of sales products on the market... SPIN... PowerBase Selling... Target Account Selling... Solution Selling.... Conceptual Selling... Customer Centered Selling... etc, etc. All of these have a longer pedigree than my company. All of them come with published authors (I'm working on it)... all of their products could be considered better (notice the word could) than the products I deliver.

    So, although I wholeheartedly agree with you that being ethical is absolutely the right thing to do the... is there a better product... scenario is far more complex in the B2B world, then it is in the B2C. In the B2B the customer is buying far more than just product... far more. It's the easiest way to lose a deal, if you focus just on product... you have to show all the value that you are delivering and this is where the differentiation begins to tell.

    Yes you are absolutely right, walk away from a deal that having your company involved would not be right for the customer, but don't necessarily walk away if other companies have better products... if you did, then there would not be much competition and that wouldn't be good for the customer either.
  • Ian,

    No doubt you have opened a can of worms with this question and those of us who majored in philosophy will enjoy the debate.

    Of course, all sellers and all business people have an obligation to deal with each other in an ethical manner. But, what that means is so vague and depends so much on each person's understanding of "fair" or "ethical" or "upfront" that you are likely to never get agreement.

    In one of your examples, you suggested that one shouldn't sell something if there is a better product available to the buyer. Would that include candy? If I operate a convenience store and a patron is about to buy a Kit Kat bar am I obligated to let them know that Snickers is the better candy bar? That seems silly but it is the silly examples that usually break down an argument.

    You sell training services and so do others. Who is to say which is better than another? The question for you and others who seek to behave ethically is are you fairly representing the products and services you offer? Do you do what you say you will do and will the customer get the benefits you tout?

    I think that for you to have a complete understanding of all of your competitor's offers, products and services and which is better or best for every application is beyond the scope of your ethical requirement.
  • Hi Colin, Hi Tim,

    Colin - perhaps I should have expanded product to mean "the complete product, service and value you will get from me" - but it's a tad unwieldy.

    When I posted the original I was tempted to add a point about shades of grey within grey. Of course, I can never know all my competitors offers. And even if I do know them, my own ego and my good friend cognitive dissonance will help me to identify at least some way in which my services are better ;) But sometimes I do know their offers and capabilities and in some specific areas I know they may be better than mine - and that's where the ethical dilema comes up.

    For example, I used to do a lot of consulting in pharma - particularly on the strategy side - helping them to look at how the healthcare environment was changing around the globe and what that meant for their organisations. So if a pharma company came to me wanting to know how to reshape their sales organisation to improve performance and address the changes in the external environement then I was their man.

    However, if they came to me jut wanting to do a straightforward sizing exercise for a salesforce for a new product I could have done it and done a reasonable job; but there are firms who specialise in that sort of work (for example they maintain benchmarking databases and field tested sizing models) and would have been in a far better position to help them. Now absolutely, I would "stay in the game" to be sure I knew what they were really looking for. I would also (if I really believed it was what they needed) try to persuade them that they would be better trying to focus more on the future and how their market would be changing over the next few years rather than doing a standard sizing exercise based on today's market.

    However, sometimes a standard sizing exercise was what they needed; and sometimes even when it wasn't, I couldn't persuade them otherwise. In those cases, I would absolutely recommend one of the specialists in those areas rather than myself.

    This tends to happen in specialist areas rather than wider engagements. When a client's needs are complex and multi-facteted (as they frequently are) I usually find my combination of capabilities plus my ability to "get things done" in partnership with clients outweighs any specialist expertise the competitors may have that I don't.

    But at the end of the day, on the occasions where I do know with a high degree of certainty that a competitor is better placed than I am to help a client, then I couldn't look them in the eye and tell them differently.

    Ian
  • Fascinating topic Ian as the debate shows.

    Without going into this too deeply, and ethics is a deep subject, I agree with you in principle with regards to letting clients know of other solutions out there, but only if my solution definitely doesn't fit the clients needs. If there are similarities, then I feel I have a right to pitch for business. I liken it to the adversarial process of a courtroom where two laywers (sales people) are convincing their clients (the jury) of the benefit of their product (the case). The definition of "right or better product" can only be determined by the client as it they who are looking for the truth.

    As Colin points out with regards to B2B, there is usually more than just a product involved. I think even in B2C sales this is true, how many people stay with a particular vendor because they like them, or because they have a history?

    We are only scratching the service of this debate I think...
  • Hi Nesh -

    I don't think the advocate example applies that often to selling situations I'm in.

    Usually, it's just me and the client and I'm trying to establish myself as a trusted advisor. There's no one else to put forward the view of any competitors, and usually there is a stark information assymetry - I know lots more about the options that the potential client.

    If it's a competitve battle then yes - I can focus more on promoting myself and leave the other guys to highlight where they are strong.

    But if it's me one-on-one with a client, I feel I have a duty to give them a full picture. That's what makes me a trusted advisor. (Alhough again, the fact that I don't know the competitors inside out and the fact I really think I am good means that mostly I will believe that I am the right answer for them).

    The analogy I would draw is with a surgeon. Sometimes the problem a patient has is just so specialised or complex that you need to refer the patient on to a more specialist surgeon focusing on that area - or perhaps the top guy in the field for really, really difficult surgery. it would be unethical not to do so, right? You have to put your patient's needs above your own need for the income.

    Now obviously consulting isn't surgery - but there are similarities. Also, my ego makes me think I am the top guy in the field - so I don't have to worry about that situation :)
  • I see what you are getting at Ian, in a specialist situation where I couldn't fulfill the needs of a client then I would certainly refer to someone who could. This might lead to another ethical question though.

    Many of us are in the same situation where we build up relationships with related or specialist practitioners in various industries. This process of referring has created another channel to market which we all recognise as channel or business partnerships. What then are the ethical considerations involved with referring? Are all referals a non-selfish act?
  • Ugh! That's a toughy Nesh.

    Should we refer to people we have a relationship with, perhaps even people who will pay us for a referral - or should we always try to refer to people we "know to be the best"?

    The same considerations as before apply I think. I certainly won't refer to someone who I know will do a bad job just because I know them or they will pay me.

    Should I refer to them if I think they will do a good job - but someone could do a better job?

    Well to be honest -if I'm referring to them then it's likely to be an area I don't know so well - so probably they will be the best person I know. I guess I might say - "I'm no expert, but I believe/hear/think that X will be able to do a good job for you...".

    Paid referrals are an area where I struggle. I know it's common in some fields - but I kind of feel dirty. I think I shouldn't feel bad - I certainly wouldn't refer to someone who would do a bad job even if they paid me. In fact I'd probably be referring to them whether they paid me or not. But I always think "what if the person I'm referring finds out I got paid for the referral?" How would they feel? As I say - sometimes it;s common and expected - other times it's not. If someone referred me to a doctor for example, I would be rather miffed if the reason they made the referral was because they were being paid rather than they thought it was the best doctor. Maybe I wouldn't mind if they were transparent about it.

    To be honest though, paid referrals aren't something that have happened often enough for me to worry about.

    Ian
  • I think paid referrals like affiliate marketing is going to be always money driven rather than benefit driven. It would be like Google Adwords in that if you are paid for the number of referrals you make then the relationship really only centres on traffic and not whether that referral will benefit from the introduction to another party.

    For the benefit of a company's reputation, I would assume that the relationship that is forged from a partnership should be on the basis of expertise in relevant fields and therefore any referral you make would be based around a genuine belief in the partners ability. Like you, I don't see the benefit in referring to someone who would do a bad job and I would hope that I wouldn't enter into a business relationship with such a person anyway.

    I am always a little aware of the subjective nature of referrals. In the same way that I wouldn't pitch an idea to a prospect without finding out what issues they were facing then in the same respect I can't know unless I qualify in depth, whether my recommnedation is correct or not. My basis for my opinion, is based on my own experiences, but what I do owe is the opportunity for the company that I am recommending to tackle the sales process as well. They are in a position of expertise better positioned to solve the customers problem and it is then their job to pitch their ideas.

    As I said earlier, I think we are only scratching the surface here. Thanks for getting me thinking.
  • I work with companies that sell in the B2C market. What if a customer doesn't NEED something, but they WANT something? Is that unethical if a salesperson sells to that prospect? If a person has perfectly good carpet but they want a new color of carpet, is that unethical? What is the definition of "need" as used in this argument?
  • Ian,

    I don't feel particularly qualified to talk about this as I have no personal experience in the sales and marketing profession.

    However, I tend to lean toward your point of view. In a one on one consultant-like situation, where you feel a competing product is available which may be more suitable for your customers needs, then I would say that you do have an ethical obligation to inform your customer about the beneficial features of the competing product.

    You need not, in my view, attempt in any way to persuade your customer to purchase the competing product or service. Simply informing them of the beneficial features of the competing product should be sufficient in my view.

    Yes, in your action, you will risk losing customers to competitors. However, you will also build up an immense amount of trust with your customer or client, which in turn will form a solid basis for a long term business relationship with your customer.

    Cheers

    Andrew
  • Another tricksy one!

    To be fair Skip, sometimes sales are driven by WANTs rather than NEEDs in b2b too - although probably less than b2c.

    I suppose a psychologist could have a field day with the "needs underlying the wants" - for example, why do some men want flashy fast sportscars, what's the need behind that, ahem.

    To a certain degree, if the product is personal then there's nothing wrong with buying it based on a want rather than a need. You could argue that manipulating customers desires to want product they don't really need is a bad thing in society (e.g. the constant advertising of unhealthy food products to kids) but that drifts even further into a grey area way outside my expertise.

    I was thinking mainly of business to business situations where often the customer doesn't realise they need something until the salesperson had educated and informed them. It's the use of this education and informing to mislead a customer into thinking they need something that they really don't that I was talking about as a definitely unethical area. But if the customer started out wanting something, and you didn't "manufacture" that want - then to a certain degree you might as well sell somthing that meets that want to them.
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