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Sales Ethics: What Entry-Level Salespeople Should Know

Sales Ethics: What Entry-Level Salespeople Should Know. Jennifer Sawayda Anderson School of Management University of New Mexico Albuquerque, NM. Ethical Risks for Salespeople. Boundary spanning role

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Sales Ethics: What Entry-Level Salespeople Should Know

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  1. Sales Ethics: What Entry-Level Salespeople Should Know Jennifer Sawayda Anderson School of Management University of New Mexico Albuquerque, NM

  2. Ethical Risks for Salespeople • Boundary spanning role • Connects customers to the firm, so their actions will impact the relationship between company and customer. • Significant autonomy • Salespeople exercise significant autonomy in selling, often when sales managers are not present. They may be faced with conflicts they are ill-equipped to handle without guidance. • Role conflict • Is the role of the salesperson to do what’s in the firm’s best interest or the customer’s? • Non-uniformity of interactions • Each sales interaction is different, and different situations may call for different actions.

  3. Ethical Issues in Sales • Channel stuffing • Forcing more products through a channel than the channel is capable of selling • Price fixing • Colluding with other companies to set prices on products • Misrepresenting the product • Includes exaggerated claims, failing to tell consumer about product’s risk, dilution of warning statements, or making downright false statements • Disparaging competitor offerings • Making an untrue claim about a competitor offering could set company up for a lawsuit

  4. Examples • Kayla has not made her sales quota for the year. She decides to ship extra product to one of her larger business clients. Even if they return the product, it will be in the next quarter. She can record the product shipment as revenue for this year. • DX Company and ABC Firm are the sole sellers of a necessary product component. Salespeople from DX Company collaborate with ABC Firm to set a price for their products so the customer will be forced to buy from one of them at an established price. • Jason is worried that the large warning label on his company’s product will dissuade the customer from buying. He decides to downplay the risks to assure the customer that the product is completely safe. • Fred is afraid his prospect will do business with another firm with a better reputation. He tells the client that the other firm’s products are made with lower-quality components than his company’s product.

  5. Entry-level Salespeople • Older salespeople have familiarity with the industry and firm values, but what of new hires? • Sales is a growing profession, and many younger workers are discovering that they are well suited to this type of work. • As Baby Boomer and Gen Xers age, more Millennials (1980-1995) are entering the sales industry • Observant companies recognize that young salespeople might not have as much knowledge, but they offer significant benefits to the firm. • Digitally savvy: 78% of salespeople today use social media for selling • Passion: When millennials identify with a company’s mission, they tend to be extremely passionate and supportive of the products • Innovative and entrepreneurial • More data-focused

  6. Characteristics of New Salespeople • More emphasis on job fulfillment and work-life balance • Dislike ambiguity and risk, so will often turn to sales managers for direction • Great opportunity for sales managers to train new hires in the ethical values of the firm • Less knowledge of ethical norms

  7. Ethical Training for New Hires • To familiarize new salespeople with ethical standards, ethics training programs should: • Differentiate between seasoned salespeople and new hires, and adapt the training accordingly • Instill open communication and support from higher-level salespeople so new hires can discuss issues with those who have more knowledge • Refrain from passive learning exercises and instead incorporate critical reasoning exercises in the form of role-plays, case studies, scenarios, and simulations

  8. Ethical Principles for All Salespeople • According to the Direct Selling Association, an ethical salesperson should observe the following rules: • Identify yourself as a salesperson • Clearly explain the offer • Make sure that testimonials and product representation are truthful and accurate • Do not mislead the customer or use ambiguous language • Make sure the prospect knows which firm is selling the product and how to contact them • Clearly explain the terms for returning a product or cancelling the order • Do not disparage competing firms or products

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