Sales Ethics: It

1
Sales Ethics Its Not An Oxymoron
2
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

3
Advertising

• Large advertisers such as Verizon, PG, GM, and
  Coca-Cola will be around for decades.
• Its not smart business to bite the hands that
  will feed your company for the next several
  decades.
• Dont lie to them or cheat them.
• Customers dont buy from people or companies they
  dont trust.

4
Current Headlines

• The press loves stories about corporate
  dishonesty
• Enron scandal
• WorldCom
• Ogilvy Mather over-billing the governments
  Office of National Drug Control
• Bear Stearns hedge fund managers lying to
  investors
• Goldman Sachs cheating customers

5
Whats Going On?

• Greed
• Wrong incentives
• People go along with unethical behavior because
• No one will know.
• If I dont take their money someone else will.

6
Rationalization

• Criminals and other sociopaths typically
  rationalize their behavior with the last one (If
  I dont take their money, someone else will.)
• A salesperson for a major media company forged a
  clients name on a contract so revenue would be
  recognized, but got caught when the client got a
  bill and said, We didnt sign anything!
• I wont get caught.

7
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 doessocial
  pressure and conformity Everyone does it.
• An absence of clearly defined and communicated
  standards Nobody told me.

8

• Bow to authority
• Give up their individual free will and autonomy
  and turn their conscience over to someone else.
• Wont 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.
• Wont work you have a conscience, the crowd
  doesnt.
• Absence of standards
• Organizations must create and communicate ethical
  standards to trump the nobody told me copout.
• Copout wont work we all know what were
  supposed to do.

9
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.

10
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

11

• 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).

12
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
  Druckers sage advice
• It is more important to do the right thing than
  to do things right.

13
Salespersons Five Areas of Ethical Responsibility

• 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

14
Salespersons Five Areas of Ethical Responsibility

• To consumers (audience/subscribers)
• Put consumers first.
• Dont lie to them.
• Dont sell them shoddy products.
• Dont sell unsafe products.
• Dont accept advertising for products you
  wouldnt recommend to a relative.

15

• To your conscience
• Doing whats right according to ones 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 persons and a
  companys reputation and eventually kill the
  organism.

16

• Some people are unethical because they believe
  they wont 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.

17

• To customers
• Customers (advertisers) dont buy from people and
  companies they dont trust.
• Under-promise and over-deliver.
• Dont sell customers
• Something they dont need
• Something they cant afford
• Something that doesnt work

18

• Dont accept advertising
• That is in bad taste.
• That hurts a customers image.
• That is misleading.
• Native advertising?
• Salespeople shouldnt
• 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.

19

• Salespeople shouldnt
• Promise what advertising itself cannot deliver.
• The media can deliver potential exposure to an
  audience.
• Cant promise results--too many uncontrollable
  factors.
• Promise something they cant realistically
  deliver
• Promotions
• Merchandising
• Tickets
• Position
• Placements
• Completion of schedules

20

• 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?

21

• 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 peoples 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
• Dont foul your nest or cheat your neighbor.
• Broadcasters get licenses to serve the community.

22

• 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 companys credibility depends on the
  salespersons credibility.

23

• 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.

24

• CFOs or top management sometimes recommend
  accounting practices that preserve a companys
  assets.
• Too often they have the wrong assets in mind.
• A companys and a salespersons most precious
  asset is an excellent reputation.
• Protect this reputation by always doing the right
  thing.

25
The Ethical Hierarchy

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

26
Ethics Check

• Is it legal?
• Laws
• Regulations
• Company policy
• Is it fair?
• To both sides
• To all stakeholders
• What does my conscience say?

27
Ethics

• The New Golden Rule
• Do unto customers as they would have others do
  unto them (not you).
• Kants Categorical Imperative
• Act on the premise that the choices you make will
  become universal law for all people for all
  time.