Sales and Ethics

When we think about sales, we always see some common themes. Salespeople build relationships, they find problems and pain points, and they sell their products as the fix-all to these problems.

However, there are also high sales quotas, extra compensation for high performance, and the need to sell to earn a living. These requirements sometimes create conflicts based on what we should and shouldn't do as salespeople. Enter ethics and the important role it plays in sales.

Ethics are Important

Recently in one of my classes we've talked a lot about ethics in sales roles. It's a very important topic because there are way too many opportunities to do the wrong thing.

This is why when we teach sales skills, we need to make it a point to emphasize the importance of doing the right thing. The teaching phase is where most salespeople will learn all the techniques and best practices for their careers, so it’s here that we should make sure to include a portion on proper ethical behavior.

Not only is this the right way to act and sell, but it tends to have better career results in the long run. Unethical behaviors lead to loss of relationships, lost sales, and bad reputations.

All of these factors will lead to decreased sales and ultimately decreased income for salespeople throughout their careers. This means it’s in the best interest of not only the business, but also the salesperson, to act ethically.

Why Do Unethical Sales Situations Exist?

From my class, the main things that spawn ethics issues are things that influence pay.

Take performance-based bonuses, for example, if a salesperson is close to earning a bonus, they might be more likely to perform unethical sales practices to get the last sale they need to earn it.

This is similar to meeting certain sales quotas that are high or unattainable. That’s what happened with Wells Fargo a few years ago when their employees began opening up accounts without the permission of customers.

Not only do we need to make sure we act in an ethical way, but we need to make sure our sales systems are set up in a way that promotes and enables this ethical practice we are going for.

We have to design performance standards so that our salespeople can reach these goals ethically. Sure, they can, and should, still be geared to drive new sales, but they need to be reasonable and attainable.

A good way to do this is by modifying your typical sales compensation plan. Specifically, they need to be designed to encourage these ethical behaviors and discourage unethical practices.

They should allow for competitive compensation, but in a way that curtails bad selling practices. Plans that are set up on a 100 percent commission basis just don’t work anymore. Instead, a mix of salary and commission is your best bet.

The salary helps promote a more relationship-based style of sales, which is better for their clients in the long run. It also lets salespeople use ethical selling techniques as they’re not relying purely on commission to support themselves and their families.

The Bottom Line

As salespeople, we have many opportunities to do the wrong thing, but we need to stay far away from these practices. We should always act in the best interest of our customers, and we should always stay within the confines of the law.