12.4 Ethics in Sales and Sales Management

Common Ethical Issues for Salespeople

What are the most common ethical issues facing salespeople? Here are some common situations salespeople face:

• A customer asking for information about one of their competitors. The competitor happens to be one of their current customers
• Deciding how much to spend on holiday season gifts for customers
• A buyer asking for something special, which they could provide but are not supposed to give away

In the first issue, a customer owns the information about their business. The salesperson may hold that information, such as how many cases of the product they purchase or who their customers are, but they do not have the right to share that information with the customer’s competitor. More often than not, a buyer may ask the seller to sign a nondisclosure agreement because, in order to serve the buyer, the seller will gain access to important private information about that buyer.

In the second, the concern is whether the gift is so extravagant that it is considered a bribe. In some companies buyers are not allowed to accept anything (even a free coffee) from a seller. These companies do not want buyers to receive any gifts because they want every vendor to have free access to sales opportunities and earn the business on their merits, not their freebies.

The third presents an interesting dilemma for salespeople. Customers may not know that while their request may seem reasonable to them, it is against company policy. In that instance, the salesperson should not follow through on the request or alternatively work to get the policy changed.

Company Safeguards

As in many other areas of the company, sales policies should be based on the company’s mission and values and state clearly what is acceptable and what is not. Not all ethical dilemmas can be listed in a policy, so by detailing the principles and values that make up the reasoning behind the policies, salespeople and sales managers will be more prepared to respond appropriately.

Companies should have solid policies, easily available documentation on policies and procedures, and training for all employees on those policies to protect themselves. One reason for such training is to secure greater support and application of the policy, but another reason is that, should a salesperson engage in an unethical or illegal activity, the company is legally protected.

The company must also enforce the policy and have procedures in place. Companies should have a mechanism for reporting unethical activity in a way that protects the person making the report. A common practice is to have an ethics office, charged with investigating any complaints. Companies should also have internal auditing procedures to detect misconduct.

Challenges Facing Sales Managers

Sales managers face the same challenges that all managers face. These include ensuring that hiring, compensation, and other management practices are not discriminatory; and that employees are treated with dignity and respect.