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
– 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.
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
Examples
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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.
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 (19801995) 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
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
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 higherlevel 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
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