Chapter 03

Ethics: The Foundation for Relationships That Create Value

Developing a Relationship Strategy for Partnering–Style Selling
Emotional Intelligence – the capacity for recognizing our own feelings and those of others, for
motivating ourselves, and for managing emotions effectively in ourselves and our relationships.
 Greater predictor of success than IQ  Can be enhanced with practice
Three major relationship challenges:
1) Building new relationships
2) Transforming relationships from the personal level to the business level
3) Management of the relationships

Temptation to maximize short-term gains motivated by offers from clients, competitors,

company personnel, and suppliers
 Leads to the destruction of long-term relationship, product, customer, and presentation
strategies

Factors Influencing The Ethical Decision Making of Salespeople

Influences in a Global Economy

Cultural Issues
 Culture – the sum total of beliefs, values, knowledge, ethnic customs and objects that people
use to adapt to their environment
 If understood, communication problems are less likely
 Difference could exist with understanding versus agreement and perception of time

Legal Issues
 Canadian and U.S. governments have enacted legislation that prohibits companies from using
bribes or kickbacks
 Gifts from foreign suppliers also
 International Business Ethics Institute says Canada is a role model

Influence of Sales Management

 The organization’s moral tone, as established by management personnel, is the most
important single determinant of employee ethics

Influence of Company Policies and Practices

Developing policy statements forces a firm to “take a stand” on various business practices 
Code of Business Conduct:  Integrity  Customer focus  Value
Most marketing companies provide guidelines:
 Sharing Confidential Information
 Reciprocity – a mutual exchange of benefits
 Bribery – an attempt to influence the person receiving the “gift”

Gift Giving Guidelines:

1) Do not give gifts before doing business with a customer
2) Never convey the impression you are “buying” the customer’s business with gifts
3) Done correctly, the customer will clearly view it as symbolic of your appreciation
4) Be sure the gift is not a violation of your firm’s policies or your customer’s firm

Entertainment
 Line dividing gifts and entertainment from bribes is often quite arbitrary
 A few industries see entertainment as part of the approach used to obtain new accounts
 Especially true where competing products are nearly identical

 Business Defamation
 Business slander – unfair and untrue oral statements about a competitor
 Business libel – unfair and untrue written statements about a competitor
 Product disparagement – false or deceptive comparisons or distorted claims about a
competitive offering
 Use of the Internet

The effectiveness of company policies as a deterrent to unethical behaviours depends on:

1) Firm’s attitude toward employees who violate these policies
2) Policies that influence personal selling need the support of the entire sales staff

Influence of the Sales Manager

Sales managers influence the ethical behaviour of salespeople by virtue of what they say and
what they do (mirror)
 Looked to for guidance and direction
 Generally provide first orientation to company operations
 Closest point of contact
 Responsible for interpreting policy

Influence of the Salesperson’s Personal Values

Values Conflict If you view employer’s instructions or influence as improper:

1) Ignore the influence of your values and engage in unethical behaviour
2) Voice strong opposition to the practice that is in conflict with your value system
3) Refuse to compromise your values and be prepared to deal with the consequences

Influence of Laws, Contracts, And Agreements

Laws – specific obligations (statutes) imposed by government on the way a business operates 
Competition Act – federal legislation
 Price fixing, bid rigging, price discrimination, predatory pricing, double ticketing, resale price
maintenance, bait and switch selling, and pyramid selling

Cooling-off Laws – provincial and territorial laws that give customers an opportunity to
reconsider a buying decision made under a salesperson’s persuasive influence
 Referred to as:
 The Direct Sellers Act or  The Consumer Protection Act

Contract – an oral or written (preferred) promise enforceable by law

 Examples are sales slips, notation on a cheque, or any other writings of promise
 Employment Contracts:
 Effective protection of intellectual property, customer lists, and other resources
 Noncompete clause – prohibits joining a competing firm for a year after they leave

Building Trust
Meaning of trust (integrity, ability, and character) changes with the type of sale:
 Transactional sales – with the product
 Consultative sales – with the salesperson
 Strategic Alliance selling – with the salesperson as it reflects the trust with the institution

Making Ethical Decisions

 Business Ethics – comprise principles and standards that guide behaviour in the world of
business
 Help translate values into appropriate and effective behaviours in day-to-day life
 No one uniform code of ethics for salespeople as societal and relational norms can vary
CPSA Sales Institute Code of Ethics
 Requires that all persons seeking to become a Certified Sales Professional (CSP) to agree to
abide to the CPSA Sales Institute Code of Ethics

Influence of Character in Ethical Decision Making

Character and integrity strongly influence relationships
 Character – personal standards, including honesty, integrity, and moral strength
 based on internal values and the resulting judgments you make about
 ethical decisions reflect your character strength
Integrity– what you have when your behaviour is in accordance with your professed standards
and personal code of moral values
 part of character
 valuable character trait

The Erosions of Character on Ethical Decision Making

The new economy depends on innovation and aggressive development of markets
 A company cannot enjoy long-term success unless its employees are honest, ethical, and
uncompromising about values and principles

Some “half-truths” that have influenced the erosion of moral character:

 We are only in it for ourselves
 Corporations exists to maximize shareholder value
 It’s not wrong because everyone is doing it
 Companies need to be lean and mean

Many firms struggle to align their values, ethics, and principles with the expectations of their
sales people and their customers
 negotiations must be ongoing
 Can moral behaviour be taught?
 Ethics Resource Center found 90% of employees said training is useful

Developing A Personal Code of Ethics That Adds Value

General guidelines:
1) Relationship comes first, task second
2) Be honest with yourself and with others
3) Personal selling must be viewed as an exchange of value
 Summary
Ethics is the foundation of a good relationship
 There are many issues that challenge our ability to remain ethical
 Industry, company, and individual managers will influence ethical decisions
 Often company guidelines or laws will provide a framework for dealing with ethical dilemma
 Develop our own personal code of ethics
 Ethics in international markets can be complex

Chapter 06: Creating Product Solutions

 Having your product different from others

 Feature of a backpack, the straps; benefits you can carry
it with one hand, hanging it on a hook
A product Solution that adds value
Product Strategy – a well-conceived plan for sales that emphasizes acquiring extensive product
knowledge, learning to select and communicate appropriate product benefits that will appeal to
the customer, and creating value-added solutions
 Survey of more than 1200 B-2-B purchasing decision makers revealed a lack of product
knowledge on the part of the salesperson was most likely to kill the sale

Solution – a mutually shared answer to a recognized customer problem

 More encompassing than a specific product
Not just the product but the support from the brand
 Often provides measurable results
 Solution Selling – a process by which the salesperson uncovers and clarifies a customer’s
problem, works with the customer to create a vision of how things could be better, and then
develops a plan for implementing the vision (Microsoft)

 Wait before the see the product 3 times before they buy an item
 Seeing the second time they want to see growth and business in the brand, the quality is
consistence
 Venders have handbook for new clients that buyers can take a percentage off the good if
the polices are not met.

Product Configurations
The challenge facing both customers and salespeople in this era of information overload is
deciding which product applications, or combination of applications, can solve the customer’s
buying problem

Product Configuration –the solution of complex buying needs; when the salesperson brings
together many different parts of the company’s product mix or uses specialized software to
develop a custom-fitted solution
 Contact Management Software
Requires quotation management

Preparing Written Proposals

Written proposal – a specific plan of action based on the facts, assumptions, and supporting
documentation about a buying solution that are included in the sales presentation
 Varies in content, format, and length
 Offers buyer reassurance
 Adds value when well-written

An effective proposal includes:

 Budget and overview – clear
 Objective – very specific
 Strategy – how to meet objectives
 Schedule – implementation timeframes
 Rationale – why take action now
 Should address the “invisible” customer (you don’t always know who or how many will be
reviewing the proposal but just the buyers)

Writing Effective Sales Letters

1) Follow the standard visual format of a business letter
2) Provide balanced white space bordering the entire letter
3) Proper use of punctuation
4) Three paragraphs long
5) Proper grammar and spelling
6) Focused on customer

Becoming a Product Expert

 The number one characteristic of salespeople who are able to build trust is level of product
knowledge
 Level must meet and exceed customer expectations to increase sales effectiveness and
willingness to pay

Most common categories are:

1) Product development and quality improvement processes
2) Performance data and specifications
3) Maintenance and service contracts
4) Price and delivery (on time)

Product Development and Quality Improvement Processes

Product Development – the testing, modifying, and retesting of an idea for a product several
times before offering it to the customer
 Salespeople need to:
 identify processes for quality improvement that provide a competitive advantage
 be prepared to discuss

 Quality Control – the evaluation or testing of products against established standard

 Sales appeal used to convince a prospect of a product’s quality
 International Standards Organization (ISO) assures customers of a high level of quality
service through certification

Performance Data and Specifications

 Especially critical when the customer is attempting to compare product merits
 Salesperson must be prepared to address this in sales proposals and presentations

Maintenance and Service Contracts

Proper maintenance and service contracts will usually extend the life of a product so should be
provided
 Salespeople who can quickly and accurately provide information will have an edge
 Customized agreements add value and protect against competition, example: if there is the
same store close by both carry different colour ways of the product

Become a Company Expert

Key with a strategic alliance buyer
 Organizational Culture – a collection of beliefs, behaviours, and work patterns held in
common by people employed by a specific firm
 Supportive culture that encourages salespeople to offer tailor-made solutions to buyer
problems will set the stage for long-term partnerships
 Support for the product is also key

Become the Industry Expert

Helpful guidelines:
1) Do not refer to competition or say anything negative about competition
2) Never discuss the competition unless you have all your facts straight
3) Never criticize the competition
4) Be prepared to add value Customers appreciate an accurate, fair, and honest presentation of
the facts from an industry expert

Sources of Information Product, Company, and Industry

1) Web-based catalogues, and other product literature developed by the company
2) Sales training programs
3) Plant tours
4) Internal sales and sales support team members
5) Customers
6) Product
7) Publications

Word of Caution
 Communication problems can arise if the salesperson does not accurately gauge the
prospect’s level of understanding
 Do not overwhelm the potential buyer with facts and figures
 Adopt the feature-benefit strategy

Creating Value With a Feature benefit strategy

Successful sales presentations translate product features into benefits that meet a specific need
expressed by the customer
 “Talking the customer’s talk”
 Solution-oriented statements make an impact on the customer
Features and Benefits
 Feature – data, facts, or characteristics of a product or service
 Anything the customer can feel, see, hear, taste, smell, or measure
 Often relate to craftsmanship, design, durability, and economy of operation
 Answers the question “what is it?”
Feature dump – listing a series of features without enabling the customer to see what benefits
these features provide
 Benefit –provides the consumer with personal advantage or gain
 “How will I benefit from owning or using the product?”
 “What’s in it for me?”

 General Benefit – shows how a feature can be helpful to a buyer

 Does not relate to a specific need expressed by the buyer
 “It’s so easy to use!”
 Specific Benefit – when it fulfills a specific need expressed by the buyer
 Effective in large and complex sales
 “Provides the level of consistency you’ve said your recipes call for.”
Advantages – characteristics (i.e., features) of the product that can be used or will help the buyer
 Should only be included when the buyer has expressed a need for this information
 “What the feature does?”
Bridge Statement – a transitional phrase that connects one or more product features with
potential customer benefits
 “Our quality control has been ranked the highest in the industry so you will have fewer
complaints and customer returns.”

Identify Features ad Benefits

Logical three step approach:
1) Identify all important features and arrange in logical order
2) Write beside each feature the most important benefit for the customer
3) Prepare a series of bridge statements to connect features with benefits

Avoid Information Overload

Data Dump – salespeople who love their products and possess vast product knowledge overload
customers with data they neither need nor want
 Once the needs are known, a customized sales presentation should be developed with specific
benefits

Summary
 A product strategy ensures you are meeting specific customer needs with a solution  Product
configuration puts the best product or group of products together in one package
 Product knowledge helps you quickly identify customer needs and instills confidence  How
do you stack up against the competition?
 A feature-benefit strategy adds value by distinguishing between what the product is and what
it does for the customer