Sales ethics is about doing right by your customers, but this can mean many different things based on who you ask.
When sales and marketing ethics are mentioned, the first thing that often comes to mind is fraud or, more specifically, avoiding it, but there’s more to ethical behavior in business.
Sales ethics can take your entire company to the next level. By embedding ethical culture into your organization, you’ll set the foundation for customer loyalty, higher morale among your sales reps and marketing team, and even sustainable growth.
To make that happen, you’ll need to take some specific steps. In this article, we’ll outline benefits, examples and steps to take to implement an ethical culture in your business.
Table of contents:
What is sales ethics?
Sales ethics refers to a set of behaviors that ensure that every lead, prospect and customer is treated with respect, fairness, honesty and integrity.
It means that, as a salesperson or marketer, you put the people you sell to first. You respect their choices and opinions instead of forcing your agenda on them.
When you consider the long game, ethical behavior in sales makes sense—you build loyalty and trust with customers because you’re doing right by them. The outcome? Higher customer spend, more engaged employees and lower costs of running the business.
By adopting an ethical approach to sales, you’re making a clear statement: you want to sell to customers that want to buy from you instead of selling by any means necessary.
What is ethical behavior when it comes to sales?
What does ethical behavior look like in a real-life sales team? Here are some examples to follow.
Always be honest about the impact your product makes
Picture this: You’re on a sales call. It’s going well and you’ve built a great rapport with your prospect. But then they ask you for more insights into your product’s specifics, including features, capabilities and pricing options.
You may feel tempted to say exactly what your prospect wants to hear just to close the sale, even if it’s not completely true. For example, you could exaggerate the results other customers got with the product or completely make up figures.
Not only does this make your product attractive, but it also makes you sound smart. What could go wrong?
The answer: a lot. When the customer uses your product, they won’t just realize you were dishonest—they’ll lose trust in the entire company.
Many customers will never do business with a company again after just one negative experience. These unhappy customers may also overload your customer support department with complaints and refund requests.
The fallout doesn’t end with a lost customer. A study by American Express revealed that Americans tell an average of 15 people about a poor service experience, but only 11 about a good experience.
Instead of winning a happy, satisfied customer, you’ll end up with a negative referral engine.
Don’t attack your competitors
“Why should I pick you over your competitor?” is a question you’ll hear more times than you want to.
When that happens, you have two options:
- Slander and criticize your competitor for everything they do worse than you
- Use this as an opportunity to show your knowledge of available options and why your product stands out, brings better results and is more suited to the prospect’s needs
Belittling your competitors won’t make you look better in your prospect’s eyes. Instead, they’ll see you as dishonest and unethical.
Instead, use the competitor question as an opportunity to showcase:
- Case studies and success stories of existing customers that switched from a competitor to you
- A feature comparison, with an explanation of why your product is a better match to your prospect’s pain points
- What makes you and your product unique, like onboarding, product documentation, walkthroughs and anything else that makes your customer’s experience exceptional
Simply put: make your product stand out because it’s good, not because your competitors are bad.
Adopt the Serve Don’t Sell Method
The sales process is fundamentally about helping buyers make informed decisions. According to Liston Witherill, creator of the Serve Don’t Sell Method, this approach lifts the pressure from sales reps to sell anything.
The Serve Don’t Sell (SDS) Method is made of five stages you can follow in sequence:
- Fit: define your Perfect Fit Client (PFC) using demographic and psychographic factors such as job title, industry, company size, beliefs, core problems, previous experience
- Discovery: establish your prospect’s personal and organizational pain points, why this change needs to happen now, their goals, objectives and motivations
- Offer: include your prospect’s pain points and goals, how you can help, examples of similar previous clients, options of working with you and a Q&A section
- Agreement: send a written proposal, collect and address unmet needs and get a signed contract
- Transition: onboard and prepare your client, establish points of contact and send supporting materials and documentation that will make them more successful
When you build a customer base packed with people and companies you can actually serve and help, you’ll build relationships that work both ways.
From your customer’s perspective, you’ll make a genuine difference in their life or business. And from your company’s perspective, you’ll have a loyal customer that’s happy to keep paying for what you offer.
In other words, you won’t sell just for the sake of selling; you’ll grow your company in an ethical, honest way in the long run.
How to foster an ethical culture in your sales team and business
Growing and managing your company in an ethical manner is no easy feat. Building an ethical culture needs to happen from every facet of the company. It also has to be intentional.
Here are the main ways you can make ethics in sales a habit for your company.
Encourage open communication around goals and expectations
Setting sales goals is essential to moving the entire company forward. When you use the SMART approach in setting goals—making them specific, measurable, achievable, realistic and time-based—they can be huge motivators for your sales team.
But when you set ambitious sales quotas and don’t outline a solid plan detailing how to achieve them, you’re setting yourself up for failure.
At best, you’ll end up with bad, high-churning deals. You might also see a drop in your sales team morale, from a dip in performance and a longer sales cycle to an increase in tension.
The worst-case scenario? Driving your sales team to commit fraud. Just remember the Wells Fargo scandal, in which bank tellers opened thousands of fraudulent accounts due to mathematically unrealistic quotas:
“[...] there were only about 11,500 potential customers in the area, and 11 other financial institutions. The quotas for the bankers at Guitron’s branch totaled 12,000 Daily Solutions each year, including almost 3,000 new checking accounts. Without fraud, the math didn’t work.”
Each step of the way, from setting goals and defining your sales cycle to tracking sales results, make it easy for reps to openly share thoughts and concerns. Create a safe space for them.
This can happen through one-on-one meetings, written feedback, regular surveys and any other way that gives your team a voice.
Hire the right salespeople
A surefire way to make ethical selling a default for your sales team? Hiring ethical salespeople.
Of course, being an ethical salesperson isn’t just one thing. It’s a range of traits. Here are some qualities to look for when hiring sales reps:
- Honest: How would they treat a ‘grey area’ scenario? Would they try to get away with a white lie and tweaking the numbers on even a small deal?
- Helpful: How would they help a prospect or a customer that has a specific pain point?
- Courteous: How are their manners? How do they treat people they interact with?
- Humble: Can they leave their ego at the door? How do they talk about their accomplishments, especially when talking about group achievements?
- Caring: Do they display empathy? How do they talk about issues they care about?
- Resilient: How do they cope with stress and rejections?
Develop a code of conduct for ethical selling
Sales reps have lots of influence on their prospect’s decisions; with this influence comes responsibility.
After you’ve hired ethical salespeople and created an open, safe space for them to talk about sales goals and expectations, the next step is to solidify what ethical selling means.
By developing a code of conduct for ethical selling, you’ll have a tangible guide that reps can refer to at any time. It leaves no room for confusion and it makes decision-making during the sales process easier.
Your code of ethics for marketing and sales can include:
- Your business values
- Desirable and appropriate steps for prospecting and approaching potential customers
- Communication principles
- Steps and guidance for handling complaints and conflicts
- Undesirable and unacceptable practices for prospecting, outreach, negotiation and more
Use real and/or fictional examples to paint a vivid picture of the ethical culture you’re aiming for.
This document should be a living, breathing asset you can update and improve as your company evolves. Make it available to every sales rep and ensure it’s not something that collects dust on your hard drive.
It should be a core driver of your sales team’s everyday activities.
Build cold calling scripts and cold email templates
Another way to solidify how sales happen in your company is through cold calling scripts and cold email templates you’ve built and developed together with your sales team.
The purpose of cold calling scripts isn’t blindly following them. Instead, they’re a great way to set the tone and expectations of a great first outreach call. They help your reps get focused instead of worrying about the outcome before the call even started.
It gives each rep a starting point and a framework they can adapt to their own personality and voice.
Cold emails have an extra benefit: they help you scale your team’s sales efforts. With cold email templates, they can do so ethically.
On any given day, it’s much easier to send 100 cold emails than to make 100 cold calls. By building templates, you’ll give reps an easy way to make sure they’re doing so based on your ethical standards instead of winging it.
Run regular training sessions
Regular ethics-focused training sessions with your team will help you make sure your approach to ethical selling works.
Set up a recurring appointment, ideally once a quarter, to check in with your team and go over recent scenarios and situations that came up in their conversations with prospects.
Use these sessions to answer these questions:
- Is your code of conduct for ethical selling clear and straightforward?
- Are there any sales call scenarios we haven’t yet addressed and covered?
- Do the scripts and templates still work?
- Is there an ongoing ethical challenge we need to fix?
- Is it easy for reps to share any issues around current sales quotas?
Use these sales training sessions to role-play scenarios that your reps want to become more confident in.
“Go over ethical dilemmas that come up for the business—real ones,” recommends Liston. “The most obvious is how to handle a customer who wants you to make a promise that you can't actually guarantee.”
You can also develop a checklist for making ethical decisions and include items such as:
- Would I be embarrassed if a customer found out about this behavior?
- Would I be upset if a sales rep did this to me?
- Am I about to do this because I think I can get away with it?
By taking this maintenance approach to ethics in sales, you’ll be able to catch any issues quickly and resolve them before they hurt your reputation or cause damage to your business that’s beyond repair.
Why are ethics important in sales and marketing?
Ethical behavior will help you maximize your efforts in sales and marketing, both short-term and in the long run.
In the short term, you will:
- Be more efficient in lead qualification
- Move your leads through your sales pipeline more quickly and easily
- Get better at forecasting your sales and revenue for the foreseeable future
It’s simple: selling ethically means serving your best-fit prospects, which will help you close better deals and do so faster.
In the long run, an ethical approach strengthens your marketing because you can turn your best customers into your marketing engine. When you sell in an ethical manner, you position yourself as a trustworthy, reliable brand.
As a result, this will lift up all of your marketing efforts, from specific campaigns to your reputation in the industry.
You also need to consider laws of selling in your industry and codes of conduct you need to abide by. If you’re in industries such as real estate, financial services and telecommunications, make sure you know their legal side.
Look for documents and codes of conduct that apply to the market you sell into and your industry. Here are some examples:
- Code of Ethics and Standards of Practice by the National Association of REALTORS
- Code of Ethics by The Insurance Institute
What are the business benefits of behaving in an ethical manner?
Why is ethics important? Selling ethically isn’t just about boosting your sales and marketing efforts—it benefits your company as a whole.
The Journal of Business Ethics stated that “an ethical brand acts with responsibility, honesty, respect and accountability.” In their research, they found five major benefits for brands that engage in ethical behavior:
- Commitment toward the brand: Customers are more emotionally attached and committed to brands they see as ethical, as well as less sensitive to price differences compared to competitors
- Customer-perceived quality: Customers perceive the brand’s service excellence as superior compared to its competitors when they see the company as ethical
- Empathy and satisfaction: Empathic employees are better at understanding customer needs, which also elicits greater positive emotions from customers and higher customer satisfaction
- Customer loyalty: Ethical brands benefit from higher customer loyalty, repeat purchases and higher customer retention
- Positive word-of-mouth: Ethical companies boost positive conversations about the brand
Ethics in sales, marketing and business lead to a strong, resilient business that does well by its customers. Let’s look at some examples.
Brands that use their ethics in their decision-making, marketing and sales
Ethical culture looks very specific based on the brand in question. Here are examples of companies that have made huge decisions based on what they believe in.
Costco is a great example of strong company ethics. Over recent years, they increased their hourly minimum wage to $15. The average cashier in the United States earns between $7.25 and $9 per hour (as of January 2020).
This shows how dedicated Costco is to giving employees better opportunities.
Some companies have made their ethical decisions an essential part of their marketing. They use it in their copy and visual assets and even build entire marketing campaigns around it.
Ethical marketing means that companies go beyond themselves and what they sell in their marketing assets—they dive into their ‘why.’ This often includes social and environmental causes.
For example, TOMS shoes has given nearly 100 million pairs of shoes to people in need since 2006. This was their entire business model and has become one of the most well-known social enterprises. Everything from their website to their product labels was communicating this message:
Today, they’re giving $1 away into impact grants for every $3 they make, continuing their efforts to contribute to causes that matter to them.
Another great example of ethical marketing is Dr. Bronner’s, a brand known for creating and selling socially and environmentally responsible products like soap, laundry detergent, hair care and coconut oil.
On their about page, they share their six cosmic principles. Instead of talking about themselves, they share their dedication to treating their customers, suppliers, employees, the planet and community well.
Putting it all together
To build and maintain your sales ethics, start by fostering open communication around your sales goals and processes. This will set the best foundation for all other efforts you invest in sales ethics.
From there, explore the best ways to make ethical behavior the default way to approach sales conversations. Collaborate with your team and:
- Create and tweak cold calling scripts and cold email templates
- Run through different scenarios and sales objections to train and prepare your reps
- Review consumer rights and laws that regulate selling in your industry
Finally, remember that ethical selling is never a finished project. Make it a habit to consistently review your hiring process, lead qualification criteria and feedback from your sales reps. This way, you can make sure you always do right by your customers and reinforce an ethical culture in sales.