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Door-knocking sales face regulation

Tuesday, 15 March 2011 | By Michelle Hammond

Start-ups that use door-knocking sales strategies have been urged to review their approach, following proposals that would regulate the practice more tightly.

 

The electricity industry, which accounts for a large proportion of door-to-door salespeople, has put a proposal to the Australian Competition and Consumer Commission to set up an independent body to accredit door knockers, field complaints and administer a code of conduct.

 

The move, seen as an attempt to safeguard the future of the practice, comes after Victoria’s Energy and Water Ombudsman Fiona McLeod revealed that complaints about marketing-related issues rose 33% in the previous financial year, arguing it is a “mounting concern for consumers”.

 

McLeod says the proposed code is an opportunity to improve confidence in the conduct of retailers, giving her support to the proposal.

 

Tim Wolfenden, chief executive of comparison and switching service Make It Cheaper, says salespeople must prioritise credibility over making a sale.

 

“Sales is about dressing up the truth and making it appeal to the customer, but massaging lies to make [the offering] feel palatable is advised against,” Wolfenden says.

 

Wolfenden also supports the call for a code of conduct, believing there should also be a registrar of “predatory” door-to-door salespeople.

 

“This would create visibility and allows the industry to avoid salespeople who have committed malpractice,” he says.

 

“It is an essential practice, which the industry definitely needs, because it scares the bejesus out of sales agents out there to get this right.”

 

Wolfenden says nine times out of 10, the door-to-door sales technique is “not great” because it consists of one person selling one retailer, which is selling one proposition.

 

“A lot of salespeople work on commission, so it’s just a numbers game; it’s imperative to make a certain number of sales come hell or high water,” he says.

 

Wolfenden also supports the move for an independent industry body, saying every interaction between a salesperson and a customer should be verified before the sale goes through to ensure the customer hasn’t been coerced into it.

 

According to Wolfenden, a lot of customers only commit to a sale in order to get rid of the salesperson, which has repercussions in the long run.

 

“Customers don’t like to say no a lot of the time. Pushing them into an uncomfortable decision can become quite a crude form of marketing and selling,” he says.

 

“You want the customer to feel empowered about making a purchasing decision, which means achieving the right level of credibility.”

 

Wolfenden says in addition to securing sales through other channels, salespeople should offer customers a range of options and walk through them with the customer.

 

“Credible salespeople also want their customer to take the information away, have a think about it and then come back the next day to do the deal – once they’ve consolidated their thoughts,” he says.

 

“Tell the truth, treat customers fairly and be clear about what you intend to do. This will make the whole process feel less onerous.”