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How to prevent dodgy sales practices in your business

Wednesday, 4 December 2013 | By Taskmaster

recently, your humble correspondent read an article about how consumer watchdog the ACCC is taking an energy company to court over its sales tactics.

 

The energy company hired a door-to-door sales company to help shill its gas and electricity offerings. In turn, sales reps from this direct marketing firm– most likely under tight sales targets – allegedly engaged in unconscionable conduct. This included telling customers that there was a government requirement for them to switch providers.

 

Legal action aside, it’s already generated bad publicity for a company that spends a small fortune each year on advertising. Not just that, but Old Taskmaster hates doorknockers – especially first thing Sunday morning!

 

So do you want to avoid a similar situation occurring to your business? Well, it’s time for Old Taskmaster to play sales super-sleuth and uncover where sales jobs can go so horribly wrong.

 

Good and bad sales behaviour

 

The first thing to keep in mind is that sales is a very tough business. Convincing people to part with their cash in exchange for your goods and services is quite possibly one of the toughest challenges your business will face.

 

Let’s imagine a hypothetical situation where the owner of a particular house is not ready to immediately switch utility providers after an unsolicited knock on the door. Perhaps the householder wants some time to think it through – it’s not an unreasonable reaction.

 

A good salesperson will provide them with pamphlets or a rate card to consider and accept their decision not to immediately switch. Hopefully they will consider switching some time down the road. Perhaps they might follow up a couple of weeks later when the customer has had time to properly consider their sales material.

 

A dodgy salesperson will come up with a line to pressure the customer into switching immediately. For example, they might say: “I’m here to inform you your old energy company has gone bankrupt! Switch now or else the government will disconnect your gas supply!”

 

Recognising and rewarding good behaviour

 

So how can you reward the good salesperson rather than the dodgy one?

 

Targets are a key part of any sales job. But if you make your targets so tight no one could possibly meet them without breaking the law, no one will meet them without breaking the law.

 

Make sure your sales scorecards measure the right things. Do you have penalties for unethical behaviour on your scorecards? Do you reward the initial sale, or do you reward salespeople who sign up customers who remain loyal six months later? Do you offer rewards for leads that are generated if a customer decides not to purchase on their first contact, but decides to make a purchase later on?

 

Unreasonably tough targets combined with scorecards, commissions and the need to convince a customer to switch on their first contact is an incredibly high-pressure sales environment. The kind dodgy sales reps thrive in.

 

In the long run, it’s a recipe for a PR and, potentially, a legal disaster for your business.

 

Choose the right sales channels

 

It’s also worth considering your overall sales and marketing efforts. Closing a sale through cold call or unsolicited sales – be it via telemarketing or door-knocking – is by its very nature more difficult than closing a deal when a potential customer seeks out your product using his or her own initiative.

 

It is always preferable to effectively market your products and set up online or retail sales channels where customers can come to you.

 

So do you have incentives for bad sales behaviour in your business? Make sure you clear it out – before the ACCC does!

 

Get it done – today!