How to measure ethics in sales through the sales force rewarding system

By Alice Alessandri and Alberto Aleo

One of the most common forms of feedback we get from salespeople at the end of a Sales Ethics course is: “This all sounds great, but we’re not the ones who want to play dirty! Our bosses force us to do it!”

In fact, companies, and sales managers in particular, commonly believe that ethics is simply a burden that hinders the achievement of results. Let’s try to understand if this is really the case and what entrepreneurs and managers can do to help their collaborators achieve better results while playing fair.

Why playing dirty doesn’t get results in selling

We believe that no sales manager truly wants their salespeople to play dirty, but they do want them to achieve results, in some cases “at all costs”. However, many believe that this equation always holds true:

more results = less ethics

Where does this conviction stem from? Why is it still staunchly supported even though common sense tells us that if we treat customers nicely, they will reward us with more purchases and positive word of mouth? The supporters of this equation state that, in economy, “being a bleeding-heart doesn’t pay off”. We can only agree with this, but don’t think it’s equivalent to being ethical! We’ve discussed this in other articles, but let’s remember that the difference between a bleeding-heart salesperson and an ethical salesperson is equivalent to the difference between a doctor that decides to not operate and let a patient die and one who decides to take risks and operate in an attempt to save a life. Having been challenged by this clarification, the ones who think ethics and results are inversely proportional will try to introduce a new vital variable into the equation: time. Therefore, the updated and harder to criticize version of the equation is:

more short-term results = less ethics

As if to say, “ok ethics (maybe) work, but if I have wages to pay out every month, it’s a luxury I can’t afford!”. Those who think along these lines also state they are pursuing a short-term strategy, which is a truly perplexing concept considering that strategy intrinsically implies the willingness to plan a series of actions throughout an extended period as opposed to individual acts. Anyhow, let’s temporarily overlook this contradiction and let’s see what actually happens to the organizations that pursue this operational philosophy.

---

According to many studies, and in particular, to a study carried out by the staff of the American professor Raj Sisodia – president of Conscious Capitalism – in a relatively short amount of time, these companies are expelled by the market or otherwise see a substantial drop in their returns.

---

Never mind paying out wages at the end of the month! Short-term strategy can seriously threaten the continued existence of companies!

The key indicators of ethics in sales

If, when you crunch the numbers, “short-termism” doesn’t pay off, then why do many companies and managers stubbornly consider ethics detrimental to their results? It’s because they have an excessively narrow vision of business, and they think the running of a business can only be described in terms of material costs and returns, overlooking relational costs and returns that – albeit immaterial – have an immediate effect on results.

It’s a well-known fact that, when a company is acquired, the most important assets to consider are the brand and its reputation because they have a major impact on the company’s overall value.

Do you really believe that the extraordinary capitalization of giants such as Apple and Amazon (each worth over 500 billion dollars) is simply due to their products, their real-estate, or other material aspects they feature? Their worth is related to the weight of the brand, to their reputation, and to the relationships they were able to build in the market. If playing dirty results in higher relational costs, we have a negative impact on the value of our company. This is why each action we carry out on the market should be analyzed not only in terms of economic returns, but also in terms of relational returns.

It all comes down to adopting that broader vision we’ve mentioned in an article some time ago. Without this vision, we cannot accurately assess the performance of our business and of our salespeople.

A case study of measurement of ethics in sales

So, what can be done to broaden your vision while allowing salespeople to use ethics to improve results? Help them focus on the effects of actions that go beyond mere economic results and raise awareness on relational costs and returns. We recently worked with MWM – Montalto Worldwide Moving, a logistics company with years of experience in the market that wanted to boost its already solid performance by investing further in relations. MWM operates more like a real business partner with the ones who purchase their services rather than a simple service-provider. They take care of their clients’ products (often foodstuffs) by collecting them and/or delivering them in any part of the world directly to the end consumer. They also store them in warehouses ensuring they are well preserved while carrying out sensitive operations related to customs offices and country-specific certifications.

---

The reputation of the client company depends on the quality of the service that MWM can provide.

---

 This means that MWM can’t afford to “sell at any cost”, and its salespeople, before finalizing a deal, need to liaise with the production departments to make sure they meet all the conditions to provide a smooth service. Assessing salespeople by only looking at “sales volume” doesn’t show the whole picture in this case, so MWM has decided to experiment with a reward system that also analyses other aspects:

1. An index of customer loyalty, i.e., how many clients are in their roster and for how long they are in the roster after the first contract is signed (while also measuring how many of them ask for more services from their vast range). 
2. A customer satisfaction index gained through surveys and assessments of the level of the service provided.
3. The level of cooperation with production and administrative departments, which is based on how the work of the salespeople is rated by the employees in these departments. Recurring meetings are held to assess how productive and satisfied the collaborators are, resulting in personalized professional growth.

Through their collaboration with Passodue, the company has recently organized training courses on time management and customer management within an ethical sales perspective. Furthermore, MWM has carried out personalized trainings on developing leadership skills for their collaborators, highlighting the willingness of the company to support their team’s growth and well-being.

The first results of this method were very encouraging and lead to an increase in commercial results, in customer satisfaction, and in collaboration between employees, which in turn boosted the quality of the services and the company reputation. 

In a world characterized by partial or vague information, we still hear the claims that ethics and positive results are incompatible. Although evidence shows the exact opposite, it’s easier to fill newspapers with scandals rather than good practices.

In our country, there are thousands of companies that use ethics to be successful, and with tools such as the one we described, they have helped their salespeople understand a simple formula: raising efficiency, achieving results, and increasing performance are more about quality than quantity. Placing an order just to hit the target and to get a bonus can be detrimental to relationships and to our business.

| partem claram semper aspice |