5 Unethical Sales Practices that Damage a Brand and Lead to Unfaithful Customers

August 31, 2011 by

5 unethical sales practices to avoid

Image provided by: cartoonbank.com

Acquiring new customers is hard work. Just ask any sales representative working at a startup or an expansion stage company. Trying to sell a new, unproven or unbranded product can be a struggle, especially in B2B markets where product acquisition costs are high and sales opportunities are few and far between.

Often, this struggle to acquire new customers incentivizes sales representatives and sales organizations to adopt fraudulent and/or unethical sales practices to boost closing percentages and contract values. These near-sighted sales practices may generate short-term gains, but will almost always result in permanent damage to a company’s brand and customer relationships.

Here are 5 unethical sales practices that your team must avoid:

  1. Making promises and commitments to customers that your product development team cannot fulfill. Customers oft times will make purchase or contract renewal decisions based on product or service upgrade timelines. Failing to meet product functionality or service upgrade timelines may leave customers in a rut and will result in unsatisfied customers. Thus, it is very important to keep new developments under wraps until the engineering team is certain that the new product developments will be completed before promised delivery dates.
  2. Misrepresenting promotions or products to close a deal with a prospective customer or up-sell a current customer. Tricking customers may work in the short-run through increased customer acquisition rates and up-sell percentages, but in the long-run it will lead to brand reputation damage and deteriorating customer retention rates that will almost always out-weigh the short-run benefits. Thus, companies need to ensure that sales representative and account manager incentives are deterring them from misrepresenting products and/or promotions.
  3. Leaving customers in the dark about promotion or pricing changes. Not being transparent about promotion period end dates and/or price changes is a slimy way to increase contract values in the short-term, but almost always will result in disgruntled customers. The cost of non-disclosure is substantial with promotion end dates and price changes as it shows a break in the circle of trust, which will permanently alter a customer relationship and often will cause a customer loss.
  4. Skipping contract commitment disclosures. Customers hate to be caught off-guard and be tied to commitments that are contained in the fine print of a deal. Doing so upsets customers and leads to decreased levels of customer satisfaction and declining retention rates. Even if disclosing contract commitments upfront will decrease sales opportunities on the front end, it will ensure that you are only selling to good customers that will value your products and promote them to peers and colleagues.
  5. Making sales final before a customer has had ample time to try-out a product. Product sales are as important as product advocates, as positive publicity and recommendations generate new lead opportunities and sales. Having unsatisfied customers only leads to customer detraction, so it is in a company’s best interest to establish free product trial periods and/or 15 or 30 day full refund policies to let customers try out your products. Doing so will also signal to your customers you are confident that you are selling a top of the line product, which will boost product interest.

By establishing reasonable customer expectations, being transparent about contractual issues and allowing customers to test-out products during a trial period or offering a 15 to 30 day refund policy, your sales team will weed out bad customers and set your customer management and product management teams up for success in building long-lasting customer relationships with every newly acquired customer.

However, your company must also commit to providing first class customer service to ensure that customer issues are resolved in a timely and thorough manner since one of the largest causes of customer retention problems is poor customer support.

If you are interested in learning more about customer service, I recommend reading my blog post on how poorly defined customer service tracking programs can derail customer management processes.

Similarly, if you are interested in learning more about CRM implementation and how to develop a first class customer service model, I highly recommend reading The Best Service is No Service: How to Liberate Your Customers from Customer Service, Keep Them Happy, and Control Costs by Bill Price.

  • Itsmedw

    Related to this: when a company purposely misleads a customer by NOT telling them of a decision, which causes the customer to spend time and resources that end up being a waste of time. This happened to me recently and the company is a large one with billions of dollars in revenue that preaches about “doing the right thing”. As a sales person, I was forced to lie (by omission) to customers who had placed their trust in me. This is when it is time to question the company itself. I am looking for another position.

    • Brandon Hickie

      Agreed. Forcing a sale by omitting key information
      about a product will oft times result in a dissatisfied customer, who will
      detract other potential customers from your product and likely decline a
      contract renewal. Thus, the costs outweigh the benefits for such practices.