Do Sales Incentives Remove Consumers Best Interests from Being Served?

Posted by Cory Meisenheimer on 24th Dec 2019

Do Sales Incentives Remove Consumers Best Interests from Being Served?

With consumerism at a peak during the Holiday shopping season, retail seems to get a pass when it comes to persuading the consumer into spending their money. Salespeople, with the innate drive to sell, driven by what can only be described as a unique nitrogen-containing nucleobase combination, can however be subject to following personal incentives versus providing honest answers and solutions.

If consumers are equipped with data, and that data is accurate and true, the power dynamic then shifts from the salesperson to the consumer. This shift allows buying decisions to be made that are in consumer’s best interest, not that of the salesperson. A question we could ask, is it the salesperson’s job to educate the consumer of the various options on the market or to just convert them into a product or service they sell?

This dilemma can cause friction between the best interest of the consumer and that of the salesperson. If the personal incentive for the salesperson, (money, awards, prizes, acknowledgment, promotions) outweigh providing the honest options for the consumer, can the consumer’s best interest ever be served?

To provide clarity, I don’t want to confuse the differences between a consumer who willingly enters a retail location with the intent to purchase your product or service, versus a consumer who visits your location to gain assistance in solving a problem they have. Also, while I’m setting up the framework around this thought, this article is not a blanket statement for all salespeople, but a discussion on how incentives have the potential to alter consumers best interests from being served. As business leaders how do we line up our incentives where salespeople are not penalized for providing all options, even if an option is for them to not spend money with them today. We also would want to analyze the difference between a weak salesperson from using this new method of ‘helping the customer’ stance as an excuse to not perform.

The circumstance that spurred this article comes from the mobile consumer electronic space as this is the arena I am most commonly associated with. We’ve recently learned service providers in our area are convincing customers it’s not worth fixing their device and that they should just buy a new one. Or telling them prices are 3x for repairs and they should just upgrade. Who should be determining it’s worth it or not? This article wasn’t designed to speak poorly about the salespeople who have the amazing gift of converting a consumer who was looking to buy one thing, and they walk out with six. In my opinion, that consumer was equipped with the accurate information and was able to make a decision for themselves. If you are this salesperson, please DM me as I would love to find a space for you on my team. What has me more concerned are the consumers who enter a place of business with a problem they are having.

Service provider salespeople are not incentivized by metrics to provide support or service, but to SELL devices, accessories, and insurance plans. The salesperson isn’t positioned to gain commission, rewards, acknowledgement or bonuses from providing a consumer with alternatives outside of those that align with the list above and therefore in my opinion I do not believe they are in a position to serve the best interest of the consumer. The question could be asked, are they even there to do so?

I’ve been transparent in the past that I am a ‘repair versus replace’ proponent whenever possible, so my bias has been well documented. My worry for consumer electronic customers is that when they enter their service provider’s location looking for assistance with getting their device repaired or serviced, the person greeting them incentives don’t align. Their incentives are sale driven which affects their income, their lifestyle, their ability to pay their bills. This alone will make them follow their incentives versus providing all the options to allow the customer the ability to make the decision that lines up with their best interest, but can we blame them?

A dividing line that I hope to bring forth within this article is to explain the carrier service providers, i.e. Verizon, AT&T, T-Mobile, Sprint incentives are not to fix or repair your existing devices. Nor is it that of Apple, Samsung, Google or LG’s incentive to fix or repair your existing device. Quarterly shareholder meetings don’t have these publicly traded companies bragging about all the customers they helped provide repair options too. They report on units sold and revenue from services.

I feel we have a tremendous responsibility to provide the most accurate and honest information to each and every customer who walks in our doors. These are our neighbors, our friends, our family, our community and we should have a desire to help each other when they need it, not exploit their circumstance for a payday. Can a business survive by providing honest, fair advice that positions the consumer to make a buying decision that is best for them? Or do we need to accept a world of ‘black lies’ to keep revenue flowing for organizations?

I am really interested in hearing your thoughts.