While marketing efforts promote the value of a product or service, it is the responsibility of sales to seek out customers who will benefit from it and thereby validate its value in the market through sales. But what principles should guide a salesman’s efforts? What are a salesman’s incentives and motivations? Are they the same as the entrepreneur’s? Are sales based on subjective or objective values? Do negotiations with customers entail an element of compromise? These are the questions this essay will address.
Of all the employees in a company, ideally the salesman’s incentives and motivations are most closely aligned with those of the entrepreneur’s. Ideally a salesman shares the same passion for the product the entrepreneur envisioned and created. The salesman is motivated to validate that product in the market as much as the entrepreneur is motivated to create it. A salesmen’s incentive, in the form of compensation and commissions, is usually tied to the success of their individual efforts just as the success of the enterprise is tied to individual efforts of the entrepreneur. The principles of Individualism guide the salesman as much as they do the entrepreneur as they both see the success of the enterprise being the vehicle for achieving success for them.
One accolade often given to a salesman is stated as “he could sell a refrigerator to an Eskimo.” While in this modern world there are Eskimos who no doubt would value owning a refrigerator, the remark implies the ability of a salesman to sell someone a product they have no use for. Is this actually wise? Would it not be a breach of integrity for a salesman to sell an Eskimo a refrigerator they know is of no value to them (Honesty and Integrity)? Once the Eskimo realizes the refrigerator is of no value to them they will rightly question the integrity of the salesman. In an attempt to evade the truth and make an immediate sale the salesman potentially compromises their long term success selling refrigerators to Eskimos who do value them, as the word would get around the salesman cannot be trusted. This is the reality of compromising a long term value for a short term gain. Honesty and Integrity apply as much to a salesman in his efforts to sell a product as they do to the entrepreneur who creates it. Just as the Objectivist entrepreneur would never compromise the product they create, a salesman should never compromise their relationship with their customers.
“Integrity is loyalty to one’s convictions and values; it is the policy of acting in accordance with one’s values, of expressing, upholding and translating them into practical reality.”
Ayn Rand
Still compromise is often viewed as an essential component of sales negotiations. But compromise is not the same as negotiation (Compromise vs Negotiation). Compromise entails the loss of value, which results in a diminished outcome for one or both parties. Negotiation entails the exchange of value, which results in a net gain for both parties. If a salesman sells their product for less than it is worth they compromise the success of their enterprise. If they sell their product for more than it is worth they compromise their future relationship with their customer. Negotiation requires both the seller and the buyer to have a clear understanding of their respective value to each other. Not by compromise but by negotiation through communication the salesman and the customer learn the objective value a sale will be to each other. It is sometimes said “a successful negotiation ends when both parties feel they have lost equally.” That may happen in divorces with the two parties acrimoniously going their separate ways. But in business, where long term relationships are essential to long term success, I say a successful negotiation ends when both parties feel they have gained equally. That entails negotiation, not compromise.
“In any compromise between food and poison, it is only death that can win.”
Ayn Rand
One common rule sales men attest to is “never turn down an order.” But is this wise if there has been no objective assessment of values by either party? While creating a product demands adherence to objective reality by an entrepreneur for their product to have any objective value in a market, it is often thought sales are based more on subjective sales practices to meet customer’s subjective needs. While a customer’s values may be personal it is potentially an error to assume that means they are subjective. This is an important distinction. Subjective sales practices attempt to disconnect the objective value a product offers from the object value a customer hopes to gain, and replace it with subjective values detached from reality.
“The subjectivist theory holds that the good bears no relation to the facts of reality”
Ayn Rand
A “smooth talking”, “back slapping”, “glad handing”, “snake oil” salesman would be an example of a salesman attempting to employ subjective sales practices to make a sale. The salesman Willie Loren from the play “The Death of a Salesman” would admire such practices; but they are irrational. This is an attempt to make a sale based on a personal relationship or the salesman’s personality, both subjective values detached from the objective value of the product offered. This was a sales tactic practiced more in the past than today, as wiser customers can see through it, but still somewhat common. In today’s world “green washing” and “white washing” are new examples of subjective sales practices (Social Entrepreneurship – An Objective Perspective). These are appeals to environmental or social values that are often completely detached from the objective values of a product itself. All such subjective sales practices, which dissociate the merits of the product from its objective values, are an evasion of the truth, and when ultimately discovered undermine a customer’s trust and thus long term success.
“Since no rational standards are applicable, the …… method leads to concern with personalities, not ideas; pull, not merit; “prestige,” not truth.” Ayn Rand
For an Objectivist entrepreneur, sales represent more than revenue for the enterprise but also a means of validating their product in the market. They are of equal value. The role of the salesman is to offer the objective values of their product to customers who share those values and seek to gain them. It requires honest communication by both parties in order to assess whether both will gain from the sale. A salesman should not attempt to sell their product to customers who have no objective need for them. They win customer trust not with their “personality” but with the objective values their product offers presented with honesty and integrity. They complete each sale not through compromise but through negotiation based on value given for value received.
“Value is that which one acts to gain and keep, “virtue” is the action by which one gains and keeps it. “
Ayn Rand