How do regulations affect the way salespeople do their jobs?

Jul 8

posted by Dr. John Riggs in Sales | 7 Comments

Many companies are faced with rising numbers of regulations with which they must comply. Regulations are particularly common in the areas of employment, environmental protection, and licensing of businesses. In recent years, a growing trend of new regulations has emerged in the selling and sales management business environment, changing the nature and scope of salespeople's jobs. How do regulations affect the way salespeople do their jobs? Well, we're not really sure.

Regulations intended to control selling activities are not industry specific. Numerous selling activities are regulated in telecommunications, real estate, energy, tobacco, pharmaceuticals, and financial services. Rationale for regulating various selling practices has been attributed to an increase in scrutiny by industry groups, federal regulators, and consumer watchdogs on the practice of promotion and personal selling. This increased scrutiny has resulted in a labyrinth of new laws, the issuance of revised rules, and the creation of specific agencies designed to enforce compliance.

Currently, it is argued that the pharmaceutical industry is one of the most regulated industries with respect to "what sales people can do". For example, "gift-giving", entertainment, promotional events, and methods for sharing product information are restricted and in some cases prohibited. So, here's the dilemma...does it matter that a sales person is prohibited from bringing a platter of sandwiches to a physician's office for lunch when discussing their product(s)? Or, does the 50 cent disposable ink pen that has a product name on it really make an impact on the "sale"?

The debate regarding the impact of regulations on sales people's activity is a lively one. Given the current growth of regulatory control, and its potential impact on the selling environment, adjusting with innovative approaches and adapting to new selling processes is required for both practitioners and academic researchers.

John Riggs, D.B.A., is an Assistant Professor of Marketing at Nova Southeastern University. Prior to entering academia, Professor Riggs spent over 20 years in the pharmaceutical/ biotechnology industry. He can be reached at jr1904@nova.edu More About the Contributor

This entry was posted on July 8, 2013 at 8:49 AM and has received 3031 views. There are currently 7 comments. Print this entry. Download attachment.

Comments

(Comment Moderation is enabled. Your comment will not appear until approved.)

• #1 by Steve Kramer on 7/8/13 - 9:05 AM

  

  Interesting points, Dr. Riggs. I suggest you write a research paper on this with our Nova ethics expert, Dr. Sims.

• #2 by John Riggs on 7/8/13 - 9:17 PM

  

  Excellent idea...would be an interesting project. Thanks for the recommendation Dr. Kramer.

• #3 by Nadia Henry on 7/20/13 - 10:08 PM

  

  Dr. Riggs, you ask a very important question which is hard to answer because sales people work across almost all fields and industries and the laws unique to each field and industry will sometimes affect them differently. As a salesperson for a retail establishment, I am often instructed on certain do's and dont's by managers because there are legal implications for certain actions and decisions we make. The best guideline we can use is to stay within the law and respect customers' and clients' rights.

• #4 by John Riggs on 7/22/13 - 10:35 AM

  

  Nadia, Your point is a great one...complying with the law and respecting customers are important "guideposts" to follow.
  
  An interesting development regarding regulations in business is that regulations are no longer limited in scope to the firm level of a company. For example, the FTC's principal mission is to protect consumers from unfair/deceptive business practices, and prevent anti-competitive business practices...things like fraud, deception, anti-competitive mergers, etc. are largely focused on the "firm". The FTC and many other regulating agencies are seen to add tremendous value to consumers, companies and marketplaces.
  
  Regulations are beginning to find their way into the "day-to-day" activities of sales forces, which is a new experience for firms, managers and sales forces. Today, companies (small and large) share a growing concern that their sales people will be unable to do their jobs due to regulations that control the activities that sales people engage in on a daily basis. For example, certain industries prohibit their sales people from buying a customer a cup of coffee while sitting down to discuss their product. It is also prohibited to give a prospect an inexpensive ink pen that has your company name or product name imprinted on it. And finally, what would the impact be on a company if their sales people were limited to one 15 minute interaction with their customer(s) each month? Believe it or not, this is a reality for some industries today.
  
  The first reaction to these types of controls is typically emotional. "Why can't I buy my customer a cup of coffee while we discuss our new product? It's two-bucks! What's wrong with that?" Or "are you telling me that I am not allowed to give my customer and his kids tickets to the ball game?"

• #5 by Nadia Henry on 7/23/13 - 9:45 PM

  

  Dr. Riggs, in some cases buying customers a cup of coffee or other gift is a way of showing appreciation or gratitude and keeping the flow of business. There are often limits though in terms of price/cost, and even the nature of the item. I could buy a customer a cup of hot coffee and it turns over and burns him or her...and I could see where the problem comes up...so these laws however worrisome and cumbersome protect the interest of both parties. Thanks for the clarification.

• #6 by sales vacatures on 7/25/14 - 9:39 AM

  

  Dr Riggs, Interesting article. I agree with Nadia, reading thi sarticle with a marketing perspective. Something with top of mind?

• #7 by Raquel Blas on 11/23/15 - 10:11 PM

  

  Company today are rising and complying with regulation but sales and selling control the industry and communication with promotion and personal selling had increase in business. But with this type of sales many companies still giving promotional events, sharing product information and gift giving so they can promote their products to their customer or clients. This regulation are giving a big role in order to have a good impact in the selling environment and good way to impact the sales. It is true sometime that without this initiative gift giving, or promotional events the client would not remember the product or care less for it. Sometimes that is why companies uses a lot of this approach as a way to adapt the client to use their products.