Perk or Bribe?

Michael Fritsch
Title: Account Executive
Company: Freedom Broadcasting of Michigan
Product: Television advertising
Market: Serves the Lansing-Jackson region of mid-Michigan with a nontraditional approach to presenting the news and entertainment

It’s better to give than to receive. We’ve been taught that all of our lives. Giving is fun. It makes you feel good. The question is, when it’s couched in a selling perspective, how much giving is OK, and where do you draw the line? What happens when giving becomes a criterion for getting and keeping the business? What happens when it’s expected instead of appreciated, and the sale hangs in the process?

Distributing gratuities is part of the selling process. Giving away such promotional items as T-shirts, coffee cups, pens, note pads or caps is pretty harmless. If a sales relationship is based on a free coffee mug, then a salesperson needs to go back to sales 101. Dinners, tickets to events, expensive golf outings or special trips need to be analyzed on a situation-by-situation basis. When does a perk become a bribe?

“In the past several years, this issue has become much less frequent, as the majority of our customers have firm policies against accepting perks,” says David Wayne, North American sales manager for Ionics Instruments in Boulder, CO.

Wayne believes there is credibility in value adding with perks, but they have to be monitored. Who is getting them, and what are they?

“First off, if there was an issue, I’d qualify whether or not the purchasing employee is a decision maker in the sale,” says Wayne. “If they’re not, this becomes a nonissue.

“If the perk is something like a business lunch, a golf outing or something of that nature, I think it is acceptable, provided that the cost is not excessive, and the time spent provides us the opportunity to better understand the prospect’s organization, discuss future purchasing, planning, solidify agreements and build relationships,” says Wayne.

According to Michael Fritsch, account executive for Freedom Broadcasting of Michigan, perks are legitimate as long as they are approved and endorsed by corporate. “Perks are all about time spent with clients and are legitimate if they are approved up front by corporate,” says Fritsch. “Salespeople need to be aware of their corporate rules and regulations regarding perks and not cross the line.”

In Fritsch’s case, his company puts on a trip for television advertisers who commit to a certain level of business. “If an advertiser reaches a certain level of expenditures, we’ll put them on a boat to Cancun and put them up in a five-star resort with all expenses paid,” says Fritsch. “It’s all aboveboard, with corporate approval, and it’s expensed out. Not only is it an opportunity to thank advertisers for their business and build on individual relationships, but also it allows the advertisers to network with each other,” notes Fritsch.

Fritsch believes perks are excellent tools for building rapport. “Look for customer interests outside of the office,” suggests Fritsch. “It may be your customer is a big sports fan, enjoys cooking or is a cigar smoker. It’s OK to bring in a cigar once in a while.

“One of my clients is a surgeon and is a big fly fisherman and outdoorsman,” says Fritsch. “Since I’m a turkey hunter, I told him that if I shot a turkey, I’d bring him in some feathers to tie flies with. It’s all about building rapport as long as you don’t compromise your personal and professional integrity.”

According to Fritsch, perks don’t necessarily have to take the form of gifts or trips. It can be helping someone in business. “For example, if you have a customer who is expanding his showroom, take some time and lend a hand,” says Fritsch. “If you’re going to attend a trade show, go in early and help a customer set up his booth. It’s sweat equity, and customers remember that as much as going golfing.”

“It’s really all about setting yourself apart from your competition and proving that you care about your clients and are grateful for the business they give you,” says Fritsch.

Wayne draws the line if he discovers a purchasing agent is demanding something before he places an order. “Providing gifts of any significant value in order to secure an order is not appropriate,” says Wayne. “This type of request should be forwarded to the employee’s manager for further review.”

Skill Set
– Know just how far you can go with perks.
– Don’t violate corporate policy.
– Don’t use perks to get the business; use them to keep and enhance it.
– Don’t get an image of being a “freebie giver” or allow your customer to take you for granted.
– Find out-of-the-normal ways to provide perks for your customers.
– Always be legal, honest, ethical and polite.

Expert Advice: Keep It Honest
“So many salespeople try to win accounts through party favors,” says sales consultant Paul Goldner. “Perks are not a basis to build a relationship, it’s a basis to enhance one.”

Goldner cautions salespeople not to go overboard on perks and freebies because ultimately customers come to expect them and take them for granted. “I was speaking at a sales conference on behalf of a bank, and there was a golf outing that I decided to play in. I found that I didn’t have enough balls, so I went into the pro shop to buy some. One of the bank people came up to me and told me that ‘we don’t buy golf balls,’ and he points to the vendors and says, ‘that’s what we have them for.’”

Goldner believes business relationships are built on business results. “Once you have the business relationship in place because you have performed, you can use the golf and the T-shirts or whatever it is to enhance the personal side of the relationship. You can’t have a business relationship in absence of business performance.

“Perks are not the platform upon which we can differentiate our product or service,” says Goldner. “If you offer something for free, your competition can offer something better, and it ends up being the equivalent of price cutting, and at the end of the day, you’ll be giving away your product for free.”

Goldner advises salespeople to be aware of corporate policies and keep in mind four basic rules. “Everything you need to do in selling has to be legal, honest, ethical and polite,” says Goldner. Goldner is CEO of Sales & Performance Group, an internationally recognized sales-training organization and the author of Red Hot Customers (Chandler House Press, 1999). For more information call 1-888-hot-hot3, or visit paul@redhotsales.com.