Transaction or Transgression? Social Selling Creates Questionable Practices


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Q: How can you tell when a salesperson is lying?
A: When he or she is using a keyboard.

The popular salesman joke, modified for social media. More contemporary, but equally unfair: not every salesperson is dishonest, and deceit isn’t unique to salespeople. Social selling is inherently collaborative, and misguided motives can exist at many points in a selling network. As customers, we often don’t know—or don’t want to. Human evolution has always depended on trust–even when it’s shaky.

Bernie Madoff’s Ponzi scheme, 2009’s Granddaddy of all Sales Scandals, reminds us of the power social forces play in organized theft. According to author Stephen Greenspan (“Why We Keep Falling for Financial Scams, The Wall Street Journal, January 3, 2009), “the basic mechanism explaining the success of Ponzi schemes is the tendency of humans to model their actions—especially when dealing with matters they don’t fully understand—on the behavior of other humans.” Ka-Ching! Human behavior has never been more accessible—or more viral. And there’s an unlimited supply of things people don’t understand. What could be a better tool than social media for the unscrupulous salesperson—or his employer?

But wait! Didn’t the advent of the socially empowered consumer create barriers for deceptive sales practices? After all, fast-talking, moussed-hair salespeople were replaced by information and the Wisdom of the Crowd. No sales pressure, no manipulation, no deception. Um-umgawa! Consumers have the powwa! But even with price comparisons and product reviews in the palms of our hands 24/7, we’re still duped. We fall for deceptive sales practices, and companies sell chronically bad products.

Why? According to Robert Shiller, (Animal Spirits Depend on Trust, The Wall Street Journal, January 27, 2009), “The term ‘animal spirits,’ popularized by John Maynard Keynes . . . refers to the sense of trust we have in each other, our sense of fairness in economic dealings, and our sense of the extent of corruption and bad faith. There are good times when people have substantial trust and associated feelings that contribute to an environment of confidence. They make decisions spontaneously. They believe instinctively that they will be successful, and they suspend their suspicions. As long as large groups of people remain trusting, people’s somewhat rash, impulsive decision-making is not discovered.”

For some vendors, “suspension of suspicions” looks like raw steak. Fritz Nelson, Executive Producer of TechWeb TV wrote “assuming a business already believes in using the Web to listen to, follow, and engage customers—and most important, get them to act,” (my emphasis), there are important opportunities to try ideas that will lead to success (A Web Presence Needs Sizzle, For Shizzle, InformationWeek, November 30, 2009). Nelson doesn’t advocate breaking trust, but when it comes to honesty and good customer experience, not every company views “success” the same way. The question becomes, does the end—success—justify the means?

Here are some examples. You be the judge:

Listen to: In 2008, The Washington Post reported “Several Internet and broadband companies have acknowledged using targeted advertising technology without explicitly informing customers.” (Some Web Firms Say They Track Behavior Without Explicit Consent, August 12, 2008).

Follow: The article “Prescription Data Used to Assess Consumers (The Washington Post, August 4, 2008), reported “The practice . . . illustrates how electronic data gathered for one purpose can be used and marketed for another—often without consumers’ knowledge.” Some social media tools bring the stalking practice mainstream. According to blogger Dan Tynan (“Social Media Search: A Stalker’s Paradise,” January 7, 2009) , “Spokeo is a search engine that uses email addresses to find people across the social Web. Give the site your log-on info for Gmail, Hotmail, Yahoo Mail, or AOL – or just upload your personal address book; Spokeo will scour 41 social networks and collect all information associated with each email address. Blog entries, Linked In profiles, Flickr photostreams, Twitter tweets, Digg comments, Amazon wish lists – and a whole lot more – all on one tidy little Web page. And every time they add new content, Spokeo lets you know.” (The company asks on its homepage, “Want to see something Juicy?”)

Engage customers: Under the guise of discussions, social sellers have exploited LinkedIn groups to hawk products, prompting this recent group discussion board comment from Axel Schultze: “Many of us are here to conduct business. But none of us are here to get “sold”. We have enough email spam. As such some of you noticed that we began to ask some of you to move your “announcements” to NEWS and took the liberty to remove it from the Discussion Board.”

Get them to act: It’s called post-transaction marketing. Linda Lindquist, a customer, describes her experience. (Internet Scam or Post-sale Bargain? Senators Expose Controversial Offers That Follow Online Transactions) “On the confirmation page was a coupon stating, ‘Get $10 off your next purchase.’ So, I clicked on the coupon because it seemed that it was a legitimate offer from and I thought they were a reputable website,’ Lindquist told a Senate panel investigating online marketing tactics. Little did she know, Lindquist had consented to a paid, monthly subscription to a ‘coupons and discounts’ membership club run by a company independent of”

Social selling incorporates ideas that offer significant opportunities for creating and executing business strategies. But like any good idea, it’s possible to abuse it by pushing it too far. The more things change, the more they stay the same. True that!

Further reading:

NJ Telemarketer Admits Role in Big Internet Scam, October 30, 2009

The Post Transaction Marketing Wall of Shame: Hundreds of Well Known e-commerce Sites Rip off Customers, by Michael Arrington, November 17, 2009

Astroturfing–A New Ethical Dilemma, by Francis Buttle


  1. You have touched upon so many angles within one blog post, I don’t know where to start!

    Great read though – always better with a hint of personailty thrown in their.

    What is really interesting is that even though consumers now have more power, or so we think, there are still methods being used that prey up our ‘animal spirits’.

    I have posted an opinion on sales and ethics on my new blog. You may want to have a look. It is more about personal ethics than corporate ethics though.

    Thanks for the good read.


  2. Did I just say that? Hard to believe!

    Robert: thanks for your comment. As long as people people have a computer and an Internet connection, we’ll have shady selling, overselling, and unethical selling online. Social media doesn’t change any of that. If anything, it enhances it.

    Before we get too wowed by social media tools and what they can do, we should consider how the tools are being abused. When innocent people get hurt emotionally and financially through sales scams, we all pay a price. Thankfully, underhanded practices such as Post-Transaction Marketing (legalized stealing?) are raising red flags with legislators.


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