When I Say ‘Cheat,’ You Say ‘How Much?’ Why Salespeople Are Easy to Exploit


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“Your judgment gets clouded out in the field when you are pressured to sell, sell, sell.”

Wells Fargo, 2016? Actually, no. Dial back about twenty-two years – to 1994. This quote came from Prudential Insurance sales rep John Vetter, talking about a scam that began in the 1980’s. A scam that turned nearly eleven million Prudential customers into victims.

When pressure is baked into the sales culture, customers are jeopardized. Carol and Keith Nicholson were loyal Prudential Insurance customers at the time Keith was diagnosed with Leukemia. “Carol had been known to say that she trusted her Prudential agent like she trusted her pastor. He was going to play a vital role in smoothing a very uncertain future. Therefore, when her agent suggested that she and her husband take out a new life insurance policy on Keith at no additional cost, the couple agreed, no questions asked. They just signed the forms, believing they had brought even more certainty to the unpredictable future,” according to a business school discussion about the case prepared by Hunn, Shenkir, and Walker of the University of Virginia’s McIntire School of Commerce.

The Nicholson’s were wrong. Keith eventually died, and that was when Carol discovered that the $103,000 Prudential life insurance policy they traded in was worth only $22,000. “The Nicholson’s agent had taken advantage of the couple’s trust by borrowing against their old policy in order to get them to purchase a new and more expensive policy.” [Hunn, Shenkir, and Walker]

By 1998, Prudential estimated its liability in the US from related class action lawsuits at $2 billion. States with large populations of retirees were especially hit hard, and investigations into the company’s practices ensued. “Prudential trained its agents to mislead, misrepresent and defraud policyholders,” according to a 1997 internal report from the Florida attorney general’s office.

Pressure, incentives, training, pressure. Repeat. That’s how eleven million Prudential customers got scammed. The same way Wells Fargo opened two million credit card accounts without customer consent. The same way Valeant/Philidor tricked health benefits providers into overpaying millions of dollars for prescription drugs. And the same way Dun & Bradstreet Credibility Corporation used alarming, but groundless, sales pitches to frighten small business owners into subscribing to their service.

You’d think after a while, the actors in these corporate debacles – boards, executives, shareholders, and employees – would figure things out, making such sordid patterns fizzle into obscurity.

But no. Today’s CXO’s, engorged on bonuses from share price appreciation, and financially fattened from meeting short-term revenue and profit targets, often gut internal governance to keep their gravy trains rolling. They emasculate audit enforcement and crush dissension. It’s all in a day’s work. Practical advice for the first-time job seeker: bolt from any hiring manager who says, “We run an aggressive sales organization here.”

It’s revolting to see sales strategies and tactics used for malevolent objectives, and to learn the consequences that victims endure. Executives can salivate over clever strategies for sales enablement, but anyone who fails to consider the possibility of harm to employees and customers needs to remove his or her head from the sand.

Not every revenue scandal involves the sales force. Enron’s meltdown first flourished in the CFO’s office, implemented through creative manipulation of debits and credits. VW’s emissions-cheating scheme was prosecuted through its engineering department. Turing Pharmaceuticals controversial price gouging was the brainchild of its profit-obsessed CEO, Martin Shkreli.

But all too frequently, you’ll find the sales organization close to the heart of an ethical storm. The linchpin in the mechanism for repeatable, scalable deceit. The reason, in five easily-tweetable words: Salespeople are easy to exploit.

1. The sales team holds a unique position of trust with a company’s customers. And all scams rely on the ability to exploit trust.

2. Salespeople provide a convenient smokescreen for unethical managers. Too tempting to ignore. At Wells Fargo, the sales force took the fall for not upholding corporate values, when in fact, they were executing them.

3. Commission- and incentive-based pay plans enable management to control behavior like a puppeteer manipulating a marionette. Such plans predominate in sales organizations, and many salespeople depend on their income-at-risk to make ends meet. That makes them particularly vulnerable to making ethical compromises.

4. Organizations traditionally control salespeople as individuals, despite the popular rhetoric about playing as a team. It’s embedded in the culture. Companies champion sales individuality: individual contributors, individual quotas, “What’s-in-it-for-me? (WIFM),” and personal motivation. Through internal sales contests, companies often play salespeople against each other, limiting their individual and collective power to resist management abuse.

5. Many times, salespeople don’t understand their personal risk situations. In deterministic you-will-make-your-number sales cultures, salespeople – particularly those new to the role – fail to confront the uncertainties they face. Instead, lacking background and experience, they acquiesce to management’s performance demands, no matter how unrealistic.

6. Thanks to automation, many sales roles have become de-skilled. And will become more so. That makes salespeople easy to replace, and easy to threaten.

Think of sales as the revenue-risk shock absorber for a company. Industries can become more competitive. Market demand can wax and wane. State-of-the-art products can unexpectedly decline, or become “disrupted.” Senior executives can endlessly tinker with planning and strategy, and achieve rock-star fame through TED talks about their “lessons learned.” But one thing remains durable, as surely as the sun rises and sets: revenue expectations for salespeople never recede or decline. Do companies exploit that by endlessly funneling risk onto its sales force? I think so.

Salespeople who have worked even a short time are inured to working harder to maintain their standard of living. Companies like Wells Fargo and others have learned exactly how easy it is to manipulate their salespeople to achieve that prosaic goal.


  1. Hi Andrew, great analysis. What do you suggest to mitigate this issue? As you rightly say (many) companies do not seem to be able/willing to fix this problem.


  2. Hi Thomas: thanks for your comment and for your question. I have tackled this issue and it will be the subject of my next post, titled How to Make Your Sales Organization Fraud-Resistant. That’s a bit of a misnomer, so I might change the title to How to Make Your Company Fraud-Resistant. Either way, I’ll send you a note when it’s posted this week.

  3. thanks Andrew – am looking forward to your thoughts. It certainly is a difficult thing to achieve in a profit driven world.


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