Popularity is For Sale

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The measure of your impact in social media is often the number of followers or views that you have.  The theory being that better, more interesting, or more popular individuals and content will naturally draw a larger follower base than those of lesser interest.  However, it seems that everywhere you turn there are individuals willing to venture into ethical grey areas to get ahead.  The New York Times wrote this lengthy but fascinating article titled The Follower Factory.

The article covers a number of topics including social identity theft and the practice of buying Likes, followers, YouTube views, and more.  The article states that nearly 15% of Twitter’s reported active users are actually automated accounts designed to simulate real people.  Facebook disclosed that they have up to 60 million automated accounts.  The range of people buying these fake accounts is staggering.  Professional athletes, politicians, entertainers, TED speakers, and church pastors are just a small sampling of the customers knowingly buying fake followers to boost their social media status.  These accounts are also used to support overseas governments, promote products and services, and promote pornography.  Some of these accounts are auto-generated but many of them are duplicates of actual people making it look like those individuals are the ones promoting those views, products, or services.

The article also discusses the incentives many companies put in place that unintentionally encourage people to participate in this activity.  Overall it is a very interesting article and could lead to a rich class discussion.

Truth in Advertising

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We have all seen our fair share of unethical or misleading marketing campaigns in the world.  In the quest to win customers, companies will often do whatever they can to woo consumers to their value proposition.  Unfortunately, that involves blurring the lines of right and wrong far more than it should or needs to.  A few companies have decided to take a stand in the opposite direction.  Dove made headlines over a decade ago when they decided to use more natural models and CVS Health is following suit with a new set of standards for imagery associated with beauty products.  This article talks about the details of that move.  The article also has a good illustration of what an untouched photo looks like compared to a digitally altered image looks like.  CVS says they want to portray more realistic body imagery and will start appending a “beauty mark” to images that have not been altered.  It will also ban any alteration for imagery associated with CVS-brand makeup marketing.

Ask your students if they think this is a good move or a bad move by CVS.  Will authenticity help them sell more product or are consumers more likely to buy from competitors if those competitors continue to use altered imagery?

 

Ethical lines

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This Bloomberg article, “Two Major Apple Shareholders Push for Study of iPhone Addiction in Children“, describes an effort from two Apple shareholders to get the company to add parental tools that limit child access to the phone.  This raises an interesting question which could lead to a good classroom discussion.  What obligations does a company have when it comes to ethical concerns?  While the suggested action in this case is fairly easy for Apple to implement, should they?  When a company has consumers “addicted” to their products do they have any obligation to reduce that addiction?  What if taking the requested steps pushes some consumers to a competitive product?

The Gray World of Online Reviews

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The internet has given consumers incredible power when it comes to evaluating and purchasing products.  No longer do you have to visit multiple stores to compare different products.  Visiting websites of multiple manufacturers couldn’t be simpler but it’s not just access to manufacturer provided product information that has changed.  Consumers have always been skeptical of promotional messages from sellers, rightly assuming those messages are biased.  That skepticism has given rise to the popularity of “unbiased” consumer reviews.  Go to Amazon or most other online retailer and you can quickly find product information provided by the manufacturer along with consumer reviews and ratings.  This desire for consumer to consumer reviews has become the entire business model for companies such as Yelp.

Individuals have also capitalized on this trend by posting video reviews on sites like YouTube or creating their own review sites.  When these sites rise in popularity their product reviews can have a significant impact on product sales.  Unfortunately this “free advice” isn’t always altruistic.  Recognizing the impact these sites can have has led many companies to try to woo reviewers and incent them to push their products over their competitors.  Trying to determine if a reviewer has received any compensation or incentives from manufacturers is often a difficult process as many reviewers hide that information or outright fail to disclose it.

The Fast Company article, “The War to Sell You a Mattress is an Internet Nightmare“, provides an in-depth look at these practices within the world of mattresses.  The article details the practices of online reviewers as well as mattress manufacturers.  Some of those practices might trigger a few ethical concerns.  For instance, Casper CEO Phillip Krim wrote one review site saying, “Currently you actively endorse a competing product on our review page. What can we do not to have you endorse another product as superior to ours?”  Casper goes on to offer free products, travel, etc. to convince the reviewer to give their product a better rating than their competitor Leesa.  These incentives and kickbacks create a conflict of interest for these independent reviewers and can compromise the integrity of their reviews.

Which side is right and which is in the wrong?  There are many sides to this issue which can lead to some great in-class discussions (or a written position paper).  This is also an opportunity to highlight the significant role publicity can play in a marketing strategy.

Wells Fargo Case Raises Ethical Questions for Sales Managers

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The real world keeps handing us interesting marketing ethics issues. Yesterday we laid out the Mylan EpiPen case.  Today we will try to tackle Wells Fargo’s missteps.

In chapter 14 we describe how sales managers motivate salespeople with compensation plans based on commissions, bonuses, and sales quotas. While these compensation practices are quite common, they can have unintended consequences and should therefore be closely monitored. Wells Fargo found this out the hard way — and it will cost the company hundreds of millions of dollars, and a huge hit on its reputation.

For a nice overview, you can listen to or read this story at NPR Morning Edition, “Wells Fargo Fires 5,000 Employees Over Fake Accounts” (September 9). For a more detailed examination and harsh review of Wells Fargo’s practices over the years, see “The mind-blowing stupidity of Wells Fargo” (The Week, September 12, 2016).

While Wells Fargo offers an egregious example, salespeople often game comp plans. My wife used to work in sales for a well-known consumer packaged goods firm. End of year gamesmanship was not uncommon at this company. Faced with falling just short of their quota — or needing more sales to win an end of year “prize” — some salespeople would intentionally place an unusually large order for a customer. Sometimes salespeople worked out a “wink-wink” deal with a friendly customer and other times the salesperson did it on their own. Either way, the salesperson would late claim it was a mistake and process a return. Of course the return was in the new year and the “sale” was booked in the previous year. This company moved salespeople so often, that it was not  unusual for a salesperson to be transferred into the new territory and already have “negative” sales for the year. The company incurred the extra expense of shipping and returns and a dishonest salesperson made quota or earned a trip.

Examples like these can lead to a discussion of ethics in personal selling and sales management.