Chris Moerdyk
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Chris Moerdyk
Marketing Tips

Backhanders are definitely not a good idea

If you have to bribe someone to persuade a customer to purchase your product, you might have a short-term solution but inevitably a long-term problem.
But, what the heck does one do when all your competitors are throwing backhanders around right, left and centre?

Particularly when research shows that the majority of South African consumers - black, white, rich, poor, male and female - still implicitly trust salespeople in shops.

Which, in spite of global trends showing a dramatically decreasing level of consumer trust in everything from politics to business, churches and especially salesmen in just about every shape or form, suggests that South Africans are still among the world's most apathetic and gullible consumers.

Now, anyone who has ever had anything to do with the retail industry in this country will know that when salespeople give advice to customers, nine times out of ten, they will not sell them what is best for their customer but rather they will sell them a product from which they will get the most commission or the biggest backhander.

The age-old and corrupt practice of "spivving" is still rife in the retail industry, particularly in the electronic goods and furniture markets.

Nothing is more infuriating for any manufacturer than to spend a fortune on advertising that successfully draws a customer into a store determined to buy their product, only to be talked out of it by a slick salesman indulging in some well-practiced "switch-selling" that will put more money in his pocket.

And as the South African economy becomes more competitive, the more intense this practice will become.

Most big brand manufacturers and distributors can't stand being involved in backhanders and many of them simply give in by saying "if you can't beat 'em, join 'em."

It is a worldwide problem but a trend that is finding favour slowly but surely in South Africa is the advent of manufacturers opening their own retail outlets. Motor car manufacturers, for example, have been doing this for years of course.

Dell Computers also bypass dealers as does Apple with its own outlets in more and more of the world's major shopping malls, while still allowing dealers to sell its products.

Which of course, one can do if you have a really hot product such as the Apple iPod that most shops desperately want on their shelves. But, the gamble is that if your product isn't quite that hot, opening your own shop might just result in dealers taking your product off their shelves.

Spivving, backhanders and all sorts of other so-called "sales promotion" ploys are the source of evergreen marketing dilemmas for manufacturers and distributors. And they are a nightmare for SME's because the smaller the company the more the pressure unscrupulous retailers will apply.

But, there might just be light at the end of the tunnel because it is rumoured that legislation is being considered to counteract these and other dodgy practices which, whatever way you look at them are corrupt, crooked and downright dishonest. And deserve to be outlawed.

What is really scary is that they have become so commonplace that many retailers don't see anything wrong with them.

But, one thing is for sure and that is South Africa's consumers will not be naïve and gullible forever. And slowly but surely they're already simply stopping dealing with stores whose staff they don't trust anymore.

So, what is wrong with simply joining in with all this spivving? Well, the problem is that whatever commission or bribe you offer to a salesman, your competitor will offer more and then you have to up the ante and pay more as well.

This can go on and on until you have no profit margin left.

Another problem is that if you rely on backhanders this often takes one's eye off product quality as manufacturers start getting lazy and simply keep relying on bribery as a marketing tool.

Companies that score in the long run are those that have excellent product quality and service and who market their products so well that consumers don't ask the advice of salesman because they know exactly what they want.

And that's what efficient marketing is all about.

The idea is to put yourself way above your competitor and to make your products or services "must-have's" instead of options.

2 Apr 2008 13:17

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About Chris Moerdyk

Apart from being a corporate marketing analyst, advisor and media commentator, Chris Moerdyk is a former chairman of Bizcommunity. He was head of strategic planning and public affairs for BMW South Africa and spent 16 years in the creative and client service departments of ad agencies, ending up as resident director of Lindsay Smithers-FCB in KwaZulu-Natal. Email Chris on moc.liamg@ckydreom and follow him on Twitter at @chrismoerdyk.




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