Sunday, January 07, 2007

Of Saints and Schemes

I apologize in advance if this post is mostly anecdotal, but I have been concerned for a while about the business practices of some Mormon run companies specializing in door-to-door sales. I have several friends who have taken positions in companies selling a range of things, from pest control services and alarm systems, to knives. For the most part, their experiences have been terrible.

The companies of which I am aware tend to recruit male returned missionaries as their sales force. When they get enough people to sign employment contracts, everyone relocates somewhere for the summer (except for the knife salesmen who are encouraged to sell among family and friends). Then they begin selling. The work days can run anywhere from 8 to 12 hours depending on the salesperson. There is no direct supervision; however the salesmen are usually in competition with one another. Those who make more sales often receive random prizes like Plasma TVs and Ipods in addition to the extra money they make from commission.

Given the incentive to sell, many employees begin to lose their moral compass. Almost everyone I’ve spoken to about these companies report that the salesmen are encouraged to lie. Sometimes, the ‘team leaders,’ themselves returned missionaries, will use gospel-oriented motivations, like explaining that more money from sales equals a larger tithe for the church.

What’s amazing is that it seems to work. One person I know makes between 35 and 40K – just selling over the summer! His brother, a partner in one of the companies, has made well over a million dollars over the last few summers. However, for every success story, I have heard of several people who quit or are forced to resign, either because they don’t make enough to pay their rent, or because they dislike having to mislead people in order to make sales.

I know that unethical behavior is practically ubiquitous in many sales based organizations and, therefore, it shouldn’t matter if some Mormon companies engage in the same dodgy practices. But I worry about what it will mean to the church if in ten to twenty years these salesmen begin to assume leadership positions.

Has anyone else had experience with Mormon run summer sales companies? What about multi-level marketing, pyramid and matrix schemes? Ever get a call from an ex mission companion asking you to meet for a “reunion” in Provo?


TrailerTrash said...

My younger brother has been involved in the close cousin to these schemes: telemarketing! I don't know why, but these seem to be the only kinds of jobs available for undergrads in Utah.

Robert C. said...

My only anecdotal evidence: I have a brother-in-law who owns a pest control company in Georgia. Although a few employees quit and come home, the overwhelming majority do very well. And I don't think there are any moral qualms like you describe. I think the sales reps legitamely believe that they are selling a nice service at a good price.

Anonymous said...

Robert C,

I'm glad to hear that at least one company seems to be doing it right. For all of my friends (except one) it became painfully obvious that they were selling their product for way more than what it was worth. One company had to hire an "expert" to come in and tell the technicians exactly what was on the state test so that they could pass and get their license to practice "pest control." The expert would take the test once a month to learn what was on it. At the very least, it was unethical to pay him for the questions; at the most, it was illegal and dangerous (think about a bunch of "technicians" who don't know any more than you do about pest control). For me to think that sales reps made gobs of money selling that service makes my blood boil. Then to consider that most of them were Mormon and aware of the scheme to get licensed makes me bang my head against the wall.

Woodbury Family said...

I have sold pest control door to door for six years. I have never heard anyone ever tell their employees to lie. I find it hard to believe that the paying "more tithing" excuse is even true. The salesman that usually quit have the craziest stories of them all! In six summers the people who fail are usually the ones who simply don't work. I have seen two people out of over 100 who actually worked hard all day, and were honest, and didn't make more than $6000. In my opinion...that still isn't too bad considering the life skills they learned while doing the job.

Anonymous said...

My personal experience is as follows: in an informal recruiting session, a sales rep told me that he was glad to know that, because the company owners were Mormons, the profits would all be tithed. In the same session, the rep told me that the best door approach involves this line: "you've probably seen our truck in your neighborhood." He said that more often than not the truck had not been in the area since sales reps usually signed customers before the trucks would go in and do the work - but, saying that made the people believe that the sales reps were part of a legitimate enterprise.

Furthermore, this rep told me that his colleagues called their their new powers of persuasiveness "jedi mind tricks." His only qualm with using the jedi mind tricks was that occasionally he would feel pressured to use them to convince an obviously low-income family to purchase pest control when they clearly could not afford to do so. He had no problems persuading middle-income and wealthy people to purchase his company's service.

Thankfully, I did not go. However, my friend did as a technician. He frequently found himself face-to-face with angry customers who resented the sales reps for talking them in to signing contracts. These customers usually felt they had been lied to. The sales reps did not see this effect of their unethical salesmanship because their contact with the customer ended the moment they had a signed contract. The supervisors were aware of what was going on (my friend told them on a regular basis), but they did nothing to stop it because they took home a large cut of each sale. In the end, my friend calculated that he made less than 10 dollars an hour dealing with the customers post-sale and spraying their homes.

Anonymous said...

Seeing as how most of these comments are anecdotal it is hard to take them too seriously. I have done these summer sales jobs for 6 years and have had great experiences. There are obviously those that have bad experiences. What’s unfortunate is most people who fail do not go home to mom and dad to say they were lazy or were not good salesman. Most go home saying how they got screwed or how the company was dishonest. This leaves the former employee a 'dignified reason for failure' and in their mind they were 'above the job'.... get real. I have heard the horror stories and I believe about 5-10% to be true. Thanks continuing to bad mouth an industry with 'anecdotal stories'. Real dignified.

diahman said...

I think it should be noted however, that the initial posted admitted that this was mostly anecdotal and even asked others to share thier personal experiences.

With that said however, there are always implicit claims in moving from particular to more universal observations.

For the most part I think you are right. There are people that have to justify their failure and are unwilling to take the responsibility themselves. I think partially, this is simply the name of the game in sales. It really is hard work, and in order to find the high producing sales reps, any given company will have to go through several mediocre or sub-par individuals.

As you stated, these people are usually lazy or not good sales people.

The problem however is two-fold. Firstly, most companies recruiting platforms are to put the top procuding sales people (or their experience) in front of potential employees. This creates a false picture of the norm and so people go into these jobs with false expectations. Companies knowingly send these people out, with the expectation that 20% of them will produce 80% of the results. However this is not the picture that sales reps go into the field with. Each believes that he or she "can make it big". What they don't realize is how much hard work it really is and what it takes to be a good sales rep.

The second problem, leaving aside the "lazy people", is what it takes to be a "good" sales person. In Zig Zigglar's "Secrets of Closing the Sale", he shares this anecdote of a sales man who wasn't performing very well selling pots and pans door to door. When Zigglar visited his home he noticed that he didn't use the pots himself and then made excuses as to why he didn't (money, etc. the normal stuff). The point I think is fairly obvious--one must believe that what he or she is selling is necessary.

This, I think, is where the problem is. The summer that I sold pest control, it was difficult for me to believe that the people I was selling it to really needed it. It seemed that the top performing sales reps were the ones who were able to justify more people needing the product than I could. Many of the justifications were very ethical. In some respects, it is a subjective call.

However, I think the link between this line of thinking and the gospel is interesting and sometimes apparent in these companies. When you serve a mission you opperate under the assumption that you have a universal message--it's meant for everyone. I think it rather easy to carry over the notion of universality to the sales field.

I, of course, had a few qualms with that.

Handle said...

Like Diahman said, the point of my post was to generate a conversation about sales-based companies. I'm interested in all of the experiences people have had, both positive and negative.

I agree with Diahman that most companies tend to use the most productive sales reps as examples for everyone else.

I would like to see more honest conversation about the realities of sales jobs. Ex-reps are not always the best people to ask for information. As Anon said, those who fail tend to have horror stories. However, the reverse is true as well: those who succeed tend to have very positive views. I believe the reality lies somewhere in the middle.

Returned missionaries (or anyone else who is considering taking a summer sales job) should be given information from both perspectives.

Anonymous said...

So understandably, those who do well think the industry is fantastic. I just got done selling for a summer sales company that was stealing hundreds of thousands of dollars from their customers and the company they were contracted with to sell their product. I reported them, and now they are trying to sue me for thousands based on made up garbage. Summer sales companies, in general, are dishonest and the salesmen who sell for them are even worse. I've heard the things they say, I've been pitched to by them and their recruiters. I have a couple honest friends who did fairly well, but -IN GENERAL- they are terrible companies that turn their employees into liars able to justify anything and everything. I know I'll never work for one again.
p.s. Those who don't believe my anecdote, I can provide legal documentation of everything I claim.

Anonymous said...

I am a former owner of a pest control company (we recently sold the business). Our company was built through the summer sales model. Year after year we had hundreds of summer sales reps work for our company. Many of these sales reps were LDS many of them were not.

I saw thousands of reps over the years. The majority of the reps were honest, hard working and respectable. Some of the reps were not quite as respectable. However, all in all the good reps far out numbered the bad reps.

In order to be successful in pest control sales you do not need to be a great sales person, you only need to work hard day after day after day. If you do this you will be a success. The job is difficult, you must be up to the challenge.

I saw many reps quit, sometimes it is just easier to give up and quit. Some of the reps have good reasons for quiting. Perhaps they have a poor manager, or perhaps the company is not organized or ready for the sales program. Although some reps are justified in quiting most reps quit because quiting is easy.

I challenge anyone to refute the value of a pest control service. Pest Control is a multi-billion dollar industry. People do not like ants in the kitchen and they are willing to pay for a service company to keep the bugs away.

It is true that I had a handful of customers that claimed that they had been lied to, in these instances I cancelled their services and apologized. But I had 100,000 customers that were happy with the service. These customers wanted the service, if they didnt want the service they would have cancelled. Why not let the customer decide whether there is value in the service? If the customer is willing to pay $450 per year when they are under no obligation to do so how can you argue that the service is a hoax? Millions and millions of Americans are paying for annual pest control services simply because they do not want ants in the kitchen.

Yes, there are always a few bad apples in the summer sales industry and unfortunately they make the industry look bad. But I seem to remember a few bad apples on the mission also. Its a good thing I didnt quit the mission just because my trainer sold our furniture and fridge and pocketed the money.

My point is that the summer sales industry is like any other stage in life. For the most part there are great people, but without a doubt there are some slippery people also.

I must say I love the company that recruits under the pretense of "tithing". Or the so-called team leaders that encourage the reps to make more sales in order to increase the tithe. For hell sakes, that is the lamest thing I have ever heard. If you believe that you deserve to be duped.

The best experience of my life was my mission. The second best experience of my life was summer sales. Its interesting to note that I wanted to quit both the mission and summer sales in the early stages. I couldnt quit the mission for obvious reasons. I couldnt quit summer sales because my best friend was doing so well. How could I go home and tell mom and dad that the job was a scam when my best friend was making it a huge success? It is a good thing that I toughed it out. Both the mission and summer sales changed my life.

Anonymous said...

I have sold for 3 different summer sales companies; all fell on different places of the spectrum between honest and not. The first was a pest control company. I was told by my manager to say "the truck is going to be in the area..." when it wasn't in fact going to be there unless I sold the customer's house. Call it what you want, my manager crapped a brick when I told him I didn't agree, claiming that it was the "optimistic approach" (if you promise someone a 300% increase on an investment is that just an optimistic approach too?...) I don't feel that it was honest, so I took a different approach, still sold a lot of pest control (led the office for about 6 weeks) and I made a good deal of money. Not as much as some people in summer sales, but enough to get me back to school and pay for living expenses while I studied. Echoing those who've said it boils down to hard work, I worked 9 hour days to make about 2 sales a day, and came out all right.

I then decided to sell alarms the next year (higher commissions), and thought I could make the same type experience. My manager went out knocking doors with me, and I couldn't believe my ears. He introduced himself and said he was with Honeywell (not the company we were actually working for...) and he said he was there as an advertising intern. He said that he represented the company that made the person's old alarm system (not true - it was an ADT alarm, and we were selling for a company called APX) and that we were bringing out the upgraded "wireless" system that was the newer model and safer. It was so smooth that I don't know if the customer realized what was going on. My manager said he was allowed to give out 2 free alarms on each side of the street, to advertise for when the "sales teams" come out later in the summer. (and that from each sign in the yard, we sell 2 alarms via call-in - also bullcrap)
The list goes on and on, and I couldn't believe the lies I heard. While he was closing the deal with a customer (who bought because he thought he was the 2nd (and last) person on the street getting the free alarm, the customer asked, "do you get paid for the alarms you give out?" my manager answered him, "No, if i reach my quota, the company pays my housing for the summer." Shame on me for not speaking up and telling the customer the truth, but I was so shocked by my manager's blatant dishonesty, I just listened, and afterward decided to quit. This guy was one of the top managers in the entire company, and my hard work could be put to use for a better company...

My last experience was the worst ever, the which I'm still paying the price for. I can't name the company because they are currenly pursuing a lawsuit against me, and against the other workers who stood up to the dishonest owners. I will say they are a retailer for Dish Network, and they operate in a number of states, including Washington, Idaho, California, and Utah. I signed a contract to sell for 4 months, and my wife and I moved to California and settled in our new apartment, provided by the company. My second day in the city, during a one-on-one training with my manager, who is also owner of the company, he said this: "now that you're here I want to tell you how you will get a large number of your sales this summer. It's called a "re-install." Knock on doors where you see a Dish on top of the house, and ask them if they are still bound by their original contract. If they are not, that means they pay month to month, and ask them if they would like to sign a new contract. If they sign up again, we can give them free upgrades, new equipment, and a $100 discount."

who doesn't want their customers to be under contract, right? It made sense to me, even though kind of strange...

I found out a month later that when the technicians that the owner hired were servicing and installing these "re-install" accounts, they were calling up Dish vicariously for the customer, cancelling the customer's original dish account, then calling back and activating an entirely new account later on. They would give new info such as a different phone #, attach a fake apartment number to the address, whatever else they could to "trick" Dish's computer system, so Dish would pay this retailer for signing up a new customer - each one scored them about $1000, and they had been doing it for years before they got busted this last summer, which totals hundreds of thousands of dollars of revenue from these fruadulent accounts. After finding this out, I decided to quit and have learned about additional fraudulent practices, forgeries, etc. that were going on. Long story short, when I quit, I breached my contract, and so I am being sued for $5,000. Yeah, that's pretty stupid right, how could they get away with that? You'd think Dish Corporate would throw me some help to expose these rascals, but this certain retailer seemingly still makes plenty of money for them, on the accounts that they have found ways to "get away with" and a few ligitimate ones sprinkled into the mix. So after fining them for their fraud (which I soon plan on reporting to the attorney general in California, Idaho, Washington, and Utah, once I obtain the rest of the paperwork) Dish Network just slapped them on the wrist and is once again accepting new accounts from them.

If there's any great lawyers out there reading this, I'm also contemplating a countersuit against the company and against the owner personally for a number of damages that I have incurred, and continue to receive and incur due to travel costs (I live across country now, and have to pay about $1000 each time I travel to court), as well as constant threats, extortion attempts threatening false CRIMINAL charges, multiple other harrassments from the owner of the company, accusations, defamations, and there are others in the same situation as me, so there might be a good potential for a small class action suit...

I am still working on the case, and cannnot include the rest of the details, but long story short, this certain retailer is lying about everything, and making me out to look like the slacker.

That's the best defense a sales company can take because too often those who don't know how to work hard just give up and make excuses. And sadly enough, even with a dishonest and corrupt sales company, the hardest workers (with rapidly fading or non-existent consciences) will still make lots and lots of money.

I am actively seeking the interest and comments of other salespeople and/or sales companies out there who can contribute stories and other information to help me expose some of the fraud that is taking place in a lot of the crappier, less accountable sales companies. I have a small production studio, and I want to put together a video documentary on these "summer sales" companies and the different schemes they are working. Also, I'd like to highlight any honest sales companies in the documentary, if any are so bold and confident as to say they are truly honest. You're free to contact me, I'm not so jaded that I can't entertain the idea that there are still some morally driven salespeople out there. Somewhere. shoot me an email, thanks ya'll, and thanks to the owner of this blog for helping bring to light more info on this whole summer sales thing....

exparte said...

i worked for Firstline last summer as a technician. I wouldn't trust the majority of the sales rep as far as I can throw them. True, there are some honest guys that do well, but the majority that lead the office will be liars and disgraceful manipulators. I made 15k (in the bank) on the summer, most techs didn't make more than 10k. Half our techs barely broke even with all the expenses figured in. As for the reps, the honest Sales reps usually quit or barely broke even and took home the "experience." about 25% lost money on the summer. It made me sick sometimes to see the company applaud dishonesty by handing out "incentives" to the "best" reps. I often had customers call back reps to straighten things out and made sure customers got what they had been promised, to the detriment of sleezy sales reps. I showed up at houses many times and heard Reps talk to customers-- the lies i heard made me feel ashamed because, for a lot of these people on the east coast, the only LDS people they would ever meet would be me and the sales rep. Way to represent. After a while I stopped giving a damn about the sales reps and was honest with customers-- reviewing everything that was going down before I started installing. Without exception, customers loved being talked to straight, and they almost always stayed with the contract. Of course, sometimes the lies they had been told were too much, so they had to cancel, but they always appreciated my honesty. As for the sales reps, once they figured out that i wouldn't play ball their way, they were more careful about the tactics they would use, knowing that the techs weren't just looking the other way on shady deals. So it worked out for the best for everyone in the end.
Money can turn even the best of people into scum bags and I saw a lot of RM's turn into greedy bastards, that's for sure. there are still a lot of honest sales reps, but among the "best" sellers, the majority are shady. I ruffled my share of feathers by calling people out on their BS, but it sure feels good.
Another thing about the figures people quote about how much they make on the summer--they exaggerate. A buddy of mine used to tell people he made 50k on the summer, but a year later he confided in me that in reality, on his bank statements, he only cleared about 21k. So don't believe everything you hear about how much they make-- usually they give you the theoretical amount they've earned, which, in summer sales, sometimes twice as much as they will actually see in their bank accounts. (factor in cancellations and expenses you wouldn't have otherwise incurred working elsewhere, and opportunity cost of taking the job)
The flip side is, who can complain about 20k in 3 1/2 months?! I surely can't complain about my 15k, even if I was initially told I would make 25k. I worked my tail off in alaska one summer and brought home 6k, and i thought that was good. Anyway, Firstline has filed restructuring bankruptcy, so people waiting for their "back-end pay" might not see half their money for a while, if at all.
bottom line--if it sounds too good to be true, it probably is, and don't trust the guy recruiting you, he gets all kinds of kick backs just by having you sign.

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Anonymous said...

The best salesmens (produce the most sales) regardless of their religion are those who lie until the consumer cant resist purchasing. On the pest cntrol side of the business a lot of the salesmen from Utah do not have very much knowledge of what they're truley selling. At least they do not know they're lying. Howeve there is a saying ignorance is no excuse. Please sell with integrity. Read searching for companies which use d2d sales and you will see a high number of complaints of varying reasons but mostly feeling scammed.