Customer preference in any forum is powerful.  Preference in sales is powerful, and manifests itself by creating unfair advantages for one option or another.  Racial preference in sales is powerful, and can even be damning against the sales professional that never gets an opportunity because they are the wrong color (regardless of what color they are).

You will remember reading about racial preference in sales and its effects in Black Journal before.  This depiction of racial preference in the buying process makes more clear the effect that race has on the decision of who a buyer will potentially work with.

I will define Racial Preference in sales as simple definition that I will give as follows:

The customer choosing to work with a sales professional who is of a particular race or skin color.

That’s it.  Simple preference to work with someone on the basis of his or her color or race.  It happens every day in one way or another.  This is not the most insidious type of discrimination, just the most pervasive.  It is also more ‘natural’, and does not seem wrong to many who do it.

There are also opportunities for preference to have minor versus major effects so this one is on the basis of degrees.

We will use an example of “true” racial preference, meaning control of all other externalities.  This study was done by Stanford University News, July 19th, 2010 (see the whole article).  This story was well done by Louis Bergeron and is essentially a clinical example of what happens when race gets in the way.

A Strong Example of Racial Preference

This example is as clinical as it can be, done by researchers at Stanford.  I will use some clips of the dialog, and you will understand the design and results of their tests.

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Online shoppers more likely to buy from white sellers than black, Stanford researchers say

When a seller’s race is evident in an online classified ad for an iPod nano, black sellers receive fewer offers and less money than white sellers, says a new Stanford study.

Online shoppers are more likely to buy from a white seller than a black one, according to a study by two Stanford researchers who posted ads on local classified advertising websites across the United States.

Courtesy of Jennifer Doleac and Luke Stein

Classified ads featuring a black person’s hand holding an iPod being advertised for sale received 13 percent fewer responses and 17 percent fewer offers than ads showing the iPod held by a white hand.

The ads offered the latest version of the iPod nano for sale, with each ad containing a photo of either a dark- or light-skinned hand holding the popular digital music player. The ads with a black hand received 13 percent fewer responses and 17 percent fewer offers than ads showing a white hand. Black sellers were also offered less money for the iPods than white sellers.

“We were really struck to find as much racial discrimination as we did,” said Jennifer Doleac, one of the researchers and a doctoral candidate in economics. “On average it’s a younger, more educated group of people shopping online and if anything they probably discriminate less than the population as a whole.”

“We suspect that the negative effect of race would be even larger in the general population,” she said.

Doleac and fellow researcher Luke Stein, also a doctoral candidate in economics, ran ads in more than 300 locales, ranging from small towns to major cities, during the course of a year.

The study showed that black sellers were at the greatest disadvantage in the Northeast, where they received 32 percent fewer offers than whites. In the Midwest, black sellers got 23 percent fewer offers, and they got 15 percent fewer in the South. The West was the only region where the difference in the number of offers received by black and white sellers was not statistically significant.

The amount of money offered black sellers was between 2 percent and 4 percent less than the offers white sellers received. The disparity was most pronounced when the ads were posted in locales with high crime rates or where blacks and whites were geographically isolated from each other.

Buyers responding to classified ads of an iPod for sale made offers 2 percent to 4 percent lower when the iPod was shown being held by a black hand instead of a white hand.

In general, black sellers were at much less of a disadvantage when the ads were posted in more competitive markets, where larger numbers of iPods were for sale, Doleac said.

The iPod listed in the ads was always a silver, 8-gigabyte version of the most recent edition of the nano, which also plays videos. Each ad stated that the box had never been opened and the iPod was for sale because the seller did not need it.

Doleac and Stein never met with the buyers in person. Instead, when it came time to set up a meeting, the researchers said they were out of town and offered to ship the iPod to a buyer’s home, which produced another striking disparity.

Potential buyers corresponding with black sellers were 44 percent less likely to agree to have the iPod shipped to them and were 56 percent more likely to express concern about sending payment to the seller by PayPal.

Doleac and Stein interpreted the buyers’ reluctance as indicating a lack of trust in the sellers. The would-be buyers were also 17 percent less likely to include their name in emails when they responded to ads placed by black sellers.

“The results were obviously disappointing in terms of what they said about the state of society,” Stein said.

Because they never met with any of the buyers, Doleac and Stein have no information on the race of the respondents.

Stanford University News, July 19th, 2010
Study Conducted by Jennifer Doleac and Luke Stein
Article By Louis Bergeron

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Why This Example? Draw the Parallel!

I chose this as an example because of the simplicity of this display of preference.  The difference in the offers on the iPods was simply the color of the hand.   There are those who suggest that my characterization of preference might be flawed.  I would suggest that there is no clearer and simpler example of racial preference that can be

You need to draw the parallel from this P2P (Personal to Personal) activity to the B2B (Business to Business) and B2P (Business to Personal) sales that most of you undertake every day.  The bridge on all of these is simple:  In B2B and B2P sales, you always are selling to a person.  There is no doubt about that…you are selling to a person and not a company.

Practical Applications

Job Hunt and Resume – The practical aspect of this is that unless you are aware that an organization you are applying to be looking for a minority candidate, you should ‘scrub’ your resume of racial indicators.  I discussed this in depth in Black Sales Journal 11/21, Is Your Resume Race Neutral?

Business Cards – Another practical application is that I feel it is important to keep your picture off of your business card.  The business card is not an ID, it is your business information in a quick and familiar format.  Keep the picture off unless you want it well known as might be the case in some real estate and B2P positions.  This was specifically mentioned in Black Sales Journal 2/10/2010 9 Prospecting Tips for the Black Sales Professional.

You want to show that you are the professional looking for the opportunity to solve a customer’s problems.  Once you crest the hill we call preference, you can begin to show your true talents.

Always be the best.

Your comments are welcome.

Sounds like a dumb advertisement doesn’t it?  Anyone who believes that a sales professional should work for free has a touch of a fever, but the actual situation plays out everyday.

Yet in reality, many sales professionals, and especially Black sales professionals find themselves in that situation, unintended of course.

It happens when you make presentations to buyers who based on reasons beyond your control, take your presentation’s price, and your constructive ideas, and give them to your competition.  When that happens, they are actually saying you should work for free!

How It Happens

This can happen to anyone, any color, and any creed.  It is what happens when someone makes a decision to be courted and accepts the benefits of a relationship, yet not get married.  The problem arises when the fruit of your labor is used to better the position of the customer, even though they had no intention of making the move to you or your organization.

You come in with a ‘killer’ price, and a product offering that is exceptional.  You realize that based on the customer’s needs your organization can use a combination of products that are currently available on the market and couple it with some creative financing to make it palatable.   In the whole, your price and product offering is enhanced by your terms (financing, payment deferral, and other benefits) and you feel success is in the making.

As you know the customer can benefit financially and product-wise from the activities of the sales professional without ever making a real commitment to you, and certainly without putting any food on your table.  You may have felt this ‘sting’ several times before, and you do not have to be a ‘repeat’ victim.

You do all of the work, and the customer gets the benefit and any reward goes to the sales professional who followed your lead.  You have to ‘wait until next time or next year’.  Can’t buy much bacon with that! Objectively, this is part of the sales process, and a part of the process that you cannot avoid; yet you can manage.

Take Smart Precautions

To avoid this being your anthem, you have to develop your principles and rules and stick to them.  You also must work on gaining commitment before showing your complete arsenal of products and services during the process.  That commitment is based on the answers to the questions below.

When presenting, seek to get agreement on what you need to solve, and what level of price and program will “land the business”.  Logic would show that you could still be manipulated; yet this starts to get at some of the problem.  You will want to cover these bases:

Ask the all-important questions before the solicitation process.  These are the requisite questions that will define what it will take to separate them from the incumbent:

• Why are you looking for competitive quotes/bids?
• How will the quote/bid process be conducted?
• What pricing difference must be made? What will it take for you to change?
• How long have you been with the incumbent? Does the incumbent get the last shot?
• Is the playing field level with the others that are quoting (other than the incumbent)?

The purpose of these questions is clarity about the buying process and what definable difference that you must make.  Knowing the answers, if the buyer is honest, allows you to do what is necessary to be successful, whether with this customer, or another one.

An important point is that you cannot be hesitant to ask these questions.  They are part of what a true sales professional asks, and gets clarification of before the sales process.  What you learn about how the process is defined in the eyes of the customer will speak volumes.

I am sure that you sales veterans out there do this already, yet it bears mention for the new sales professionals

Don’t hesitate, ask!  Yes, the customer can still violate his/her own rules, but does so at the peril of alienating you and other sales professionals.

How Does this Affect The Black Sales Professional?

This affects all sales professionals, and it is part of the sales ‘game’.  It is what happens when customers must get competitive quotations of products and services because they want to check how they stand, or to satisfy a procedure that does the same.

Here is where it gets vexing.  Black sales professionals can easily be subject to working ‘without pay’ because of the complexities of preference and even prejudice (See Black Sales Journal 5/19 A Deep Dive into Preference, Perceptions, and Prejudice).  If a buyer has no intent on doing business with you as sales professional, or your organization, and is planning on taking your work and giving it to the incumbent, they are wasting your precious time and effort.   Issues regarding preference manifest themselves that way. The buyer strengthens his or her relationship with their current vendor, while at the same time improving their price and terms, thanks to your efforts.  Prolonged activities like this could obviously cost you your job.

In this way, being used is bad for your current employment health.  The above questions, if answered truthfully could save you some time, or at least help tip you off as to who the prospects are and who the ‘suspects’ are.

The Reality

You will always run the possibility of wasting time on good accounts that have no intention of moving their business because of their relationship with the incumbent.  They just want to use you for leverage to make sure they get a good price or program.  You have to make the decision of whether you want to be a willing participant, or should we call it a ‘not-for-profit sales professional’.

You have many choices that include not working with a prospect to contacting every few years to maintain the customer pending a personnel change of buyers.  The most important thing is that to increase your effectiveness, you don’t want to waste your time while you better someone else’s program.

You owe it to yourself, and it will make you more effective.

Always be effective!

Your comments are welcome.