Innovation

Best Practices: When you're asked for a bribe or kickback

Written by ProfitGuide

The odds that your firm will be asked to pay a bribe or kickback may be higher than you think. Just over half the respondents to our poll — 52% — said their company has faced such a request. Their advice on how to respond included:

1. “When I was with a major consumer-products company, I was in charge of shipping overseas through the port of New York,” writes Gary Ellis. “The trucking company we used (a very good one, I might add) had a mysterious $75 charge on its invoices. After quizzing them on it, I learned that the dockworkers at the port levied a $75 ‘charge’ so each shipping container would find its way to the correct ship. If the charge were not paid, the container would somehow get ‘lost’ on the dock. I guess it was more extortion than a bribe, but because the practice seemed rampant and my company had no power to control the dockworkers, we ‘gladly’ paid the $75 charge as an unfortunate cost of doing business.”

2. “I would never ‘buy’ business—ever,” says Vancouverpita. “It is becoming more common for customers to ask, ‘What’s in it for me?’ I see more and more of my competition handing out expensive promos and smooching to gain business. But I prefer to know that I earned the business. That way, I am more secure in knowing I will retain a client based on service and quality. When a customer can be bribed to do business, they will never truly be your client; rather, they’re only the client of the highest bidder! To overcome this, I work harder. I improve on my ways of overcoming objections, and I sell customer service, quality and reliability. Sooner or later, a client who has been bought will discover that people don’t work as hard to meet their needs, based on an assumption of assured business. If you have been bought, do you have the right to complain?”

3. “We are a small food service and catering company,” says TS. “On occasion, some of our larger corporate clients will ask us if we can get them seats at a show or game, or donate to their corporate charity. First of all, it is done professionally, i.e., it is always a request. Secondly, they give us a way out by saying that it’s fairly short notice and they would understand if we were unable to fulfil their request. We find that giving these ‘kickbacks’ has solidified our relationship with them, and our volumes have grown exponentially. I am not sure if I would write a cheque to someone for the privilege of their business, but a marketing cost by way of tickets or dinner is fine by me.”

4. “This is a request we would never ever entertain,” says D. Downs. “Our reputation is our best advertisement, and no client is worth risking it for.”

5. “This is a moral issue, to be sure,” says Denjae. “However, in the Asian culture bribes are considered a cost of doing business. We live in a competitive global community. I would not opt for a bribe, but I would consider a finder’s fee for someone who helped our firm win a business. Example: I would not reward an official who may be restricted by law or custom. But I would consider rewarding someone who helped us win business — the latter being an acceptable custom now. On the other hand, in another culture an outright bribe may or may not be appropriate, subject to existing custom or law. The moral and legal aspects would have to be balanced and at least considered.”

For his answer, Denjae will receive a copy of What Customers Want: Using outcome — driven innovation to create breakthrough products and services by Anthony Ulwick.

Watch for another Best Practices Poll in the next PROFIT-Xtra.

© 2005 Rogers Media Inc.

Originally appeared on PROFITguide.com