Various groups are getting more and more concerned with companies ripping off consumers who don’t really understand the “proposition” they are offered. There have been court cases of sales-people effectively intimidating semi-bewildered old people in their homes. Now there are worries about loan sharks whose interest rates are quite astonishingly high, but not very easily understood by those who are desperate for cash.
Some customers are more vulnerable than others. We seem to try to protect the young, but there are other groups who also experience problems. Who are they and what should we do?
‘Vulnerable’ means that some people are more susceptible than the average person to the influence of high-pressure sales staff.. There are two issues preventing a straight-forward working definition: the first is that vulnerability is clearly a dimension from ‘not at all’ to ‘very’ and one has the near-impossible task of drawing a definite line in the sand. Next, of course, there are different aspects of vulnerability. Indeed four can readily be distinguished:
1. Comprehension Vulnerability: this is essentially about understanding what one is being sold, at what price and under-what conditions. It is related to many factors, such as education, intelligence, mother-tongue, culture and age. Older people have problems of hearing and of short-term memory. Many have had little exposure to financial language. This problem is compounded if their first language is not (in this case) English, or they come from a culture where the “rules” of selling are very different. This is always compounded by home selling as there are many complex rules surrounding the treatment of strangers in the home.
Clearly there are some jargon terms which not everybody understands. Some companies rather like that: they can comply with legislation but confuse customers.
2. Financial Vulnerability: Lots of people are effectively financially illiterate, irresponsible or in financial trouble. They very easily get into debt, buying on the “never-never”. They readily buy things they really cannot afford and undertake regular repayments they can, in no way, keep up. Many do not understand the arithmetic of interest rates. The data on financial literacy is indeed shocking. It implies that it is very easy to bamboozle a large number of people with numbers.
3. Physical Vulnerability: Many people suffer from various forms of sensory or motor impairment. They may not see or hear well and have difficulty getting about. They may as a consequence be particularly vulnerable in their own homes where they feel unable to eject visitors. Possibly they can’t get to the shops and are forced to purchase goods using technology they don’t really understand
4. Assertiveness Vulnerability: This concerns having the social skills associated with all negotiations. It means feeling comfortable and confident in simply saying “no” without shame, embarrassment or incoherence. There are countless cases of people buying things they really do not want because they do not know how to turn away an experienced and subtle salesperson who fully understands how to manipulate emotions. Assertiveness, however, can relatively easily be taught..
Yet, it is no doubt the first vulnerability – comprehension – that is the most fundamental. It is also where good companies and the law can intervene. But there are steps that selling organisations can and should take when selling to potentially vulnerable customers. First, take account of the selling situation. Where is it taking place, what are the social norms and conventions, how much pressure is coming to bear on the individual?
Next, there are sensible and sensitive checks that can relatively easily be carried out when booking or confirming a sales appointment. These checks provide an excellent opportunity to ask a few unobtrusive questions which may help identify the comprehension-vulnerable.
Sales staff can, to some extent, recognise if someone is deaf, or confused or a non-native speaker struggling with the language. But sometimes basic questions can tap into memory and understanding. “What is the nearest main road or main line station? Later on, more subtle questions may be appropriate: What is your full post-code? Have you ever bought any of these (or similar) products before? What day of the week were they born on? The dates of birth of their spouse, children, wedding?”
What organisations could do when going through a relatively careful and tested script is to ensure they are categorizing potential customers in terms of their risk for being comprehension vulnerable. This could be, say, a three or five point scale from ‘not at all’, through ‘potentially’ to ‘very’.
Any sales person or organisation needs to size up their appetite for risk at this point. Risks of court cases, loss of reputation, risk of default in repayments, etc. It is far better to have a considered plan and strategy for avoiding the vulnerable consumer and for managing the potentially vulnerable. This may mean asking for a friend or relative to be present at the sales meeting. It may mean putting each target customer through a short, non-embarrassing test.
It certainly would be a paradox if companies that do not take full cognisance of the vulnerability of their customers end up themselves being highly vulnerable in the eyes of the law.