Reading: Ethics in B2B Marketing

You will recall that business-to-business (B2B) marketing differs from business-to-consumer (B2C) marketing in key ways. B2B marketers sell to other businesses or institutions, which then consume the product as part of their operations or use it in the assembly of the final product they sell to consumers. B2C marketers, in contrast, focus their efforts on individuals who consume finished products.

The marketing processes used by B2B marketers have also evolved significantly in recent years. While personal selling and relationship-building remain central, the process in 2025 is now deeply influenced by AI-driven analytics, procurement platforms, and compliance oversight. B2B sales often involve higher-priced, larger-ticket items, and so marketing tactics include not just adjustments in pricing, delivery terms, and product customization, but also alignment with data privacy, sustainability, and ethical sourcing requirements. Many organizations require vendors to demonstrate transparency through environmental, social, and governance (ESG) reporting and compliance with digital ethics standards before contracts are signed.

The Challenge of Monitoring Ethics in B2B Marketing

Imagine that Banana Republic, the retail clothing store, wants to launch a new promotion with a significant price discount. As a B2C company, the process is standardized and highly structured: the marketing team reviews pricing and communications, the legal team approves the language, and digital promotions are tested for accuracy and compliance before launch. Pricing is fairly uniform for all buyers, and corporate oversight ensures consistency and consumer protection.

By contrast, in today’s B2B environment, the process looks quite different. Suppose a sales executive from Microsoft (or another enterprise software company) is negotiating with your college’s technology leaders about a new AI-enabled platform for student services. Instead of a uniform price sheet, the sales team uses dynamic pricing models powered by AI that consider prior purchases, institutional size, bundled offers, and even seasonal or quarterly sales goals. Negotiations may take place over video conferences, procurement portals, or even informal networking events such as conferences.

What makes this ethically challenging is that individual sales representatives still have wide discretion in structuring deals, but now their decisions are augmented by AI-driven recommendations that may not always be transparent. Should the rep offer a lower price today to close the quarter, or hold out for a larger bundled contract? Should they disclose how the AI system sets price ranges—or is that considered proprietary? Legal teams and compliance officers typically only review terms once a deal is in draft contract form, meaning the most ethically sensitive decisions are made long before formal oversight occurs.

Why B2B Sales Processes Are Still Harder to Regulate

Even in 2025, B2B sales processes generally have fewer controls than B2C processes, due to several factors:

• Relationship-based personalization: Deals are still built on personal trust and tailored approaches, which makes universal rules harder to apply.

• Complexity of contracts: Multi-year, multi-service agreements often require customization of pricing, delivery, and performance terms.

• Negotiated (non-uniform) pricing: Prices vary widely across clients, markets, and geographies, raising fairness and transparency concerns.

• Informal communications: Much of the sales process—especially early stages—still happens through presentations, calls, or networking events, now increasingly augmented by AI chatbots and virtual assistants.

• AI-driven risks: Dynamic pricing, predictive lead scoring, and automated client profiling introduce ethical dilemmas around bias, privacy, and transparency.

For these reasons, monitoring ethics in B2B marketing requires not just stronger legal contracts, but also ongoing oversight of how sales teams use AI tools, how they handle confidential data, and how they balance short-term revenue goals with long-term trust.

The B2B sales process is difficult to monitor and control—and exceedingly high stakes. In Canada, the potential consumer base includes over 40 million individuals, whereas the number of businesses is significantly smaller. As of January 1, 2025, Canada’s population was estimated at 41.53 million, though growth has slowed in recent months.^[1] In contrast, as of December 2024, there were 1.36 million employer businesses and 3.48 million non-employer businesses generating over $30,000 in revenue.^[2]

Because B2B firms market to a much smaller set of potential customers—and often for high-value products or services—each sale carries greater financial and ethical weight. This concentrated exchange means that small deviations or unethical shortcuts in the sales process can have outsized consequences.

Structural Challenges in Personal Selling

The challenges of creating appropriate controls in the B2B sales process places special pressure on the individual sales representatives to make good judgment calls in a very flexible environment. In addition, personal selling almost always uses an incentive structure, which puts immense pressure on the sales rep to close large deals.

Often a B2B company will spend approximately 20 percent of its total revenue on sales costs, with a significant portion of that paid out in commissions. In other words, if a company buys a software package that costs $1 million, as much as $200,000 will be paid in sales commissions. This is generally distributed through the sales management chain, such that an individual sales rep is paid a commission on his sales, and a sales manager is paid a commission on the sales from all of the sales reps that she manages.

Let’s look at an example of a commission plan and consider how it might impact ethical judgment calls during the sales process.

Each salesperson has an annual sales quota that he is expected to meet—in this case, $1 million in annual sales. On top of a base salary, sales representatives are paid a commission on their sales. Often, either no commission is paid (as in this example) or a very low commission is paid until the sales quota is met. Once the sales quota is met, the sales rep earns a percentage of all sales. In this example, if the rep sells a $1 million deal, then he will meet his quota and be paid a $100,000 sales commission. There is also an accelerator: If the sales rep sells more, he will earn a higher-percent commission. B2B sales representatives have a personal financial stake in closing deals.

Besides the financial incentive they face, sales reps are also motivated to meet (and exceed) sales quotas because they don’t want to get fired (which is a pretty common, legitimate worry).

Let’s revisit the scenario above where a software sales rep is on your college’s campus. Will she act differently if she is approaching the end of the year and has only closed $800,000 in sales? If she has not have met her sales quota for the year, both her compensation and her job would be at risk. She might be tempted to oversell the features and benefits of the product this one time in order to close a sale before the end of the year. She would also be more likely to advocate for steep pricing discounts that might bring the price of the software right to the $200,000 she needs to meet the quota.

What if she has exceeded her quota but needs a few big sales once the new year starts? In that case, our sales rep might be tempted to slow down a sales deal in order to push the sale into next year. While that doesn’t present an ethical dilemma for the customer, it does create an issue for the company. If an employee is purposely reducing the company’s sales this year in order to profit, does that constitute ethical behaviour?

Companies understand and expect that the sales compensation structure will influence behaviour, but they try to make adjustments that lead to smaller ethical issues (slowing down a sales process, e.g.,) rather than larger ethical issues (promising value that the product cannot deliver, e.g.). B2B marketers must carefully consider the sales compensation and incentives structure and identify where it creates unnecessary ethical risks or puts sales reps in an ethical bind.

Diverse Policy Requirements

Finally, while all marketers are required to be aware of provincial and federal laws that impact their work, B2B marketers must also understand the procurement policies of the organizations to which they sell. The policies and guidelines can vary significantly depending upon the structure of the organization.  For example, the Government of Canada remains one of the country’s largest institutional purchasers, with annual procurement of goods and services now estimated at approximately $37 billion, handled largely through Public Services and Procurement Canada (PSPC) and Shared Services Canada.³ Unlike the rigid consumer-facing processes of B2C marketing, government procurement is governed by strict, legislated protocols that emphasize fairness, transparency, and best value—not just in terms of cost but also in achieving broader socio-economic objectives.^[3] This would be very different than a private company or social enterprise’s approach to purchasing. Company policies will generally define:

• The total purchase authority of a single individual or department
• The threshold at which a purchase decision must go out for competitive bid
• The circumstances under which the company’s status as a customer can be disclosed
• A dollar threshold for gifts from vendors

It is the responsibility of the employees within the company to follow the policies, so why does this matter to the marketer? Let’s return to the example of a software rep selling a product to your college or university. The chief information officer is responsible for understanding and following the college’s policies. Still, the software company and its sales rep are in a position to conduct sales and marketing efforts that either respect and support the college’s policies or push against them. Even when issues arise from the vendor’s ignorance about the college’s policies, such lapses can create a tone in which the vendor is seen to be undercutting the college’s requirements instead of understanding and supporting ethical behaviour.

Creation note: This content was updated with the assistance of ChatGPT, a language model developed by OpenAI, and was subsequently reviewed and edited by the author for clarity and accuracy.