Should Investors Care About BCE Inc. Being Accused of High-Pressure Sales Tactics?

It shouldn’t come as a surprise to investors that companies like BCE Inc. (TSX:BCE)(NYSE:BCE) are putting service on the back burner to grow sales and profits.

| More on:
The Motley Fool

BCE Inc. (TSX:BCE)(NYSE:BCE) has recently come under fire for high-pressure sales tactics where customers and employees alike have accused the company of being too aggressive. An investigation by Go Public found that customers were effectively lied to and misled about deals and what their plans were supposed to be.

This should not come as a surprise given that BCE was one of the telecom providers that was found to be reluctant to tell customers about the mandated $25 TV package that the CRTC said providers needed to offer to customers.

In an industry that see lots of churn and customers floating from one provider to the next, aggressive upselling and pushing unnecessary plans and options is one way a company like BCE can boost its top and bottom line.

Aggressive sales not only a telecom problem

Earlier this year, we also heard about Toronto-Dominion Bank engaging in questionable sales tactics to boost its performance. As investors put more pressure on companies to continue to grow sales, that results in more pressure being put on sales reps to meet higher and higher targets.

The result is that service takes a backseat to a company’s sales and overall profits. While this may be good for investors, it creates a race to the bottom as far as customer service goes.

Should this matter to investors?

Whether you’re concerned about companies being overly aggressive in their sales tactics or if a company like Canadian Imperial Bank of Commerce is replacing Canadian workers with Indian ones comes down to how much of an ethical investor you are.

Certainly, just looking at sales and profits will ultimately impact your returns, and so it may not matter to you, at least in the short term. However, in the bigger picture, it does matter, because these types of practices could have significant impacts on the health of the economy and how much disposable income consumers have and where it will be spent.

A poor Canadian economy is a recipe for problems, and many stocks on the TSX would suffer as a result. Investors should consider ethics as an element of their investment strategy, since a lack of ethics could be a sign of bigger problems beneath the surface.

Why customer service is bad for business

Unfortunately, as customers want the lowest prices possible, and investors want to see the strongest financials possible, something has to give, and that’s usually service. You only need to look as far as retail stores, where cashiers are being replaced with self-checkouts, and customers can place orders online at fast-food restaurants. These are examples of where service individuals are slowly being taken out of the industry.

Although this might be under the guise of convenience, it’s to save companies money. Minimum wage hikes will likely have a detrimental impact on the economy, and companies will have to cut costs just to maintain profitability.

Why you shouldn’t buy BCE

I’m not a fan of BCE by any stretch, and the sales tactics cement that position for me. A company that is taking aggressive approaches to sales shows a company that is desperate to grow its sales by any means and doesn’t have enough confidence in its own products and services.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor David Jagielski has no position in any stocks mentioned.

More on Investing

gas station, convenience store, gas pumps

Alimentation Couche-Tard Slips 3.2% on Earnings: Time to Buy?

Alimentation Couche-Tard (TSX:ATD) stock still looks too cheap after a mild post-earnings pullback.

Read more »

A meter measures energy use.
Dividend Stocks

Is Fortis Stock a Buy?

Conservative investors can consider Fortis stock if they find the expected total returns of about 8% acceptable.

Read more »

online shopping
Tech Stocks

1 Tech Stock You’ll be Glad You Bought When the Bull Market Starts

This tech stock has had a banger year, but should that continue into 2024? After its Investor Day, analysts are…

Read more »

oil and gas pipeline
Dividend Stocks

Should You Buy TC Energy Stock for its 7.2% Dividend Yield?

TC Energy stock offers shareholders a tasty dividend yield of 7.3% which is quite tasty. But can the TSX energy…

Read more »

A worker overlooks an oil refinery plant.
Energy Stocks

Better Buy: Suncor Energy Stock or Cenovus Energy Stock?

Suncor Energy (TSX:SU) and Cenovus Energy (TSX:CVE) are great energy stocks to watch going into year-end.

Read more »

protect, safe, trust
Dividend Stocks

2 Defence Stocks to Consider for December 2023

Buying and holding the best defence stocks in Canada can be an excellent way to inject growth potential into your…

Read more »

Man making notes on graphs and charts
Stocks for Beginners

Where to Invest $1,000 in December 2023

A $1,000 investment is enough to earn dividends or realize capital gains from two TSX stocks

Read more »

stock data
Dividend Stocks

GICs vs. High-Yield Stocks: What’s the Better Buy for a TFSA?

GICs and dividend stocks can be used to create a recurring stream of passive income in a TFSA. But which…

Read more »