M: «M^. GIFT OF r^ ORGANIZING FOR INCREASED BUSINESS Edited by THE BUREAU OF BUSINESS STANDARDS of the A. W. SHAW COMPANY SECTION 1 Picking the ^^One BesV^ Marketing Plan PICKING THE RIGHT MARKETING PLAN FACTORY — a ramshackle, three-room frame cot- tage which housed kitchen, laboratories, botthng, storing, and assembhng; stock — a gross of empty four-ounce bottles with corks and cheap labels; assets — a family formula for a face lotion; this was the condition not many years ago of a now prosperous concern manufacturing toilet preparations. The marketing plan which made possible the first strides toward success was furnished by a young man whom the original owner — a man of 60 — took into partnership. The new partner furnished $100 capital which, with $25 from each of four friends of the older man, enabled the young concern to begin selling. The first merchandising step was to place on con- signment in the local general store six dozen bottles. The second came when the new partner went from door to door seUing the product — not as a face lotion, but as the ideal lotion for use on the hands after a busy Monday's washing. The profits from these two ''elaborate" sales campaigns enabled the firm to pur- chase a gross of ground-glass-stoppered bottles and to enhst a real artist to design a label. This label, with its delicate blue background, gold borders, and an attractive girl in the center, plus unusually fine lettering brought the cash capital of the pair down to a $10 bill. The package looked like a dollar bill and that was the price on the label, but the first six dozen were sold at 30 cents net each. These were placed on display 121 Copyright, 1921. by A. W. SHAW COMPANY as a part of the Shaw Selling Seriee 122 . .MAitKl^TINfJ .F^M-NS' AND POLICIES in a cut-price drug store in a big city nearby. The new partner himself decorated a window to match his label, and presided over the foot-square demonstration table. This process was repeated six times in two weeks before the firm was financially strong enough to order five gross of fancy bottles, and also cash in on the low price of quince seeds. These seeds formed the basis of the product, as it may be said. The next step was to visit the hair-dressing and manicure parlors patronized by the rich. Here, at 60 cents each, cash in advance, over two gross were sold. The label and bottle appealed strongly and the white, rose-scented lotion was fortunate enough to possess novelty as well as merit. A round of the department stores disposed of several more gross at 50 cents net cash. The young sales manager believed in a rigid price policy, but he knew from experience that a certain amount of capital must be secured to work the business and to develop it to a stage where a price poHcy could be maintained. Next, this hustling salesman picked out five cities averaging 25,000, which formed a ring around his little country town. He figured that in four weeks he could visit each of these five cities three times. In those four weeks he secured enough business to start his company on a state-wide campaign. In the year fol- lowing the campaign brought enough revenue to sup- port two men in comparative comfort — $4,000 net. This was the method of attack: In each of the five cities he selected on his first trip the second-best drug store. To its buyer he showed his handsome package, pointing out the pleasing rate of profit based on a retail price of $1 and a laid-down cost of 60 cents. ''You can't expect to get business away from your competitors," he argued, *'so long as you hand out the same goods they carry, at the same prices. You can't cut prices, because if you do the others will follow suit GETTING THE RIGHT PLAN 123 and it won't be long before you are all losing money, and losing it mighty fast." These arguments, with a few sound hints on mer- chandising the lotion, landed a dealer in each city on the first visit, and on the second trip the first-grade stores for the most part fell into line. "You have the best class of customers, those who would hesitate least to pay $1 for a first-rate lotion, yet you are missing profits that other stores are making on this product," the salesman said. Further arguments as to the lotion's display, and a playing up of the large sales in second-grade stores, placed goods in four out of five of the best stores. Twelve days later, on his third trip, the sales manager called on every drug store worthy of credit, every de- partment-store toilet-goods buyer, and every barber shop. Special $25 assortments, backed by records of results in practically all the best drug stores, appealed strongly to buyers, with the result that an almost perfect distribution was completed on schedule. THIS MARKETING PLAN WAS BUILT UP LOGICALLY AND HAS HAD A BIG EFFECT ON ONE CONCERN'S GROWTH With the five cities well fined up, state-wide distribu- tion followed, each new town being handled as well as the firm's growing income permitted. It was not long before the company could indulge in the luxury of working consumers for the benefit of dealers. The original territory was covered by a sampUng crew of two. The samplers went from house to house in the late fall, soliciting orders for the best drug stores This plan was followed as the sales territory grew, and is still used in some territories. It has been an important factor in the concern's steady growth. In contrast to the methods necessary for this strug- gling, penniless organization, consider the plan for marketing a new, popular-priced brand of tobacco 124 ^IA]al Figure 38: One sales manager sets quotas for the spring and fall seasons at the beginning of the year on a chart like this. The quotas for each trip in the spring are given, and the actual sales for the first two. 68 PROFITABLE SALES QUOTAS 69 spends most of his time getting business in the largest town. Probably 375 tires is more than the company's share of the business in the town, but the analysis indicates that the outlying towns are being neglected. This is especially true of the towns near the large city in the next county, where sales apparently are less than half what they should be. In both instances the salesman was making his full quota, but before the analj'sis of his territory was made in the second instance he was not getting proper distribution for his product. This company holds that equitable distribution is exceedingly important, and in setting quotas it is careful to set a mark in each town which will give the company its fair share of the possible business from each town. In each town this (Company considers it should have approximately one third of the total business, for in most towns it has only two large competitors. The diagram in Figure 37 shows how the company analyzes each town to determine the amount of business it should have. In one town, for instance, there are 100 cars, and, consequently, there is a possible market for 400 tires in a season. At an average seUing price of $20 a tire, the total market would be 18,000. There- fore, the company sets its quota for that town at 150 tires, or $3,000. If the salesman sells much less, the company begins to inquire what is wrong. Another company has worked out a somewhat similar system of establishing quotas only after a careful analysis of each territoiy. This concern also has an effective system of sales records obtained from salesmen's reports on customers and prospects. ''While the net selhng cost has decreased with us because of increased volume, this does not mean that it is growing easier to sell," says the sales manager of the company. "I am confident it is becoming every year more and more necessary to dig deep beneath the 70 BOOSTING THE SALES VOLUME surface of sales territories. At one time we purposely sent our salesmen out for a hasty run over large territories. They were able merely to scratch the surface. This method of selling, indeed, brought results and quick profits, but in the long run it did not bring the kind of returns we wanted. "Intensive methods' of seUing are necessary for that. We have found in our business that the deeper you go into a sales territory, the more possibilities you find for the development of sales on a lasting basis. "Our records begin with the salesman himself. His daily report sheet is made out with a great deal of care. We require a good many details. On the other hand, we provide a report sheet which enables him to report these details in short time. "Every dealer in the country who can handle our goods is on our list. Our territories are so arranged that the salesmen will call on every one of these dealers an average of three times a year. Quotas are set for every territory. We go even further than that, how- ever, and get separate quotas for every district, state, county, town, and dealer. "Our quotas are based on population. We figiu-e how much of our goods should be used in a year by each group of 100 people; and on this basis we figure out what the total consumption of the county is. Then we figure the percentage of this consumption which we think our company should get. Worked out in detail, this gives us the amount we should be able to sell to every retailer in every part of the country." Here is how another concern analyzes its field to determine the right quota for each territory. It makes an office machine, and began to fix quotas about 10 years ago. At the beginning of each year the new quota for the entire sales organization is determined upon a basis of past sales, business conditions, popula- tion, and estimated production capacity for the year. PROFITABLE SALES QUOTAS 71 Then this quota is divided among the different sales units of the organization in proper proportion. Quotas are expressed both in dollars and in points. If, for example, the quota for this company for the entire year is $15,000,000, or 600,000 points, the first step is to distribute these points among the company's agencies, proportioning them by months and according to the size of the agency's territory. Then, in turn, the points are distributed to each subterritory. Distributing the quotas by months does not mean that the points are divided into 12 equal parts, be- cause the company has found that it is easier to sell in some months than in others. For example, it might be that 8% of the quota would be scheduled to be sold in January, 7% in February, 10% in June, 7% in July and August, 9% in November, and so on. THE QUOTA PLAN OF THIS CONCERN IS FAIR. YOU'LL AGREE, TO BOTH COMPANY AND SALESMEN In establishing quotas the company aims to make a steady increase from year to year. It does not take temporary conditions into consideration. For in- stance, if there were unusually heavy sales in one territory caused by an abnormal increase in business, the quota for the next year would not be raised to correspond, but would be fixed so it could be reached under normal business conditions. During one year more than 75% of the company's branches made more than 100% of their quotas. Some made as high as 190%. The quota is not re- garded as the maximum to be obtained, but is looked upon as a figure to be reached as early as possible. Territory valuation formerly was judged on a basis of population only, but it was found that territories of equal population in different parts of the country would almost always yield different amounts of busi- ness. AccessibiHty and the amount of general business Record of Quota and Sales by Salesmen and Units Performance \ (All performance figures in red^f Salesman C-cats'Va'je'S'-iits'Va'^efTctai Coats Va'.e S-":= Va'.T , :: = Harrison 1 Bolton 1 ■ ^ ■ Jones ! ' Wakefield 1 ' Anderson i ' Ughtfoot ' Osbom 1 Figure 39: To enable the sales manager to check the actual perform- ance of his salesmen with their quotas, this record is kept. "Task" or quota figures are entered in black: "performance" figures in red- RECORD OF TOTAL ORDER BY TRIPS Spring Fall 1 2 3 4 Salesman j 1 2 3 4 Total 1 H = Tison i 5. -on Jr-es .'.;• e-' r : 1 Anderson — .- — ! ' i Fig^e 40: TrJs record gives salesmen's total orders by trips. It is expected that a salesrr.an will make four trips in the spring and fotir mcve in the falL Additional colunms can be added without difficulty. PROFITABLE SALES QUOTAS 73 present are considered in making the territory analysis. The company also is aided in estabHshing its quotas by a detailed analysis of sales, covering the entire period of the company's existence, and tabulated to show at once the number of machines sold, the type, the number of sales in each territory, and the average selling price in each territory — gross and net. These analytic tables show the total sales of "all machines in each territory, and the' sales to each different line of trade in each territory'. For example, the sales by lines are classified under the headings of financial, government, pubhc service, manufacturers, wholesalers, retailers, and general. Under each of these heads is shown the number of machines, their average selling price, and the percentage of gain or loss in each line of business. Foreign sales are just as carefully classified. .^ Other tabulations show the percentage of cash to time sales in each territory, the salesmen's total points gained, and the percentage of the quota sold for the year. Some models of machines are, of course, harder to sell than others and so the quota credit on the different machines varies. Just what is fair on each fine is shown by charts gi\ang previous sales on each type of machine. Its system enables this company to establish quotas accurately, and to keep a constant record of how the sales in each territory are progressing. Thus, sales are always kept up to the mark. Another sales manager for a manufacturing concern carefully analyzes the field by methods sunilar to those just described and then sets a sales quota for himself for the year. His concern manufactures a line of clothing and the salesman makes two trips each season. The sales manager divides his quota among the salesmen and then keeps a record of task and accompUshment on charts similar to those in Figures 38, 39, and 40. 74 BOOSTING THE SALES VOLUME Quotas for each salesman are based on his percentages of total sales the previous year. That is, the total increase desired is figured from the previous year's total and then proportioned among the salesmen. If one man's sales amounted to 2% of the total sales he would be expected to show a proportionate increase. These, then, are some of the most successful methods used by manufacturers to analyze the field carefully and to set a logical mark for salesmen to reach. And without some definite goal to work to and without some means of arriving at a proper mark, disaster often yawns, according to one sales manager. ''I believe that establishing sales quotas on the right basis is going to be an increasingly vital factor in sales work," he says. ''It will be a factor — a mighty important factor — in keeping down the rising cost of getting goods to the customer — a cost which today threatens to swamp many of us, and which must be met with the most effective methods at our command." HOW ABOUT PRICES? WHAT price shall we charge?" was one of the first questions put before his executives by the president of a reorganized company which was about to manufacture an automobile accessory. Under the old regime the product had sold for $5 — normal price if figured on the basis of cost plus a reasonable average profit. Sales had not, however, shown encouraging increases, and the new president — a close student of merchandising and of the "psy- chology of the buj^er" — believed that a higher price would lead prospective users to place a higher valua- tion on the product, which, being a patented specialty, he felt justified any sane price that would show sav- ings and satisfaction to the purchaser. Other factors which favored fixing a higher price, the president reasoned, were (1) the product was new and had virtually no competition; (2) a high price would attract attention by startling contrast and would allow a generous margin widening markets; and, (3) it filled a genuine need, long felt by motorists. "Why keep a high-grade useful article buried in a mass of inferior products," he reasoned, ''when a higher price will probably sell it more effectively and attract more to its benefits. Let's fix a price by the value of this article to the motorist rather than by what it costs to make and sell." Twenty dollars accordingly was chosen as a logical price — a radical increase, to be sure, yet results proved 172 PRICE POLICIES THAT WIN 173 the wisdom of the change. Within a few years the company considered it a poor day if sales did not reach 3,000 units when at the old price of $5 the record for one month was 2,000 units. Furthermore, as the product became better known, its usefulness led to revisions of automobile-insurance regulations, and savings in insurance premiums offset for the motorist the higher price which was charged. This story points out the wisdom of careful price analysis of a product, not only from the manufacturer's own point of view as affected by manufacturing and distributing costs, but from the ultimate user's stand- point, of "What will this article do for me? How much is it worth to me or my business?" Business history probably has comparatively few incidents exactly like that of the accessory concern, for few concerns can be pioneers. Yet many expe- riences which do stand out from the common run, illus- trate the importance of logical pricing as a factor in getting and maintaining effective distribution. Investigation in connection with the preparation of this book among manufacturers in practically every division of industry, brought to light hundreds of interesting facts involved in the problem of prices. Price-setting poHcies and plans, methods of making price changes, the relation of salesmen to prices, the relation of advertising to prices, price as a factor in distribution — on all of these phases of the broad problem of prices, manufacturers in all parts of the country gave freely of their methods and results. For purpose of discussion, price poHcies and methods can be grouped logically and conveniently under three divisions: (1) getting prices on the right basis; (2) adjusting prices to meet new conditions; and, (3) standing up firmly for right prices. "Since monetary profit is the primary purpose in business generally," says a recognized business author- 174 MARKETING PLANS AND POLICIES ity who is also a manufacturer, "the price problem seems at first glance to be a comparatively simple one. It would appear that a manufacturer has but to know what it costs him to produce his goods, then to add enough to allow for distribution expense and profit, and thus to fix his price. The problem seldom is worked out that way, however, as most manufacturers know. In fact, reverse the process and you have the method usually adopted." HERE YOU SEE EXPLAINED WHY ONE EXPERT BELIEVES THE ESTABLISHED MARKET PRICE IS IMPORTANT The established market price is the most important factor, is this expert's view, in establishing the price of a product. The cost of raw materials, which he calls the most important variable in manufacturing cost, becomes secondary in importance to the economic factors of the potential supply of the finished goods in the market, the buying and distributive capacities of merchants, and the ability of the goods to meet competition of other products in their class. His view is strongly supported by a study of prices recently made, showing the range over a 35-year period, of prices of three well-known brands of cotton goods, and of raw cotton. A comparison of these prices shows wide divergence at times when close parallels might have been expected, because of manufacturing con- ditions — and this in spite of standardization of prod- ucts and processes carried further perhaps than in any other industry. Frequently, prices of finished goods went up even while raw-cotton prices were slipping; and just as frequently cotton goods prices showed steady reductions in the face of a higher raw-cotton market. Clearly, the law of supply and demand — not of raw cotton but of the finished goods — controlled. The accessory manufacturer whose price experience was described at the beginning of this section, took PRICE POLICIES THAT WIN 175 advantage of the law of supply and demand in fixing the price of his product. He controlled the supply — temporarily, at least — and he awakened an actual demand from what had long been a potential demand. That conditions were extraordinarily favorable to him at the time is unquestioned. It is interesting to note, however, that the later appearance of several strong competing products has caused no change of price. New manufacturers in his field have fixed their prices by adopting the estabUshed market price as they foimd it. This may be accounted for in part by increased manufacturing costs in recent years, but it also probably indicates a tendency on the part of new entrants into any field to avoid price competition. Roughly speaking, a manufacturer or jobber who has competition to consider — and very few have not — has three price policies open to him: (1) he may sell below the market; (2) he may sell at the market; or, (3) he may sell above the market — all with the estab- lished prices of similar grades of products as a basis. The manufacturer of an article of household use made a careful analysis of his market, preparatory to an advertising campaign. He found a single, strongly entrenched product selling at 10 cents. It dominated the trade by virtue of a huge advertising appropriation. Several other similar articles sold at 5 cents and had very little advertising back of them. The 5-cent brands — by-products of other industries for the most part — evidently relied for demand creation upon the lower prices and a more liberal profit margin for the trade, instead of upon advertising. The manufacturer took his cue from these facts. As there was no well-advertised 5-cent brand, he would put one on the market. He had as good a product as the 10-cent brand, he beheved, but he lacked resources to undertake the great volume of advertising which would be necessary over several years to build up a 176 MARKETING PLANS AND POLICIES profitable business on a 10-cent basis. By advertising a 5-cent article, however, he felt sure he could seize the bulk of the business in the 5-cent field. Results showed he was right. Demand grew rapidly as his advertising took hold, and with greater volume came decreased manufacturing cost. SelUng expense also went down proportionately, until before long he was able to offer the trade inducements just as attrac- tive as those held out by unadvertised 5-cent brands. He now dominates the 5-cent market, just as the manu- facturer of the 10-cent product is alone in his field. Selling below the market is a popular and often an effective method of getting distribution. Jobbers and retailers expect price concessions in return for stocking and pushing goods, and if this trade activity is backed by concentrated advertising, a satisfactory initial dis- tribution and demand usually follows. Selling below the market was the method of a western soap concern which recently branched out into new markets. Price concessions backed by a product of merit won the cooperation of jobbers and dealers, and a strong campaign of newspaper adver- tising on the special introductory prices, turned the initial stocks quickly enough to bring reorders. The chart (Figure 53) indicates in theory how a policy of selling below the market operates in bringing new buyers into the market. Take any one of thou- sands of staple articles, specialties, or semi-specialties — distributed for the most part through regular trade channels — and an abihty to ''shade the price" often swings the deal, other factors being equal. The type of product has, of course, much to do with the success or failure of a given price policy. Demand for one product may be steady, whereas an- other is perhaps subject to highly elastic demand. The individual manufacturer's problem is to weigh the factors of supply and demand before fixing his price. SELLING AT THE MARKET MINUS ^x \ ox indicate! a scale of prices for the product, OY the number of buyers, and LM the num- ber of buyers at any given price. Ifoa repre- sents the prevailing market price, and oc the number of buyers at that price, it it apparent that if the price of the product is reduced from s,^^ oa tooa', new consumers (oc') will be brought ^S^ into the market. a a» ^'"^^^^b ' l-^^^^H? — - M c c' Y Reprinted fro Publi m "An Approach to Buslnees ProblemB." shed by Harvard Lloiveraity Press Figure 53: This chart shows graphically the operation on the demand side of the price policy, "selling at the market minus." A careful analy- sis of the product and its market help to determine the right price. SELLING AT THE MARKET ox is a scale of increasing price, OY the num- . . f ber of buyers, and LM the number of buyers Y L L. at any given price. The established market V ^-^ price is represented by oa, and the buyers at N. ^ that price by oc. By increasing the demands N. .^ and the proportional number of buyers at each \y^^*^ price, the demand curve LM will be replaced ^v. ^^ by L'M', and at the price oa, more buyers ^s/'v ^ (oc') will be secured. a ^"^b^. h' ^"-^^i^r«-> M ; i — ^ M ! i c c Y KeDrint«d from "An Appro»ch to Baslnxss Problems.' Published by Harvard University Press Figure 54: This chart attempts to show graphically the effect of a stimulation of increased demand for a commodity without any increase in the price at which it is marketed. Note how it differs from Figure 53. 177 178 MARKETING PLANS AND POLICIES Far more goods probably are sold on a par with the market quotation than at any other price. The tendency, according to investigation, is to avoid cut- throat competition. Price standards are fairly well fixed, and unless the delivered cost of goods is low as compared to costs of competitors' goods, selling below market prices usually is dangerous. Setting prices for its products by what consumers are accustomed to pay is the poHcy of a middle western company turning out a line of staples. Re- sults have been particularly satisfactory, for the prices allow adequate margins to the trade, and a larger volume of business has brought about a paring down of production cost which has resulted in a larger profit. The company now finds itself in an enviable condition as practically every factor is working with it — con- sumer demand, trade cooperation, and profit. DO YOU KNOW WHICH IS BEST FOR YOU— TO SELL BELOW THE MARKET, AT THE MARKET, OR ABOVE IT? Selhng at established market prices was a distribu- tion policy which was generally accepted, one manu- facturer points out, in the period when production methods were being perfected and standardized, and in the marketing of staple commodities it is common practice today. Figure 54 illustrates certain basic tendencies of the working out of this poHcy. Modern merchandising contains many examples of selling at prices above the market. With the develop- ment of consumer psychology as a business study, manufacturers are beginning to pay attention, one authority points out, to what economists call the "consumer surplus," or the difference between the usual price of an article and what the consumers would be willing to pay for a better quality of the same article. Selling above the market nearly always involves putting into the merchandise new features or addi- PRICE POLICIES THAT WIN 179 tional quality which will set the product apart from others in the buyer's mind. "Obviously," says the same authority, "selling above the market creates a golden opportunity for demand creation by advertising. How else can a product's distinguishing features be brought to the attention of buyers? Without adver- tising, selling above the market appears to my mind to be a poUcy of doubtful wisdom." Not long ago a clothing manufacturer was swamped with requests from his salesmen and dealers for a cheaper line — men's suits to sell at $15 — to meet dangerous competition at that price. A careful can- vass of the situation convinced the manufacturer that neither he nor any other manufacturer could turn out a suit to sell at $15 which would be good quality. He refused, therefore, to bring out a $15 Une, and began, instead, a comprehensive campaign of news- paper advertising, featuring $25 as a good price to pay for clothes if the buyer wanted maximum value. "Go into a clothing store," read one of his adver- tisements, "wdth the idea of spending $25. One of our suits at $25 represents the most in style, tailoring, and wearing quality that you can find anywhere. "You may decide, after seeing various suits, to spend more than $25, if you want more style and quaUty. But you get your money's worth, no matter what the price, if it's one of our suits." The campaign put an end to the $15 talk. A ten- dency toward sales of better merchandise was notice- able, and dealers reported unusually hea^^ sales. Thus far we have dwelt largely on goods sold to the public through the trade. But no study of price policies would be complete without a word as to prices of manufactured products sold almost entirely through bids, for it is roughly estimated that sales of products through this channel represents a far greater volume than do trade-marked goods sold at fixed prices. 180 MARKETING PLANS AND POLICIES In many lines of business it is possible to find in selling methods relics of the days of horse trading. If a purchasing agent needs materials quickly, he will doubtless have to pay more a car or a ton; but if he can afford to wait and the seller cannot, the purchaser probably gets the goods at less than the first price. Yet even here we see the law of supply and demand in operation, despite the fact that it is narrowed down to a single transaction. Bids and asked prices create "the market," and the manufacturing cost is, of course, the basis of the ''asked" price. A foundryman prob- ably figures on a bid about like this: cost of pig iron, plus cost of other materials, plus labor cost, plus over- head, plus $5-a-ton profit, and then asks a price to give $7-a-ton profit. He may finally, of course, have to take less than a $5 profit. A foundryman may, for instance, accept an offer which means a $3 loss a ton, because that loss would be less than his loss if his plant lay idle. So "trading" days are not yet over and all conditions must be carefully considered. Let us take up the second division we mentioned — adjusting prices to meet new conditions. Investiga- tion indicates that handling price increases is one of the most troublesome phases of the price question. Scarcely a manufacturer has escaped in recent years the necessity of announcing higher prices, and, of course, all have been forced to adopt methods designed to lessen the shock to their customers. Because of the unsteady prices of raw materials a varnish-and-paint concern has found it practically im- possible to quote standard prices for its goods. Not long ago one manufacturer — the paint concern sells largely to manufacturers — ordered 50 gallons of varnish and was quoted a price of $1.80 a gallon. Before the order could be filled the price had to be raised to $2.80 and by the time a reorder came in the price had jumped to $3.80 a gallon and was still going up. PRICE POLICIES THAT WIN 181 A new product was made up of cheaper materials. It would do about the same work as the $3.80 varnish, and it sold at $2.80. This cheaper grade then was offered as a substitute for the higher priced varnish. Few sales were made, however, the principal draw- back apparently being a psychological one. Buyers expressed appreciation of the varnish manufacturer's offer but preferred the higher priced product. ADVERTISING, MANY MANUFACTURERS HAVE FOUND, IS AN EXTREMELY VALUABLE AID TO GOOD-WILL BUILDING Advertising also has proved a powerful aid for many manufacturers in maintaining good will when higher prices have become necessary. One concern — it man- ufactures a popular brand of overalls — advertised its new price, not as a new price, but as "'the" price. In a lower corner of the space was the brief explanation that prices of dyestuffs and cotton were sky-high, and that to maintain the standard quahty of the goods it was necessary to raise the price from $1 to $1.25, and that later it might be necessary to increase this price. ''As a modern merchant," read one trade-paper advertisement, "regardful of the kind of merchandise you offer your customers, you know how unsatisfactory substitute dyes can be; you know how miserably they fade out when washed or exposed to light — some garments even change color while lying on your shelves. "To convince you that 'Wear- Well' overalls at $1.25 a pair are absolutely the best-seUing overalls you ever had in your store, we will send you a trial order of 5 or 10 dozen and guarantee the sale of very garment. "We have the goods — every pair guaranteed. ''Now that you cannot afford to sell any good over- alls for less than $1.25, why not give your trade the best — the ' Wear- Well ' overall that is fully guaranteed." A special appeal also was made through the mail. A folder was sent to dealers, bearing in blue pencil : 182 MARKETING PLANS AND POLICIES "These prices v/ill look mighty good to you in 30 days, you will find." On the first page was a special message signed by the president of the company, and headed: "To all my friends who sell 'Wear- Well' overalls." He told his dealers that in his judgment the prices were low. Take another example. "Our product has been advertised nationally for years at a standard price," says one manufacturer. "It probably was as closely associated with this price in the mind of the buying pubHc as any other product on the market. Our difficulties, therefore, when in- creased costs made it necessary to raise our prices, seemed about as great as any concern could encounter. "We had Uttle trouble in handhng the increased price through the wholesale selhng end, but we were up against it on the retail merchants. We worked this by caUing upon most of the retail merchants. "We organized price-changing crews for each ter- ritory; these men were equipped with new labels and fixtures and they went to the retailers with the sole object of seeing that the new prices were displayed. "Here are the statistics on two divisions of territory — the first in the Middle West and the second in the East. In the first diyision the crews made 14,975 calls, changed the labels on 197,615 boxes, and installed 3,690 new fixtures, while 66 dealers refused to permit any changes to be made. In the second division the crews made 20,925 calls, changed 329,955 box labels, installed 10,110 new fixtures and were refused by 85 dealers. The cost per visit in the Middle West worked out to 63 cents, and in the East to 68 cents; the cost of changing a label in the West was 4.7 cents and in the East 4.3 cents, our figures showed. "Many of the dealers rephed to the announcements that we had sent out to them, and about 10% of the replies contained new orders for an average of about PRICE POLICIES THAT WIN 183 $17. The number of the repHes and the size of the orders are about one half of our usual average, from which I deduce that a raising of prices cannot stop with mere notification to the dealer. Had we stopped with the dealer I think that our business would have declined. Outside advertising to the pubhc seems necessary if a concern is to maintain its regular volume. "Once the dealers had been fixed up, the adver- tising campaign began in full force and its results were immediate. In the first month our business increased 50% — and nearly all on the models that had been marked up. Orders from the trade — soHcited and otherwise — showed a steady increase and in October, six months later, notwithstanding greatly increased production, we were compelled to start dechning orders on these models, as the factory was sold out. And, of course, the dealers who had resented the price changes soon forgot about them in the new business. " 'Raising the price of a standard-price article is one of the hardest problems that a manufacturer can go up against,' " says a manufacturer who is one of the country's heaviest advertisers. 'Tor years he has been advertising the price as much as the article; he has tried to make the article and the price synonymous in the pubhc mind; and he has diligently followed up every report of his goods being sold at more or less than the advertised price. Having estabhshed this standard price everywhere, having brought the pubhc and the dealer to the thought that the price is a thing inviolate, suddenly the manufacturer is confronted by soaring factory costs which make a profit at the old price impossible. What is he going to do? That out- lines exactly the problem we had to solve not long ago. "Where prices vary from day to day as they do in many lines a jump in price means only another quota- tion and is a matter of no moment. But we had been hammering ' standard price ' ever since we went into 184 MARKETING PLANS AND POLICIES business. Nearly a hundred thousand dealers v/ere displaying fixtures showing the prices of our goods and every box carried the price in plain figures. Adver- tisements, every one featuring the price, were scattered from coast to coast and from border to border, and there were more than a hundred varieties of adver- tising. Our goods carried a guarantee and an exchange value; we were holding hundreds of orders for future delivery at a definite price. Everything that we owned, it seemed, was price-marked. THE SALES AND PRICE PROBLEM HERE WAS INTRICATE, BUT NOT IMPOSSIBLE OF SOLUTION, AS WAS PROVED *'If a manufacturer has to consider only the larger dealer and the public, the puzzle may be somewhat simpler of solution, but we had also speciaHzed on small dealers who bought direct. We had a bewildering number of units with which to deal, I cannot think of any manufacturer with more angles to his price raising than we had. Nevertheless, we not only raised prices but we also increased business at the same time. "Since our first price raise to the public, we have made several other increases in wholesale prices in an effort to keep pace with jumping costs. We have learned a good deal about price raising, almost as much as we had learned previously about price stand- ardizing. We have learned, at some cost, that it is impossible under certain trade conditions to keep your own prices definitely fixed. You cannot take an order now, for delivery four months hence, at other than the market price at the time of delivery; to agree to deliver at a certain price is merely to gamble with the chances that the market will be against you. "To go back to the price raising. It would have been only a question of detail to mark up prices with a 'take it or leave it' air; then we could have sat back and probably watched om* business dwindle. We PRICE POLICIES THAT WIN 185 wanted to raise prices and at the same time keep every- one happy; to keep the dealers happy, they must sell more goods than before and thus make more money; to keep the public happy we had to be sure that the buyer felt that he was getting his money's worth regardless of the price he paid. "We quickly decided that the price the dealer received would have to be increased — that as the goods were worth more all around, the public should pay more. But would it not be harder for the dealers to sell at higher prices? Probably it would. We decided, therefore, to give the dealer a higher percentage of profit, and to increase our advertising in order to make it easier for him to obtain the advanced prices. The dealer must be protected — we must get behind him v/ith all kinds of support of the right sort. "The price was raised on four articles at the be- ginning — these were well known, but not so well known as our leader. We decided that we could not increase the price on that leader, although the rising costs had taken all the profit out of the sale. Within a very few months we were temporarily forced to take it off the market entirely. A year later we were able to accept orders for it, but it is now as ^special price, $1.40.' "We determined to inaugurate the biggest adver- tising campaign that we had ever undertaken and direct it to the goods that had increased in price, but without mentioning in the advertisements that there had been any increase in price. "We felt that without extra advertising, sales might slump, and if that happened, making it necessary to cut down production, unit costs would shoot still higher, with proportionate increase to the pubUc. Advertising helped to keep the prices down. But the increase in price was a problem for the dealer alone if we could induce the public to buy regardless of price; in other words, we aimed to center attention on the 186 MARKETING PLANS AND POLICIES higher class and higher price goods. This does not, of course, mean that we were not entirely frank about the raise — but we felt that policy dictated an emphasis on quality and service rather than price. "First, we prepared and placed our advertising, arranging for its start after we had notified the dealers. We divided this advertising into 15 sections; first came the general advertising in newspapers and other publications which would reach the people as a whole. In these we advertised the whole line in what I think are the best advertisements that we ever put out. The other 14 classes of advertising were arranged to appeal to particular divisions of prospects. "For instance, in the medical journals we set out the merits of goods peculiarly suited to the needs of doctors, and so on through all the various classes such as farmers, the foreign-speaking population, boys and girls, and stage folk. We prepared for one big general drive and for many special-class drives. "While preparing the advertising we also made ready new price labels for all the boxes in stock or in the hands of dealers. We renewed all our outdoor and street-car signs and made up a new catalog. Having attended to all of this infinite detail we were ready to put the new prices into effect. During this 'make ready' period, saving time was, of course, a great object, and for a good share of a week, part of the ofl&ce force and half a dozen printing establishments worked day and night. But when we started the campaign we were ready in every particular. "We sent the announcement of the new prices broadcast to the dealers by an illustrated circular, with which we enclosed a post-card with blank spaces for the dealer to tell how many and what sort of new labels he wanted for his fixtures and stock. "In the circular we told the dealer just why prices were raised — the increased cost of metals and of all PRICE POLICIES THAT WIN 187 the materials which went toward the making of the goods, the high price of labor and the necessity of meeting the competition of the fancy wages of other plants. We told them of the advertising campaign which we were about to undertake and asked them to cooperate with us to their own advantage. We pointed out that they were entitled to the additional price on goods which they had bought at the old prices, be- cause in times hke these with costs varying constantly, it is impossible to protect the trade against a decline in prices later. We told them that their compensation for a decline in the future would be in getting the additional price at the present time. "Last of all, but not least, we warned against over- buying and taking undue risks, quoting Judge Gary's article in System on the necessity of careful buying in order to avoid reaction. In other words, we tried to help them as we would have wanted to be helped in similar circumstances. This practice pays. THE RETAILERS WERE SUPPLIED WITH A FULL AND EFFECPIVE COURSE OF SALES PROCEDURE "While notifying the retailers we brought our own salesmen together and gave them full instructions and provided them with new price-lists, new samples, photographs of advertising signs and fixtures, and labels for changing boxes, and the like. "For a seUing talk we told them to concentrate on advertising and forget that there had been a raise in prices. Of course, if they could not avoid a discussion of the subject they had a good explanation ready to give the dealer, but we felt sure that it was best for all concerned to devote ourselves to talking such positives as general prosperity, rather than to emphasize a negative point. This line of reasoning was our manner of advertising to the public — putting the emphasis on other points than higher prices. 188 MARKETING PLANS AND POLICIES *'We followed the same procedure with the jobbers and their salesmen and gave them a new price-list and all other needed paraphernalia. No difficulty arose in deaHng with either our own salesmen or dealers." That lowering prices, when such a change is possible in normal times, may also present difficulties is proved by the experience of an automobile manufacturer. His advertising had pictured to prospective buyers many of the joys of motoring, particularly in the country. Sales grew normally each year, with prices unchanged. Mechanical improvements in one year's new models — the ehmination of parts, and marked reductions in manufacturing costs — enabled the maker to announce a list of prices considerably lower than prices of previous years. Advertising illustrations continued to suggest the joj^s of country roads while copy featured the lower prices on the several models. A flood of inquiries began to come in immediately after the first magazine advertisements appeared. Car owners, dealers, and prospects demanded assurance that the new prices were not due to cheaper materials. Advertising copy was hastily revised and new illus- trations pointed out the various mechanical changes which made lower prices possible. Many sales were lost, however, because the manufacturer failed to grasp in t^me the fact that his former prices were the accepted measure of the value of his products. So much for handling price increases and reductions. Standing up for fair prices, or seeing to it that sales- men stick to price schedules — our third and last divi- sion — also presents an important problem. Within a year after installing a profit-and-loss de- partment an eastern manufacturer, who makes a number of articles, stopped the leaks which were caused by incorrect quotation of prices, and enabled his sales manager as well as salesmen to tell at a glance the exact profit on every article sold. The cost of main- PRICE POLICIES THAT WIN 189 taining this department is S5,000 a year, but this expenditure is declared to be insignificant compared to the benefit that has followed its definite analysis of the manufacturer's profit and loss. Roughly outlined, the profit-and-loss department works as follows. When an order comes in it goes to the billing department, where a bill is made out and sent to the profit-and-loss department. The inventory costs of all articles manufactured have been type- written on sheets of paper, and these sheets are tacked on frames attached to a table. The clerk in checking up an order can glance at the list of inventory costs and quickly determine the profits. If an incorrect price is quoted she notifies the billing department, which in turn reports the error to the sales department. To simplify the determination of profits, and also the marking of goods in stock the following key table is used: _ Profit Profit Division 1 less than 10% Division 5 18% to 20% Division 2. . . . 10% to 12^% Division 6 20% to 25% Division 3. . . . 12}^% to 15% Division 7 25% to 30% Division 4 15% to 18% Division 8. . . . more than 20% Let us suppose that a salesman sends in an order for a gross of a certain article. A bill is made out and comes to the profit-and-loss department for checking. The clerk who gets this bill finds on the sheet that the inventory cost of the goods is $6 a gross and it is marked up to sell for $8 a gross. The goods belong in Division 6. If the billing department made a mis- take, or a salesman cut the price, and the bill is made out for $6.75 or $7 or $7.50, the error is noted and the bill sent back for correction at once. Every salesman knows that the house is checking the way he is standing up for profits and the system helps him further in pointing out which lines he ought to give more attention and time. 190 MARKETING PLANS AND POLICIES "One of our greatest problems," says the sales man- ager of this concern, "is to make our men understand that they must stick to the prices, and know prices well enough to stick to them. Frequently a salesman is told by buyers that goods can be bought cheaper from other houses. Nine times out of ten it's a bluff, and when the salesman doesn't know his business the bluff probably works. Not long ago a merchant talked one of our men into shading prices on a big order. When he came in I showed him an order from a much larger estabUshment, and pointed out that the price he had quoted was 5% under that paid by the larger store. I told him we could not pass the order, that he would have to stand the loss himself or else adjust the prices. He grumbled, and prophesied a loss of business from the merchant in question, but we stood pat. As a matter- of fact he had little trouble in straightening the situation out, our business with that store has increased, and we cured our salesman. "We issue weekly price bulletins so the men are kept informed on price changes. We require that they acknowledge receipt of the bulletins, and if a man doesn't report within a reasonable length of time that he has received his bulletin, we jack him up on it." Holding to prices may not always be possible or advisable in some concerns — for example, those in which goods are sold largely by "bid." For the most part the "one-price pohcy" holds good, however, as is demonstrated by the experience of one of the largest corporations in the country. This concern has given up its practice of protecting its heaviest buyers by giving them a price preference, because it found 75% of the product on hand just prior to an advance, usually was sold to these "protected" customers, while the other 25% went to smaller users at the higher prices. This custom, of course, made it necessary to pile up great stocks, for the big buyers would order in quantities PRICE POLICIES THAT WIN 191 when the word came that an advance in the price of the product was imminent. Under the new poHcy of the same price to all, the company needs to carry much less stock than formerly. A smaller stock means that less money is tied up, and there is a consequent saving of interest. Not only is the financial condition of the company strengthened by the new policy, but the smaller stock carried means greatly decreased insurance costs, and the equal treat- ment accorded customers promotes a better feeling throughout the entire trade. To sum up briefly, it is clear that usually no single- price policy can be applied to every business. But investigation demonstrates that getting the "other fellow's" viewpoint nearly always will suggest a satis- factory solution of the price problem, just as it often does to other phases of the manufacturer's and jobber's contact with dealers, and ultimate consumers. "P\URING the Great War business men all over the country came to know the building at Washington which housed the War Industries Board. There men met to learn the Govern- ment's needs and to lay plans for gearing their particular enterprises to the nation's enterprise. Thus the building may be said to symbohze the cooperation and the interchange of economic thought always essential to the greatest progress. The new structure in which the Shaw Publica- tions are now housed is a permanent counterpart in stone of the building that business men knew so well during the war. ?•■-■■■' ORGANIZING FOR INCREASED BUSINESS Edited by THE BUREAU OF BUSINESS STANDARDS of the A. W. SHAW COMPANY SECTION 3 Cutting Salesmen Who Make Good GETTING THE RIGHT SALESMEN FIVE sales managers in five different concerns scored a hit seven times out of eight in the selec- tion of salesmen in one year. For two years previous the best any one had been able to do was to pick four successful men out of eleven applicants. This record was made with less work than usual. This high average also was made in a year when salesmen were hard to get. Furthermore, in no instance did the sales managers interview many men and no special ability was required on the part of the assis- tants who did most of the interviewing. It is a record of which any manager could be proud, and it was made by the use of an application blank prepared along scientific lines — one so worded that a comparatively low-priced clerk can judge accurately the quahfications of a high-priced salesman. But before we go into this plan in detail let us see what investigation reveals about the questions involved in the choosing of the right men to represent the firm or house on the sales firing line. First, we confront the problem : Where shall we look for salesmen? Shall we advertise or shall we develop men from within the organization, and shall we take trained men or those untrained in selling? Second, what qualifications shall we look for; and, third, what methods shall we use to decide whether the applicant has the qualifications we desire? Let us take up and consider each question in turn. Copyright, 1921, by A. W. SHAW COMPANY as a part of the Shaw Selling Serie* 2 BUILDING UP A SALES FORCE What is the best source of good salesmen? Do the best men answer newspaper advertisements? Here is the experience of several sales managers on this first question which arises with the necessity of adding the right new men to the sales force. Applicants secured through newspaper advertise- ments are not usually so well fitted for sales, work as men obtained from other sources, in the opinion of the sales manager of one wholesale concern. His experience has been that the better class of trade papers and magazines bring salesmen of higher caliber. One manufacturer says: "If a salesman is capable he is pretty sure to be holding down a job. I never hire a salesman who advertises for a job and I never advertise for a man." On the other hand, the sales manager of a concern which makes a $10 specialty believes that newspaper and magazine advertisements if properly worded will bring the best type of men. He uses a blind advertise- ment so worded as to give an accurate impression of the business, and he tells the amount of salary he will pay. He has found that this sort of advertising brings in a large number of applicants of a high standard. A concern which manufactures cans found that one advertisement calling for salesmen on a commission basis brought a very poor class of men, while a later advertisement which mentioned that a small salary- would be paid while learning, brought over 400 replies from a much higher type of applicant. A wholesale grocery concern gets many of its best salesmen from behind the counters of retail grocery stores. This company instructs its salesmen to keep their eyes open for good selling material. Whenever a salesman comes across a particularly bright clerk who seems to have the knack of selling he reports to the sales manager. The young man's work is watched for a while and, if he continues to make good, when the GETTING EFFECTIVE SALESMEN 3 time comes he is taken into the sales organization. This plan gives the company men who are familiar with selling and who understand the retailer and his prob- lems because they have worked behind the counter. "Many of our best salesmen were developed from chauffeurs and mechanics," said the sales head of one automobile-manufacturing concern. ''Very few of our salesmen are obtained outside the organization. Many of them first attend night school to get the funda- mentals of sales work, and if they have the stuff in them to do that, they are pretty sure to make good." "We recruit our sales force entirely from within the organization," said the head of an engraving company. "The men first are trained in the various departments. We have never made a practice of employing men who have had experience with other engravers, reasoning that other houses would not let good men go. Hiring men trained in other lines in most instances has not been satisfactory, either." HERE ARE THE QUALIFICATIONS ONE KEEN BUSINE8S MAN SEEKS WHEN HIRING SALESMEN The following sums up the experience of a shoe whole- saler. Practically all the salesmen for his company have worked in the different departments of a shoe factory. The company is very particular about the type of men it sends on the road. They must be young, have well-developed powers of observation, and be neat and clean in appearance. "To enable the men to hve up to our quahfications we pay them well," remarked this wholesaler. "We never start a man at less than $1,500 a year, and expenses, and we expect them to earn a raise every year. If a man is not worth more at the end of the year we are pretty likely to get rid of him. The company does not want a man who is entirely satisfied with his sales and with his pay." 4 BUILDING UP A SALES FORCE A wire-and-steel-products concern hires its salesmen, you might say, when it hires its office boys. The boys are picked with a view to their developing into sales- men. They must be of good physique and have at least a grammar-school education. Its sales manager says he does not want boys who are too aggressive, as his experience is that the quiet fellow can get in sym- pathy with dealers better, and is the most successful. One paint-and-varnish company gets all its salesmen from within the organization, because they have to be specially trained to sell the company's products. A wholesale grocery company prefers to hire men who have had selling experience in other lines. It prefers to get a man who, for instance, is selling shoes in the particular territory it wants a man for. Now let us see what quahfications employers w^ant in salesmen. There is, investigation indicates, a wide range of standards on this point. Some concerns are satisfied if the applicant has adequate personal qual- ifications. Others lay stress on past experience, family history, personal appearance, and the hke. One shoe manufacturer looks out for one or more of the following qualifications. First, the candidate for the selling job must have sold shoes in some territory to the retail trade; or, second, he must have traveled the territory to which he is to be assigned for at least a year for any one hne, or, third, he must have sold shoes at either wholesale or retail at some point in the territory. The man who is familiar with traveling the territory is preferred. Usually he knows best how to get around economically, understands the local cus- tomers, and knows, or can quickly learn, their needs. On the other hand the man who has sold shoes can quickly learn the territory — its needs and its trans- portation facilities. Men who have lived in the territory should know its needs fairly well, and need to learn only tlie line and the manufacturer's particular GETTING EFFECTIVE SALESMEN 5 selling angle. Men who have traveled the territory for other houses, not necessarily in shoes, would have to learn the line. If the man aheady lives in the territory he usually can get home every week end, which is considered an advantage to the house. Another sales manager emphasizes the quality of persistence when selecting a salesman. His deciding test is this. After he has made up his mind that the appUcant stacks up to other requirements, he tells him he does not believe he will make good selling the line. From the applicant's answer he normally can tell whether the man is easily discouraged or not. Another sales manager prefers men who show them- selves to be ambitious. He usually asks the applicant why he thinks he can sell gas engines. The answer gives him an idea of the man's attitude toward sales- manship, leads to a discussion of his ambitions, and gives him a line on the applicant's general char- acteristics and probable future development. After deciding on the qualifications we desire how are we to tell when a salesman has these qualifications? Many sales managers believe in personal interviews and a quick judgment based on first impressions. Let us go back, however, and examine in detail the care- fully worked-out system mentioned at the very begin- ning of this section, the one which enabled five con- cerns to select an average of seven successful sales- men out of eight applicants. We will let the sales expert who worked out this plan — Elbert Clarke — tell his story in his own words. In it he explains his attitude toward salesmen, shows how he classifies and ranks applicants, and gives his reasons for emphasizing the qualities he does. "When we choose a salesman we buy something," begins Mr. Clarke, ''and after the opportunity of closer inspection it sometimes happens we are not altogether pleased with what we have bought. The choosing of 6 BUILDING UP A SALES FORCE a salesman is not greatly different from the purchase of wares to fill other needs. An experienced buyer of cotton cloth measures the number of threads to the inch, the strength of the threads, the regularity of the print, the fastness of the colors, and other specific requirements bearing on the quality, usefulness, and service of the cloth. "When a buyer selects material according to specific requirements, he purchases scientifically. If, however, he is attracted to the artistic appearance of the cloth and does not definitely inspect the weave, fastness of color, and so forth, he makes a haphazard purchase; and I believe that many employers select salesmen in the same haphazard way, instead of getting down to hard facts and definitely deciding just how much qualification each applicant possesses. WHEN YOU HIRE SALESMEN DO YOU GO ABOUT IT SCIENTIFICALLY OR HIT-OR-MISS STYLE? "Perhaps it is because salesmen as a merchandise entity have not as definite qualifications as the strength of the fiber of cloth, its color, or its weave, that so many selections are made without other analysis of the sales- man than the finding out of how much he sold for some other company. However, if we determine the salient qualifications which all salesmen should have to sell merchandise successfully, we can analyze prospective salesmen scientifically by a process fundamentally similar to the purchase of cotton cloth or any other commodity. The scientific selection of a salesman augments the usual methods of instinctive selection and insures a better selection than one which is based on intuition alone. "The scientific selection of a salesman means definitely testing the qualities of the man whose services we would purchase. In fact, scientific buying of both merchandise and salesmen differs from hap- APPLICATION FOR POSITION AS SALESMAN TO CHICAGO MANUFACTURING COMPANY Age 2 7 Nati onality /^'^-^vwt-^ - Rollgton ^ HBight S' Ft. /-^Inches nn yon \i^R tobacco Marrifld "Mi.^. Ch; Weight /S'O Hej>>th. 58 tobacco %iL- Do vou use intoxicants ')]r- Staf--- How w oul d you attemp t to secure y ^jr compet itors' custo mers? 8. How closely should a salesman adhere to the facts about his goods? I'H-' ' " yViyyi.'t /T^ cmytc^ ^Jma/u /Z. rT^ .//^t a.^cya^^ at- at/xaZ^ 9. Do you attend many social functi ^ jytyt/l- Have v ou ma ny real frie.ids conventionalities of etiquette yoif make friends very easily? 'i /yy(L- Are vou familiar with the 10 Are you qoick to anger? iiK Why should a salesman be diplpnatlc7 ,^ ^ '^ ^ fc«^ Salary desired 8 XS'O nonthjy Least salary considered % J JO monthly. Present or last salary $ 3./)0 monthly. When would you be available? ^< tl -< ^ Figure 1: The salesman-applicant's qualifications can be well judged on this blank. The essential information is secured without embar- rassing the applicant. Note that the applicant is graded on 10 simple questions which determine his classification and potential sales value. 8 BUILDING UP A SALES FORCE hazard buying in the definitcness with which the requirements of the material purchased are tested and known before the purchase is made. "Scientific choosing of a salesman may be brought to a standard practice so simple and definite that an inexperienced clerk is able to determine which appli- cants are worth while for the sales manager to inter- view. An application blank can be so worded that many of the qualifications of the applicant may be determined in definite points, for or against him, and without seeing or talking with the applicant, a fair indication of his qualifications to become a successful salesman may be determined by the employer. We can consider that each of 10 essential qualifications (Figure 1) are equal to 10 points and that any sales- man who does not pass, say a 50% examination, would not be worth a personal interview. ''The application blank for salesmen applicants indicates hov/ the quahties of the man applying for a position as salesman are tested by his answers to simple questions. Space is provided at the left of the num- bered questions in which to write the percentage of accuracy with which respective questions are answered. Completeness of answers also is a big point. "Total percentages accorded for the 10 questions are placed in the upper right-corner against 'Class.' Against the word 'Grade' the letter A is used to represent a high-grade man who has made full answers and indicated by his answers that he has considerable initiative. The letter B is used as a mark for a sales- man who apparently will need slight supervision and direction. The B man ought to be capable of taking over an agency or becoming a submanager. Letter C indicates a man of moderate ability who has never had much responsibility entrusted to him. Against the word 'value' is placed the price at which the sales- man probably could be employed. APPLICATION FOR SALESMAN'S POSITION liame Address Date Age Height Salary expected When available 1. State briefly your previous experience 2. With vhat lines are you most fBmiliar? 3. Why do you want to sell our goods? 4. Is your health goo^l? 5. Are you married? Chlldtren? Live with your wife? 6. Do you save money? 7. r/hat recreation do you enjoy most? Are your personal habits good? 8. What do you believe to be your greatest weakness? Your greatest asset? 9. What books and magazines do you read? 10. Are you optimistic? Ambitious? 11. Do you lose your temper easily? Figure 2: On this form the salesman-applicant is asked to give full information about his general characteristics and habits. From this data the sales manager decides whether or not the prospect is a capable man, and places him in one of two distinct ability classifications. 10 BUILDING UP A SALES FORCE "With this form in mind I will discuss the 10 ques- tions in Figure 1 and show why I think these are essential qualifications for effective salesmanship. That the classification is an effective one is proved by the success with which it has been applied in the five con- cerns. The apphcant who filled out this particular blank passed with a rank of 91 and is an A-grade man: 1. The personal appearance of an appUcant indi- cates the probability or improbability of his possessing the remaining nine qualifications. Unkempt clothing and uncleanliness in details of attire indicate a lack of self-respect, determination, experience, and so forth. The quick-witted individual soon discovers that a little attention to dress and cleanliness often gets him audience which salesmen who do not pay attention to these details have difficulty in obtaining. Poor personal appearance marks a lack of expe- rience, because the dullest salesmen soon discovers that a pleasing personal appearance is worth all the effort it costs him. A salesman need not have on a new suit of clothes or a diamond ring to be a successful sales- man. In fact, the man who makes big sales is infre- quently flashily attired. The clean-cut, keen-eyed, inconspicuously but neatly dressed apphcant has 100% to his credit on this qualification. 2. An alert mind, a quick understanding, is par- ticularly desu-able in a salesman, because a quick com- prehension of situations which arise during a call, and the abihty to say the right word at the right time, greatly assist the salesman, while a lack of under- standing may entirely prevent his making a sale. An alertness of mind and an intelligent answer of ques- tions frequently removes distrust from the mind of the buyer. Many a salesman would have been a success if he could have said in that given second when he had the opportunity, the words which after the interview he GETTING EFFECTIVE SALESMEN 11 decides would have clinched the sale. The quick, alert, active mind has an advantage in selling over the slow, methodical thinker. The apphcant who asks questions of his prospective employer to get a grasp of the situation, the apphcant who anwers questions quickly, intelligently, and to the point, and the appli- cant who is able to parry questions without creating distrust in the employer, qualifies on the second requisite. Such an apphcant will probably make a sale before the buyer can pin him down with an un- answerable reason for not buying. HERE YOU SEE WHAT A BIG PART A FAIR EDUCATION PLAYS FOR THE SUCCESSFUL SALESMAN 3. An adequate education plays an important part in the success of a salesman because in his meeting with men he must be versatile to hold the attention and win the confidence and the interest of buyers. We all like the people who hke the things we hke. Similar likes are a common bond of friendship and esteem. The successful salesman frequently appeals to the purchaser through some mutual acquaintance or knowledge and the more general the education of the salesman, the better his chances are of success. The successful candidate for a position as a salesman need not necessarily have graduated from a college or even a high school but he should be able to convince his prospective employer that he has a fair grasp of a number of subjects and especially that he has compre- hensive ideas on those subjects particularly apphcable to the business in which he is applying for the position. A salesman with an alert mind can, however, succeed without so much education, where a salesman with a slower moving mind must depend more upon his general knowledge and education. 4. Experience is so vital a factor in successful selling that many employers of salesman seek to find 12 BUILDING UP A SALES FORCE out from the applicant nothing but what experience he has had as a salesman. The applicant's experience perhaps more closely gages his present ability as a salesman than any other qualification which we have suggested, but it is difficult to find salesmen with a full, rounded-out experience and the big question in em- ploying most salesmen is whether there is the "mak- ing" of a good one in the applicant. 5. If a salesman possesses an alert mind, a fair education, and a little experience, he is qualified to become familiar with almost any type of product in a reasonable length of time. If a salesman is questioned about the products which he has sold, it takes but a few minutes to find out his grasp of their salient selling points and of his ability to present the merits of goods from a sales standpoint. A salesman may know all about the good points of a product and yet not be able to pick out the features which would interest a buyer. Many salesmen who have been schooled in the selling features of a product simply unreel to the buyer everything they have been taught, hoping that he will automatically pick out the points that should appeal to him and say: "I will buy." In choosing salesman, the applicant always should be questioned closely on his familiarity with goods which he has sold to determine his ability to select and present forcefully the merits of your product. Many applicants, if asked to tell the strong points of the goods they have sold, will commence to sprout a stereotyped house-to-house canvass just as they have learned it, and as automatically as a talking machine. But the effective salesman will ''sell" you. 6. Courage and determination play quite as great a part in selling as in any other phase of fife. A weak spinal column and a spongy mind have no place in a real sales organization. The acid test for determination and stamina will more often prevent a prospective GETTING EFFECTIVE SALESMEN 13 salesman from securing a position than any of the other tests in scientifically choosing a salesman. A shifty-eyed applicant usually has not the courage to face the big buyer. The employer frequently can test the courage and determination of the applicant effectively by picturing to him the difficulties of the position he is applying for. If the applicant is easily brought to believe that the position is too difficult for him, much expense will have been saved. Courage and determination in a man indicate ambition and intelligence — they go hand in glove every time with success. Without "pep" and determination, the prospective salesman will never be able to influence the mind of the buyer to buy. Salesmen without "pep" and the will to succeed are misnomers. They are never under any circumstances more than order takers. Lack of determination and courage mean lack of dependability and contribute, I believe, to the loss of more sales than almost any other deficiency. A sales- man without determination and courage will not, as a rule, see the trade regularly. He is the salesman who comes out of the hotel around 10:30 or 11 o'clock in the morning, takes two hours off for luncheon, and knocks off around 3:30 in the afternoon. I would waive in some measure good appearance, education, experience, and familiarity with the product, if the applicant has determination and courage. 7. A knowledge of human nature is an important requisite in a salesman. Abihty to make a buyer sign an order often springs from a salesman's sizing-up of the human equation involved. A salesman unfamiliar with handling men almost invariably will use the wrong tactics to secure an order, and not infrequently he loses the customer for all time. In choosing salesmen, I Hke to test the salesman's judgment of human nature by the way he attempts to 14 BUILDING UP A SALES FORCE sell his services to me. I like to note how he sizes me up and the tactics he uses to convince me that he is the man for the job. It is surprising how many applicants for sales positions sit before me Hke a bag of meal waiting for me to buy them. They make no attempt whatever to convince me that they are the man for the place. Some seem to be content merely to parry my questions and to try to prevent me from discover- ing what they are capable or incapable of doing. This attitude is a common one and does harm all around. One good test of an applicant's abihty to size up human nature is for employers to ask the applicant to describe the way in which he would appeal to and attempt to sell to a dyed-in-the-wool grouch. It is surprising how few men can even indicate in slight degree how they would approach any particular type of man. In fact, few applicants for positions as sales- men appear ever to have attempted to classify the types of men they meet every day. WHY PREVIOUS EMPLOYERS' RECOMMENDATIONS CANNOT BE ABSOLUTELY DEPENDED UPON 8. The usual questions which employers ask of an apphcant's previous employers are those on trust- worthiness, character, and ability. On ability, how- ever, but little worth-while information is ever forth- coming from a previous employer, I have found. References usually state: "We beUeve that Jordan is a good man. He sold successfully for us," and so on. Whether selling successfully means that they made $25 a week on the salesman, and that he sold about one tenth of what he should have sold in the territory to which he was assigned, or whether it means that he made 90% of the sales that reasonably could be expected from his territory, is rarely stated. The references of a salesman, therefore, usually are most valuable on the angles of trustworthiness and honesty. GETTING EFFECTIVE SALESMEN 15 It is, I think, necessary to know something more about the trustworthiness and honesty of a salesman than merely that he has not served a jail term. It is a good plan to test the honesty of the apphcant by finding out how far away from the truth he feels justi- fied in going to secure a sale or how far he will exag- gerate in describing the product he is selling. I beheve that a salesman has every right to describe his wares favorably, but it does not lead to permanent sales development to overstock the buyer or to mislead him on quality. There usually is an awful reaction to this type of selling, sales managers will agree. The honesty and trustworthiness of the apphcant also indicates his ability to make and keep friends, to obtain new customers, and tends to show what may be expected from him in developing his territory. 9. If a salesman is selling sewer pipe to a rough, burly contractor he may not need to be too much of a gentleman. As a matter of fact, there are a number of sales positions in which too great politeness would be more of a handicap than a help. The salesman must meet his customer on his level, but it is pleasant to know, nevertheless, that your salesman could be poHshed if necessary. A salesman's experience, deter- mination, knowledge of human nature and trustworthi- ness indicate how gentlemanly he can be when occasion requires. Gentlemanhness might be termed the art of winning the respect, friendship, and esteem of the buyer. The gentleman always has a stronger influence with the customer. The salesman who can be a gentle- man safeguards his prospective sale by not offending the customer, intentionally or unintentionally. 10. The diplomacy and tact of the applicant com- pletes our search into his qualifications as a sales- man. It is by diplomacy alone that we often sell our ideas, our products, and our services. I test the diplo- macy of a salesman by noting his ability to "coast"; 16 BUILDING UP A SALES FORCE by this I mean his ability to be non-committal and yet to hold the interest of the purchaser until after an insight into the idiosyncrasies of the buyer has been gained. Then he can use it to make the sale. Some salesmen rush in where angels in truth might fear to tread. An applicant who is diplomatic will not commit himself by undertaking to appeal to his customer until he has had an opportunity of sizing up the characteristics of the buyer. A good ''coaster" floats when in doubt. He will not commit himself, until he is sure of his ground and he saves himself from walking into the buj^er's trap and losing a sale through psychological or other blunders. The choosing of a salesman, of course, is not yet an exact science, but if an employer will measure up a few definite qualifications of an applicant in the same way that he looks into the merits of merchandise, the probability of building an effective sales organization is much more certain. And scientific choosing of a salesman does not mean a lot of red tape. It merely means knowing what you require in a salesman, and finding out whether the applicant fills enough of these requirements to justify the purchase of his services. How another sales manager determines whether an apphcant has the necessary qualities for selling is shown in Figure 2. This blank asks for much the same information as the one just discussed, but in a little different form. It puts it up to the salesman to interpret his own abilities more fully, perhaps, and leaves less to be interpreted from the answers. This sales manager classifies salesman under two heads; those who sell simple types of goods to simple types of minds, and those who sell complicated or expensive propositions or products to customers of a more highly developed type of mind. As a rule, the younger men are more successful in work under the first head because they usually have more enthusiasm and more interest APPLICATION BLANK Mason-Adams Company Dated at. 1 am considering an appointment as salesman with your Company, and for your infortna tion, pending final negotiations, submit answers to the following questions: 1. What is your age? Nationality?. .Married or single? 2. What is your present occupation? _ — — ■ — . 3. Name and address of present or last employer ?_ 4. Type of business and work performed?- 5. Through whom did you learn of this special branch of our business?- 6. Do you desire permanent position, if successful? 7. How much available cash have you on hand for expenses? 8. Do you wish to devote all your time to this business? 9. When do you wish to begin work? 10. Can you go to any field assigned you? Jl. Home address?- 12. Mail address for next 10 days?- GIVE THREE REFERENCES (Business Men). N;VME ADDRESS BUSINESS OCCUPATION (Sign here) NOTE: The above questions must be answered fully; and such answers will greatly facilitate negotiations. We make no arrangements until the applicant has satisfied us by references as to his fitness for the work. Adiiicu all communicationB to MASON ADAMS COMPANY Figure 3: One concern which does not use a "regular" application blank, finds this information form effective. The prospective sales- man fills the form out after he has applied in person, and has been interviewed. Salesmen rarely object to this form, it has been found. 17 18 BUILDING UP A SALES FORCE in human nature generally, while older men are better for the "heady" type of selling. This type usually emphasizes the merits of the goods better. Another concern which has a long and complicated list of questions for applicants for sales positions to answer, believes that this is the best method of keep- ing dishonest applicants from the payroll. Its form fills four pages, covering every phase of a man's past experience in all connections. It must be stated, however, that many good appli- cants are dismayed at the sight of a voluminous appli- cation blank, and some are lost to the concern for this reason. But the plan is worth this price, it is believed. In hiring salesmen one eastern sales manager asks questions which will bring out the temperament, habits, and likes and dislikes of applicants. Then he makes a chart of their characteristics. Those that he hires he puts into classes — for example, those that he thinks must be driven go in one class; those that have to be moved by financial appeals in another; those that will respond best if selling is made a sporting proposi- tion in another, and so forth. He has worked out a series of personal letters to stir up each class. IF YOUR BUSINESS IS SUBJECT TO THESE CONDITIONS, THIS PLAN MAY HELP YOU MIGHTILY But suppose yours is a line in which there are definite selling seasons which are soon over. Perhaps you want salesmen for only a few months but find it hard to get men to take work under these conditions. If so, you will be interested in a simple plan used by one sales manager in a like situation to get good men. He promises to help them get another job when the season is over and they are no longer needed. He makes good his promise by a letter similar to the following, which he sends out to a number of first- class concerns at the close of his season. GETTING EFFECTIVE SALESMEN 19 Dear Sir: We can and want to place in your organiza- tion 10 competent salesmen. We know they are good men because they worked for us for some months and we have thoroughly tested them out. The fact that they are still in our organization proves that they are men who have survived a vigorous sifting process. Most of these men have been with us since early spring and have worked the western and southern states. In this letter we will merely give you their names and territories which they have been covering for us. The reason that we are about to discontinue their services is that our active selling season ends between August 15 and September 15. and we therefore cannot continue these men beyond the last named date. (Here follows the names of the men and the territories covered.) These 10 men represent the pick of a force of 45. They are men whom we feel we ought to make a special effort to place, and we accept the responsibility of recommending them to you. We can have any of these men write you direct or you can inform us where they can best see your representative. We are writing you in this way because we have a high opinion of these men, and we feel that in trying to place them with you we are helping out all around. Let us consider one more example of building the sales force right, as expressed by a business man who has employed hundreds of salesmen. He says: "It is necessary to see a man two or three times before he can be properly sized up. No man should be hired on the first interview. It is a good idea to have more than one man see a man before he is employed. I have an applicant see two or three of my 20 BUILDING UP A SALES FORCE men, and then they get together and compare their impressions. It is poor policy to employ men who can- not be fired as easily as they were hired — this apphes particularly to relatives and friends." Some of the questions this manufacturer uses for his third-degree of salesmen applicants are: Can he furnish a security bond? Ninety-nine times out of a hundred there is something wrong with a man who cannot. Has he a reason for leaving his last employer? Can he give his last employer as well as employers further back as references? Did he work as a boy or was he brought up in idleness? Does he overindulge in liquor, tobacco, and the like? Has he any money saved? If not, why not? Can he answer objections quickly? Try him out by asking him why he thinks he can sell j'our goods. Is his voice pleasing or rasping? Does his voice and manner impress you as carrjang conviction? Has he respect for the opinion of others? Is he enthusiastic? Does he know when to stop talking? Is he easily discouraged when told he can't have the job or that you don't believe he can sell your goods? Is he willing to undergo a course of training? So, from the experience of progressive concerns we find that fitting the salesman to the job apparently requires the same fundamental attention that hiring men for any line of work does. The requirements of the job must be learned, and the qualifications of the applicant matched against them. When this is done, guesswork in hiring largely is eliminated and the manu- facturer, wholesaler, or sales manager does not have to reproach himself for so many failures. "'■•^ "POURING the Great War business men all over the country came to Icnow the building at Washington which housed the War Industries Board. There men met to learn the Govern- ment's needs and to lay plans for gearing their particular enterprises to the nation's enterprise. Thus the building may be said to symbolize the cooperation and the interchange of economic thought always essential to the greatest progress. The new structure in which the Shaw Publica- tions are now housed is a permanent counterptart in stone of the building that business men Imew so well during the war. K.. ORGANIZING FOR INCREASED BUSINESS Edited by THE BUREAU OF BUSINESS STANDARDS of tht A. W. SHAW COMPANY SECTION 4 How to Place Salesmen and Handle Them HOW ONE SALES MANAGER HANDLES HIS MEN EVERY salesman needs supervision of some sort. There must be a real personal contact between the salesman and the sales manager if both are to get the best results. Your first-class seller almost always is an imaginative, somewhat romantic type who can be depended upon to exercise selling skill, but who cannot always be depended upon to reason out or to see the "why" of necessary policy or price changes. Your typical salesman sometimes will be erratic in his sales and perhaps wander away from the lines that you want him to sell. Your poor salesman may be (and probably will be) an expert excuse writer. Each class needs some sort of supervision. The topnotcher has to be made to feel that the sales manager and the company have his interest at heart, and that they do not make changes in policy or price primarily to increase the difficulty of selling. The middle-grade salesman needs an occasional keel-hauling, while, with the low-grade man the chief concern of the sales manager usually is to spot him and fire him quick. As I* see sales supervision, it is entirely a personal problem except with the low-grade force which sells inexpensive articles and whose commissions never can run very high. In this class are most of the canvassers of the house-to-house type — the men that are hired by the hundreds to pull door bells, the men who should •The first half of this eection was prepared by Frank E. Fehlman, president of the Churchill-Hall Company, New York City, and a sales manager of long, success, ful emperience. 45 Copyright, 1921, by by A. W. SHAW COMPANY as a part of the Shaw Selling Seriea 46 BUILDING UP A SALES FORCE really be classed as unskilled, casual laborers. This class, generally speaking, includes all seasonal forces or squads that are taken on solely on commission, or with very slight expense advances, and who are not ex- pected to ''stick." If they sell, well and good; if they do not sell, they drop out automatically. The chief duty of the sales manager is to keep a sufficient supply of men going the rounds, and he is as much an employment man as a sales manager. Even so, the dihgent and alert sales manager will be quick to find the men of promise, and by personal attention will try to make real salesmen of them. I seriously question if it is ever good business poUcy to employ great numbers of salesmen at random, give them the leads turned up through advertising, and let them loose upon the world without more- ado. I ques- tion the economy of the plan in the first place, and in the second place its expediency. About half of the men employed with but a cursory investigation, take their few dollars of expense advance and never show up again. The other half will sell with only the com- mission in mind, and the house they represent will not gain in reputation because they wdll tell any yarn to customers that is likely to bring a sale. I have found it more economical to employ fewer and better men over a wider territory, at the same time giving them the supervision that they require. It is true that the distribution may be somewhat slower at first, but the sales field will constantly broaden, the goods will stay sold better, and the eventual result will be far more satisfactory. Of course, I am speaking now of the house which really has something to sell, and a reputation to make or to keep. Selling is divided into two broad classes that tend to overlap at many points— we may call them "short circuit" and ''long circuit" selling. "Short circuit" seUing we may describe as the bringing to the attention HANDLING THE FORCE 47 of the prospective buyer some article which his aji- cestors probably used before him, as soap, hats, chairs, or tobacco ; the buyer probably has always used it and unless the design is quite new, he needs to be told httle except the quality and price. If the design is radical or the article itself is abso- lutely new, then the prospect will become a buyer only when he is made fully to understand its utility — which is **long circuit" selling. Cash registers, calculating machines, electric cookers, waterproof fabrics, office appliances, and other new or comparatively new offer- ings come under this heading. DOES YOUR TYPE OF PRODUCT REQUIRE "SHORT CIRCUIT" OR "LONG CIRCUIT" SELLING METHODS? The first class requires less selling skill than the second, but the articles in the second class constantly move up into the first class with the passage of time. Then, again, the particular individual who is to be sold sometimes determines the classification. For instance, when a clerk v/ho has never paid more than $25 for a suit of clothes is offered one at $50, he has to be persuaded that the expensive clothing is some- thing more than a covering for his body, and that it will pay him in the end to buy it. But when the man who has been buying suits from his tailor at $100 is offered a ready-made suit at $50, the sale falls under the first class. These examples are from retail sales- manship, of course, but the analogy holds. In keeping salesmen up to the mark the sales manager will do well first to classify the product sold. If it is in the first class, the goods probably will be the best "salesman" and his principal thought will be to see that the men make their rounds and sell the quantity that should be sold. In the second class the salesmen are more in the nature of propagandists. Primarily they sell ideas rather than goods. These men usually 48 BUILDING UP A SALES FORCE need all there is at the sales manager's disposal in the way of selling talk, enthusiasm, and encourage- ment, and they cannot sell to best advantage with- out his close cooperation. There is no hard-and-fast dividing line between the classes, and the get-ahead sales manager will adapt himself to the circumstances of each class with both the individual and the territory in mind. Much that has long since passed into the first class on Fifth Avenue or Michigan Boulevard is still in the propa- ganda stage in the small cities and towns. To repeat, the problem largely is a personal one, and the sales manager who does not know his man and the territory which he is supposed to cover — who does not know both with the greatest intimacy — cannot give worth-while supervision. There are salesmen who will look lip to the manger and heed what he says, and there are others — including many of the ''stars" — who will look down on the sales manager and take what he says with a chip on the shoulder. This is particularly true if the salesman happens to be older than the sales manager. And it is then that men of this type require the most supervision. I well remember one salesman who gave me a lot of trouble. He was some 20 years my senior and a college graduate. Before going on the road he had been a teacher. He was a good salesman — a very good one — but he did not take to me or to my ideas at all. I had introduced a training school for retailers among other steps, and this he scoffed at. He did not say much and he did not actively oppose me, but he would not work with me. He wanted to sell in the old way — to sell goods alone — while I insisted on the sales force selling service and, through the retailer's school, in a way, to make each customer an agency. He was too good a man to fire outright, although I often felt tempted to. Instead, I decided that I would HANDLING THE FORCE 49 prove to him that my way was right and that he was behind the times. I proved it by the men who used my methods. They began to double and triple their sales while the old man kept on at his old level. He found also, that his customers who came to our training school began to ask him questions about selling that he could not answer from old experience. I wrote him friendly letters from time to time sug- gesting that he could sell this or that store more goods, and incidently telling him what other salesmen were doing. I never mentioned in these letters that he was falling down because he had not followed my course. That would only have made him stubborn. But when I had all my facts in hand — and it took me a year and a half to make sure that I was ready — I called him in from the road, sat him down in my office, and went at him without gloves. He could not reply for I had the facts. I licked him, and every sales manager figura- tively will have to lick a recalcitrant salesman before he gets his job working right. Sales supervision with some salesmen is based upon the intellectual superior- ity of the manager, and the manager sooner or later must prove that he has that superiority. I say ''prove" superiority, but I do not mean that he is to assert it in so many words, that he is to throw his chest out and declaim : "I am it." The superiority thus declared is just as apt as not to break up a sales force and put it quite out of harmony. The superiority that counts is the one which is never loudly asserted, but which the salesman feels and is glad to acknowledge, to himself if not to anyone else. And this is only attained through a close personal study of the man's work, and the realization by him that you stand behind him and are not only willing, but have the ability to help him. Sometimes it is secured by "covering up " your supervision and putting everything in his hands. Then he will usually do 50 BUILDING UP A SALES FORCE what you want done out of a sense of fairness. This is usually the best course to take with the high-strung leaders — for the leaders are touchy individuals. They must be, or they would not make big sales. A cowlike selling force does not bring in big orders. Take one man I know, for example. He had sold in Chicago for nine years on the "entertainment " plan. He had the old idea that liquor furnishes the best of selling arguments, and that a sale commonly came as the aftermath of a "spree" with a buyer. His firm let him go on, because he did turn in business and it had not the nerve to try to correct him ; it simply let him ruin himself. He broke up all at once and at a time when he was earning over $6,000 a year. I came across him after he had been out of work for nearly a 3^ear and a half. His former mode of life had not been a saving one, and, having a wife and four children, he was fairly on the rocks. He was desperate indeed. SOMETIMES IT'S DIFFICULT TO MAKE A MODERN SALESMAN OUT OF MATERIAL LIKE THIS— BUT IT CAN BE DONE I investigated his record, found out his habits, and also that he was at times willing to take advantage of his firm. But everyone agreed that he was a good sales- man when sober. I hired him. I gave him an advance of $50 a week out of which he was to pay his own traveling expenses. I knew he w^ould have no easy time "getting by" on that sum for traveling, let alone sending anything to his family. I told him that it was squarely up to him to make good, and he did make good most astonishingly. Within nine months he had opened up 118 new accounts. I called him back to the office and took him out to dinner. Gradually I steered the conversation around to moral issues. I told him something which went like this: "I thought when you came with us that all you needed was a chance to show what you could do on HANDLING THE FORCE 51 your own feet. You have made a record that you ought to be proud of. I know that I am proud of it. Now, I know you are a square fellow and I am going to leave you on youi- owti responsibility. Also, we are going to^ pay you a good salary in addition to your commissions and we will take care of expenses." Now most of the statement— I have condensed it here— was not entirely true. I knew that he was not absolutely square and I had no intention of leaving him entirely on his own responsibihty. But I also knew that he would be square if he felt that he was on his honor and not supervised. I realized that if I made him feel that he was directing himself, I could suggest anything in reason to him and he would do it. That man developed into probably the best sales- man I ever knew. He played the game with absolute fairness and he fell in with every change that we made. He would even come back to the office hunting sug- gestions for ways of getting more business! Yet, I doubt if that same man would ever have taken an order or filed a report because of a threat. He was eager for hints because he knew that we wanted to work with him— that our interest was to better his sales. I take this as a maxim in deaUng with topnotch salesmen: ''Do not issue orders as though you were a king. If you have something to say to them, far better put it across in a friendly way over the luncheon table or in a convention meeting. Try to manage so that they will be in the frame of mind to take sympathetically what you have to say before you have actually said it. Sell them your propaganda and also sell them yourself. Then you will not have to sell them the idea that it all leads up to — they will grasp it for themselves! You must create a desire for your product before you can make a sale. That holds in selHng your salesmen as much as in the actual sale of goods." 52 BUILDING UP A SALES FORCE The woman on the road may offer an interesting and timely digression at this point. She offers a problem to baffle any sales manager. If she is worth while at all, she usually is three times as temperamental as any man. If she is very successful, she often will shortly try to run you if you attempt the painless sort of supervision described previously, but, on the other hand, sharp words almost always will lose her. Then, too, women will often do the most unexpected things. While acting as the sales manager for a corset house I had frequent applications from women for places on the sales force. If they had not had retail selling experience I always told them that I would hire them if they spent three months selling over the counter. One day a rather good-looking young woman asked to join our force. I told her the old story about first learning selling from the retail side. She said that she would go out and find a job and would be back in exactly three months. She left and I never expected to see her again. Exactly three months later a card bearing a woman's name was sent in to me. I did not recognize the name and asked the clerk to find out what she wanted. The reply came back that I had made the appointment three months before. It was the would-be traveler. She had put in her time and was back for the job. We gave her two weeks in the training school and sent her out to cover Arkansas. She was not content to travel comfortably from Chicago to her territory. The day after she started we got an order from her at some station where she had stopped off, and where she had no business at all to be selling. Whenever she got the chance, at junction points and between trains, she hunted up a store and sold an order of corsets. We began to get frantic telegrams from our agents asking by what authority another was selling in their territory, but we could not catch the "poacher" by HANDLING THE FORCE 53 wire until she had reached her headquarters. Then I did my best to inform her that she was not to sell outside of her own bailiwick, but I must say that I never quite broke that woman of the habit of selling where or when she could. She simply refused to comprehend that her field was not the world. When she had been out six weeks I had to bring her back, much to her disgust, to give her further instruc- tion in wi'iting out orders and reports. She had skipped those details in the training course, and they were so simple that I had not thought to examine her closely on them. And in those six weeks she certainly had managed to mess up her orders in fine shape. But how she could sell! In her first nine months she opened 87 new accounts in Arkansas — which is not an easy state in which to sell high-grade corsets. HERE ARE SOME MIGHTY GOOD "TIPS" ON HANDLING SALESWOMEN TO GET THE BEST RESULTS She had to have very frequent letters — two or three a week — to keep her w^ithin bounds, but they had to be carefully worded to avoid kilUng the enthusiasm which made her such a cracker jack saleswoman. I have found it a good rule never to reprimand a woman sharply, unless I am content to have her quit. A saleswoman needs cheerfulness in letters — and they do not differ from men in this respect. Nagging letters will only cause sullen discom-agement and antagonism. Any supervision that arouses antagonism — which makes the salesman feel that the home office is not with him — is bad. Any supervision that creates and keeps alive cooperation is good. The manager has a double-edged sword and I hold that he should wield it meticulously. A deal depends upon the common sense of the sales manager and his knowledge of human nature if he is to be a real help and not merely a " boss " of the men under him. Bossing does not get a sales 54 BUILDING UP A SALES FORCE manager anywhere in my opinion and experience, although I have seen some who thought it did. It is not possible to reduce the whole subject of sales supervision to a group of numbered heads, but fol- lowing are what I consider the important general divisions of supervision, and I offer them with the further thought that they are valuable only when used with discrimination. This discrimination will come if the sales manager makes it his business to know thor- oughly all of the territory and what it should produce. He ought, for instance, to know the best seasons, the financial conditions from time to time in the various sections, and, in short, be so thoroughly up on his subject that he will not commit the fatal error of asking a salesman to do the impossible. Nothing will so quickly destroy a salesman's confidence in his manager as the realization that the manager sometimes "talks through his hat." If a manager is not sure of his ground — so sure that he can offer to go out and turn the trick himself — he had best keep quiet. Now let us turn to the divisions. 1. Reports. These form the basis of a considerable portion of the manager's supervision — although by no means the whole basis — and they may take many different forms according to the type of the business. But this one point is common to all good reports — they must have a definite objective. A good report is something more than a diary or a compendium of excuses. It should aim to give the sales manager the information to correspond intelligently with the customer sold, or even to talk at length with the buyer should he drop in unexpectedly at the home office. When a customer appears in the offing with trouble written all over his face it is well for the manager to have the facts right at hand for the adjustment. I have often saved a perilous situation by having all the facts at my finger tips, and I have made it a rule never DAILY SALES REPORT. CitKlnmnt Corsot ordar Brassiere order Grand toUl For Delivery If new account indicate with X and give rolorences or names , — , of several concerns now extending them credit terms. 1 1 At Once Future Total Merchandise manager. -Advertising manager. What individuals did you interview?. Who reads the Corsetiere? Are fittings featured? Is she a graduate? .When will Corsetiere attend our school?. (s corset department well located? Has stock prominent place?. Name all corset lines carried 1 4 1 Name brassiere lines earned 1 2 5 2 2 3 6 J 3 Corset Models Stocked Brassiere Models Stocked | Model No. Quant, ity Model No. Quant- ity Model No. Quant- ity Model No. Quant- ity Model No. Quant- ify Model No. Quant- ity Model No. Quant- ity About what proportion of itieir brassiere business do we receive? - What is your plan for increasing J** What efforts have you made to open additionalbrassiere accounts?. How often do they advertise our morrhanrtign? Have they a "repeat sales" follownjp? Indicate which of the following advertising helps are being used—— ^ ,—, r-i Window ,—,,—,,—,—, Medical _^ Folders l_J Manikins l—J Posters LI Cuts Ul Slides I I Siqim LJ Booklets LJ Have you explained the best methods of folder disfrihutinn? Figure 8: This comprehensive sales report is sent into the sales manager of one concern by the salesman or saleswoman after every call. In this way a complete record is kept on sales to each customer. This report also checks up fully on the dealer's advertising activities. 55 56 BUILDING UP A SALES FORCE to see a customer without first having quickly run over the account and the reports of the salesmen. If the visitor has not a ''kick" with him, the manager's acquaintance with the account pleases him, and if he has a ''kick" it certainly is easier to adjust with the facts than without them, you will agree. The exact form of the reports is largely a matter of individual preference. They should contain headings for all the facts that the manager wants to know, therefore they will vary with the individual manager and business. I found the form shown in Figure 8 very satisfactory and it can be modified to fit almost any type of business. I think it is quite as elaborate as a salesman should be asked to fill out. It is extremely difficult to get reports out of first- class salesmen, I have found. They can be induced to return the simpler forms, but they spurn voluminous records of their doings. The sales manager has to "sell" his report to them. He has to overcome the feeling that the reports have no end beyond keeping tab on the salesman's movements — he must convince that reports help the men on the road to make sales. It is hard to down opposition on this score and the manager needs all possible tact. I recall one concern which employed 14 men and sold largely to farmers. I put in a reporting system for it. Instantly the older men scented spy work. At first they would not send in reports at all, and when I insisted they began to fake them. Since they visited farmers they could seldom work on rainy days, and had then to kill time in country stores and hotels. But "sat in a chair all day and smoked" does not look well on a report for the home office. So they faked rainy-weather reports. It struck me from an examination of the daily forms that the country must be all dried up — for never did I find a drop of rain in them! I looked up the weather- bureau records, and they told a different story. Then HANDLING THE FORCE 57 I pointed out to the salesmen in a series of letters that they were not to blame for rainy days and that the time could well be spent in talking to prospects who came into town. I suggested that it would be wiser to stay in town on rainy days. I did not say a word to let them know that I had run down the fakes, but they were quick enough to ''get me." The weather, from the salesmen's reports, got worse, but the sales picked up in way to surprise you! HERE IS A REPORT SITUATION YOU MUST EXPECT. BUT IT IS NOT LIKELY TO ANNOY A GREAT WHILE One must expect salesmen to doctor their reports in the beginning. But that course is a short one. They soon grow tired of ''kidding" themselves, and get around to telling the whole truth — because it is so much easier. When they reach that point the report usually becomes a real benefit to the man making it, for it causes him to reflect upon how he has passed the day, and reflection is at the bottom of most improvement. 2. Letters. The number of letters that a sales manager should send out to his men is fixed by the temperament of the individuals, except with certain routine circular announcements, as on prices. My only guide in writing a letter is what I would say to the salesman if he w^ere in my office. No manager would think of reefing off a set speech to a man sitting across his desk — regardless of the temperament of that man — so why put letters on a different footing? That is the reason I do not believe in form letters or any other sort of letter which is too general in its terms. You have the salesman's report before you and that is the basis on which the letter is to be founded. If the sales have been good, tell the man so, and if they are falfing off try to find out what is the trouble — but always in a nice way, if best results are to be secured. This last is the important part of letter writing, I believe. 58 BUILDING UP A SALES FORCE It is easy for the manager to dash off a curt repri- mand, but the result is more apt to be a discourage- ment than an incentive. I would rather send out a barrel of sunshine, at the one time, letting the man know that sales are below par, but expressing my com- plete confidence that he will bring them up. Probably the real reason for the slump is that the salesman is out of sorts with himself, and the best step that the manager can take is to try to bring back his confidence. One morning I received this telegram from a sales- man in Michigan : Expect to return to Chicago tomorrow. Shall I bring samples with me? I wired back : Special-delivery letter written today. Wait until it arrives. Don't try to sell. Have a good time while you wait. The trouble with this salesman was that he had expected to open up about 50 new accounts in a ter- ritory that had been very poorly handled by three preceding salesmen. Everywhere he went the store owners would say : ''Well, you're the f oiurth new sales- man to call on me in 18 months. I wonder who the next one will be, and what he will say?" He was taking orders right along but being treated as a joke "got on" his nerves and he was ready to quit. Up to that time he had opened up 18 new accounts. Some of them were very small but others showed evidence of becoming live and profitable. I told him that his record for opening new accounts was the best we had on our books for the state and that the satis- faction of calling on these same accounts six months later would be worth the price of the laughs the Michigan customers then had on him. This salesman spent a year and a half in the territory, opened up over 60 new accounts, and when he left he HANDLING THE FORCE 59 received many letters from the trade, telling how impressed they had been with his stick-to-it-iveness and with his ability to straighten out the previous rather sloppy reputation of the house. I am a believer in telegrams and I never hesitate to use the wire when a salesman's feelings are at stake. A cheerful, warm, and cordial night letter often will start a man off 100% encouraged in the morning, regardless of the weather or his previous day's failures. 3. Personal Contact. If letters dio not effect an improvement, the sales manager may either call the ''falhng down" salesman into the home office, or, better yet, go out on the road with him and find out at first hand just what the trouble is. It compliments the salesman to have the manager journey out to see him, and he is glad to introduce him to his customers. Also, it helps business for the customers to feel that their accounts are so esteemed that the manager him- self calls on them. These calls buck up the salesman and, although best made in a friendly way as though selUng were not the object, will often pull in good-sized orders. They help the salesman too, in finding his way to that class of buyers v/ho feel their importance. It is a curious commentary upon our retailing meth- ods that many buyers are not buyers at all, but men who have been "heaved" into buying because of selling ability. They sometimes do not know their business and they conceal this lack of knowledge by being brusk and overbearing. Sometimes they will try to frighten salesmen by yelling at them. I try to teach my men to sit quietly by and let the buyer yell his head off if that diversion pleases him. Then, when he has all of the "rough stuff" out of his system, or finds that he must come up for air, to go ahead and sell him. A demonstration of accurate know^ledge by a sales- man will soon put this class of buyer in a receptive mood, but he fnust first be allowed to have his httle 60 BUILDING UP A SALES FORCE season of disorder. If the salesman cannot overcome the buyer's arrogance, probably the sales manager can, for the buyer "usually will know that the manager draws down a bigger salary than he does; and it is comparative salaries that regulate the bearing of these chaps. The knowledge of the buyer can safely be taken in inverse ratio to his rudeness, as a general rule. When the manager does come in contact with the salesman, either in the office or the field, I find that the "sunshine" course brings the best results. Tell him that he cannot fail and explain why. Tell him that the company and all of its money is at his disposal if he makes good. Talk along this line will help him. Then, if you can point out where and why he has fallen down — but in a constructive and not a nagging way — you will leave a salesman full of enthusiasm and determined to go back hard at the game. WHY SELLING TALKS AND METHODS TO BE EFFECTIVE MUST BE TIED UP WITH A POTENT PERSONAL APPEAL Jf.. Selling Talks and Methods. When men are long away from personal contact with the manager they may and often do become careless in their approaches and selling talks and these need to be watched care- fully. If a man is not using all the tools that you give him, he is not getting the utmost out of his job. That is the way to put it up to him — that the talk is to help him to make more money. Nothing is effective with a salesman who does not have as his end the earning of greater commissions. The dollar mark may never be left out with success, I have found. 6. Contests. The awakening of the spirit of com- petition through contests speeds up sales as will nothing else — provided always that they are not used too often. I favor prizes, but not in cash. Cash arouses the idea that the company ought to give larger com- missions anyway, while jewelry, articles for the sales- HANDLING THE FORCE 61 man's home, and other tokens do not touch this point and, in addition, they are constant reminders of past success which may be of considerable help in times of discouragements when sales are slow and few. Frequent contests lose their value. Once, or at the most twice a year is quite enough. It is of help, how- ever, to print the leaders in sales each month in the house organ. Leadership in gross sales is a question of territory rather than of the individual, and a rating based on percentage of sales with respect to oppor- tunity often is fairer than the gross business rating. Or both plans may be used and two lists published. The trouble is that a man selling in New York City perhaps could easily lead the gross sales month after month without, as a matter of fact, getting nearly all that he should out of his territory. 6. Conventions. I think that every member of the selling force should meet with the executives at the home office in a convention at least once a year. This plan brings up the morale and also permits the "put- ting over" of new selling points. The salesmen should know exactly how all articles are made and they should know at first hand every improvement in manufacture. There is, of course, a social side to conventions but business should predominate. The skilful manager can, however, make the sessions so interesting and so sand- wiched in with social events that the business flavor will not be too prominent. A great editorial writer was once asked why he permitted comic cartoons on the same page with his editorials. He answered: "It is sometimes necessary to rap on the sides of the bath- tub wihile giving the baby a bath." And that, I think, is nearly the formula for the successful convention — amuse the salesmen or you will never have the chance to teach them anything. 7. Remvneration and Expenses. Here is an easy lAafie for the manager to fall into trouble. The salary, 62 BUILDING UP A SALES FORCE commissions, and expense accounts of the salesmen often are constant worry spots. I take the view that the laborer is worthy of his hire, and I will not consent to rigid expense limiting or commission cutting of men who are making money for the company. There is a limit, and if demands are unreasonable the salesman can be shown. Put all your cards on the table, let him know what the company makes on sales, and convince him that he is getting his fair share. If he is not getting a fair share, see that he does get it or resign yourself. No sales manager can keep his self-respect when he knows that he is hired to flimflam the men. I am not an advocate of small expense accounts. I do not want a man to divide his time between saving expenses and selling. If he is worth sending out at all, he is worth sending out right. I want a salesman to be well dressed, to get his clothing pressed frequently at the expense of the company, and generally to spare no reasonable cost that will aid in keeping up his ''pep." I travel with my eyes not on the expense but on the results ; that is the viewpoint I want from the m.en who are working with me. Of course, some men will try to pad their accounts, but I find this usually is true only when a manager is overcritical on petty items. For instance, I know of one house that will not pay for Pullman seats. But all the salesmen ride in Pull- mans just the same, and the company foots the bill — but it does not know that it is buying Pullmans, for the accounts come in camouflaged. Wliy encourage such petty deceit? A salesman who goes comfortably to a town in a Pullman will do better work than one who rides jammed into a crowded day-coach. A scheme which some firms use is to make a sched\ile allowing a certain amount a day for different classes of towns and cities. They calculate what it should cost a man to live well in cities of the first class, of the second, and so on. Then the man turns in his expense HANDLING THE FORCE 63 account with the actual railroad fares paid, and he ir> allowed expenses on the proper per diem schedule, a copy of which is in his possession. If he spends more than the allowance it comes out of his pocket unless he can give a good reason ; if he spends less he is that much ahead. Some companies have found this plan to work well, and to average up to the satisfaction of both the salesman and the company. It has the advantage of avoiding disputes, at any rate. Then, too, some salesmen do not know how to travel to the best advantage. When this is true, the routes should be laid out ahead — this plan is nearly always necessary with M^omen — and explicit directions given about trains and hotels. I am not one of those who take the view that when one strikes a town, the time of the train out should be forgotten. On the contrary, I think that a salesman should map out his day with reference to the trains, and should change his schedule only if he finds that he will make more sales by staying. However, this is a very different attitude from making catching the train out the main feature of the day. It is better expressed as "Know what you are going to do — then do it as well as you know how." I hold that true supervision is constructive and has little to do with faultfinding. But, in addition to helping the man to make sales through supervision, there is a great deal of what has been called ''behind the line" selling that is entirely the manager's affair. One could not expect to reap a harvest from an un- sown field. Neither should one expect to make sales in an unprepared market. It is up to the company through the sales manager to give service to the prospective buyer, to impress him through adver- tising, through proffered helps in his own business, as the training of his retail salesmen in a "service school," and the like, and through every other means possible to prepare the way ahead of the salesman. 64 BUILDING UP A SALES FORCE "Behind the Hne" seUing is really a part of the handling of salesmen, although it is an entire and a big subject in itself. For, if the man does not absolutely know that you are doing all in your power to help him, he will not return to you that keen enthusiasm and loyalty without which so very little can be done. To close, in the main, handling salesmen can be most satisfactorily accomplished if the manager has dignity and yet is friendly, matches fairness with firmness when necessary, and always keeps his men pointed in the right direction toward the big goal — increased sales. PUTTING SALESMEN IN THE RIGHT FIELD Y reassigning sales territories each year, one eastern manufacturer has developed his organ- ization to meet the demands of a growing busi- ness, has kept his salesmen satisfied, and has reduced his cost of selling by keeping each sales territory covered effectively at all times. This concern has organized the United States into seven districts, each in charge of a district manager. A district contains from three to five territories, with a sales manager for each. The question of assigning or reassigning territories is one of the most important questions taken up at the annual meeting of the district managers and sales managers with the higher company officials. Previous to the meeting each manager has talked with his salesmen about their territories and has decided on the chj^nges which seem necessary. He also has consulted with his district manager. At the annual meeting each district manager pre- sents his recommendations for assigning territories for the coming year. These usually are approved unless the heads of the business suggest a different arrangement. Sometimes salesmen are transferred from one part of a territory to another and sometimes they are transferred to another territory or even to another district. Sales and district managers also are called into conference three or four times during the year and if changes in the original territorial arrangement seem necessary they are made. 21 22 BUILDING UP A SALES FORCE In laying out and assigning territories the ease in transportation for both salesmen and product is the first point taken into consideration. Local conditions, the class of population, and the ability of the salesman, are other determining factors. ''This systematic consideration of territories has done much to make our sales organization more ef- fective," said the sales manager of this company. "By making readjustments as soon as there is any need for change we keep our salesmen contented because they feel we are trying to give them the best possible working conditions. We try hard all the time to reduce the size of each salesman's territory as rapidly as possible, in order to give him a better chance for intensive cultivation of prospects." This policy shows how a successful concern meets one of the most difficult problems sales managers have to face. The constant growth in population, its shifting, and the rapid development of new territories makes it necessary to keep a close watch on the sales field to insure effective distributions. Investigation indicates that the four chief questions manufacturers and wholesalers have to face in meeting this problem are: 1. On what plan shall our territories be assigned? 2. How shall we make sure we place the right sales- men in each territory? 3. What is the most effective method of organizing the territories and routing the men? 4. How best can we keep each salesman satisfied and enthusiastic about his territory? The most common method of deciding the first of these questions — on what basis shall the territory be assigned — is, of com-se, to use already -laid -down geographical boundaries — a state or a group of states. Investigation indicates, however, that there are PLACING SALESMEN RIGHT 23 several other successful methods, among them that of territories based on sales possibilities, and of territories limited only by a classification of prospects by lines. One manufacturer, for example, puts accessibiUty ahead of everything else in deciding upon territories. ''Our territories are assigned to salesmen on the basis of immediate accessibiUty," says the sales manager of this concern. "Since we are engaged in rapid-fire propositions which require quick deliveries, it is necessary that our salesmen make favorable im- pressions on our customers by prompt handling of all inquiries. This prompt handling of inquiries has been our most effective method of reducing sales costs." HERE'S AN EFFECTIVE TERRITORY ARRANGEMENT WHICH HAS HELPED SALES GROW FOR ONE CONCERN Another concern arranges its territories according to convenience of branch offices, accessibility, and logical markets. Branch offices in each territory are in charge of salaried managers. In other parts of the country all selling is done tlu-ough agencies on a coromission basis. Up to three years ago another company had no fixed territories for its salesmen. Each man was allowed to go wherever he could get orders. Then it was decided to establish definite territories on the basis of sales. That is, customers were assigned to salesmen in such a manner that each man had about an equal volume of business. In assigning the territories, local and geo- graphical conditions also were taken into consideration. Still another concern has found it wise to apportion all territories on the basis of classes of trade, instead of assignments based on geographical districts. This is especially applicable to city territories, of course. In working out this plan, lists of prospective cus- tomers first were obtained. These were divided into lines of business, as furniture dealers, real estate men, grocers, jewelers, and so on. The concern's plan was 24 BUILDING UP A SALES FORCE based on the fact that every salesman knows some one particular business better than any other. A blank form was sent to each member of the sales force, containing questions as: In what other lines of business than this have you worked? What particular line of business do you know best? Would you like to sell to this line exclusively? — and so on. These blanks, as filled in by the salesmen, were used as a basis for the readjustment of territories. Instead of restricting a man's territory by street boundaries, it is now divided by trades. Thus, John Cowley, who at one time sold real estate, is given a list of real estate men to call upon; Fred Thompson, who formerly clerked in a grocery store, is allotted a "territory" consisting of a list of grocers ; and so on. A list of several hundred prospective customers in a line he knows comprises the salesman's "territory." By thus placing its men at work among the type of men to which they are already accustomed, this con- cern has greatly increased the effectiveness of its sales force. Men who were already good producers have made higher sales records under the new plan, and several men who were about to be dropped from the force on account of their inabihty to produce a sufficient amount of business, quickly developed into more than usually successful salesmen. One instance in particular shows the successful operation of this method. A young fellow who had come to Chicago from a small Wisconsin town was given a territory that comprised part of the downtown district. He worked conscientiously and averaged eight calls a day — good work for any salesman in this hne. But not many sales resulted from his efforts. Apparently his lack of acquaintance with the city and its business ways was responsible for his lack of suc- cess. He already had notice to quit when the new method of allotting territories was decided upon. PLACING SALESMEN RIGHT 27 Investigation of his business experience revealed that before coming to Chicago he had spent four years in his father's furniture factory, and that he had a close knowledge of the furniture industry. He was given another trial under the new plan. This time his "territory" consisted, not of blocks of buildings with mixed classes of possible customers, but of a list of 300 furniture dealers and factories within the city limits. Eager and confident, placed among the class of people he was famihar with, he set to work with a will. With- in a month he had five sales to his credit, and he now ranks with the firm's biggest money-making salesmen, and his sales are growing every day. While this plan of territory division obviously re- duces the number of calls a salesman can make each day, owing to the scattered location of his prospects, yet the increased efficiency that results from adapting the salesman to his customer is declared to more than offset this disadvantage. Five selected calls a day, it is said, will often produce more business than 10 or more haphazard calls. Sometimes, however, it is possible to fit the salesman to the class of prospects he knows, without also com- pelling him to scatter his efforts over a wide area. The tendency for similar lines of business to congregate in one district often can be utilized by the sales manager for this purpose. Fortunately this concentration of allied business is almost universal. In New York City, for example, engineering interests are with few ex- ceptions confined to the environs of Liberty Street; financial interests gather on Wall Street; theatrical near Broadway and Forty-second Street; wholesale dry goods on lower Broadway, and so on. Take any town or city in the country, and you will find that in much the same way each line of commercial endeavor has its own particular district. 28 BUILDING UP A SALES FORCE This concentration of effort is gained in another wa;y by a concern which continues to divide its territories on geographical lines. This firm — it sells a specialty of general appeal — sends its salesmen lists of prospects classified by lines of business. The salesmen are in- structed to concentrate on a given trade during a certain month. For example, August will be "grocers' month" ; September, " dry goods dealers' month" ; and so on throughout the year. YOU'LL AGREE THAT THE RESULTS SECURED BY THIS METHOD JUSTIFY ITS TRIAL BY MANY CONCERNS This method is reported to have many advantages; the principal one is that it limits salesmen to a' certain number of prospects for the period, and thus makes them concentrate their efforts. Experience has shown this firm that a month's concentrated effort on 20 prospects, all of whom are in the same line of business, will normally produce more sales than efforts scattered over 50 or even 100 prospects in different lines. This concentration upon given trades also has the effect of making the salesman's task easier. Suppose that under the old plan he selects a certain street for his day's operations, and calls on stores, one after the other, in regular order. The first prospect may be a butcher; the second a grocer; then a stationer, barber, dry-goods proprietor, and so on. Each prospect re- quires a different appeal. Arguments that induce a grocer to buy are likely to prove futile on a barber, and this plan avoids waste of this sort. By concentrating on one line of business at a time the salesman can, in the main, use one definite method of approach and demonstration. His mind is not con- fused by a mass of arguments for all trades, but is devoted exclusively, say, to grocery arguments and instances of how other grocers under similar conditions have used his appliance to advantage. PLACING SALESMEN RIGHT 29 Each month, when informing its salesmen that the following four weeks are to be devoted to grocers, or dry goods dealere, or whatever line the approach is planned to interest, the firm sends to all of its salesmen a printed resum^ of selling methods that have produced especially good results from the line to be dealt with. This resume gives the salesman a full hne of seUing ammunition, and posts him on the best points of appeal to the trade he is to call on. This brings us to the second question we enumerated on page 22 — how are we going to place the salesman in the territory to which he is best suited? One wholesale concern overcomes this difficulty mainly by hiring only men who are natives of the ter- ritory in which they are to work. For example, if the Texas territory is vacant, the company tries to get a Texan for the job. By so doing it usually gets a man who is familiar with the habits and customs of the people he is to deal with and who knows how to get about the territory quickly. "A salesman who makes a complete failure in one territory often will become a star producer when trans- ferred to another district," says the head of one con- cern. ''Likewise, a successful salesman may drop into the ranks of the mediocre or poor producers when moved to another ground. The principal reason for this is the fact that for a salesman to produce the highest results he must deal with customers of a type of mind similar to his own. "Every fine of business develops a distinct type of mind, one which views all questions from its own particular angle. The manufacturer, retailer, jobber, publisher, and real estate man — each has his own viewpoint. An idea which arouses intense interest in the manufacturer or wholesaler oftentimes is looked upon by the retailer as having nothing of value for him. It is difficult to change this view, too. 30 BUILDING UP A SALES FORCE "A salesman accustomed to dealing with the pro- moter's enthusiastic type of mind, therefore, is ob- viously at a disadvantage when set to work in a ter- ritory in which the engineer's cold, calculating thought processes predominate to any extent. ''History cites many instances where epoch-making battles were won solely through the successful general's knowledge of the enemies' ground — resulting in fore- knowledge of their actions. Big commercial battles — the making of sales in particular — are often won by forecasting the prospect's probable thoughts and actions, and adopting the method of salesmanship logi- cally best suited to them." Working with this fact in mind, sales managers of successful organizations have found that a close study of the salesman in relation to his territory is really as important as a study of the goods and their points of appeal. They seek to eliminate guesswoTk as far as possible, in allotting a territory to a salesman. They predetermine the thought plane of the various members of the sales force and the occupants of various ter- ritories, and then reorganize their force for better sales results by setting each salesman to work in a territory where the general plane is similar to his own. In in- stances where they have not, results have been bad. The lack of sales success which often results where this is not done, is aptly illustrated by an experience of the sales manager for a New York specialty concern. The lead in this particular experience was played by Corbin, one of his salesmen. "Corbin walked into my office one day," says this sales manager, "and applied for a job. He had sold books, insurance, and, latest, electric signs for retail stores. It seemed to me that his experience should have equipped him to sell our bookkeeping system to store- keepers, and I took him on. One of our best territories — upper Broadway — was vacant, and he got it. PLACING SALESMEN RIGHT 31 "A month passed and Corbin's one small sale seemed to mark him as unsuited to our business. I had a heart-to-heart talk with him to try to discover his weak points, but without avail. I finally decided to put in a day with him, working in his territory, to show him the knack of selling our hne. "A stationer was the first man we called on. I in- troduced myself and started the conversation; then I turned it over to Corbin. I wanted to see at first- hand how he handled a prospect. "From the very start I noticed that he seemed to lack confidence; was defensive rather than aggressive, and failed utterly in presenting the merits of our system. ALTHOUGH THIS SALESMAN COULDN'T SELL TO SOME PROSPECTS. HE WAS A WIZARD WITH HIS OWN CLASS ''We made three more calls; at a dry goods store, a restaurant, and a shoe store. In each Corbin appeared confused — he lacked confidence and failed to make an impression. I did not interrupt him ; I was out to size up Corbin — not to sell goods. ''Passing through a side street on our way back to the office, Corbin interrupted my conversation with: 'Let's try this grocery store.' "In we went, as Corbin wished. He took the lead. He made a skilful approach and got the grocer inter- ested to the point of asking questions about the system. And when a prospect gets to that stage, he's mighty near buying, salesmen will agree. "But what interested me most was Corbin. He was a changed man. His seUing talk was a masterpiece; his every word rang true; bashfulness was replaced by absolute confidence in himself. Well, to make it short, Corbin landed the order — took it in a matter-of-fact way, quite different from what I expected. "On our way back to the office, Corbin broke in on my congratulatory remarks. 'It's easy to sell that type 32 BUILDING UP A SALES FORCE of man,' he said. 'If I had a territory full of stores like that, I'd make big sales.' "Then I saw a light. Corbin was unaccustomed to calling on high-grade trade such as we met on Broad- way. The type of man there was strange to him, and did not respond to his regular methods of approach. But the small, side-street grocer was typical of the class that Corbin was accustomed to deal with. He knew that man's habit of thought — the angle from which he viewed things. ''Well, I transferred Corbin — gave him a Sixth Avenue territory, full of small, medium-class stores. The first week his sales amounted to $250. Today he stands second on our sales rating." In a high-class territory, Corbin proved a failure; he was out of his element. But with medium-class trade to deal with he proved a record-breaker, because his prospective customers were of his own type of mentahty, and had a similar point of view. In another concern, a grocery house, the resignation of a salesman left the firm with a vacant territory. This firm dealt with two classes of trade; first, dis- tributors who sold to retailers in outlying districts; and second, retailers in large cities. Customers in the vacant territory consisted largely of one-man grocery stores. It meant a dead loss to leave the territory vacant. So, calling in Burton, a wholesale salesman, the general manager explained the situation and asked him to divide his time between his wholesale territory and the retail territory. Four days later, Burton entered the general man- ager's ofRce, his woe-begone expression showing plainly that something was wrong. "I can't do business with those little stores," he exclaimed; "I thought I was a good salesman, but they're beyond me. They don't seem to 'open up' ; I've tried the 'glad hand,' and so on, but it's no use." PLACING SALESMEN RIGHT 33 Here was an instance where the man used to the mentahty of men in big concerns, could not get the attitude of the small tradesman. Both of these men, Corbin and Burton, were good salesmen — among the men they were used to. Corbin could no more "talk up" to a high-class trade than Burton could "talk down" to a smaller class trade than he had been accustomed to deal with. Similar instances can be found in every sales force. A salesman who is unfitted for the territory he is in, may produce a fair amount of business by schooling himself to overcome this initial handicap; but, placed in a territory for which he is naturally fitted, he usually will produce far bigger business. A Chicago sales manager on a visit to Tampa, Florida, became acquainted with a southerner who had made a big record selling life insurance. By the offer of a larger salary the southerner was induced to go to Chicago to take up the sale of a line of crackers. Two months in a Chicago territory and the south- erner admitted failure. "I can't do business with northerners," he said, with a touch of regret: "Can't get them to listen to me; and then, they want to do business in such a rush. I guess I'd better go back to Tampa w^here I'm a proved success." Experience had shown this sales manager that a man who makes a flat failure in one territory often will roll up a big record in another. He had, to some extent, discovered the reason. Prompted by this, he said to the wavering southerner: "How would you like to go to Boston? Different class of people than in Chicago; in some ways their habits resemble those of the South. They don't do business as quickly as we do in Chicago — more like the people you know." The southerner moved to Boston. Eight days later the sales manager received a letter from him, in the course of which he said: 34 BUILDING UP A SALES FORCE "The people here do think and act differently than do you in the Middle West. They don't try to get 48 hours out of every day. In lots of ways Boston reminds me of the South. I get on well with the people. I'll stick here because I'm going to 'make good.' The $200 order enclosed is just a hint of what is to follow." In selling to professional men, some concerns have solved sales problems by employing as salesmen, men who have belonged to the same profession. A St. Louis firm catering to trade of this sort has found by experience that in its business, a professional man, although green as regards business and salesmanship, often will make more sales than its "star" salesman. While this does not hold true in every instance, yet it proves the value of adapting the salesman's type of mind to that of the customer. Similar types of mind come quickly to an understanding and work in har- mony, while different types work along divergent lines and generally fail to find any meeting point. With the right salesmen selected for each territory the third question which faces the sales manager is how to arrange for the salesmen to cover ground to the best advantage, and to organize territories for the most effective all around handling. YOU WILL HAVE TO ANSWER THIS VITAL QUESTION IF YOU GET THE BEST FROM YOUR SALES FORCE By putting its salesmen on a definite time schedule, one grocery concern was able to increase sales more than 50%. To do this the company hired a railroad man who was thoroughly familiar with railroad schedules to help plan the salesman's routes. First, the number of grocery stores in each town to be visited was determined. Then a certain amount of time was allowed for each call. This was based on the experience of the salesmen. After the total time necessary in each town had been estimated the rail- PLACING SALESMEN RIGHT 35 road man figured olit the most advantageous schedule. Then each man tried out the schedule for about two months and the adjustments which seemed necessary were made. If the salesman got off schedule there- after, he had to report the reason to the sales man- ager by letter — and good reasons were required. In working out the new schedule it was found that many towns of less than 500 in population had never been touched. Many of these towns were in rich farming districts. The sales manager and the railroad man revised the routes so most of the little towns were included and yet it did not take any salesman any longer to cover his route. In a firm selling specialties to machine shops the word "territory" was done away with entirely and the word "route" substituted. For example, a sales- man instead of having Tennessee and Kentucky for his territory would have Routes 14, 15, 26, and 28. If an inquiry came in from a town on Route 37 the sales manager would telegraph to a salesman to see the prospect and then continue to cover Route 37. These routes were worked out carefully. To get rid of the trouble of fixing train schedules one concern has arranged its territories so that each sales- man can work from a central base and cover his entire field by automobile. This concern has found that this method is cheaper and that the salesmen work the territories more thoroughly because they do not feel obUged to rush calls in order to catch trains. Another company has worked out a somewhat similar plan. It arranges its territories so the men have about two weeks in the central base city and two weeks outside. This enables them to have their homes in pleasant localities and does not require their being away on too long trips. The men prefer the plan and results have shown it is far less expensive than "shoot- ing" men around the country in a more or less haphaz- 36 BUILDING UP A SALES FORCE ard way. This consideration for the men also has done much to foster a spirit of company loyalty, A shoe manufacturer endeavors to work each ter- ritory intensively and for this purpose he has tried to eliminate long jumps from one part of the country to another. To aid in this he tries to persuade each salesman to live near the center of his territory. In organizing territories for most effective selhng one house has appointed one southern and three west- ern managers for the territories in these districts. These managers do no selling themselves but are responsible for the sales in the territory. They do not have the power to hire or fire salesmen, but any sug- gestions which they make usually are followed out by the sales manager, who feels it necessary to back his managers up to preserve discipline. Only under special circumstances is a salesman transferred to another territory, except through these district managers. Incidentally, the salesmen for this house are required to handle only such lines as they think will sell in their districts. It is up to the department manager in the factory to sell his goods to the salesmen if he wants to make a good record. By this system no salesman is compelled to carry a line he does not have con- fidence in. When this selective system was put into operation it cut the number of trunks carried by one salesman in the Northwest from three to one. Upon going over the goods carefully it was found that for climatic or other reasons two thirds of the line was un- suitable to this territory. The salesman increased his sales by being able to concentrate on suitable lines. While its sales territories are fairly well defined thi^ company believes in sending two or three men into a town if it appears necessary to do it to get all the business there is to be secured there. As an illustration of how this works out, the sales manager told of an incident which occurred recently. PLACING SALESMEN RIGHT 37 One of the senior partners of the firm, a man who had nothing to do with the sales, visited a small Iowa town. At the hotel where he stopped he was surprised to find three of the company's salesmen — one of them a division manager — registered. Each salesman was displaying the same line of goods but in different rooms. The partner was astounded. When he returned he ran to the sales manager and asked him if he knew that these three salesmen were displaying the same goods in the same town at the same time. The sales manager replied that he didn't know it, but that it was entirely probable, for each one of these men had customers there whose accounts were large enough to make it worth while to visit the town, and he knew that one salesman could not sell all three customers because it had been tried the year before and two of the accounts had been lost temporarily. The partner was soon convinced of the wisdom of the poUcy. "IT KEEPS THE MEN ON THEIR TOES," SAYS THE SALES MANAGER BEHIND THIS TESTED PLAN ''This scheme of having two of three men in one town helps to keep the salesmen on their toes," ex- plained this sales manager. "A little inside competi>. tion often is a good stimulus. For instance, the man visiting Waterloo, Iowa, may not be selling the line to Adams, who logically is a good prospect. We instruct our man at Fort Dodge to go over the next week and try to sell Adams. If he does, the account is his. In the same way the Waterloo man may be sent to Fort Dodge. The knowledge that he may lose a good account keeps each man working his hardest to get all he can out of the territory." On one occasion the district manager for the state of Texas reported that all the merchants had bought all they would for the season and that it would be economy to call the salesmen in. But the sales manager 38 BUILDING UP A SALES FORCE believed more goods could be sold in Texas. After consulting with the manager he sent one salesman a trunkful of overalls with instructions to spend three weeks in the territory with nothing but this line. In three weeks' time this man had sold his overalls to the amount of $6,900 worth. "I would have been satisfied if he had sold $1,000 worth a week," said the sales manager, ''especially at that season of the year — but he sold $2,300. He had only one line, he knew he had to sell it, and he did." One sales manager keeps track of his salesmen by a series of racks and cards. When the salesman starts on the road, narrow strips of cardboard bearing the names of the towns the salesman will cover are placed in the lower racks. As soon as the salesman reports each town, the cards are moved to the upper rack. Calls are indicated by white cards where sales are made and by red cards where no sales are made. By using this system the sales manager can sit at his desk and see at a glance just how much of his route each man has covered and what results are developing. In the chart (Figure 7) is a diagram showing how the sales force of one food-products concern is organized to meet conditions in its territories. Branch managers, each with an assistant, are in charge of districts. Each territory is in charge of a head salesman who has salesmen and advertising service men under him. This territory organization holds except where very large cities in a territory complicate the organization. For example, at the right of the chart is the organ- ization for the Chicago territory. It will be noted that an assistant manager has charge of the city field and that a head salesman is in charge of each of the out- lying territories. This form differs slightly from the regular organization shown on the left, in that the head salesmen come directly under the branch manager. HOME OFFICE Branch Manager Branch Manager Branch Manager Assistant Manager Head Branch JVlanager Branch Manager Head Salesmen Salesmen Outlying Territory Assistant Manager Advertising and Service Men Variable Number of Salesmen £ Salesmen He ad Sa l esmen Chica go pop ) Territory | □ □ Salesmen & Figure 7: The flexibility of one nationally known sales organization is shown in this chart. At the left is shown the standard branch-office sales organization; at the right are indicated the variations in organiza- tion due to the special conditions in and surrounding a large city. 39 40 BUILDING UP A SALES FORCE With the territories laid out, the men assigned to their territories and the entire field organized for the most effective handhng, the fourth question we enumer- ated — how to keep the salesmen satisfied with their territory — comes up for consideration. It is but natural for a salesman to think that his territory is harder to work than the other fellow's; that if he were only over in the next territory he could beat all records, and so on. Here is the plan which one concern used to compare the seUing possibilities of several adjacent territories. It is especially useful in determining the value of territories in a large city and may readily be modified to apply to almost any concern's problems. The sales force of this concern is composed of 14 men, each in charge of a territory in the same district. Some of the salesmen complained that their territories were not as good as some of the others. The company determined to find out. It laid out a plan. Twice during its "find out" campaign the entire selling force was concentrated in each man's territory for the two hours between 3 and 5 o'clock in the afternoon. To avoid showing partiality the names of the salesmen were di'awn from a box and the territo- ries worked in the order drawn. This plan gave each salesman a chance to work in every territory. It also led the salesmen to study their own territories more carefully because each man laid out the work for the other representatives when they came into his district. Thus it gave each man a chance to show his ability to map out a selling campaign. This concern manufactures a varied line of gas appliances. On the day previous to the group seUing, which has just been described, a boy distributed literature from house to house showing the use of the various articles. It gave the householder prospects a chance to study them. PLACING SALESMEN RIGHT 41 The earnings of the entire force during the period spent in any one man's territory were pooled and the sum given to the man whose district was worked. Under this plan each man had a chance to show what he could do in the other man's territory. Also, it gave the company an accurate comparative record of the various territories, for the same men had worked the same territories for the same length of time. Further, it gave a good check on the abilities of the various salesmen, for after each one had the same opportunities in the same territories his total sales formed an accurate record of his worth. This plan gave the company a more logical basis for establish- ing quotas. Needless to say, the green fields of the other man's territory didn't look so green after this contest was over. It was a long time before there were requests for transfer from this sales force. WHY ONE SALES MANAGER ALWAYS PAYS CLOSE ATTENTION TO SALESMEN'S COMPLAINTS ABOUT TERRITORIES Instead of looking at a salesman's complaint ''that his territory is too small" as a chronic grievance, one sales manager makes a special point of treating each complaint as an individual prolDlem to be worked out. He goes on the theory that if a salesman makes a complaint he probably has thought about it until it has become a very real trouble with hhn. This man has tabulated every town in each territory which has two or more rated dealers who might handle the goods. Towns in which dealers are established are indicated by crosses. These lists are done up in pack- ages, one for each salesman. With this material at hand the sales manager is ready for the salesman's comi)laint. He tells him he may be right and that he will go over the territory with him. The sales manager, we will say, is then able to point out that there are 35 towns in Green County 42 BUILDING UP A SALES FORCE having more than two rated merchants and that there- fore the company should have at least 35 dealers in that county instead of the four it actually has. He suggests that the salesman spend a couple of weeks opening new towns in this county. Or he may point out that another county has 84 big towns, but the company only nine dealers, and so on. After a short session along this line, the salesman usually finds that the territory he thought too small has possibilities he did not suppose existed. And he goes back to his work with a new idea of his field, and this new idea translates into new sales. Another sales manager now meets complaints by a systematic changing of territories at regular intervals. "Sooner or later," he says, ''any man will tell me that his gi'ound is 'worked out.' To allow only two men to change territories under such conditions makes the rest of the force dissatisfied. My plan now is to change all territories about every six months. Here's the way it works out: ''We divide Boston into 20 territories. By keeping 20 salesmen on the move we get the utmost from each territory, for it is certain that normally each man will appeal to a different class of prospect than his predecessor. In this way, we make the whole of each territory produce — not simply the part of it easily worked by one type of salesman. "There is an added advantage, too, in frequent change. It prevents a salesman from getting the stale- ness that is liable to come from too great famiharity with his territory. There is a certain fascination about a new territory which keeps a man keyed up, and this enthusiasm is a very vital part of a salesman's mental equipment, I have found." The same reasoning has shown another concern that it does not pay to allow a salesman to occupy one territory for too long a time. PLACING SALESMEN RIGHT 43 One day one of its salesmen walked into the New York office of the sales manager. His territory con- sisted of an eastern section of Massachusetts. *'My territory is 'worked out,'" he complained. "I've sold every man who can be sold. I guess I'll have to quit unless you can give me another territory." At that time all of the concern's territories were filled. But the sales manager remembered that one of the Maine salesmen also was complaining that his territory was 'worked out,' and wanted a change. Within a week the two men had exchanged territo- ries. Like the horse that can find no good feed on his own part of the meadow and persists in craning his neck over the fence to nibble grass from the next field, each salesman thought the other's territory better than his own. And so both men were pleased at the change. "A remarkable event soon happened," said the sales manager. ''Both 'worked -out' territories began to produce good results. The reason is not far to seek. No one man can make an equally strong appeal to all classes. Following the line of least resistance he works on prospects that his nature and training fit him to deal with easiest. Others — not of his type — he condemns as impossible. "The two territories were not 'worked out' by any means, but only the particular class of prospects with which each man could deal most advantageously. And the other prospects were 'impossible' only from the individual salesman's standpoint; not by any means from the firm's point of view." This sales manager says that in making territory changes of this sort his rule is to transfer men of widely different temperaments, so that the new territory to which each man goes may offer the widest scope for his efforts. - Obviously, the change would not be so beneficial were men of similar temperaments to be allowed to exchange territories. 44 BUILDING UP A SALES FORCE These examples go to show how wide-awake concerns ke.ep their men satisfied with the territories which have been selected for th-em after a careful study of their qualification for the field. We also have seen how the boundaries of territories are effectively determined, and how they are organized to get the best results at the least cost. When this is done two-thirds of the way toward bigger sales has been won. TOURING the Great War business men all over the country came to know the building at Washington which housed the War Industries Board. There men met to learn the Govern- ment's needs and to lay plans for gearing their particular enterprises to the nation's enterprise. Thus the building may be said to symbolize the cooperation and the interchange of economic thought always essential to the greatest progress. The new structure in which the Shaw Pubhca- tions are now housed is a permanent counterpart in stone of the building that business men knew so well during the war. ORGANIZING FOR INCREASED BUSINESS Edited by THE BUREAU OF BUSINESS STANDARDS of thm A. W. SHAW COMPANY SECTION 5 What About Salesmen's Reports? WHAT ABOUT SALESMEN'S REPORTS? SHALL we ask our salesmen to spend valuable time every day making out reports on expenses, sales, calls, customers' business, credits, and so forth, or shall we be satisfied with orders, and let them speak for the salesman? If we do ask for reports, how shall we use them to help future sales and how can we make salesmen realize their value?* These questions and others that bear on the effective recording of sales and expenses by salesmen are prob- lems which every manufacturer and wholesaler has difficulty in solving. Investigation indicates that business men constantly are on the lookout for plans which will give them the desired information without burdening the man on the road with too much clerical detail. Reports from salesmen are generally desired, investigation indicates, on: (1) expense, (2) sales, and, (3) prospects and customers. In considering the first — expense accounts — the problem which every wholesaler and manufacturer has to decide is: Shall I check expense reports closely and question small items at the risk of offending sales- men, or shall I consider merely the total expense and not bother about the details? The following incident illustrates the two extremes in policy which prevail: ♦ This seotion is intended to indicate the general policies which govern the obtain- ing of sales information, and the type of reports used by many sales managers, 'i he uae made of the information after it is obtained is discussed in these sectiona. 1 Copyright, 1921, by A. W. SHAW COMPANY as a part of the Shaw Selling Series 2 BOOSTING THE SALES VOLUME Two salesmen were sitting in a railroad station when one of them remarked that he had forgotten what his ticket cost the last jump, and that he would have to look it up. The other salesman jokingly asked if he could not guess it high enough. *' Guess," replied the first. "It's a slim chance I have to do any guessing. If I put it down at $2 when it was only $1.98 I'd get a letter by return mail saying that the other 2 cents had been deducted from my expense allowance. I think my house must have the passenger rates of every railroad in the country and a corps of clerks to check up every report. The second salesman expressed surprise that expense accounts should be watched so closely. " Listen," said the first salesman, as he pulled a letter from his pocket. "Up in Chesterton — of course, that's not the real name of the place, but it will serve — I've a good many customers scattered around in the outskirts. It takes some tall hustling to get to them all in one day. Last week when I was there I got out early. It was below zero, too, but by digging in hard all day I covered them all and got a darned nice lot of business, too. I wrote it all up that night with a good deal of satisfaction and sent it in to the officCj together with my weekly expense account. Now, listen what happened — here's the letter I got back from my company just yesterday: Dear Lacey: We have your letter of the 15th, together with your weekly expense account. On the whole, your expenses appear to be running higher than they should, but we do not want to seem over-critical. In the main we will therefore content ourselves with saying that we trust that you will be a little more careful in the future. There is one item, however, that we do not think we can pass unnoticed. WHAT ABOUT REPORTS? 3 We find that among your expenses on the 15th there is included an item of 35 cents for carfare. Inasmuch as Chesterton is a town of only 25,000, we do not see how it would be reason- able, or even possible, for you to have spent that amount in carfare. We have therefore credited you with 20 cents for this item, which we think is liberal, and have charged the other 15 cents to your personal account. "Now, what do you think of that, and what would you do about it?" asked the salesman, as he finished. "I know what I'd do about it," said the second salesman; "I'd send them a wire, collect, saying that my sample case was on its way to the office." "Well, you know, that's just what I started to do," said the first salesman, "but I changed my mind. I've a good job and no particular fault to find with my work. So instead of quitting, I'm just going to plug ahead and make it a particular point to squeeze in an extra few cents each day on my expanse account. I've always given them a square deal, but I don't consider that they're giving me one now, and so I won't hesitate to make that 15 cents cost them S15 each and every year I stay with them. That will help to take the soreness out of my system, I think." Then the other salesman gave his experience. "When I go out on the road I count my money. When I get back I count it again. I find what the difference is and then I turn in an account as follows: 'Railroad fare, hotel bills and incidentals, from such and such a date, so many dollars and so many cents.' That's easy enough. Moreover, I have a lump sum set aside at the beginning of each year and I draw against this for my expenses. This past year I found that it was S35 too much. So I told the boss that I had $35 of 'charity' money in my expense fund, and that I was going to distribute it to the girls in the 4 BOOSTING THE SALES VOLUME office for Christmas money. He said: 'All right, go to it/ and that's just what I did." This illustrates the two extremes. Naturally, there is, or should be, a middle ground. Here is how one sales manager gets a clear understanding with his men about expenses on the road : "When I hire a salesman," says this man, "I have a little talk with him about expense accounts that runs about like this in most instances : " 'Now, Mr. Heywood, about your expense account. Let's see if we can understand each other on this point. You're not going to find us too exacting. I've been out on the road myself and I know that there are times and occasions when it's necessary for you to spend a little money for your own good and for the good of the company that might not come under a strict interpretation of legitimate expense. ** *If this situation comes up, put the item down for what it is. Don't try to slide it by under some other items. I want to feel that you are going out with our complete confidence in this respect. I'm not going to look over your expense account and scrutinize each item. I naturally know about what it should cost you to travel your territory, and I expect you to keep somewhere in that neighborhood. We're paying your expenses and we're willing to give that word 'expenses' a fairly broad meaning just as long as you don't attempt to abuse it. " 'We don't expect and won't stand for your trying to make or save money on your expense account. If you want more money than we're paying you it will be a lot easier to get it by turning in more business than we expect. I'm not putting you on your honor, because I take it that you understand that you've already got my confidence or I wouldn't have hired you. I'm just expecting you to be as fair and square with us as we're willing to be with you.' 19 Weeks |\ Salesmen 1 2 3 4 5 6 7 MB 49 50 51 52 Total Oliver 52.lt //; « m.S(^ 9Ln 101 or ioi.:il J 10 Uf S.^l i.3L 3,-3.5 f.fj Bolton rf.^? IIO-V 1,113 mr Tf.n /Oi'3^ :?.y/ S.M ^JL 3.¥l SJf Lxi Merrill fi2l DSif u.n 11 ^ tL.fJ f3.Cl Uf s.n _ i.H 3.17 Z.U Kimball Sullivan Field \ / \ \\ \ w / Total weekly sales expense Figure 1: This expense report has reduced the expense accounts of salesmen materially in one concern. The upper set of figures after each name shows the total expense for the week. The lower set are small items which the sales manager believes could easily be eliminated. 5 SALESMAN'S DAILY REPORT INSTRUCnON-fiead carefully. Reports must be number of dozens and net amount in dollar* and cenw of mde out and maifed at the Cose of each day's ^1^ '^nrtt^n::^^'' :"Zl 'TZlZ business, showlnii every call made and order taken. In „|unin. write auch information as Is needed for olfiiCB tk» columns lieaded "Jobber, Retailer, Department Store'- ,^^^6 and special definite information lor following up write names of dealers called on. Place the letters J. R. y^^^ work from the office. After all orders to be filled / or D. In first column to right of dealer's name, to indicate ||,fough jobbers, write jobber's name in remarks column. / whether « jobber, retailer or department store. Show bb careful to give all information called for on this fepon.j Jobber Retailer Department Store J. R. D. Sold Today Dozen Direct Orders Net Value Stockl\ Stal (Yes o/ 1 UA:^XLLf(^yi.tri 2 jcrLiJ^) A G^jft: C^ . s ro /T ^f 4, 3 feA./n./ ^ r^^^^^J 9- ro \ 4 (]L. h.^.-fU-^ C'^ I XI 1- ^ ^ 1 --7 b (l 8 7 8 9 10 / 11 12 13 14 15 16 17 18 19 20 i Totals Figure 2: A daily report from salesmen which gives information about every call made, is required by one concern. The left half of the record is shown here and the right half on the opposite page. The report indicates whether the concern called on is a jobber, retail dealer, 6 Date Salesman Town Turn-Over Orders Net Value Remarks ^j'^^£ J^jiAaj --kj lj^J ^J^ /A 2L ^ ~XX't/%yv»/«iy Q'PjJ^£ccf. ^enlO/lMI^^ Of i^ 1 street Buyer Jobber / Avail Essentl. Handles and Pushes ^^ Date Att. Fr Trio Ord D'l'rs.Viewp'l Disp? Push? Wlly not ours J When Chance Cki-op Office 1 Sales Effort | Y T E J ^ /I R V 1/ N N AT A H AN T AT W AT P Olheri MQ D YR. Dale 'i^'."%P-- Done 1 r 19 If 1^ *-(/>2A / 4 fi ^ r- 5 fi 6 1? A '• ==: — ~ — = - 7 ' ^ ^ — " 12 13 13 14 o 14 fB V ; V ^ W J 15 Figure 15: Valuable information concerning dealers is seciired for one concern by its salesmen through cards similar to this. All lines handled and pushed are indicated, as well as data on the store management. Name Date Called Address City Business Buyers Name Use For Size Will Last Appear Satisfied Demonstrated Quoted Remarks iVIake a separate report for each system used or recommended. Write additional remarks on reverse side. Figure 16: When a salesman for one concern finds a prospect already supplied, he notes the facts upon this card, which is filed at the main office. It acts as a reminder to the salesman to call at a future date* 28 WHAT ABOUT REPORTS? 29 "He will charge a fortress in the face of a withering fire; but he feels hke running when asked to check over the items in a wagonload of supplies. Still, if he has been properly trained, he knows that the com- missary department is as essential to the success of an arm}'' as brave shock troops. ''He has no respect for a sales manager who does not keep himself and the organization informed of conditions, who does not get the right kind of reports, analyze them, draw helpful conclusions from them, and use the conclusions to advantage. "Sales managers who have not the courage and initiative to call for reports, to compile and to analyze data from them, and then to make their conclusions the foundations of policies, ar not respected. Far from gaining popularity, such sales managers often are called 'mossbacks' and 'sleepers' by their men. A salesman wants to know that his manager is wide- awake — demands that he be full of aggressiveness and initiative — constantly starting new things, and he feejs confident of a bigger future in a concern which has such a man at its helm. "The wise sales manager, having himself been a salesman, knows these facts and governs himself accordingly. He is not afraid to put out any set of report blanks, provided he can show his men that the filling out of these blanks by individuals will enable the home office, by getting first-hand knowledge of conditions on all fronts, to devise plans that will make the work of each individual salesman easier. "He is never timid in insisting on the prompt receipt of reports, because he knows that his men have brains enough to see that a concern which works in such a way is alert and far-seeing; that it is going to lead competitors and is a good concern to work for. "Modern salesmen are not children. Once show them that any report system is for the good of the 30 BOOSTING THE SALES VOLUME entire sales force and they will gladly cooperate in making the reports effective. But they insist on know- ing that the facts which they put into the reports are compiled, analyzed, and results put into action. *'Make salesmen see that if many men report dismal failures for the same causes — that if enough men say the customers claim the price is too high, or that the quality of the goods is too poor — this information in their reports will be a factor in determining the policy of the house. Then they will look upon filling out reports, not as punishment to be endured, but as an opportunity to be embraced. THESE POINTS, WHEN EMPHASIZED TO SALESMEN, HELP INCREASE THE VALUE OF REPORTS "What a salesman objects to at the bottom of his heart is not the necessity for making out reports, but the feehng that the information which he and his fellows send in is called for merely as a question of routine — that it will not be compiled and analyzed and acted upon by the concern. Then a report system appears to him as tyranny of the worst sort. "Never tell a salesman to set about a task merely because you have the authority to issue orders. Give him reasons for your action, prove to him that the action is for the good of the force as a whole, and he will not only acquiesce himself, but will back your policy to the limit. But having once given reasons and issued orders, then hold every individual salesman up to obeying those orders implicitly. "Make your men realize that report blanks pur- posely are made curt — that their apparently dry statistical appearance is a matter of intention — that they are designed to contain as much concentrated information in as small a space as possible — that their rigidity — the system and method insisted upon in filling them out — is necessary: first, to save as much SALESMAN'S REPORT Salesman Date 19. rirm Buyer Town Stale It a Line Yaid Dealer, give name and address of Home Office Pealer [~] Dealer our Line Exclusive ["] Contractor r~\ Consumer r~\ Put>lic Official J~] Mfgr rn Dealer also Contractor or Cons, rn Architect ri Enflineer r~\ Public Commissioner r] If a dealer, how does he rank with other dealers in town? Answer: 1st ["] 2d n 3rd r~\ Has dealer switch into his yard? If so, what road? Does he take team traik delivery? If so, what road7_ Preference as to delivery, if any Average No. of barrels handled per year? Warehouse storage capacity for how many carE?_ If handling our brand with other brands, what percentage of business are we getting? If not handling our brand what are our prospects? What brand being pushed? If competitive brand, why?_ I quoted $ Competitors quoting. Received order for Has in stock bbis Should beinmarkef. ts dealer well supplied with advertising material? Does he use it?_ What form of advertising does he prefer? Is warehouse sign-Old r~] New r~l Displayed, Yes |~l No [~] Is it in good condition? r-j Yes r] Norn II a Line Yard, do they operate a silo or elevator construction 'It^^'™"''? If consumer or contractor, from whom does he hny? '^"'y REMARKS: Figure 17: A report like this one not only shows the amount of the order, but gives complete information about the dealer as well. This includes his standing compared with other dealers; arrangement of his switching and side-track facilities; his delivery system; and so on. 31 COMPARATIVE NET REVENUE FROM SALESMAN Vonr SnloKmnn Class of Goods Total Sales Direct Cost Gross Revenue Expense of Selling Net Revenue from Sales Cost Selling Price Freight Salary and so forth Travel Miscel- laneous Total Percent- age of Sales Percent- age of Direct Cost Per Unit Total A lMo(\<^ ■3(}Oo'^ ■ Of iLoo"^ \7S- ^^ ifo.n Uc Wl(h^ 3/f. 73^. B / c D E F G Totals Figure 18: This form gives the comparative net revenue from each salesman of one concern. It can be used over an entire year, and enables the management to pass judgment accurately upon the value. SALESMEN'S V/EEKLY EXPENSE REPORT WEEK EHDINGJ^kzCai^aTliaiy Date Break- fast Din- ner Sup- per Total Meals Bed Total Rail- road Laun- dry Bus Miscel- laneous Miscel- laneous Total Sales % Sunday .35- .TT MO 1-70 ZbO 3.7d 3.7a Monday .35- SO SO I.3S- 166 335 /.7S .2i" .^r 6M ^a.0 % Tuesday Wednesday Thursday Friday Saturday Total Cash on ha id $ Expenses fo r week linnrt , Balance on c 3 c :> Figure 19: One concern's weekly expense report for salesmen is reproduced here. The simplicity of this sheet wins favor for it from ^usy salesmen. Sales are given, and the percentage cost of selling. 32 WHAT ABOUT REPORTS? 33 as possible of the salesman's time and labor; and, second, to save the concern labor and cost in handling them, and thereby to make possible a saving in over- head expense, and to leave more money to be paid to the salesmen in salaries and commissions. "Usually several types of daily reports are required. Just as many houses print upon the top of each sheet of paper on a memorandum pad, 'Take up only one subject on this sheet,' so it often reduces confusion if a salesman makes reports of different sorts upon blanks differently designed. ''For instance, there may be the daily report blank on which the salesman reports the time he arrives in a town, where he may be reached during each of the following two or three days, the dealers called upon successfully, dealers called upon without success, reasons for failure to secure orders, the condition of stock of each dealer called upon, advertising material left, advertising material which the concern should mail, when each dealer called upon will be in the market, prices and terms offered, estimated amount of goods in 'our' Hne, what lines the dealers push hardest and why, whether or not a dealer advertises, what estimated percentage of a dealer's consumption is furnished by 'us' and what percentage by com- petitors, names of competitors, reasons why the competitors are preferred, and — with reasons — names of dealers not called upon. "A second type of report might be made out when a salesman 'made' a town for the first time. Often it might be to the advantage of the concern to know the population of the town, the class and racial type of the population and that of the surrounding country buying in the town's local stores — whether agricultural or industrial, whether dealers occupied stores, offices, or warehouses, whether they were located on corners, main or side streets; the appearance (whether good, 34 BOOSTING THE SALES VOLUME average or indifferent) of each dealer's place of business, the type of the management (aggressive and up to date, or conservative), whether or not the town made large or small sales of goods in 'our' lines, the name of the buyer for each dealer; a size-up of his character- istics; each dealer's local reputation for paying ; refer- ences (persons of whom the salesman inquired) on new firms in the town or towns. "Another report blank might be used for salesmen's expenses — railroad fare, Pullman car, meals on the train, hotel expenses for room and meals, taxi or bus hire, and baggage expense. "Many concerns, needing but little information of each type, are able to make out report forms which will contain on one card all of the information they need. But no matter how much or how little infor- mation a concern asks from its men, it should let them know that it notes all the information they send in — that it never asks for a point that will not help. It is only by so doing that it can secure the full co- operation of its men on the road." This sales manager has mentioned the possibihties contained in reports on customers and prospects — the third of the classes under which we are considering salesmen's reports in this section. In one clothing-manufacturing concern each prospect who wishes to handle the line is asked to fill out the report card shown in Figure 13. This is a 4-by-6- inch yellow card. A blue card of the same size, shown in Figure 14, is filled out by the salesmen. One je^'elry concern asks its salesmen to furnish detailed information on the form shown in Figure 15. One of the valuable features of this report is that it requires only checking by the salesman and is there- fore easily filled out in a short time. The sales manager of one concern which makes a high-priced specialty has devised a simple customer WHAT ABOUT REPORTS? 35 report (Figure 16) which shows what model of machine the customer or prospect is now using and about when he will be in the market for a new machine. These reports serve as a follow-up and enable the company to remind salesmen when to call again. Salesmen's reports for another concern not only show the amount of the order sold but also classify the customer according to his Une of business, his standing in his community, the average amount of his business, brands of goods handled, and the amount of adver- tising done. One report is shown in Figure 17. In this section, then, has been described how many successful concerns obtain effective records of their sales and expenses, and how they get a line on their customer's business. Also we have seen how sales managers handle this reporting to overcome the preju- dice many salesmen have against doing the necessary clerical work attached. The fullest value of these records cannot be obtained, however, unless a concern has some sort of record which will show the comparative net revenue from each salesman. Such a record (Figure 18) has been of immense value to one firm in determining the exact worth of each man on the road. In closing, perhaps we could sum up the situation no more logically than by requoting from the sales manager who says on page 29 : *' Sales managers who have not the courage and initiative to call for reports, to compile and to analyze data from them, and then to make their conclusions the foundations of policies, are not respected. Far from gaining popularity, such sales managers often are called 'mossbacks' and 'sleepers' by their men. A salesman wants to know that his manager is wide- awake — demands that he be full of aggressiveness and initiative — constantly starting new things, and he feels confident of a bigger future in a concern which has such a man at its helm." "P\URING the Great War business men all over the country came to know the building at Washington which housed the War Industries Board. There men met to learn the Govern- ment's needs and to lay plans for gearing their particular enterprises to the nation's enterprise. Thus the building may be said to symbolize the cooperation and the interchange of economic thought always essential to the greatest progress. The new structure in which the Shaw Publica- tions are now housed is a permanent counterpart in stone of the building that business men knvw so well during the war. Wi- -s ORGANIZING FOR INCREASED BUSINESS Edited by THE BUREAU OF BUSINESS STANDARDS of the A. W. SHAW COMPANY SECTION 6 Do Sales Contests Really Pay? DO SALES CONTESTS REALLY PAY? TO do away with what had come to be regarded as an unavoidable depression in business during the summer months, a manufacturer of office furniture decided to stage a summer contest for dealers and dealers' salesmen. He held the firm con- viction that there was no need for a great falling off in business during the summer months. During the first summer the contest was held there was a marked increase in sales, but the results the second year were even more remarkable. June, July, and August were the months selected for the drive to increase business. In June of the second year the sales doubled over those in June of the first year, and were 20% greater than any previous month in the history of the company. The winning dealer made 694% of his quota. In July, dealer sales showed an increase of $55,000 over the sales of July the previous year. August was another record-breaking month — the winning dealer making 822% of his quota. These gains are shown in graphic form in Figure 41. This contest proved to the company the value of a determined drive to push sales during the dull season, and it is for this purpose that business men find the sales contest most useful, investigation indicates, although another purpose for which it is generally used is to secure a wider distribution of products. We may then, for purposes of discussion, classify sales contests as follows: 75 Copyright, 1921, by A. W. SHAW COMPA^fY as a part of the Shaw Sellins Series 76 BOOSTING THE SALES VOLUME L Dull-season sales contests a For dealers b For salesmen 1. Based on current events 2. Based on love of sports 3. Based on salesman's pride IL Wider-distribution contests In beginning our discussion of the first of these classes of sales contests, let us go back and see what made the dull-season sales contest — the one men- tioned at the beginning of the section — so successful. The two big factors in its success were the carefully worked-out methods for keeping interest at a high pitch, and the unbounded energy of the advertising manager, who had the contest in charge. To begin with — as an "appetizer" for dealers — the company held a better-business show during March and April. A first prize of $75 and a second of $50 were given to the two dealers getting up the best window displays during the show. In addition, 20 prizes of $10 each were given to dealers' salesmen who made the largest individual sale which could be at- tributed directly to his employer's window display. Prizes also were given salesmen for the largest number of sales of all goods and for the largest total amount of sales of goods shown in the windows. This plan in itself increased sales, but its chief object was to arouse dealers and their salesmen for the real contest which followed. The big contest began on June 1. Of 325 dealers, 278 were eligible. ''Experience had shown us," said the advertising manager, **that merchandise prizes are more eagerly sought after than cash prizes. Therefore, for the first month we offered these six prizes: First, a watch; second, a traveling bag; third, a camera; fourth, a salesmen's portfolio; fifth, a safety razor; and, sixth, a folding umbrella of practical design. DO SALES CONTESTS PAY? 77 "These went to the dealers' salesmen and proved such popular prizes that we duplicated them for the July and August contests. And in the fact that we ofifered prizes for each month's work instead of more valuable prizes for the entire three months' contest period hes one of the secrets of our success. I do not Made Annou June 1916 June 1917 July 1916 July 1917 August 1916 August 1917 ncement of the Fall Campaign of Advertising ' :-,.^55:*;-:^;=»i^K.-.:S-M-;-Wl ' Results of second summer contest. Figure 41: When summer sales fell below the year's average, one manager staged a summer sales contest. This figure shows the increases during the contest months over the same period in the previous year. believe it is possible to sustain continued interest in a contest over a longer period than one month." In addition to the prizes for the dealers' salesmen, each month cash prizes of $25, $10, and S5 were given to the dealers having the best window displays. Also, each dealer who made 100% of his quota for the three months received a gold button inscribed with his name, the name of the company, and 100%. To keep the company's own salesmen from feeling entirely out of it, five cash prizes each month of $35, $25, $20, $15, and $10 were given to its salesmen 78 BOOSTING THE SALES VOLUME turning in the largest percentage of their quota for these months. Sales made through agencies in the territories were credited to each salesman. Interest in the contest was kept at a high pitch through a four-page house-organ ''newspaper" pub- lished each week. The style followed was that of the so-called sensational newspapers. Big, black headlines announced the names of the leading dealers and sales- men. Photographs of the leaders in the race appeared on the front page. On the inside page of each issue were listed the prizes and contest announcements. Of course, the standings of the dealers, dealers' salesmen and company salesmen also were announced. "In this connection we discovered an interesting psychological fact," declared the advertising manager. "At first we gave all the standing in percentages. We soon found, however, that some of the dealers did not understand this method fully. So we changed and gave the standing of the dealers and their salesmen in one, two, three order. There was an immediate jump in interest. We left the standings of our own salesmen in percentages as they were familiar with that method and preferred it to the actual sales figures." THIS NOVEL PLAN NO DOUBT CAN BE USED TO ADVANTAGE BY CONCERNS IN MANY DIFFERENT LINES Still another feature which added a strong human- interest touch and served to furnish a ''high light" during the month was the plan of naming each month's contest after some one of the company's officials. It so happened that the sales manager had a birthday the middle of June, the secretary one in July, and the advertising manager one in August. All these men were well known to many of the dealers. So June was made "Bob" Tucker's month. All the sales talk in the house-organ "newspaper" was based on the plea of piling up a big volume of sales for him. DO SALES CONTESTS PAY? 79 On his anniversary day a special effort was made to celebrate "Tucker's day" with big sales. That the plan was successful was indicated by the flood of telegraph orders which came in on that and the following day. The sales for the day itself were far ahead of the sales for any other day during the month. The same plan was carried out successfully in connection with the secretary's and the advertising manager's birthdays the following months. During the three months of the contest the company made three direct mailings to lists of prospects fur- nished by the dealers. These mailings went out on May 26, June 25, and July 25, and called the attention of prospects to the goods and to the national advertis- ing which was appearing at the same time. An indirect but valuable result of the contest was the increasing of the mailing list from 11,000 to 60,000 names. In the last contest number of the weekly house- organ "newspaper," photographs of all the prize winners were pubhshed, and a large display advertise- ment announced plans for the fall advertising cam- paign of the company and gave the dealers a hint to get a start after the fall business. Another summer contest for dealers which brought big returns was carried out by a concern which manu- factures a medium-priced machine specialty. This contest was conducted on a quota basis, each dealer being given a quota based on previous sales. The standing was determined by the percentage of the quota sold by each dealer: Dealers were divided into two classes, "A" and "B," according to the size of their business. Cash prizes totaling $1,275 were offered to the two classes, divided as follows; Class A: First prize, $500; second, $200; third, $100; fourth, $50. 80 BOOSTING THE SALES VOLUME Class B: First prize, $250; second, $100; third, $50; fourth, $25. The contest lasted six weeks. Interest was kept up by a daily bulletin. In it standings were given in percentages of quotas, and mail and telegraph orders also were reproduced from time to time. During the first week one dealer sold 33% of his quota, another 27%, and a third 25%. At the begin- ning of the final week one dealer had sold 106% of his quota. The winning dealer in Class A sold 204% of his quota — more than he had sold in the preceding six months. The winner in Class E sold 125% of his quota. More sales were made in one city during the last week of the contest than in any other preceding month in the history of the company. General results show that July sales increased 20% over June and August sales 17% over July. August was the fourth largest month in the history of the company. This contest also was followed by an intensive fall advertising campaign. Valuable as these dealer contests appear to be, investigation indicates that manufacturers and whole- salers generally lean more strongly toward contests for their own salesmen as a means of developing busi- ness during the dull seasons. The experience of many sales managers is that to keep salesmen's interest in contests keyed to a high pitch it is necessary to tie the contests up to some current event or to appeal to their love of sport or their pride. A contest based on interest in a presidential election proved a business-getter for one wholesaler. Six weeks before the election the company published a notice in the salesmen's bulletin calling attention to the fact that the country would elect a president in six weeks. ** Let's beat the people to it," wrote the sales man- ager, "and choose the president in a preelection DO SALES CONTESTS PAY? 81 contest. Polls will open October 1 ; close October 3. Get your votes in early." This was the plan: Each division manager, branch manager, and salesman was asked to fill out a "vote" form indicating his choice for president. These blanks were all to be in before October 1. At the end of each week the total business done by the sales organization was taken as 100%. Then it was divided between the candidates. If a salesman was a Wilson man according to his "vote," every order he sent in was credited to the Wilson vote on the percentage basis. On every order sent in during October the salesmen wrote the name of the candidate to whose credit he wanted the order placed. This plan met with an enthusiastic response because most of the salesmen were interested in political affairs, and linking their work with the national event caught their fancy in a decisive way. HERE'S A HELPFUL CONTEST PLAN THAT INCREASED ONE FIRM'S BUSINESS 60% IN ONE YEAR One firm used a "600-mile automobile race." This contest lasted one year — December to December — and increased business 6 )% during that time. The sales manager prepared a chart showing an automobile race track with a judges' stand, starting posts, a pit, grandstand, and all other equipment. Each salesman received a key number and his standing in the race was indicated on the chart by placing his number in a circle opposite the number of miles he had gone. A copy of this chart was sent to each salesman each month (Insert III). He could see easily where he stood and could compare his standing with that of the other salesmen. In determining the amount of sales necessary to advance one mile on the track the sales manager took into consideration the difference in outlets for the 82 BOOSTING THE SALES VOLUME company's products, the comparative size of the sales to each class of business, and the ease of sales. Careful analysis and a comparative study of the sales records over five years indicated that on the whole it was easier to sell to factories, wholesale houses, and public institutions where the unit of sale was larger, than to sell to retail stores. More sales could be made to retailers but the unit was much smaller. After this study the entire hne was divided into four classifications and the number of dollars' worth of sales necessary to advance one mile in the race was determined as follows: Factory $150 (Wholesale oil, public institutions, government) Dry cleaning 100 Retail 50 Paint oil 40 "The same equipment may be sold to these four classes of business," said the sales manager; ''that is a salesman can sell equipment to a big factory which is exactly the same as that sold to retailers and so on. "Nine times out of ten our experience has shown that it takes a salesman longer to sell a factory than it does to sell a general or hardware store. In selling a factory usually it is necessary for the salesman to go over the ground and conditions surrounding the handling of paint oil, lubricating oil and gasoline, by a factory, and to suggest improvements and prepare detailed drawings showing the proposed installations. "This, of course, requires considerable time and involves expense. Often it will take two or three weeks and sometimes two or three months after a proposal of this sort has been submitted to the pur- chasing agent, engineer in charge, or manager, before a definite decision regarding the purchase is made, as in most instances, the cost of equipment of this type runs into a fairly large amount of money. ? 83 ng to grocers, ; required to lent. He can ■ prospects as e, the equip- r age basis as lling all four alesman who expenses paid my held the is were given 3t amount of was given to il volume of i track. The largest per- :a received a :ed out, it is of the five tance on the the prize for lis is logical sell a much : track than I high pitch led a house progress of his race his a salesman plished any itter feeling 1 their own INSERT III: One sales manager worked out starting posts, a pit, grandstand, and so on. A Q sales contest and called it the "600-mile auto- copy of this chart was sent each month to every mobile race." He prepared this chart, showing salesman of the concern during the contest, an automobUe race track with a judges' stand, The appeal to the salesman's sporting blood was contagious, and every man redoubled his efforts. compare his position with others in the race. Each salesman was given a key number, which The contest lasted one entire year — from De- indicated on the map every month what his posi- cember to December — and the business of the tion in the contest was. Then he could easily company increased over 60% during that time- DO SALES CONTESTS PAY? 83 "On the other hand, the salesman selHng to grocers, hardware dealers, and the like, is not required to spend so much time in selling the equipment. He can usually call on five or six times as many prospects as the factory salesman. At the same time, the equip- ment he sells usually involves less money. "We consider that the relative mileage basis as worked out is fair to the salesmen handling all four classes of business as a regular thing." The grand prize awarded to every salesman who finished in the race was a trip with all expenses paid to the annual convention of the company held the last of December. In addition, five prizes were given to the five salesmen covering the greatest amount of mileage on the track and a sixth prize was given to the salesman obtaining the largest total volume of business, regardless of his standing on the track. The branch office or sales division selling the largest per- centage of its previously established quota received a large silver loving cup at the finish. It will be noted that on the basis worked out, it is possible for a salesman to win the first of the five grand prizes for covering the greatest distance on the track and still not be in the running for the prize for the largest total volume of business. This is logical enough, because factory salesmen must sell a much larger volume to advance a mile on the track than salesmen selling to retail stores. In order to help keep enthusiasm at a high pitch during the contest the company published a house organ. This contained comments on the progress of the contest, and as each man finished his race his picture and a write-up of his ability as a salesman appeared in the next issue. "If this 600-mile race had not accomplished any result other than the promotion of a better feeling among our salesmen toward the men in their own 82 com to e C sale whc and larg be r A foui of s. det( Fact Dry Reta Pain clas! a sa is e: <( thai it d a fa go i han fact det£ inv( wee pro] chaf a d( in B nans DO SALES CONTESTS PAY? 83 "On the other hand, the salesman selhng to grocers, hardware dealers, and the like, is not required to spend so much time in selling the equipment. He can usually call on five or six times as many prospects as the factory salesman. At the same time, the equip- ment he sells usually involves less money. "We consider that the relative mileage basis as worked out is fair to the salesmen handling all four classes of business as a regular thing." The grand prize awarded to every salesman who finished in the race was a trip with all expenses paid to the annual convention of the company held the last of December. In addition, five prizes were given to the five salesmen covering the greatest amount of mileage on the track and a sixth prize was given to the salesman obtaining the largest total volume of business, regardless of his standing on the track. The branch office or sales division selling the largest per- centage of its previously established quota received a large silver loving cup at the finish. It will be noted that on the basis worked out, it is possible for a salesman to win the first of the five grand prizes for covering the greatest distance on the track and still not be in the running for the prize for the largest total volume of business. This is logical enough, because factory salesmen must sell a much larger volume to advance a mile on the track than salesmen selling to retail stores. In order to help keep enthusiasm at a high pitch during the contest the company published a house organ. This contained comments on the progress of the contest, and as each man finished his race his picture and a write-up of his ability as a salesman appeared in the next issue. "If this 600-mile race had not accomplished any result other than the promotion of a better feeling among our salesmen toward the men in their own 84 BOOSTING THE SALES VOLUME ranks as well as toward the company in general, we would consider that the time and effort had been well spent," declared the sales manager of this concern. Another concern took advantage of the love of sport among its salesmen by starting a football contest. This was held one month late in the summer and gave the organization a flying start after fall business. A schedule of games was arranged for each week in the month, sales teams of practically equal strength being matched against each other. Each $100 worth of business secured constituted a goal. The six teams in the race were divided into two leagues, designated asthe"school-of-experience league" andthe "university- of -hard-knocks league." Interest was maintained dur- ing the contest through pink ''sporting extras" in the house organ, giving the score by quarters and the general ''football dope" of the contest. THE SALES MANAGER WAS WORRIED BUT HE GOT OUT OF THE HOLE WITH THIS CONTEST PLAN Another sales manager — a man who has charge of the sales of a sideline for a concern which makes a leader of a high-priced specialty — brought baseball to his aid at a time when sales prospects were anything but bright. It was one of the first summers of the war — before the United States was in. Conditions made it harder to get orders in the main department of the business and many of the salesmen were neglecting the sideline entirely. The sales manager was worried — very much worried, you will understand. He says: "Now you know what a man does when he is worried if he is a golfer. I did it. I don't remember whether it was between the eighth hole and the ninth, or between the eighteenth and the nineteenth, but one Indian-summer day in October a flash came. My golf score was forgotten, and before bed time I had worked out a little war game all my own. DO SALES CONTESTS PAY? 85 "If the men were bound to worry about something, I proposed to make them worry about each other. I had noticed that baseball extras were still selling to people who did not stop to read the war bulletins. On the surface cars, elevated and subway, I saw men skipping red-ink war headings to read how the Giants were getting on with the Sox. Here was something which out-absorbed war with many. "Twenty-four hours after my flash I was launched as a baseball magnate. I had branch offices in major- league cities, in minor-league cities, and in the bush. New York, Pittsburgh, Chicago, San Francisco, Phila- delphia, Boston, St. Louis, and Washington were organized into a major league. The balance of my 56 branch offices were divided into groups of eight. Each was a league with a seven months' schedule worked out. "I did not know what a hornet's nest I was stirring up. If you want to get the real pulse of inter-city rivalry, don't go to the chambers of commerce or the boards of aldermen or the daily press. Consult the branch sales managers in the rival towns. I know. "The plan was this: Each game lasted a month. Each day was an inning. In each game the winner was the city which showed the greatest percentage of sales increase over the corresponding month of the year before. It was a simple plan. "Each league operated on a basis of its own. Each month each city played another city in the same league. Seven months completed the schedule. "The players — the salesmen — on the championship team in each league were to receive a bonus of 20% on all their sales in excess of their sales for the cor- responding seven months in the preceding year. "Now, how did it work? "Oklahoma City, on reading the conditions, wrote: *We are out of it. Our gains last year were too big. We are stacked against too strong a pace. However, 86 BOOSTING THE SALES VOLUME we are going to try not to do any worse than Cleveland did in the American league.' "Inter-city 'kidding' matches — in bleacher slang — soon had the 56 teams on their mettle. ** Spokane wrote: 'We are going to beat that short- grass bunch down in Wichita if we have to work nights to do it.' Baltimore promised to Hake the ice out of the icebergs in Minneapolis.' Boston said: *We don't allow much talking from the bench, but keep your eye on the scoreboard.' New Orleans in- vited me to watch their smoke all the time. "At the end of the first month my score sheet showed that 25 out of the 56 offices had shown an increase of better than 25%. Poor old Baltimore, with a 40% increase, took the loser's end of the guying from Minneapolis, v/ith 70%. Scranton, with 45% increase, had to swallow the jibes of its competitor for the month — Columbus, with 90% to show. "Gains didn't count. Games were the only criterion that gave the branch manager a right to live in the eyes of his fellow managers. The percentages in the different leagues appeared in my baseball extra, 'Across the Field,' which went out to the sales force. " 'Across the Field' showed cartoons of the demon pitcher for Detroit, the two lady pitchers from the Middle West and the national commission — with prods and jibes contributed by winners and losers. "It was a publication without dignity. It out- heralded the news headlines in typography. Pitts- burgh players, at the bottom of Group 1, with a per- centage of 0.000, had to grind their teeth for the next 30 days while they looked at Philadelphia at the top of the list with 1,000. But they had their turn. Soon down came Philadelphia and up went Pittsburgh. "The agony of being at the bottom of the league, I believe, was never felt by a professional ball club as it was felt by these managers and players who saw their WHAT MAKES SALESMEN WORK HARDEST TEAM Small '""* 2 3 5 6 7 8 9 101213141516171920212223242627282930 Total per Day 5 $fili>sH3H^/o/D i s ^^ i 1 :>■& ic/cii m Watson 10 15 $l*>l\ 10 % 5 ^i 1 0.5 S 1 ^ ^ h % 4'i^ VnilV6 H5 Ross 6 ^5%lillbJi^S^l>4l o1>1 oi ^ 1 i> 4ihoKi ls% Reeves 1/}\7lM b 1 >\ 3. t c4 .Hls.jb1 "f 1 S ^"1 031.(0 1 t> ^ 1 1<\IUHIC SSS Warren 18 /7 % at !U s^stih /o ^ 5 i,f k3LlQ.I5aj94i(, Ait James 8 jci/iislipH^ilf'ii'i 3 1 J. 5*>1 4 ^I'ilCll IkO Sherns 15 H lll%13.lt> 1 i 6 kIS'lO 7 lo jf^lS./04 ^ 1 "^ll bi^lb -236 Thain 8 6 5 7/^^ ^/^>/ i> S> ^ ?> ^ M/d 1 S 1 5 i StO^ JA !«,% Houston 20 i^rajfni6iA ois.'i II %n> y/« (? (,^ 2.^ 6li:UH?^ 3/6> Adams 12 IC 7 l5im_lklA 8 ^ i> ^ <5 C 6 4^ i 5^9- 3 Ic^i ItlO-lbauSJ Total 125 a/ si^ufl^iii iis-Mfiiiifiis^i iilCsuiemisAbi^Gsi^M iiii*i I - Figure 42 : A baseball contest was successfully worked into one selling organization, and sales increased over lOSc in a month. Eight cities were organized into a major league. Each "game" lasted a month, and every day was an inning. This figure shows the score card. 87 88 BOOSTING THE SALES VOLUME names and records put down in irrefutable percentages of won and lost, up and down. "After losing two games running, the Richmond manager asked his men in a Napoleonic bulletin 'if they had any fighting blood in them.' They answered, 'Yes!' in the next game, at the expense of a southern neighbor which put up a good fight. "In all my experience with selling I have never seen such enthusiasm over business-getting. It was no longer business. It was sport. A man's honor was at stake. The city's honor was at stake. And the manager was there to see that honor was not lost without a bulldog struggle to win. WITH THIS TESTED PLAN EVEN THE LOSERS HAD A CHANCE IN THE LONG RUN TO WIN SOMETHING "Of course, after a few games each league had its trailers. To provide a stimulus for these also-rans, we promised a place in the national championship league to one team which would be chosen by the national commission on the strength of their all-around work. The national champion was to get a cup. I found that many teams ranking low in their respective leagues still kept pushing ahead with the hope of coming under the favorable eye of the commission. "Each branch office posted a blackboard daily score- card (Figure 42). Each man's daily sales were shown. If his sales for the day were not good, it was more than a personal disgrace — it was an office dis- grace. Commission salesmen are liable to loaf for the first few days of the new month. They have passed the climax. They have their commission checks. A little rest sounds good. "But here was a scoreboard staring them in the face. A new responsibility came over the men. They were no longer working for themselves. They were working for the office. The high-scoring men took no DO SALES CONTESTS PAY? 89 pity on those with low scores. They got after them hard. Work started promptly the first day. "On these scoreboards, too, were posted the kidding letters from the city they were playing that month. I "As I look back, it seems to me that my contest gave the salesmen the feeling of proprietors. Men in business push ahead — for what? Profit? Yes. But isn't the joy of winning one of the strong spurs? I "Now I can look over order sheets and thank my stars for baseball. My sideline, instead of slipping out of the salesmen's minds in the midst of that summer's depression, became a strong, live issue. The sales records show it. The second month saw more cities in the more-than-25%-gain class. The third month, 15 offices showed better than a 40% increase over the corresponding month of the year before. "Columbus, with a good record the previous year, showed for one month a gain of 153%. Detroit stood high in percentages of increase. "I believe our plan can be applied quite effectively to a small sales organization as a spirit-rouser, as well as to a large one. WTien you get right down to it, any athletic contest represents hard work. The players go into it voluntarily. Why? For a chance to win. "My 56 teams were working hard, but they scarcely knew it. Even buyers caught the competitive spirit. In Milwaukee, for example, there was a large consumer of our class of product. We had worked on this con- cern for four years without success. One of our sales- men called and outlined the baseball contest. The manager showed a keen interest. To our salesman's surprise, he called in his purchasing agent then and there and instructed him to buy from us in the future. "Turning to our man he said, 'jMilwaukee has got to win this contest in any event!'" A similar appeal has been used with good results also by a concern in Detroit. The plan, as used in this 90 BOOSTING THE SALES VOLUME organization, calls for a division, according to sales quotas, of the sales force into leagues. There are 10 leagues which compete in the vigorous contests that extend through the summer and into a post-season championship game at the home office during the organization's annual sales convention. Each of the 10 leagues includes agencies with similar sales quotas. Each agency ranks as a nine or team. There are 10 teams in each of six of the leagues, and the remainder of the leagues have 12 teams each. Each team plays nine games. The games last 10 days, and the scores are based on the percentages of the quotas obtained during the season. The managers of the 10 winning teams are taken to the annual convention at Detroit at the company's expense to play a picked team of star salesmen for the real baseball championship of the selling force. The manager of the team that makes the best three months' showing automatically becomes manager of the team of managers taken to Detroit ''on the house." A special series of bulletins keeps everybody in- formed of the contest's progress. The bulletin is called "The Scoreboard," and whenever practicable it is written in the same style as baseball reports in the newspapers. Cartoons and photographs of the con- testants frequently are featured. Next to the interest in current events and to the love of sport, manufacturers and wholesalers have found that the appeal which will get best results from salesmen is that to his pride in his organization and in his own achievements. How this appeal was used successfully is well illustrated by a story told by the head of a western wholesale concern and showing its effect on one salesman of the force. This salesman had been working along steadily for several years, getting within striking distance of his quota each year and earning enough to live on. One DO SALES CONTESTS PAY? 91 morning he opened the envelop containing the weekly bulletin from the office and saw in a large headline in red ink the words "Are you going to be there?" Under the heading was an article calling attention to the fact that to get his expenses paid to the conven- tion at the factory it was necessary to reach a certain percentage of his quota. The article gave a list of a number of salesmen who already had made their per- centages and would *'be there." Suddenly this salesman realized that if he was not there his absence would be noticed. It gave him an incentive. He no longer went about his work in a half-hearted way, and he no longer measured his effort on a standard which would merely enable him to ''get by." He wanted to be at that convention. WHEN THIS SALESMAN CHANGED HIS SALES HABITS HE FOUND THAT BL'SINESS PICKED UP ALMOST AT ONCE Instead of getting up at a time when he thought his first prospect would be at the office he made calls two hours earlier than he had ever thought a business man would be in his office in the morning. To his surprise he found he could make three or four calls and sell goods before his usual time for be- ginning work. Other salesmen were not in line to keep him waiting. Also he shortened his noon hour and worked later instead of slowing up at three or four o'clock as the other salesmen did. He found appoint- ments often could be obtained easier at the early and late hours. He found that he could often get appoint- ments in the evening to advantage. In place of working three or four hours a day with perhaps one hour actually with prospects he found he could work eight or ten hours with three, four or some- times five hours actually with prospects. Because he took more interest in his work and gave more time under the special incentive his sales increased 92 BOOSTING THE SALES VOLUME in proportion and he easily made his quota and won his place at the convention without trouble. This company also has a "Pace-makers' Club" for salesmen and every man on the force tries hard for the honor of being included in its membership. Effort is further encouraged by a system of bonuses which has been worked out for each man making the club. His first year he receives a bonus of $50 for gaining membership. The second year it is $75 ; the third year, $100; the fourth, $125; and the fifth consecutive year, $250. These bonuses are in addition to full expenses covering a trip to the convention. This system not only keeps the salesman interested, but it also helps to keep him in the organization. To make the club a salesman has to sell 500 points — a point varying from $40 to $100 in sales according to the item sold. That is, the year's business must be from $20,000 to $50,000. Another incentive to work for membership lies in the fact that the first man to make the club — that is, the first to sell his 500 points, automatically becomes president of the club for the year. The second man becomes vice-president, the third secretary, and so on until all the offices and directors are named. In addition to this contest the company has a separate contest for the district making the highest percentage of its quota for the year. This causes the men to work together, for the names of all members of the winning team are engraved on the loving cup which is the prize. As a further personal incentive each man receives a bonus of 10% on all sales above the quota established for his particular territory. One specialty concern has a hundred-point club for salesmen who make 100% of their quota for the year. This organization is too well known to require detailed description but in its workings it is much Hke the pace-makers' club just described. Those who make DO SALES CONTESTS PAY? 93 the club are entertained at the home office once a year for a week. Out of 500 salesmen about 150 win. This concern also holds a four-month contest for 200%, 175%, 150%, and 125% of quotas. Valuable merchandise prizes are given in each class. Since many of the articles given as prizes are for use in the home the company tells the wives of the salesmen all about them and it has acted as a great incentive to salesmen to try for prizes which their wives want. Another concern appealed to the pride of the sales- man and to his loyalty to the company by a series of four monthly contests, each contest being named in honor of some official of the company. The first month was the president's, the second the secretary's, the third the sales manager's, and the fourth the trea- surer's. This naming of the contests is similar to the plan carried out in the dealer's contest described near the beginning of the section. Prizes in this contest were a series of certificates signed by the official in whose month the contest was held. The certificates bore a picture of the official and the seal of the company. These prizes are valued highly by the salesmen for they realize that they con- stitute the best sort of a testimonial to sales ability. Pictures and cartoons of each official were run in the company house organ during the month of their particular contest, as well as ginger articles by them. The months of the contest showed these results. President's month: A new company record for January; a new New York office record; a new sales- men's record for individual sales. Secretary's month: A new February record; a new record for the London office. Sales manager's month: A new high record for the company; many offices established new records. Treasurer's month: A gain of 31.5% over the pre- vious April; a new high record for foreign business. 94 BOOSTING THE SALES VOLUME This company has found merchandise prizes have a greater general appeal than cash prizes. An auto- mobile contest, with a light car as a prize aroused a great deal of interest. This contest ran during Sep- tember, October, November and December of one year. It was modeled after an automobile road race. One of the novel features of the contest was the map which was published in the house organ each month showing the standings and the course. The race began at the town of Fairstart and the course the first month was to Octoberville. The second month was from Octoberville to Novemberton; the third, from Novem- berton to December City and the fourth from De- cember City to Hot Finish. In November a ''Hell Fire" edition of the house organ carried a bright red cover with a picture of the devil spearing a salesman with his trident. Inside, a single sheet was of as- bestos with the explanation, ''Our message is so hot that we cannot trust it to ordinary paper." HERE ARE SEVERAL TRIED-AND-TRUE CONTEST PLANS WHICH HELP TO SECURE WIDER DISTRIBUTION We come now to the second and last of our tv/o general classifications of contests — contests to secure a wider distribution of the line or lines. First, let us consider a contest used by a concern in the Middle West. Incidentally, this contest also appeals to the salesmen's pride, for one of the prizes given is a mem- bership in the company's "Topnotch" club. This contest lasts throughout the entire year. Every man in the sales organization from the newest sales- men to the district managers is interested, for any of them may obtain one or more prizes. Three prizes are given — to the salesman in each ter- ritory, the sales manager, and the district manager who show the greatest increases in all-round sales. The object is to get the salesmen to push the entire line. DO SALES CONTESTS PAY? 95 The topnotch salesman is the one who has the high- est percentage of increase in all-round sales in each territory. The topnotch sales manager is the one whose territory makes the best showing, and the topnotch district manager is the one whose district has the highest percentage of increase in all-round sales. The topnotch district prize is $200. The first prize for each territory is $200 and the record-making sales- man's prize is $100. The topnotch trade sales repre- sentative gets an additional prize of $200. In addition to the cash prizes, cups are given to the territories in each district making the highest all-around increases in sales. The spirit of rivalry which exists among the different groups adds great interest to the competition. All salesmen making their quotas also receive stickpins and fobs engraved with their names and the company emblem. These are prized highly. Other prizes are given for such achievements as gaining the highest percentage of the estimated total net sales, the highest percentage of estimated net trade sales, the highest percentage of gain in total net sales over previous year, the largest gain in dollars and cents for the year, the lowest percentage on sales deductions and expense reports, and the highest percentage of the estimated total of new accounts. Announcement of the standing of the various sales- men, districts, and territories in the company house organ serves to keep interest alive all the time. Contests like this are held each year with slight variation on the prizes and terms of competition and they have been responsible in large measure for the steady growth of the company, according to its sales manager. Another concern organized for national distribution also found a sales contest an effective means of obtain- ing a wider distribution of its entire line. This com- pany handles chiefly a varied line of food products, both in bulk and in branded packages. The chief THE PEAKS IN 14 LINES Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Automobile Supplies Boots and Shoes Brass Goods Builders' Supplies Clothing Drugs Dry Goods Farm Machinery Gas Fixtures Gloves Hardware Office Supplies Steam Heat- ing Apparatus Wall Paper Figure 43 : Fourteen manufacturers' lines are charted here to indicate the months in which demand is most active. This analysis makes it possible to anticipate the summer possibilities and to locate the lines that must be pushed strongest in order to divide sales more evenly. 96 DO SALES CONTESTS PAY? 97 problem is to get equitable distribution. The company divides the country into 32 districts and each district contains several branch houses. In describing the contest which was successful in securing a wider distribution for its entire line, the sales manager said: "Probably our organization and line is nowhere else duplicated, but our distribution problem, I believe, is one that every sales manager has faced in a greater or less degree. For that reason I think the story of how we carried on our contest, and evolved out of it some methods of permanent value, will prove helpful to other sales managers quite generally. "This sales contest was the immediate means of improvement. Several details of the contest were unique. In the first place, it lasted 80 weeks. The grand prize was awarded to the salesman who main- tained the best record throughout the whole period, and there were four other prizes of less value awarded to the four men ranking next in order. "It would no doubt have been impossible, however, to keep up the interest of the men for so long a time if these had been the only prizes," said the sales manager. "So the contest was subdivided into six 'contest periods,' and other prizes were offered and distributed at the end of each period. From a fund set aside for the purpose by the company, each district super- intendent was allotted $125 for each period. This was divided by him on this plan — $50 went to the sales- man who made the best sales record, figured on volume, for all hnes sold by the company. The remaining $75 went to the branch house in each district which made the best percentage of sales increase over the same period for the preceding year. In the winning branch house the $75 prize was divided into two prizes of $50 and $25 and these were given to the high and next- high salesmen in that branch. 98 BOOSTING THE SALES VOLUME ''Now I will explain how the salesmen were ranked. The mechanism of this process may seem comphcated at first, but we devised it after giving full consideration to all the factors in our problem, and it seemed best suited to accomplish the result we wanted: that is, to get salesmen to sell all of our lines. First, sales of the different men were classified under the different lines we carry, and totaled for volume in each Hne. That is we had the total grape-juice sales for each salesman, his total sales of soda-fountain suppHes, and so on. HERE IS EXPLAINED THE WAY THE CONTESTANTS \NTERE GRADED— A FAIR METHOD YOU'LL AGREE "Suppose, for example, that there were 50 men in one district, and Harry Johnson sold more grape juice than anybody else in that district. He would receive 1 point in the grape-juice column. Suppose Walter Anderson ranked next. He would receive 2 points under grape juice. Now suppose that in sales of soda- fountain supplies Harry Johnson ranked thirteenth, and Walter Anderson third. Johnson gets 13 points and Anderson 3 points. The aim of the salesmen was to, keep their total score just as low as possible, since the lowest man in points won the $50 prize for the district. There were 51 salesmen in this district and if one of the men failed to make a single sale in any one line he was marked 51 points — one point lower than the lowest possible rank if a sale was made. In another district where there were 30 salesmen, the salesman who made no sales was marked 31 points. "Naturally, these no-sale figures quickly sent the salesman's total number of points up. As a result, all of the men worked mighty hard to make at least a few sales in every line. Some of our salesmen had been in the habit of maintaining that they could not sell certain lines; at least they did not, and our general distribution suffered grieveously. DO SALES CONTESTS PAY? 99 "Under the contest rule this condition soon changed. The man who thought his territory would not buy- grape juice began to search for sound reasons why not; and he generally found there was at least one dealer in his territory who could be induced to take a few cases. The standing of the salesmen was pub- lished weekly; and we believe that the bulletins which were sent out to the men with the comparative figures of results had as much effect in stimulating them to better efforts as the actual offer of cash prizes. No man likes to rank at the foot of a competition list. "Our plan of giving prizes in the branch which made the biggest percentage of increase over the same period of the previous year, gave everybody a chance. Even the branch that had comparatively a poor territory might very easily hope to show a better record than the previous year — enough better, in fact, to win the $75 prize. So the men had every incentive to boost all the time for themselves and their branch house. 'Tn awarding the grand prize, our job was to pick the man who was most valuable to the house. You know that John Evers and Eddie Collins, the major- league baseball players, once received automobiles as prizes because they were believed to be the most valu- able men to their teams. Neither of them headed the list with their batting averages, but they were con- sidered the all-around most valuable players. We had the same proposition. We wanted to pick the most valuable all-around man on our entire sales staff, and the four men who came next in order. We decided the three factors which are enumerated below deter- mined a salesman's value to us: ( 1) The total volume of his sales. (2) The volume of his specialty sales. (3) The effectiveness of the distribution we secured through him. 100 BOOSTING THE SALES VOLUME "Total sales volume alone could not determine a man's worth, because different territories varied greatly in sales possibilities. A city territory, for example, might yield the salesman a prospect every three or four blocks, and the time between calls would be very low; while in a country territory the time consumed in going from town to town might be a big factor in lowering a man's volume of sales. The volume, then, was only one of the factors by which we judged a man, so these inequalities were offset by the other counts. "Again, we wanted to encourage specialty sales. The men find it harder to sell specialties than 'ton- nage' products, but we are anxious to raise the specialty volume, because these goods carry our name and enable us to establish our brands. So we 'weighted' these two lines. We gave a man, in figuring his final value to the house, one point for each $100 worth of 'tonnage' business, and a larger number of points for each $100 worth of specialty business. "We also figured the third factor — the effectiveness of the salesman's distribution — on a point basis, but we worked it out differently. We wanted every man to cover his field just as thoroughly as possible. We wanted him to sell just as many of the dealers in his territory as he could, and we wanted him to sell each dealer just as many lines as possible. So, at the begin- ning of the contest, we had each salesman list all the towns on his route. We then employed a rating agency to list for us under about eight classifications— groceries, drug stores, delicatessen shops, and the like — all stores in the towns named by the salesmen as points where we could hope to sell our products. "Next, each class of store was rated as a possible purchaser of a* certain number of our lines. For example, a druggist — if he purchased everything from the salesman's list that he could be expected to sell — could use 5 of our lines. A grocer, say, could use 13. DO SALES CONTESTS PAY? 101 "Now suppose in a certain territory there were 100 drug stores and 200 grocery stores. Obviously, the total possible number of orders that could be secured from drug stores would be 500, while the total possible grocery orders would be 2,600. In the same way we listed all possible orders from all stores in each man's territory and arrived at a total, and this total repre- sented perfect distribution of our products. "Naturally, no man could attain perfection in this respect, so in the final rating we allotted each salesman so many points equitably 'weighted' against tonnage and specialty sales, for each 1% of the total possible orders which he secured in his territory. "Say, for example, that we awarded a man 100 points for each 1% of the total which he realized. Suppose the total possible number of orders in his territory was 25,000, and he took 1,000 orders. Two hundred and fifty orders, then, would add 100 points to his score and 1,000 orders added 400 points. "This method of determining a salesman's value was purely a matter of office routine, but it shows how carefully we weighed every factor in finding the best man on our staff of road salesmen. RESULTS ARE WHAT COUNT; AND HERE ARE INDICATED THE RESULTS OF THE 80-WEEK CONTEST "So much for the way we conducted our 80-weeks' sales contest. What have been the results? "In the first place, our sales force is better organized than it ever was before. It is more conscious of itself as an organization, and each branch house — off by itself and always in danger of failing to catch the spirit of the house — responds more readily now to the idea that it is a real factor in the company's success. "The salesmen, also, feel the spirit of the game more keenly than ever before. The district superintendents started sending out weekly bulletins soon after the 102 BOOSTING THE SALES VOLUME contest began, showing how the different men ranked. Before the contest this comparison was made only at irregular intervals, and the result was that the men worked without any very keen realization of their sales relation to their fellow salesmen. The contest, however, has clearly shown the district superintendents the importance of the comparative bulletins in building the fighting spirit. Their value is fully recognized now. "Finally, we have created wider, permanent markets for our specialties, and we have induced the salesmen to sell the entire line. When the contest began I estimated that only 58% of our sales force was pushing the full line. Since the beginning of the contest this percentage has been raised until now 75% of our sales- men are selling the full line each week in the year. ''The company continues its rating of salesmen, even though the prizes are discontinued, and these ratings are published every week. We have definite knowledge, therefore, of the value of the men to us — an absolute basis on which to make salary adjustments. The men know where they stand, and have an incentive for achievement. Furthermore, we have definite reason to believe that our sales volume has increased far more in the past year than it would without the contest." Most concerns which do not use salesmen's contests, it was found by investigation, employ comparatively few men or their men operate over wide territories and normally do not come into the main office for frequent visits. It is less simple, therefore, to organize contests which afford equal opportunity to all. ''I believe in the principle of sales contests," saj's the sales manager of a progressive clothing concern. ''I think they have a helpful and stimulating effect. We do not use them, however, chiefly because we do not want to emphasize primarily the effort to sell. Our whole theory of busiliess building has been that if we could develop our retail customers to be better DO SALES CONTESTS PAY? 103 merchants, we would help ourselves more effectively in the long run than if we bent our efforts at all times toward 'selling more goods.' "If I had a larger sales organization with each man working in a smaller, well-defined territory where I could gage with some accuracy the volume of sales each man ought to attain, I would certainly use con- tests to stimulate the men to greater efforts. We have only about 25 men, however, some of them working several states. Conditions vary in different sections of the country — variations which usually cannot be foreseen and which may seriously affect sales in those sections. That makes it almost impossible to run a contest on a fair basis to all our men." This man's views just about sum up the attitude of many sales executives, including those who report that they do not use sales contests, although they are not opposed to them. HOW TO MAKE SALES CONVENTIONS MORE PROFITABLE HOW can we make our sales conventions this year produce the most value to us?" a man- ufacturer of farm implements asked his sales manager. "I know our conventions are considered successful and that they are supposed to help the sales force to get more business, but isn't there some way we can make this benefit more apparent?" The sales manager thought a little. His reply was another question: "Do you suppose we could arouse dealers' interest in the convention enough to make the convention a strong talking point for our salesmen during the year?" he asked his chief. The manufacturer liked the idea and a plan was worked out. The big convention was advertised ex- tensively through the trade papers. The program was arranged and pubUshed. A feature of the program consisted of a demonstration of the company's product by each member of the sales force. The attention of dealers was called to the fact that the salesman they did business with would be at the meeting and would take an active part. To further this idea the company sent out a post-card to each dealer, bearing the picture of his salesman. When the first session of the convention was called to order, every dealer on the company's list knew all about it. His interest was aroused, especially in the part his salesman was to play. The company made 104 CONVENTIONS WHICH GET RESULTS 105 arrangements with a local newspaper to publish an eight-page extra edition devoted to news of the con- vention. A copy of this was sent to all dealers. Each salesman also mailed cards to his dealers telling them what a good time he was having and what success he had with his part of the program. When the salesmen got back on the road the interest and questions of the dealers made an unusually favor- able opportunity for the salesmen to explain the new models. Sales showed a substantial increase the first month and the good effect continued over the year. Although here was a sales convention which was a decided success, much difference of opinion exists among sales managers as to the value of conventions, investigation indicates. Some sales managers are enthusiastic over the benefits to be derived from annual meetings of the entire sales force. Others be- lieve that quarterly or monthly meetings of the men in each district or territory bring the best results; while still others do not believe in them at all. One company, which had held annual sales con- ventions for many years recently discontinued them entirely. It decided the benefits were not commen- surate with the costs. The majority of sales managers are strong believers in the value of conventions, how- ever, although opinions differ as stated before. In determining the best method of holding sales conventions to make them most profitable to the company, investigation indicated that wholesalers and manufacturers must consider: First, how often shall conventions be held and shall they be for all or part of the sales force? Second, how can the convention be made interesting enough to hold salesmen's atten- tion? Let us take these questions up in turn. One wholesaler for many years held annual con- ventions of his entire sales force at New York City. These conventions lasted three days. More recently, 108 BOOSTING THE SALES VOLUME however, he has changed his plan. Now all the sales representatives west of Pittsburgh meet in Chicago and all eastern salesmen meet in New York City. The conventions last one day and are speeded up to get the most from the time. The new plan has been found far better from a productive standpoint and it suits the men better. Under the old system many of them became bored with the proceedings and the net result was more harm than good, it was found. One progressive paint company also is a great be- liever in conventions. Every two years this company holds a big three- or-four-day meeting which includes its foreign representatives as well as those in the United States. Smaller conventions also are held from time to time at the factory or at some other convenient point. District managers are called together fre- quently to talk over new products or to decide on some new plan of distribution. The district managers themselves often call meetings of the sales managers and salesmen in their territories. "THESE MEETINGS HAVE DONE MUCH TO UNIFY OUR ORGANIZATION AND TO CREATE LOYALTY" "After these meeting — and especially the big biennial gathering — the men go back to work with enthusiasm, armed with new ideas which bring direct results in increased sales," said the general sales manager of this company. ''These meetings have done much to unify our organization and to create a loyalty which has an enormous influence on sales" ''Our annual sales convention is chiefly a clearing house for complaints and grievances which the sales- men may have accumulated during the year," declares another manufacturer. "I tell the boys that if they go back on the road and then come to me with a com- plaint I will 'beat them up.' I say it in a joking way but they know I mean business just the same. CONVENTIONS WHICH GET RESULTS 107 "At our convention we list the men and their sales. I make a special effort during the year to impress upon the men the importance of pushing the slow-moving lines and at the convention the salesman who has been most successful in this work gets a check for $100." Another wholesale concern holds an annual three-day convention. It is declared that it pays, because of the opportunity it offers to ''sell" all the salesmen on the advertising campaign for the coming year. This, the company believes, could not be done so effectively at district meetings, and the advertising is an important factor in increasing sales and must have the cooperation of every salesman to be most valuable. One manufacturer formerly held annual conventions for his sales force. The salesmen employed by this company are all highly trained and all receive high salaries. Because of the high caliber of these men the company felt it was unnecessary to bring them to- gether each year. The conventions were discontinued. In their place the sales manager and his assistant make the rounds of the territories several times each year and in this way keep in personal touch with the men. Ideas are exchanged and new sales methods are discussed. The sales manager says that this plan helps him to work out special plans for each territory which are more effective than general methods would be. Another manufacturer has discontinued annual con- ventions in favor of district conventions, which he thinks, cost less and are more effective. These district conventions are held simultaneously. Two representa- tives of the general office or the factory are sent to each convention to instruct the salesmen and to manage. This plan does away with its big annual convention which was hard to handle, and which crippled the factory for a week or so. "If manufacturers would stop to think that, on the basis of a 10% profit, they would have to increase sales $60,000 to break even 108 BOOSTING THE SALES VOLUME on a convention costing $6,000, they would be more likely to put their money in more productive adver« tising," says this manufacturer. One company which has a central location for its home office and factory, divides the country into sales divisions and each summer it brings its salesmen to the factory, one division at a time, for a week each. The salesmen are housed in tents and small cottages on the company grounds and so they get a httle out- door life during the meeting. The sessions of the conventions are held in an open-air auditorium. Provision also is made for some competitive outdoor sport during the convention. Programs are arranged so that each department has one day assigned especially to it. By this plan the company executives need give only one daj"" a week to the convention for the several weeks the men from the different divisions are there. At the same time each group gets the full benefit of advice and instruction from each department head. Another company worked up from holding small conventions to larger ones, until it found the plan which best suited its organization. Instead of holding •a big annual convention this company for several years held a series of meetings in each territory. Managers of branch houses attended these meetings, which were presided over by the superintendent of the district. These superintendents or district managers, how- ever, it was found, too often made the meeting a place to display their authority. They often criticized sales- men who are unfortunate enough to be low on the sales Ust at the time of the convention, and gave perhaps undue praise to higher men. The object of this policy, of course, was to hold up the good men as models for the other to follow. In most instances, however, the result was to embitter CONVENTIONS WHICH GET RESULTS 109 the less successful salesmen against both the managers and the higher-record salesmen of the force. To remedy this condition the company reorganized the districts so that the meetings would be larger. Men in each district were given an opportunity to discuss their problems among themselves. Higher executives took charge of each meeting. Harmony was restored and a real opportunity furnished to the men to learn the company's plans and poUcies. It was possible here to go into the details sometimes difficult for the salesmen to grasp. Another concern — it distributes food products — finds, however, that frequent branch conventions are a great help to the sales force. At these meetings, which last one day, instructions and information from the head office are gone over and digested in detail. This company holds group conventions at least twice a year, at which members of the home-office staff meet the salesmen and managers of the nearby branches. Twice a year, also, all the branch managers are summoned to a convention at the home office. DIFFERENT LINES SOMETIMES REQUIRE DIFFERENT C0N\T:NTI0N plans— HERE ARE IDEAS FOR ALL Two meetings a year are especially valuable for manufacturers of goods affected by the seasons or the styles, it was found. For example, one shoe manu- facturer holds formal sales meetings twice a year. At these meetings market conditions are studied, styles are gone over carefully, and the chief selling points of each number are discussed. Certain shoes have strong features and these features are brought out. Another shoe manufacturer holds an annual con- vention for all his salesmen, and semiannual con- ventions for as many men as can be brought to the home office conveniently at the half-year period. At these meetings the men exchange experiences. 110 BOOSTING THE SALES VOLUME An electrical-goods house which employs 75 men has them all in at the home office twice a year, in instal- ments of 25 men each. This plan, the company feels, is much better than having them all in at once, as more can be accomplished in the smaller meetings. One dry-goods house has all its salesmen visit the factory at least four times a year. Those who have nearby territories come in every three or four weeks to get in touch with the department managers and to talk over market conditions, and so on. Th^ plan is in direct contrast to the pohcy of an- other dry-goods house which allows its salesmen to come to headquarters only twice a year — once just before the spring line is ready and once just before time to put the fall line on the market. At these times a general convention is held which lasts four or five days, and the men receive their instructions. There is, investigation indicates, a tendency on the part of many manufacturers and wholesalers to cut down the sessions of conventions, to hold them more often and to hold district or group meetings rather than general meetings for the entii-e sales force. All, however, have the common problem of making their conventions interesting — the second of the two prob- ems we laid down near the start of the section. One wholesale concern begins to arouse interest in its convention several weeks ahead of time by sending out letters asking the salesmen to make notes of ques- tions they wish discussed. This concern holds con- ventions in cities where there are district managers and the district managers make all arrangements for them. It is the careful working out of the details of a convention that often determines whether it is a profit or loss to the house, according to the general sales manager of one concern, who has had long ex- perience in managing conventions. He believes that little arrangements which make for the comfort of the CONVENTIONS WHICH GET RESULTS 111 men, and a well-organized program — one which permits of no delays or useless discussion — will keep interest at a high pitch all through the meetings. When the salesmen for this company arrive at the place of meeting they find rooms waiting for them at the hotel. When they ask for their mail they find letters giving them information about the program, the time and place of each meeting, and so on. A list of the names and room numbers of the other salesmen present is provided, as well as a list of the names of the home-ofhce men. Emphasis is laid on the fact that the men are there for business and not for pleasure. The program is arranged by the adver- tising department and the sales department. Department sales managers from the home office are provided with rooms where they can meet the various salesmen. In fact, the first day is given over to these conferences. The salesmen are invited to criticize the product, equipment, or method of distribution, and personal difficulties also are taken up and disposed of. During the lunch hour the men may do as they please and this applies also to the evenings after the session closes. Formerly the company arranged theater parties or some other amusement, but it found that so many of the men had friends or relatives they wished to visit while in the city that the plan did not pay. Groups of salesmen, however, are invited to form theater or automobile parties "on the company." The few set addresses of the convention are short and are based largely on the points brought out in the personal conferences of the preceding day. A concern which makes a high-priced specialty holds conventions often, but they never lack interest, be- cause of the varied methods used by the speakers to present their subjects. One of these is to use large sheets of paper in illustrating the talk instead of a blackboard which often cannot be seen at a distance. 112 BOOSTING THE SALES VOLUME Colored chalks are used to bring out the different points. Stereopticon machines have been used with success at these conventions, as well as actual demonstrations of the product. This company also stages short play- lets which depict a salesman making a demonstration to a "hard-to-sell" customer. The stage is set to represent the interior of a retail store. Moving pictures also are used successfully to demonstrate the manu- facturing process on the different lines. The success of these conventions, however, arises from the fact that each demonstration is carefully planned and rehearsed to prevent it from developing into a farce. At no one session is the same type of demonstration used twice. For example, in one meeting the first speaker may illustrate his talk with charts and crayons, the next use stereopticon pictures, and the third make an actual demonstration of the product. HERE'S A CONVENTION PLAN DECLARED TO PROVIDE SALESMEN WITH MANY STRONG SALES ARGUMENTS One manufacturer of paints and oils arranges exhibits which show the crude products and the various states they go through in the com-se of manufacture, while a manufacturer of insecticides uses the stereopticon views to illustrate a talk on the life and habits of the insects which the company's product cuts short. Demon- strations like these are declared to provide salesmen with strong selling arguments. At the annual convention held by a wholesale com- pany the sales and advertising manager and one of the salesmen presented a playlet representing a demon- stration to a merchant. It aroused so much interest that the salesmen in the audience passed up notes to the "merchant" bearing more questions for him to ask the ''salesman." This plan helped to clear up many actual objections to the line which the salesmen had encountered while on the road. CONVENTIONS WHICH GET RESULTS 115 One manufacturer of specialties selling to cities, schools, and the like, carried out a somewhat similar demonstration, but put the entire convention in the hands of the salesmen to carry through. The lead was played by a star salesman who had made an enviable record selling to cities. Other sales- men and representatives of the manufacturing depart- ment played the parts of the mayor and members of the city council. They made all sorts of objections to the company's product and forced the salesman to make the best presentation of his life. Of course, the men in the audience got many valuable pointers. In a similar way another salesman sold "high-grade fixtures to a thrifty school board." Mistakes in the presentation were criticized freely and good sales argu- ments were brought out in great detail. This convention was followed up by the publication of the "Convention Extension Monthly" which each month brought up questions discussed at the con- vention, and urged the salesmen to write in their experience in using the information learned there. That this plan of "extending" the convention throughout the year was successful was shown not only by the fact that sales were larger, but also by the fact that salesmen concentrated on the goods which yielded a bigger percentage of profit. And because the second line of defense — the office force — also came in for con- structive criticism at the convention, this supporting line of the sales army was strengthened as well. One manufacturer holds office councils to clear up office mistakes and outline new policies, and sales- men's meetings are handled in the same way. Men who have made mistakes are asked to explain, and in this way the men get a clear idea of what is going on and what is expected of them. Often misunder- standings between the sales and manufacturing depart- ments are cleared up at these meetings. The chief 116 BOOSTING THE GALES VOLUME accountant and the credit men are always present, and differences with, the salesmen are smoothed out. Attention to the little mechanical details, as proper seating arrangements, comfortable chairs, and good ventilation, often can turn an indifferent convention into one full of enthusiasm, it was found. One manu- facturer, for example, provided comfortable chairs and small tables for each representative. These were arranged so the salesmen from each section sat to- gether. Stationery was provided at each table and messenger boys collected and distributed mail. Another concern makes its salesmen feel at home during conventions by enlisting the cooperation of the home-office force. Previous to the convention a meet- ing is held and the office staff is impressed with the fact that the salesmen are the guests of the company and are to be treated cordially. Office boys, stenog- raphers, everyone in the office is told that every effort is to be made to make each salesman feel he is a part, and a mighty important part of the organization, and this plan has proved exceedingly successful in develop- ing loyalty in the sales force. THERE ARE A NUMBER OF TESTED CONVENTION PLANS HERE, READY TO GO TO WORK FOR YOU AT ONCE In preparing the program for its convention one concern printed on each left-hand page a small picture of each speaker and a short biography. The rest of the page and the entire right-hand page was left blank for notes. This plan took well, it was found. A "route sheet" designed on the plan of the work route sheets often used in factories to illustrate how the line of operation proceeds, guided the activities of the salesmen at one manufacturer's convention in a southern city. It proved an effective method of getting the men around to all the activities, without forgetting any event or losing any time in the process. CONVENTIONS WHICH GET RESULTS 117 These route sheets were about 9 by 12 inches in size. Each day's activities took up three columns. Along the left of each column ran figures representing the time of day and opposite each hour appeared notations about the activities that would come in for attention at that time. Thus, all a salesman needed to do to determine where he should be at a given moment was to turn to the sheet and find out. It was a conve- nient plan, and one greatly welcomed by the salesmen. On the other hand, one sales manager tells of a convention which had been carefully planned, every precaution taken to insure the salesmen's comfort, and a good program arranged, but which was made a partial failure because frequent telephone calls and other messages delayed the proceedings. Salesmen's conventions, however, are not the only sort from which manufacturers can derive benefits, as has been demonstrated by the success of a convention for the wives of salesmen held by the National Cash Register Company. This convention probably marks a forward step in the development of sales organization to a high point of effectiveness, and is in line with other progressive sales plans originated by this company. This convention lasted five days. The wife of every salesman and sales agent was brought to the home office at the company's expense. It was the behef of the president of the company that if the wives of the salesmen could be given an intelligent interest in their husbands' business they would be a big factor in in- creasing sales. That he was right was shown by the fact that the increased profit on the first month after the convention more than paid for its expense. During the convention representatives of the sales and manufacturing departments explained each feature of the different lines, and the women were taken through the factory by the factory manager who ex- plained the different processes to them. 118 BOOSTING THE SALES VOLUME Special lectures and demonstrations were arranged to show the women how they could most effectively aid their husbands. Experts talked on questions of health and business cooperation. The women themselves also had an active part in the program. Some of them acted as salesmen and sold machines to others who impersonated retail merchants. The women were urged to study the methods of the retailers with whom they came in contact and thus to get ''tips" for their husbands. Various entertainment features filled in. Another concern has carried out somewhat the same idea by publishing a bulletin for the wives of its sales- men, and by inviting all the women living near its plant town to attend moving-picture shows where plant operations and demonstrations are featured. With progressive ideas like these developing every day it is plain that not all the possibilities of sales conventions are yet realized. It remains for the in- dividual manufact\u*er or wholesaler to work out the best form of convention for his particular organization, and then to make his meeting as interesting as possible. In this way he encourages and instructs his salesmen, develops their loyalty to his house, and directly cuts the cost of seUing by increasing sales effectiveness. ■p\URING the Great War business men all over the country came to know the building at Washington which housed the War Industries Board. There men met to learn the Govern- ment's needs and to lay plans for gearing their particular enterprises to the nation's enterprise. Thus the building may be said to symbohze the cooperation and the interchange of economic thought always essential to the greatest progress. The new structure in which the Shaw PubUca- tions are now housed is a permanent counterpart in stone of the building that business men knew so well during the war. ORGANIZING FOR INCREASED BUSINESS Edited by THE BUREAU OF BUSINESS STANDARDS o/ Cfc« A. W. SHAW COMPANY SECTION 7 Helping the Goods to Sell Themselves HELPING THE GOODS TO SELL THEMSELVES SALES on a certain brand of soap packed three cakes in a box had been satisfactory, but the manufacturer decided to try an experiment. The old package was fairly pleasing in design, but an artist was set to work to design a new one. When the same product was put on the market in the new box, sales trebled in less than three months. This instance indicates the effective sales results which sometimes can be accomplished by making a change for the better in the container the goods are sold in, and it is only one of hundreds of like examples found during the ex- tensive investigation upon which the series is based. In deciding on a package which will stand out from the mass, the most important features to consider, are, investigation indicates, first, the shape and size of the package; second, the label with the trade-mark or name to go on it; and, third, how these features can be used effectively in demonstrations and exhibits. What are the advantages of having an attractive package? Here are a few, pointed out by a manu- facturer who has made a close study of the subject and who attributes much of his success to the fact that his product's appearance always has appealed well. He says : "I beheve that a properly designed pack- age is one which suggests the particular merit of the product, such as quality or durabihty. In other words, the package should tell the manufacturer's story of a good product to all who see it. 158 Copyright. 1921, by A. W. SHAW COMPANY as a part of tie Sliaw St'lling .Series "DRESSING" THE PRODUCT EFFECTIVELY 159 "It always is necessary to have a package attractive. That is, it must be one which will catch the eye. Then the package will claim an upstage position on the retailers' shelves and will make a better display. "Many of our products which formerly we sold in bulk we now put up in packages because in this form the dealers can display them without loss or damage. We try to design our packages so that they will be identified and remembered easily by consumers, and so they will create a desire in their minds for our goods. "We also have found that by packing our goods in substantial containers we can better control the "condition in which they reach the market. Let us consider a food product as an example. "The package should be of a size and shape that will pack w^ell in cases without loss of space and with- out breaking. I have found that too large a package suggests cheapness, and too small a package gives the idea of expensiveness which loses sales. "Then, too, in looking over the dealers' shelves the customer often gets a bewildering impression of goods, which is confusing and does not identify any particular brand. I have found that the package with the most successful appeal is the one which emphasizes the brand name more strongly than the picture of the goods. "I have also found that the color of the label in- fluences the appeal which the package has to the customer. A bright red, for example, attracts attention quickly and gives a sense of warmth. It also can be used effectively on large packages because it tends to make the package look smaller. A purple or violet color gives the impression of expensiveness and rich- ness, and a green gives an appearance of freshness and coolness which is suitable for many products. Blue gives a suggestion of coldness and tends to make the package look larger, while brown apparently tends well to a suggestion of good things to eat." 160 MARKETING PLANS AND POLICIES An instance of the pulling power of a distinctive package is illustrated by the experience of a manu- facturer of cigarets. This manufacturer was about to put a new brand on the market and, of course, wanted it to attract immediate attention. He studied the packages of competitors and noticed that most of them tried for an oriental or southern effect. He decided to make his package different. The box he designed was pure white, with the manufacturer's name on it in gilt letters, and a narrow gilt band around the edge of the box. It was a distinctive con- tainer and went well with the buyers. IT COST NO MORE, IT MADE SALES, AND IT WAS HONEST— AN EFFECTIVE PLAN, YOU'LL AGREE A similar experience is that of a hat manufacturer. He decided that it would cost no more to use a box that was an effective sales argument and fairly repre- sented the goods inside to the prospect. The design decided upon had a background showing the sky line of New York — a suggestion of the city the hats came from. In the foreground were four groups of human/ figures, each group representing a different season, and carrying the idea that the company made hats for all seasons and climates. These boxes were so attractive that dealers were proud to display them on their counter. For the same reason customers were more anxious to examine the product, for the? box carried a definite suggestion of quality. The original cost of the drawing was about $1,500, but as a large number of boxes were made, the uniU box cost was small. Manufacturers often have found it profitable to put up their product in special boxes for some of their big dealers. For example, one New York dealer has an especially rich and attractive store front in a fashion- able shopping district. The manufacturer of one line "DRESSING" THE PRODUCT EFFECTIVELY 161 of hose carried by this dealer devised a special label showing the store front. The design itself caught the eye and the box created the impression that the dealer as well as the manufacturer was standing back of the goods, which, indeed, he was. At first thought it would seem that the sale of so bulky an article as a mattress could hardly be much influenced by a container, yet one concern provided an attractive shipping cover for its mattresses and thereby attracted much attention to its goods. In addition to the color and attraction of packages for various products, there are the elements of shape, size, and convenience of handling to be considered. One illustration of the importance of this feature is told by a manufacturer of food products which have a large distribution in the Southwest. This company put up a brand of jam in two-pound glass containers. This size \^"as for several years an excellent seller in certain mining districts in the South- west. Suddenly, however, sales fell off alarmingly. Investigation revealed that many of the mines in this region had been shut down and the buying power of the population had been so cut down that they could not afford to buy the large package. The com- pany immediately put up the product in one-pound containers and sent them into the district. Sales jumped 50% within three months. "I beheve if manufacturers would study more closely the relation of the size of the package to the conditions existing in the selling field, their sales would be in- creased," said the head of this concern. By changing the size of the package in which it marketed its marshmallows to a pound capacity, one candy company trebled its sales the first year and doubled this record in the second year. Previous to the adoption of the new package the great difficulty in selling this product had been that it would not keep 162 MARKETING PLANS AND POLICIES fresh. It had been the company's policy to pack the goods only in tins containing five and ten pounds. The new packages had telescope tops, were air-tight, and the goods kept almost indefinitely. Another factor which helped the sales of the new product was a little booklet of recipes for its use, packed in each tin. A house which handles olive oil as one of its lines found it paid to give this product a distinctive con- tainer. It finally devised a ''pinched" bottle (one with concave sides) which had a distinctive appearance. As an additional feature it put a curved neck on the bottle so the opening was on the side. These changes accomplished two purposes: first, it makes the product stand out on the dealers' shelves; and, second, the curved neck made it more convenient to pour from the bottle. It was a bottle which the buyer could put on his table for immediate use. ; For the manufacturer or wholesaler who puts out a line of different products in cans or other containers, the question of labels is one requiring careful super- vision. It is not always enough that the designs be attractive and have selling power, and that they be dehvered at the branches before the product begins to come through. There also is the necessity that for each type of label there shall be an absolute standard of size, color of stock, and the quality and color of ink used, and that each successive batch of labels ordered shall conform rigidly to these standards. If even a slight variation be allowed it was found that the way is opened to objection from both dealers and consumers, to whom these changes may suggest product variation. To meet these requirements one paint-and-varnish company — it manufactures over 600 different products — has installed an effective system for handling the volume of detail connected with the designing and printing of labels for its diversified output. The super- vision of this branch of the business is vested in a Label Classification Label Letter A A A D Bs BB BBS C Siie of Stock Can Number 61x11 6J x2t 81 x\l 8} X 1} 51 X i; 51 X IJ 91 X U I Pint I Pint IS 16 15 (face) 16 (face) 27 28 Label Letter X 1 X 1 X3 X 4 X 5 X6 X 7 Size of Stock Can Number M x4} l}xSJ 21 x7j 5 x3l 4x4 5 x21 31 x31 1 Gallon (side) J Gallon (side) I Gallon (side) I Pt (back) Top ! Pt. (back) Top In ordering, the number indicates Label Classification, the letter indicates size Lab. DESCRIPTION STOCK INK No. 1 Agricultural Implement Paint Yellow 12 and Black 2 Spl. B. U. Astoria Hdw. Co Canary 12 and Black 3 Buggy Paint White 9, 12 & Black 4 Aluminum Paint White 10, 12 & Black 5 Bronzing Liquid White Green and Gold 6 Commonwealth Bam Red White 4, 12 fls Black 7 Lustroline Gold Enamel, Carton White 10, Gold and Black. 8 High Polish Fluid Wax White 9 Special Marine White 6, 12 fit Black 10 Lustroline, Enameloid White 10, I2&Black 11 Creosote Paint ^.... SWP 12 and Black 12 Copper Faint White 7 and Black 13 Distemper White 9, 12 & Black 14 Dura Verde, H. Bosch Co White 6 and Black 15 Distemper Graining Color ....• Blue Granite- Black 16 Drier, English Patent • White Black 17 Decorative Enamel White Black 18 Enamel Leather Dressing ^., White 12. 9 and Black 19 SW Co. Liq. Body Filler Oak Tint Black 20 First Quality , 1st Quality Black 21 Family Paint White 12 and Black 22 Floor Wipe. White 9, 8 and Black 23 Lustroline, Varnish Stain White 7.12andBlack 24 Spanish Bridge Paint Terra Cotta Black' 25 Famous Floor Paint, The John Kolbe Co. SWP Black 26 Nonparifl Floor Paint, Walker & Gibson SWP Black 27 Graining Color ....*.. White Special Color ^r, ^ ^ L ^ ..,L- and Black 28 Green, French Crown...,. White Gold, 7 & Black 29 Gold Size 1st Quality Black 30 Oxido de Hierro White 7. 12 & Black 31 • 32 Green, Bronze Terra Cotta Black 33 Brighten Up Stain, Golden Oak „ White S, 12 & Black Figures 48 and 49: A paint and varnish manufacturing company lists its various labels by means of an alphabetical key. Each product is given a number, which appears in the "Label Classification Book." Any changes to the labels must be approved by a special label committee. 163 164 MARKETING PLANS AND POLICIES conunittee composed of three department heads — one from the factory, one from the advertising and sales department, and one from the printing department. All prospective changes in design, additions of new designs, and other questions concerning labels are taken up and passed upon by this committee. The great number of labels necessary for a product comprising so many different brands, sizes of con; tainers, and so on, calls for a very complete system of classification. A reference book has been compiled, therefore, in which are listed all the products manu- factured by the company and the standard label which has been adopted for each brand. This is called the ''label-classification book." THERE IS LITTLE CHANCE OF CONFUSION OR COSTLY ERROR WHEN THIS TESTED LABEL PLAN IS USED On the first page (Figure 48) the different sizes of labels used are listed, and each size is identified by an alphabetical key. This simplifies reference to any particular size, and eliminates much of the possibility of error in copying label dimensions. Next comes the numerical classifications. Each product is given a number (Figure 49) and this number, in connection with the alphabetical key which designates the size of the label, is used in all label specifications. Inks also have been classified and numbered, and samples of each color are printed in the classification book. The color of stock used is shown, as well. These classifications have simplified the work of identifying the many different styles of labels in con- stant use. For instance, if a supply of labels is needed for J^-pint cans of special marine paint, it is only necessary to enter on the requisition 5,000, or whatever the quantity may be, of number 9 AA, we will say. Reference to the classification book in the printing department shows that the labels are to be 2yi inches LABEL ORDER RECORD Order No Label No. Products ^"oeo't!'"'^ ^°Dep'." To Factory URGENT LABEL ORDER To Printing Office: Date Please fill the following order immediately - th an order holding for these labels. Ordered by Approved by Letters underscored to be printed in ink Amount Wanted Description Size W'gt Label Packa LABEL CLASSIFICATION Additions and Alterations Date. Additions Description Stock Ink Label No. Alterations Labels are to be printed to read same as abovedescriplion Rodte: Foreman Composing Room Foreman Press Room Foreman Finishing Room Supt. Printing and Sampling Oept. Gen'l Acctg. Cost Dept. Signeti Figures 50, 51, and 52: Orders for labels are made out on a label requisition in triplicate. The label-order record is a record of the various orders placed, and is kept by the department issuing the requisition. Requirements usually are estimated from six months to a year ahead. 165 166 MARKETING PLANS AND POLICIES by 6^ inches, printed on white stock in Numbers 6 and 12 inks, with the special marine paint design. The color index shows what inks the numbers identify. The colors should be limited to ten, if possible, this company holds, as there is decided economy in print- ing several labels on one sheet in the same press run. Colored paper stocks often give very poor results because of variation in color. The best color results, therefore, are obtained by using tint plates and printing on white stock, this company beheves. When new labels are ordered or old ones changed, the department making the order attaches a label- classification slip (Figure 50) which informs the printing department of the colors, size, and weight of the proposed label, or changes. The printing depart- ment keeps a duplicate classification book, as men- tioned above, and each time a slip is received the information it contains is entered. The slip then is passed to the interested departments and after all have made the necessary notations it is returned to the ordering department for permanent filing. Most orders for labels originate from the manu- facturing department. Orders are made out on a label requisition (Figure 51) which is in triplicate form. One copy is kept by the clerk making out the order; the original and one copy are sent first to the sales, then back to the department with whom the requisition originated, and finally to the printing de- partment. All departments stamp both the order and label as it goes through with the time and date. A record of the order is kept by the department requisi- tioning the labels on a label record (Figure 52). "Label requirements are best estimated six months or a year ahead, basing the quantities on the previous season's output," says the sales manager of this com- pany. "This plan invariably saves many small press runs that are exceedingly expensive. On the other "DRESSING" THE PRODUCT EFFECTIVELY 167 hand, of course, it is not advisable to print up large stocks of labels that may be subject to frequent change. "To prevent slip-ups in the system a set of rules is necessary. A copy of them is kept by each department interested. The man in charge sees that the rules are observed at all times and under all conditions." While the methods and system just outlined are used by a large company, and perhaps seem compUcated, it should be remembered that the fundamentals in- volved apply whether the concern is large or small. The man in the smaller business readily can sift out from it just what he can use to advantage. Another important feature which may add or de- tract from a package is the product's trade name. Often this may be made a strong selHng feature. Space in these sections does not permit of a lengthy discussion of the many legal problems involved in choosing a trade name, but it is important to remember that there are many registered trade-mark names, so in choosing a new name care should be taken not to choose one which will so closely resemble a name already in use that its use will cause Utigation. It also is well to remember that names which merely describe the product or tell how it can be used are not, as a rule, patentable. So-called coined names, how- ever, usually can be so protected. A thorough treatment of trade names and trade- marks, together with laws governing their usage and legal pitfalls to avoid in selecting them, as well as ways to prevent infringement, is given in "Good Will, Trade-Marks, and Unfair Trading," a separate volume published by the A. W. Shaw Company. "In selecting a name for a new product it is well to start with one of the more forceful and harsher sounding consonants, such as K, or B, or T," says the sales manager of one company, "and use several consonants that stand out and command attention. With them 168 MARKETING PLANS AND POLICIES as a basis it usually is comparatively easy to fill in vowels to make a strong name. A striking example of the results of this method is shown in "kodak." That a name is an important factor in selling a product is shown by the experience of a concern which manufactures strings of beads as one of its products. These beads first were sold at 50 cents a string. The beads would not sell at the start off. Then the sales manager conceived the idea of calling them "princess 'pearls.' " Coincident with the naming the price was raised to 75 cents. In spite of this increase in price the sales were nearly doubled in six months. HERE'S SOME VALUABLE INFORMATION ON TRADE NAMES WHICH IT WILL PAY EVERY BUSINESS MAN TO KNOW The place of trade names in building up good will for a product is well known. It is only necessary to mention "Sunny Jim" or to call to mind the picture of the little black twins with their shining pan or the Dutch girl with the stick, to have the name of the product spring to mind instantly. These examples show the power of the consistent advertising of a trade- mark and its consistent use on containers. For example, a tobacco company had for years marketed one of its brands in a rather shabby-looking container on the label of which was a crude picture reproduced from a wood cut. The company decided to make the container more attractive and up-to-date. A new container was adopted and widely advertised, but in spite of it, sales fell off. Men were accustomed to the old package and would not buy the fancy package. The old container was resumed. You all know the two bewhiskered gentlemen on the cough-drop package. This trade-mark is old-fashioned and homely, yet people for three generations have come to know it, and probably it would be dangerous to profits to change it in any way. "DRESSING" THE PRODUCT EFFECTIVELY 169 Even with supplies of raw material cut off and pro- duction curtailed, the importance of keeping the trade- mark before the pubHc has been recognized by many manufacturers. The manufacturer of a brand of hosiery, for example, felt that a time of scarcity of goods and one when many manufacturers were cutting down on quaUty, was an excellent time to inform the public of the fact that his trade-mark stood for quality. This also was the view taken by the manufacturer of a brand of underwear in the same city, and the two concerns cooperated in placing their trade-marks be- fore the public in large space. Similar plans have been carried out with good results by manufacturers of drugs, hardware, clothing, steel products, gas engines, and other widely dissimilar lines. A manufacturer of food products who has for years been advertising his trade-mark in a general way, de- cided to launch a campaign to make his brands really mean something to his consumers. This was done by featuring the trade-mark in advertising which called attention to tests showing the comparative standing of this company's products with competitors. In addition to national advertising there is another method manufacturers have found successful in im- pressing the name or trade-mark of its products on the public and in calhng attention to the qualities these marks stand for. This is by demonstration at conventions or fairs and in retail stores. One manufacturer of cement products, for example, decided that one of the best ways to profit by a series of exhibits of building materials would be to impress the pubhc with the trade names of his products. An exhibit was arranged which included a model of a storehouse and wharf. In front of the storehouse was a miniature freight car and beside the wharf was a ship. All were made of cement. Ingenious endless pulley chains gave the appearance of packages of goods 170 MARKETING PLANS AND POLICIES constantly being loaded into the car and the boat, and miniature trains ran on tracks around the entire exhibit. Each one of the packages bore the product's trade name. A sign over the warehouse also carried the name. The exhibit attracted wide attention. A manufacturer of structural steel accomplished a similar purpose by an exhibit of miniature bridges, office buildings and so on, each piece of steel used in the construction bearing the trade-mark and name. One manufacturer of drug specialties made a big hit for one brand of soap which he was just putting on the market by having a song written which bore the same name as the soap. At the annual drug and chemical shows in several cities this song was sung. At its end samples of the soap were tossed into the crowd. The song had a catchj'- tune and as it was sung every half hour or hour, everj^one at the shows soon caught the melody. In this way the name of the soap was impressed definitely on the minds of the thousands of buyers attending the show each day. A food-products manufacturer decided to open a campaign to popularize a new brand of coffee by demon- strations in several of the leading grocery stores in large cities. An attractive booth was arranged in each store and women skilled in demonstration offered small cups of the coffee to customers. Cooperation with the manufacturer of a coffee per- colator and a manufacturer of fancy crackers made the demonstration complete. Everywhere about the booths the name of the brand of coffee and its dis- tinctive package was in evidence. During the demon- stration period many thousand dollars' worth of the coffee was sold, and a steady demand for it was started. One manufacturer of high-class traveling luggage had trouble in getting dealers to carry his line as the investment required was large. He decided to open stores of his own in the hotel districts of several cities. "DRESSING" THE PRODUCT EFFECTIVELY 171 These stores were opened purely for their adver- tising value — to inform travelers of the fact that good luggage meant the sort that bore his trade-mark. The cost was high but the plan has proved successful in making his goods demanded by name at other stores. With numerous calls for them dealers felt obHged to carry a stock of his products. One pottery manufacturer sold more than $7,000 worth of goods to the department stores of one city in one week through a "life exhibit" which illustrated the progress of their manufacture, from a lump of clay to the final stamping on of the trade name on the bottom of the plates, pitchers, and other articles. There are, of course, many variations of the demon- stration idea and there is practically no product large or small, which cannot be advertised to some extent by this method. Many of the ideas described in this section for selecting packages, trade names and marks, and calling them to the attention of buyers can easily be adopted by manufacturers in lines other than those which happen to supply the incidents used. A dis- tinctive package or trade name or trade-mark which is strongly presented is, investigation indicates, a strong factor in building up cumulative demand for any product, and while the methods described may not appear unusual, they are winning out every day. MAKING THE PRODUCT STAND BACK OF YOUR SELLING DOES the success of a business depend upon its salesmen — upon the men on the firing line holding the blank with the dotted hne? A smart, a very smart salesman will tell you ' Yes ' right away; and then he will go on to give you the history of the men in this country who have been made rich by their salesmen." So says an executive who has seen nearly every angle of seUing, with five years on the road, five years as sales manager, five years as general manager and five years as president — 20 years of selHng in all. The result of his experience and of his observation of nearly every selling success in two decades is expressed in these words: ''Three-quarters of selling work depends on right fundamental policies ; the man on the Hne does the rest. "Modern merchandising," he says, "does not depend on 'putting things over' in regardless fashion. The cleverest salesman in the world, the best writer of advertisements in the world, cannot alone continue to make sales of anything which has not in itself selling merit; and, on the other hand, the worst sales- man in the universe supplemented by the worst copy writer in the universe cannot avoid making at least some sales of an article which has selling merit in it. "This country has stopped buying from a man — it buys an article. If the article is good it will buy from a bhnd mute, but if the article is bad it will buy more 192 BACKING UP YOUR SELLING 193 than once from a golden tongue. Real selling begins with the conception of the article, goes through every branch of the business, and the salesman should be not a mere individual but the interpreter to the buyer of all the selling skill which the article carries. With the passing of rough-and-ready buying has gone rough- and-ready selling. Selling is not persuasion — it is demonstrations of the value of the goods. ''Sales are founded on the customer's confidence in the goods. There is no hypotism in the dealing; if hypnotism be needed, then something is the matter with the product sold; cleverness and trickery are not salesmanship. No salesman can honestly sell anything unaided ; he may persuade a certain number of people during a certain period of time to buy, but I do not call that selling. I might induce 10-year-old boys to buy moustache combs by telling them that the combs invariably raised hair on the lips of the constant users. But that would not be selling. Real selling is mutual; it is bringing to a man something that he needs. *'If you view selling in this light (and I think it is the only selling which is worth talking about) then it is easily seen that the large factor in the success of any business should be contributed by the manage- ment rather than by the man on the street. In fact I think that it is unfair to put out a man and expect him to get orders unless the management has done its part. Now, what is seUing behind the line? "It is this: Giving the salesman something which contains a real selling idea, finding the market, pre- paring the market, and then leading the salesman into it with a full knowledge of both the product he is expected to sell and the market in which he is ex- pected to sell." Now, that, of course, is getting right down to funda- mentals. Sound selling behind the line consists mainly of a foundation of sound fundamental principles. 194 MARKETING PLANS AND POLICIES Investigation of a number of outstanding selling successes emphasizes just how important it is to get the foundation built right. And comparison of basic policies shows that they can all be included roughly under the following three heads: (1) getting a selling idea in the product; (2) finding the markets; and (3) following up selling with service. First comes putting a selling idea into the product. Worded a bit differently this first policy is simply having for sale a product that somebody wants. "PUT THE SELLING IDEA INTO THE GOODS," IS THE ADVICE OF ONE PROGRESSIVE BUSINESS MAN "The selling idea in the goods is the most important element in selHng," says a prominent sales manager. "Take Uneeda biscuits — the form, the packing, and the name sold them; the Ford car was sold when the selling idea of a low-priced and durable car became mechanically possible; the big selling force of the cash register was in the machine itself and the same is true of the adding machine, the phonograph — in fact of all the big selling successes. Most of the selling was done before a salesman was engaged. They had in them the user's viewpoint, and all that was left to be done to sell them was to bring the facts about them to the attention of the buyer. Put the selling idea— the market appeal — into the goods themselves." "SelHng ideas are put into goods by the factories which make them," says the president of a typewriter concern, "and, therefore, the factory should know the consumer. It would be better if the buyer could personally supervise the manufacture, but, since that is not possible, the factory must go to the consumer through the medium of the agent. The factory can make sales by keeping the design in line with the market demand for the product. It can lose a lot of sales by remaining hidebound on design. BACKING UP YOUR SELLING 195 "Look at oar experience in Russia. I found that the machines were not selling as fast as they should. I knew the market was there. If the agents could not sell, it was the fault of the goods. I looked closely into the conditions of use and discovered that all the typists were males, and mostly big-handed males at that. We had been selhng them keyboards designed for the slender fingers of American girls. Of course the heavy, one-fingered smash of the Russian clerk usually caught a couple of keys. We widened the keys for them. ''The machines with the big keyboards sold well, bat still they did not sell as well as I thought they should. Something was still lacking. I found that something and here is how I found it. "One day I caught a Russian holding his sides with laughter as he pointed to an American automobile; I could not see anything funny. The car seemed to be a particularly good one. But the Russian continued to laugh and sputter over his joke. '' 'Look at the coffin on wheels,' he chuckled, *so smooth, so black — just like a coffin.' ''There was the trouble with our machine in Russia! The only thing that is all black in Russia is a coffin — they like heaps of gilt and color. The motor reminded the man of a coffin, because it was black and shiny. Our machine was black and shiny; probably it called to mind a coffin. I cabled home to decorate the next lot of machines; when they came through they looked more like Byzantine masterpieces than anything else. It was the touch of color that had been lacking. Merchants bought the new ghttering, gorgeous machine as much for decoration as for use! The brightness cheered up their offices. "The design must never become settled. The tendency of the factory is always to adhere to the design which it beheves in: What it thinks is not of the sHghtest moment — because the factory is making, 196 MARKETING PLANS AND POLICIES not buying. The best is that which the pubHc deter- mines to be best, and since the pubHc taste shifts, the design must also shift. Automobile makers have constant battles between the sellers and the factory. "We employ men to talk with customers, with stenog- raphers, with every machine user — to discover if they do not hke our machine and if so, why. The 10-dollar- a-week girl can give pointers on many practical matters; we changed the touch considerably on sug- gestions received in this fashion. Complaints are splendid suggestions for betterments; they are to be investigated not only to satisfy the customer, but also to locate weak spots in the product or in the organi- zation. But one cannot depend solely on expressed dissatisfaction for spurs to progress; many a man who is dissatisfied will not tell you about it. You must find him through eternal digging among your buyers. "It is not easy to get the factory around to this selling viewpoint. But it can be done. I do it by considering myself a manufacturer of an article to be sold — not merely a manufacturer. Then I bring the factory management around to the idea that it is making something to sell and that good factory methods must also be good selhng methods. I tell them what people are saying about the product — and they are interested. They now consider themselves the main selHng force and are hard after suggestions for improvements from the men who are actually on the sales firing line." Another concern, a leader in its line, feels that it is rendering a distinct service to the pubhc in manu- facturing and selhng its product— a necessity— simply by putting into the goods all the value it can, and selling them at the lowest prices it can reasonably ask. It continually urges its workers, from factory hands to salesmen, to live up to its ideal of service, in workman- ship and in business relations with dealers and pubhc. BACKING UP YOUR SELLING 197 This idealism, if that is what it should be called, is rapidly taking hold in business. The spirit of the crafts- man is displacing the spirit of the profiteer. As in what one writer calls the ''hand-made age" so today many manufacturers are building into their goods the enthusiasm of master craftsmen — an enthusiasm for painstaking care and perfect workmanship. The growing popularity of guarantees is an indi- cation of the development of this new spirit. Although some concerns selling goods still make several reser- vations with their ''guarantees" others put on their goods guarantees which really mean something. Take this one, for example: You are entitled in buying Ladden & Company Clothes to a most positive assurance of your satisfaction. Every dealer in our clothes is authorized to say this to you: "Every garment made by and bearing our label is guaranteed to be of All-Wool or Wool and Silk fabrics with no "mercerized" or other cotton added; to be thoroughly shrunk before cutting; seams sewed with pure silk thread; tailored in clean, sanitary shops; and to be free from defect of material and workmanship." More than that: the dealer is authorized to say that if the clothes are not right, or not satisfactory, 3'our money will be refunded without question or quibble. With such guarantee it is evident that the manu- facturers have every confidence in their products. There's no ground for quibbling; if the goods are not right, "bring them back" — new goods or your money refunded. In short, the goods have the selling idea. It is easy to see why sellers are wilhng to accept responsibihty for the service the goods render after the goods are sold. This attitude is largely explainable by the "selling idea" — or the seller's confidence in the service qualities of the goods he sells. That the seUing idea in goods is not a constant factor, business men agree. Conditions may come about, as in recent years, which may call for radical 198 MARKETING PLANS AND POLICIES readjustments of methods and policies. What is a powerful selUng idea today may become, tomorrow, a liabiHty rather than an asset to a business. One concern, manufacturing several items of office equipment and machinery, went so far as to change the whole character of its products. Because of pohtical and business conditions, demand for its products was reduced virtually to nothing, whereupon the company set out to manufacture certain kinds of optical glass for which there was need. Soon, in a plant where there had never been a thought of manufacturing glass, many phases of glass making were going full swing. The change was necessary to turn out goods carrying a selling idea which was effective. FINDING THE MARKETS SOMETIMES IS DIFFICULT, BUT HERE ARE A NUMBER OF TESTED METHODS Going on now to our second point — finding the markets — one executive who is preeminently a sales- man, likens seUing management to commanding an army, and says that the management must find the markets just as a commander must control from head- quarters all movements of troops and guns. "It is to be supposed," says this man, "that the president and the sales manager have a knowledge of the markets. Otherwise why should they hold execu- tive offices? The larger opportunities in salesmanship — the views of the strategic maps and the relations are available for the generals and not for the privates. "I was in a European capital when the war broke out, and I got to thinking about the many needs of the government, and where my goods would fit in. "The big thing then in hand was the raising of an army. That gave me the lead; I went down to the War Office and suggested that they would soon need machines. It had not occurred to the officer whom I saw. He agreed, and went on to say: BACKING UP YOUR SELLING 199 " 'Yes, we shall need machines by and by. Cer- tainly we shall have to buy some. Take it up with me in a couple of weeks.' " 'You need them now. They will help a lot,' I answered. 'I will cable today for 250 machines to come over on the first fast ship.' " 'All right,' he returned. 'Probably we shall take them.' "They did take them and over 10,000 more. It was my business to have the larger view. If I did not have it we should not long survive." "We are selling a lot of our goods in India," says another sales executive, "and Pears' soap did the trick. It was this way. I had thought of India as a market but I was afraid that the people were too crude. I talked conditions over with a chance acquaintance just back from India. " 'What did you sell there?' I asked. " 'Pears' soap.' " 'Pears' soap? By golly, if they use English soap they are 'civihzed' enough to use my goods! I will send some of our men down there.' "The agents went out and today they are seUing all through the Orient. The goods, of course, have been made to fit the market. "Pointing the way to the market is a function of the general staff of the business. No salesman can be expected to have the larger view; he is absorbed in the specific sales just as the private is absorbed in his own little part in the battle." This brings us to our third and last point— following up seUing with service. No discussion of seUing funda- mentals would be complete, business men agree, with- out a word as to service, for service is the very bed- rock upon which successful business is built. Business service has two meanings, investigation shows. First, then, we may discuss service broadly. 200 MARKETING PLANS AND POLICIES "The most important fact in any business," says a man whose business counsel is widely sought, ''is the idea back of it. A concern may be carrying on a business with a short-sighted view which takes in only immediate profits, and may resort to any methods which will increase these profits a little. "On the other hand, the business may represent a sincere effort to be of service to other people, with fair reward for service rendered. Other things being equal, such a concern builds for greater profits in the end. "That is why I say that the idea underlying a busi- ness is the most important fact in connection with it. Many a concern has, to my knowledge, increased its business tremendously by taking its selling efforts out of the 'Sell! Sell! Sell!' class and putting it on a service basis all the way through." AFTER ALL, THE BIG IDEA BEHIND RIGHT SELLING IS GOOD SERVICE, YOU'LL ALL AGREE In any business so built upon the principle of service in this larger sense, service as it is apphed to repairs, dehveries, and so on, is taken care of alm.ost auto- matically. If the spirit of serving exists in a business it is reasonably sure to give good service, all agree. "Of what use is good salesmanship of a good article if the service claims are not met?" says a prominent executive. "Suppose a purchaser calls up about a small repair and is answered by a stupid, indifferent clerk. Is the salesman who made the sale going to have a good chance to make another sale to him? "Whether in Russia, England, India, Sweden, or Japan, we in our business try to back up the salesman and make good on every promise. We can give as good service in Tokyo as in New York and I should not expect any men to sell in Tokyo if they could not offer all that can be given anywhere. It would not be a square deal to them in their work." BACKING UP YOUR SELLING 201 "I rarely stop in a city," says the president of a concern making an article of office use, "without buying one or more of my own machmes, and 1 also test out, watch in hand, the service that I am given on repairs. I call up from my hotel, or, sometimes, il I think that I shall not be recognized, I go directly to the store. I want to know what our agents are saying to customers and how the management is Uving up to what they have promised or should have promised. "A few short-sighted salesmen may imagine that this is spying. On the contrary, it is helping them to make more sales. Service is given in the interest ot sales; if the service is bad, the news will surely get about and the men will find that sales are harder to make. One unfulfilled promise may counteract a lull page of advertising which cost heavily." Analysis of these three selling fundamentals em- phasizes the statement made previously m this sec- tion that successful seUing is 75% behind the line and 25% on the fine— 75% management, and 25% actual selling. "So strongly do I feel the truth of this," says the same man— he is president of his company, by the ^ay— "that when one of my men falls down, I take it as a personal defeat for myself and not for him. I know perfectly well that I have omitted to do some- thing which I should have done, for if I had done my part that man could not have failed. "Were I a young salesman I would not work for a company which refused to do less than 75% of the selling. I would not waste my time with it. When on the mat being questioned as to my abihty, I would take the chance to find out something of the abihty of my prospective employer. I would go straight for him with a speech about like this : " 'What do you know about selling? My success will depend 25% upon what I do and 75% on what 202 MARKETING PLANS AND POLICIES you have ah'eady done to make selling possible. Can you give me any assurance that I shall not waste my time with you and your products? ' "We have heard a lot on how the employer ought to select his salesmen, but how about the selection of the employer? There are two sides to hiring. It is more important for a young man to select a good boss than for the boss to select a good man; the man has more at stake. Probably the average run of employers would be insulted at the very suggestion of the idea that he did not know all there was to be known about selling. But the first-class employer would not be insulted; he would get the point. He would know that the man before him had grasped the real idea in selling; that it was the selling behind the line which counted — the salesmanship in the management that would make or break him in the long run. ''There is salesmanship in the selection of em- ployers; the best salesmen are those who know how to select the right goods to sell. One might as well agree to harvest on shares a field which has never been sown as to engage to sell in an unprepared market — to sell goods that are not ready for the market or in a market which is not ready for the goods." Finally, it is evident that sifting down to funda- mentals makes for straighter thinking whether the problem has to do with selling or any other activity. The three fundamentals which, investigation points out, underlie nearly all conspicuous selling successes, emphasize the importance of getting the other man's ideas. To be successful a seller must offer an article that is wanted. And knowing what is wanted involves finding out what the other fellow is thinking. TOURING the Great War business men all over the country came to know the building at Washington which housed the War Industries Board. There men met to learn the Govern- ment's needs and to lay plans for gearing their particular enterprises to the nation's enterprise. Thus the building may be said to symbohze the cooperation and the interchange of economic thought always essential to the greatest progress. The new structure in which the Shaw PubUca- tions are now housed is a permanent counteTpart in stone of the building that business men knew so well during the war. ORGANIZING FOR INCREASED BUSINESS Edited by THE BUREAU OP BUSINESS STANDARDS of thm A. W. SHAW COMPANY SECTION 8 Fitting Salesmen for Bigger Work FITTING SALESMEN FOR BIGGER WORK TTERS — just letters — but at the same time 1 letters that differ utterly from the cold, drab notes which some concerns send out to men on the road, keep the sales manager of one Michigan concern in close daily touch with his ''boys" on the road. His letters always give the man away from home some little item of local news. It may be base- ball, or some item of interest about home politics, or a personal word from a friend of the salesman, or a bit of factory news, but always it is something intimate and warming to the spirit. Each letter, however, drives home some little plan in the sales campaign, as the hint in the letter which follows, that a grade A line ought to be pushed. This sales manager has served many years on the road him- self, and he knows the trials and disappointments of the salesmen. He knows the word of cheer is appre- ciated. His are not mere "ginger" letters. Here is one: Dear Jim: Ty Cobb got a home run, two triples and a single in four times at bat this afternoon. I wish you could have been here to go out to the game with me. It was a corker. By the way. your last report from Waco shows that you have your eye on the ball, too. You batted about .800 in Waco and I'm betting on you to increase your average in Austin. Don't forget that Grade-A line. It's always good for a hit. 65 Copyright, 1921. by A. W. SHAW COMPANY as a part of the Shaw Selling iSeries 66 BUILDING UP A SALES FORCE But the letters form only part of the plan this sales manager uses in training his salesmen and keeping them informed in the methods and plans of the house after and while they are on the road. The company's personal contact with salesmen starts as soon as they join the company. First, they are put in the factory for a few weeks to learn how the product is made. The sales manager keeps a watchful eye on their progress. When the man is ready to start out he knows the line thoroughly. He is trained so he can go into the customer's shop arid demonstrate the article effectively. And his sales education continues through letters like the one given on the preceding page, after he is on the road. Most sales managers, investigation indicates, use one or a combination of two or three methods to train their salesmen to the highest point of effectiveness. These methods are: 1. By salesmanship schools 2. By road training with experienced salesmen 3. By letters after the man is on the road In establishing schools for salesmen many concerns have these two objects in view: first, to give intensive training to men ah'eady qualified for the sales force, and, second, to train factory or office men to take sales positions and hold them effectively. One wholesaler holds schools for salesmen in different parts of the country several times each year. In each district monthly meetings of salesmen are held, and many branches have weekly meetings to discuss some feature of the goods. An important point in the pohcy in connection with these sales-training schools is that the company does not give a salesman the train- ing course until he has been tried out in the field and has made good. In this way the company saves both time and money in training poor material. TRAINING AND DEVELOPING 67 A concern which manufacturers a line consisting of several thousand articles, for years faced the problem of getting the salesmen to understand and push the full Hne. New salesmen had to gather this knowledge gradually on the road through the medium of weekly or bimonthly meetings with district managers, and the results were decidedly unsatisfactory. HERE'S A SCHOOL FOR SALESMEN WHICH TURNS OUT THE MEN WELL EQUIPPED TO GO AFTER BUSINESS The company decided to establish a school for sales- men. This school is under the immediate directions of the general sales manager and an instructor who is familiar with the manufacturing details of the business. The course of study is intensive. The first month is spent in actually handling t^e goods and filling orders in the finished product stock room. Here the men become familiar with the styles and *' put-ups " of stock items. With this preliminary experience they are the better fitted to grasp quickly the details of the manu- facturing end. The last two months of the course they spend in the manufacturing departments. They are shown exactly how each article is made and what pre- cautions and care are used in maintaining quality. Each line of goods is taken up by itself, so that the students will be thoroughly conversant with the steps through which it passes. Each detail of manufacturing is pointed out and its relation to the prices of the goods explained to students in detail. Another subject which is covered is the study of materials which enter into the products. Wherever possible this is done by using stereopticon slides to illustrate the method of manufacturing. In the laboratory salesmen learn how standards of quality are determined and watched all the way through. Paralleling the study of materials and manufacturing are a series of selling lectures given by the managers 68 BUILDING UP A SALES FORCE of the various merchandising departments of the concern. The lectures are based upon the cumulative knowledge which these men have obtained from their experience with the entire selling organization. The student is shown how to use his samples ; the uses to which each article can be put ; the arguments for them ; how to meet the arguments against them; the points in which they are superior to those of other makes; in fact everything that a salesman ought to know about his goods. These selling talks always are given at the end of the period devoted to studying manufacture. At stated intervals during the course more general lectures are given. The subjects are along broader lines and are always given by one of the men at the head of the company. A few talks that have been given are: "The past and future of the company," by the president of the concern; ''Ideals and policies," by the treasurer; ''How the factory cooperates with the salesman," by the works manager; "Selling values of conmiodities," by one of the directors; "Retail- store selling," by one of the directors; "Advertising and selling," by the advertising manager; and "The buyer's impressions of salesmen," by the general purchasing agent of the company. These general lectures, aside from the value of the subjects themselves, give the students the opportunity to meet and hear those who are responsible for the policies and management of the company, and they help to impress them with the spirit of cooperation that exists from top to bottom of the organization. The personal side of the salesman's duties is covered in talks given by the general sales manager. Salesmen's habits, dress, appearance, conduct, and manner of speech are discussed in connection with the business. The balance of the training course is made up of the study of order writing, pricing, and delivery. The subject of credits and collections is carefully gone over. TRAINING AND DEVELOPING 69 Written examinations are given weekly to enable the students to digest all the work of the week and to check up their progress. These examinations are con- sidered vital to the success of the training course. At the end of the training period at the factory the men are assigned again to a territory. They receive in the field the final touch to their education, which is learning how to sell. It can be seen that under this present plan the new salesman's experience is the reverse of his experience under the old method. For- merly he sold first and gradually acquired his knowl- edge of his product; now he acquires his knowledge first and then is taught to sell effectively. One company which makes grinding machines re- cently estabUshed a school to help its salesmen get a grasp of the engineering problems which constantly arise in the sale of its product. This knowledge, the company believes, can be obtained only through the actual handling of the machines. The company prefers graduates of technical or trade schools as sales- men, and it gives them a two-year training course in the various shop and office departments of the works, before sending them on the road. New men first spend a week in inspection of various departments of the works, observing closely the different methods of manufacture of the different parts of the products, and then writing a report on the work which they have seen. This is followed by work in the repair shop of the company. This leads to work in the shops, operating cylindrical, surface, and internal grinding machines, and inspecting grinding work. This is followed by six weeks training in the trueing and bushing room, where the wheels are finished ready for testing and inspecting. Then they are taken through the inspection and packing room to the stock room. This is succeeded by work in the drafting room of the engineering department, six months in the 70 BUILDING UP A SALES FORCE mechanical laboratory, where tests are constantly being made in an attempt to discover better methods of making grinding wheels and better adaptations of wheels to given types of work. Some time also is spent in the cost department. In the order depart- ment they trace orders through the shop to see that they are delivered on time, and short periods are spent in the credit department, publicity department, re- fractory department, and so on. NOT ALL THE SCHOOL INSTRUCTION IS ALONG SALES LINES; AS YOU READ YOU WILL SEE THE REASON WHY During all this time these men are under the super- vision of the foremen, and are given instruction by them in the different technical processes which are carried on in each department. While they are in the stock department a general review is taken of all the stages through which the product goes previous to reaching that department, and a comprehensive examination is given the student, which shows plainly whether or not the young man has taken advantage of his oppor- tunities up to that point. No regular classroom work is offered to these men, as it is assumed that they — the majority of them being college or technical-school graduates — have an ample training along the lines which would be taught in a classroom. One sales manager was ''up against it" because he could not get men trained to sell a technical specialty to fill several of his vacant territories. He noticed several likely looking men in the factory and decided to try an experiment. A notice was posted offering training in salesmenship to those inter- ested. No promise of rewards of sales jobs was made, but about 350 factory men attended the first meeting. The course lasted all winter and in the spring the sales manager had 20 men ready to take sales jobs, and a supply of trained men for future vacancies. TRAINING AND DEVELOPING 71 Another concern conducts "owl" or night classes for its factory and office men who wish to get into the selling end of the business. In these classes special training is given in the demonstration and handling of the product. In addition, business English, Spanish, advertising, public speaking, and free-hand drawing are taught. The company feels that public speaking is an invaluable aid to good sales presentation and the free-hand drawing is considered valuable because a sketch often will drive home a point which cannot be explained easily in words alone. Road training — the second method we laid down at the beginning of the section — has proved successful in many firms, and coupled with this road training has come the development of sales manuals, and greater attention to the salesman's outfit. One food-products company does not rely on training in the office or factory to develop its salesmen, but sends the men out on the road with competent instructors. It has six or seven men who are excellent instruc- tors, but who are not particularly productive salesmen. It has therefore been found economical to put these men to training new salesmen. For the first week on the road the new man does nothing but listem and ask questions while the instructor analyzes his own methods for the benefit of the student. The following week, the new man is given a chance alone in a small territory. Examination of his orders and his reports show pretty accm-ately what progress he is making. He is urged to analyze his results him- self and if he feels that he is not getting the results he might, he may send for the instructor, and work with him another period. The third week usually is spent with the instructor again, and this time the older man does the listening while the new man does the selling. The goal of all the men is the managership of one of the general branches. Calling on the jobbing trade is 72 BUILDING UP A SALES FORCE looked upon as pleasant er, and it is better paid than the retail work. The company urges members of the sales force to try for these positions. Before a salesman can get on the staff of one com- pany which makes a heating appliance, he must go through a long period of training. The company keeps squads of men in the field training for salesmen's jobs all the time. This training consists mainly of sales- promotion work. Junior salesmen are assigned to the territory of some regular salesman and they make a house-to-house canvass of every building owner in the territory. They do not try to sell any goods but merely to interest prospects in the company's products. In the course of the training period the young salesman meets about 10,000 prospective buyers. He can take only snap judgment of these prospects, and yet must study out instantly the method of approach which will be most effective. This work often develops casual prospects into good customers. One wholesale sales manager believes that special training is necessary to prevent new salesmen from getting the habit of sitting around idly in hotel lobbies or getting the idea that big orders can be taken over the telephone without involving any work. To prevent this tendency the sales manager sends out three or four new men with an older salesman. At night, they hold "experience" meetings at which the troubles of the day are discussed and the veteran advises the beginners how to improve their methods. This plan has proved successful both from the edu- cational standpoint, and because the men are spurred up to get as many orders as possible. No amount of school training and road instruction is of much value unless the salesman is effectively equipped to show his goods, according to one sales manager. He declares that it is especially important that the salesman's equipment be up to date. TRAINING AND DEVELOPING 73 "There is no question," he said, "but a house will be better represented and the salesman can better present his proposition with a compact, neat, ^id comprehensive grip or outfit to use in his seUing. "A salesman for a publishing house came into my office the other day and painted a beautiful word- picture of a series of pamphlets which had been pre- pared for manufacturers to distribute to their sales force. The presentation was attractive but it lacked the force in itself to put the sale across. AT THE PSYCHOLOGICAL MOMENT THE SALESMAN CAME FORWARD WITH A CLINCHING APPEAL "He was a good enough salesman, however, to have an outfit with him, and the folks back of him were far-sighted enough to furnish him with a well-prepared outfit. Just as I began to wonder what these pamphlets looked like he produced from a neatly arranged grip the entire series — spread them out in an imposing array across my desk, and what was the result? The buyer naturally could have nothing but admiration for the layout, even if he did not place an immediate order. It is the impression he makes with the prospect which counts with the salesman, and the outfit helps him to make a good one if it is of any account. "Many of the mistakes made in fitting out a sales force are due to failure on the part of the home office to realize that their salesmen are human and can only carry a limited amount of luggage. Some of the trunks, grips, sample cases, and portfoHos loaded onto the poor salesmen would make even old Atlas who held up the world shrink from the task. The result in most instances is that instead of utilizing this big supply of equipment the salesman has a natural tendency to leave most of it behind. He gradually gets so that he doesn't keep it up to date, and before long the entire cost of the equipment is a loss to the house. 74 BUILDING UP A SALES FORCE ''It is a good plan to prepare a salesman's outfit so it can be changed weekly, monthly, or at least once every two or three months, not necessarily in a radical way, but by throwing out some old, stale material and putting in some fresh bits of helpful matter for the salesman to show his trade. The value of this changing has been realized to the extent that the looseleaf or sectional style of outfit or portfolio has developed in tremendous strides in the last few years. Instead of the old bound book with its never-changing contents, which usually had little or no interest after the first call, it is now possible for the well-equipped salesman to keep up interest on subsequent calls with practically the same framework, by shifting ''scenery." And, after all, the salesman's abihty to get the order depends considerably on the message he has, and his method of approaching the buyer and presenting the subject. This fresh material also keeps the salesman well in- formed on new lines the house is putting out. "One of the best solicitations I ever heard was made by a publisher's representative. He called it a deaf- and-dumb sohcitation. He came in with a few whispers, centered his entire argument for a period of five minutes or so on the one dominating point where his proposition stood out above competing ones, and drove that point home with two or three easily directed references to a small ring binder which he pulled out of his coat pocket at the psychological moment. The point always comes to my mind in considering sales work — how much better that solicitation was than the average long, rambling one, which attempts to cover too big a field and leaves no definite impression. "The salesman's outfit, of course, must be so con- structed as to cover the salient points in the line. It cannot always concentrate so well, as did the pub- lishers' representative's argument, on one or two points, but its main function must be to make a big impression TRAINING AND DEVELOPING 73 of the house and the line on the prospect. Therefore its preparation well can take hours and hours of care- ful thought, study, comparison, and analysis. It can easily be weakened by too much unimportant material — its value can be lessened by too much copy and too little illustration — or it can be spoiled if the man who prepares it puts in a lot of 'big stuff' which is of Httle or no interest to the merchant in 'Littleton.' "This is a very important point to bear in mind in the preparation of a salesman's outfit — peculiar char- acteristics of the territory and the trade to be called on. If the manufactm-er of a nationally advertised product or a wholesaler is trying to cover certain territories containing many towns of say 20,000 and under, and the salesman has only one town of over that popu- lation, it is highly important to make the portfolio apply specifically to communities of that population, so that the salesman will not flash a testimonial on a merchant in 'Littleton' written by a merchant in New York City. If he does, the prospect says: 'Well, that might work all right in New York, where your maga- zine advertising is big, but it won't get across here.' Then your salesman has to build up a complete argu- ment against an antagonistic mind. If the portfolio is properly constructed the merchant in 'Littleton' sees what merchants in similar communities are doing — perhaps he sees testimonials or store pictures from dealers in nearby towns who are friends of his, and this fact lends greater weight to the proposition. "It is well to consider before preparing an outfit the relative routes of different salesmen so that sectional or geographic conditions can be taken into account as much as possible. In other words, leave certain features of the outfit flexible. "Another important point to observe in the prepara- tion of an outfit is its compactness. It is surprising how big an outfit one man can produce, given the material. 76 BUILDING UP A SALES FORCE and equally surprising how another man can take the same material and reduce the size and weight of the outfit, and yet get as good results. I saw this worked just recently, where, instead of handling all the pages of an album in flat shape the pasters on each page were 'lapped' like the shiplap siding of a cypress house. The portfolio when first prepared required one page for every two or three pasters, whereas in the revised form one of the album pages would accommodate a dozen pasters in this way, and they were just as effectively fixed on the page and made a more inter- esting impression on the prospect. This arrangement can be handled splendidly in showing testimonial letters, samples of cloth, samples of paper, labels, wrappers, bands, and so forth. ALMOST EVERY CONCERN WILL FIND HERE A VALUABLE HINT TO HELP IN BOpSTING THE SALES VOLUME ''For concerns with a line of goods which can be be seen, felt, tasted, compared, weighed, and so on, the actual goods in a demonstrating outfit will often help mightily, many sales managers have found. "The photographic outfit has come into considerable popularity and it seeriis particularly well adapted to the selling of certain classes of goods. "One manufacturer I know, last year equipped his sales force with an outfit of photographic reproductions — about 15 in number. These were carried in a port- folio about 9 by 12 inches in size, and each photograph illustrated some strong point of the company's fine. The plan proved so successful that the company decided to put out about 20 large trunks — exact enlarge- ments of the smaller outfits. These were used by the salesmen to land special prospects in big cities." "Photographs have been a big seUing help to us," says the sales manager of a wholesale dry-goods house. "We tried them first for our fine of women's wear, TRAINING AND DEVELOPING 77 children's dresses, sweaters and knit goods. We photo- graphed the garments themselves on live models. Lively pictures catch the eye, and show a customer the fit and stj'le of a garment even better than the garment itself. These pictures we mount on cardboard, and on the same card we show a small piece of the material used in the garment. The salesmen carry the cards in portfolios, four of which fit snugly in a trunk tray. ''The same plan has worked beautifully with women's and children's wear. Each salesman formerly carried one sample trunk of each of these lines. Now he carries in four portfolios sample cards of more individual items than he could possibly carry in a full- sized trunk, if he had to show the actual garments. "Similar changes in showing samples helped sales in other lines. Take knit underwear, for example. WTien we came to replace the old-style bulky samples with sketches and small pieces of the goods we were able to save 95% of the space in a trunk. Here we used sketches in place of photographs, in order to show the small but important details — such as the making of the cufT, the collar, and the anklet. "In showing piece-goods of all kinds — staple shirt- ings, sateens, tickings, draperies, ginghams, cotton dress goods, white goods, and so on — we made effective changes. Formerly they were put up in bulky books, an inch or more in thickness, furnished by the mills. We obtained the cooperation of the mills and had samples mounted on our own special sheets which were bound in looseleaf leather-covered binders. The samples themselves are smaller and so mounted that space formerly used up by hea\'y cardboard sheets is now used to show patterns and materials. "Our new sample method means two or three less trunks for each salesman, and that in turn means just so much less of his time spent in looking after trunks while he is on his trips, and in packing and unpacking 78 BUILDING UP A SALES FORCE them. I can give you a fairly clear idea of how much trunk space and how many actual garments we save on one of our lines alone — sweaters. Two 12''xl4" portfoUos carry samples of all the sweaters that we used to carry in a large-size sample trunk. We have 100 styles of sweaters. If we supplied each of our 50 salesmen with a sample of each, we would require over 400 dozen garments. Packed in 50 trunks, this would mean an approximate load of 5 tons — 200 pounds for each salesman. But the two portfohos together weigh only 20 pounds, and fill but one-half of one tray. That is a real economy, as you will agree. ''Furthermore, a salesman now can show his samples more easily and more quickly, because they are more compact ; and the customer need not spend extra time going over each garment separately. Samples are kept in better condition and need less cleaning." The salesmen's outfits just described also are well adapted, investigation shows, to effective checking up on how salesmen are taking care of their samples. Frequently, when a sales meeting or convention is held, the men are asked to bring in their outfits for inspection. In one way or another the sales managers see that the outfits are kept complete and in good condition — an important point. Not by any means the least important part of the salesman's outfit is the price-list; and many concerns make the mistake of trying to put out an ''encyclo- pedia" instead. They try to combine a catalog, a book, a sample case, and the prices all in one — and usually it doesn't work out well. Manufactiu-ers, especially since changing price conditions have pre- vailed, have seen the value of a condensed price-refer- ence list, which can be easily and quickly issued, con- veniently referred to, and inexpensively reprinted when necessary. Cumbersome price books have disappeared in many lines, much to the delight of the salesmen. TRAINING AND DEVELOPING 79 Another important part of the salesman's equip- ment, and one which serves as a real basis of instruction, is the sales manual. Investigation indicates that sales manuals are being used more widely by sales managers every day to take the place of the old, stereotyped printed instructions to salesmen. Most of these sales manuals are made up in looseleaf form so that new material can be added from time to time. HERE'S A NOVEL PLAN WHICH EFFECTIVELY TAKES THE SALES MANUAL OUT OF THE "ALMANAC" CLASS One firm has adopted a novel plan to keep the sales- man interested in his manual and to make it of real value to him. Each salesman's manual has his photo- graph embossed on it. In addition to general selling suggestions, this manual gives specific information about the different lines. For instance, under "food manufacturers" is information to use in selHng those products. Salesmen, it was found, get plenty of opportunity for studying this condensed information. The sales manager of a wholesale house selling sponges, pumice, chamois, and the like, has developed a sales manual which is very complete in the instruction it gives his men. This manual led to stronger co- operation of the sales force and it is considered so im- portant that a new edition is issued frequently. In describing his sales manual this manager said: "Each manual is numbered and assigned to a salesman. It is printed in book form, with perforations near the left margin, in order that it may fit into a leather, stapled binder that is a part of each salesman's equip- ment. Every man in the organization is encouraged to send in suggestions for improving the manual, and so rapidly has it been growing, that we already have pubhshed 10 editions. With its printed instructions before him, no salesman can plead as an excuse, *I was never told how to do this or that.' 80 BUILDING UP A SALES FORCE "Perhaps the most effective way to illustrate some of the standards that we have worked out is to quote from the manual. One of the points of general interest deals with the salesmen's expense accounts: Laundry, barber work, cigars, and other personal items of ex- pense are not allowed. We are not to be put to extra expense for compartment cars for night travel, or parlor cars for day travel. Note in your expense book the city you are in when expense is incurred— also the date. If you are living on the European plan, itemize all incidentals and also each meal — breakfast, dinner, and supper. Salesmen will prepay all telegrams to save bookkeeping. Write down the name of the town on the top of each page in your expense book, and put your name on the outside of the book. Salesmen generally are advanced $50 for expenses. With this he should, when advisable, buy the proper size of mileage book and charge only the mileage daily as used. Every Saturday night you will send in your expense book for the week ending that night and draw a draft on us for the exact amount of your expense at the same time. In this way the expense books will get to the office on Monday morning and the drafts will arrive about the same time. Drafts must be drawn only for the amount that the salesman spends during that week. This rule must be strictly adhered to. "The careful study of our own selling methods which the preparation of this manual entailed, led to a study of the 'other fellow's' methods as well. How did notably successful sales organizations, for example, straighten out the kinks in their problems that were similar to ours? How did the men who sold adding machines, or typewriters, or varnishes, solve the prob- lem of carrying samples? Out of inquiries like these grew a set of rules that now govern our salesmen's use of samples and equipment — which should consist, to quote again, of the following: First: A small price book, which we provide. Second: A fountain pen with which to make notations on our sales cards (5 by 8 inches), which you provide. TRAINING AND DEVELOPING 81 Third: A pocket magnifj'ing glass with which to examine powdered pumice stone, rouge, emery, and other products. Fourth : A pocket knife (and have it sharp) and a pocket tape measure (36 inches) to measure chamois skins and felt — a steel one preferred. These you must have each morning before you start out, in order not to be caught at a disadvantage. Salesmen are provided with black-seal leather document cases in which to carry samples of merchandise. You should carry samples of each of our standard lines. It is of immense value to show the goods we are talking of. If the buyer not only hears you talk of sponges, but sees, feels, smells, and weighs sponges, you make it easy to get his favorable attention, and then desire. Apple pie on the sideboard— you see its brown crust, you smell its delicious odor, you catch a glimpse of the browned apples— it is more desirable than "apple pie" printed on a bill of fare. ''Hand in hand with this standard equipment goes the standard demonstration of our goods to a pros- pect. The several methods of approach, the plan of exhibiting samples, and even the specific forms of address, have all been tabulated. To the manufac- turer who is famihar with these standardized forms of arguments and 'answers to objections,' the manual is not unusual. But from our experience we have culled a few ideas that have worked out so well in practice that they may be worth recording. For example, here is a bit of manual instruction that involves policy: Carbon copies of house letters to his customers are seiit to the salesman in order to keep him in daily touch with the situation. It is not expected that you are to keep these letters, but only such letters as will lead to business building, letters on subjects you desire to take up with customers on your next call. These inchide adjustment of complaints, and collections. These carbons should be filed in envelops or, better still, a flat letter file, under the name of the different towns which you make. Then, when you come to a town, pull out the correspondence for it, and you can go into the subjects in question more intelligently, and your customer will be pleased by the personal interest you have taken in his business. 82 BUILDING UP A SALES FORCE If you can go into his office with a carbon copy of a letter which has been written him and demonstrate that you are thoroughly in touch with the correspondence, you are really BUILDING BUSINESS. Then, if you desire to write us about any particular subject, we prefer that you write on the back of the carbon copy sent you. It saves looking up back correspondence. "Throughout the manual, too, are scattered bits of advice on what may appear to be points of small importance, but which experience has shown to have dkect bearing upon sales. For example: You should be calling on your first man at 8 o'clock in the morn- ing, not 9 o'clock. One of our president's characteristic plans was to go to the farthest factory and be there at 8 o'clock — and he won the admiration of the buyers. ''I found the methods of our most successful sales- men worth observance by our entire force. So the following instruction appears in the sales manual : Mention the principal article you are selling to the customer every time you call on him. Say, "I am King, the sponge man," or "I am King, the pumice man," as the article may be. This, often repeated makes such an impression that when the buyer thinks of pumice, he thinks of King. "If the prospective customer is not acquainted with either the salesman or the company, the following bit of advice apphes to his work : When you walk into a man's office, don't lay out your card and say: "I am Mr. King, representing Adams & Company of New York and Chicago." You should not say this for the follow- ing reasons: First: The buyer may not know Adams & Company, and probably he does not particularly care to. Therefore, the mention of our name does not arouse interest. Second: It is a time-worn phrase that every buyer hears probably every 10 minutes of the day — and you know how repeti- tion grates on the nerves. It certainly does not incite a feeling of welcome. Therefore, before you walk into a man's office, plan what you will sell that man. Even though he may use four of five of our TRAINING AND DEVELOPING 85 articles, get your opening talk started on one certain item that you are going to sell, and stick to that item at the start. The sales manual has been an institution in this company for six years, and it has been revised and enlarged with each edition until now it is a text-book of information that every member of the force is glad to get — and one to which each is expected to con- tribute. And that it has been of practical value is indicated by the fact that a staff of 15 salesmen, handhng a closely competitive line in which the individual sale is usuajly not large, is selhng $1,000,000 worth of goods a year on the average. One clothing concern not only suppUes its salesmen with sales manuals but it also furnishes each season a neatly printed book of pocket size, bound in stiff covers, which gives a detailed account of each model the house is offering for the season. These books are printed on heavy paper and are illustrated with drawings of the different styles. This helps salesmen to pick out the principal sales arguments quickly and easily, and also makes a good impression on the dealer, it is found. This brings us to the point where our salesman has received his preliminary training, and has been properly equipped to carry on his work. The next problem we face is how to keep up this training, and maintain our man's interest. Obviously, the best way to do this is by letter, since he is away on the road. There are two general types of letters to salesmen, investigation indicates. One is the quiet, helpful type, full of valuable selling points and general advice. The other type is the ''hurrah boys" ginger-up letter. It was found that many sales managers believe that stereotyped "enthusiasm letters" sent broadcast to a lot of salesmen, like a talk delivered at random to a mixed crowd, are not so helpful as the word in time to the man who needs it. 86 BUILDING UP A SALES FORCE One sales manager said when interviewed: "Let's take a look at one of these enthusiasm men. There he sits, behind his big flat-topped desk, dictating one of his ginger-up letters. The letter sparkles. It effervesces with enthusiasm. ' Send a copy of that to every sales- man — and get it off this afternoon/ he concludes. "Let's look into 100 hotel lobbies the next morning. In these lobbies — each one different, yet monotonously ahke — sit 100 different types of salesmen, salesmen who had 100 different kinds of yesterdays, 100 different kinds of last nights, 100 different kinds of breakfasts; yet, behold, each last one of them gets the same kind of a ginger-up talk in the morning mail. WHY "GINGER" LETTERS WHICH DON'T GINGER OFTEN ARE MORE DETRIMENTAL THAN HELPFUL TO SALESMEN "Who, do yo!!u suppose, gets any appreciable measure of enthusiasm out of that letter? Perhaps the sales manager is the only one who benefits." It is just as poor a plan, however, according to investigation, for the sales manager to send out a letter which will tend to discourage his men and make them feel that their hard work is not appreciated. Recently, for instance, a salesman for a roofing and building material concern concluded a contract for the roofing and building insulation material on a $100,- 000 hotel. He worked six days at high tension to land the contract. The order ran into several thousand dollars, and he could not help feeling that he had accomplished a good week's work. He did not get the order until midnight of the final day. The contractor and his chief engineer had been checking over the specifications with him in his room at the hotel, and when he finally got the contractor's signature on the dotted line he was dead tired. Still, he was elated with his success, and accompanied his customers to the hotel office before "turning in." IRAlNi^G AND Di:.VELUr;:\C; 87 The night clerk called him to the desk and handed him a letter. He hurried into the writing room and before opening it wrote out his biggest order. This letter the clerk had given him was from his house. It was a letter that a sales manager's corre- spondent had written and it contained a lot of strong- arm "pep" — just what an inexperienced man sitting in a swivel chair supposed the men on the road needed to "wake 'em up." It is not necessary to quote the entire letter. This is the way it began: Do you think you are doing the best you can? Is it possible for you to say honestly that you are giving the line at least eight hours of conscientious effort six days in the week? In other words, are you delivering all the service you are paid for? The salesman read the letter twice. The elation of work well done began to leave him, and anger at the man in the swivel chair back in the home office to replace it. He turned the letter over and wrote the following note on the back: Enclosed please find order. Replying to your letter herewith — no. I do not think I am doing the best I can. I am sure that I can do a blamed sight better with another house. Accept this as my resignation, effective in 60 days in accordance with my contract. The resignation was not accepted. The salesman received a prompt explanation that a copy of the letter he had received had been sent to every salesman on the road. Needless to say steps were taken to see that this particular mistake was not repeated, but the dam- age took a lot of expensive corrective work. "Salesmen and their ways must be understood if the greatest measure of profitable cooperation is to be secured," says one experienced sales manager. "Letters written from their own viewpoint, in a spirit 88 BUILDING UP A SALES FORCE of fellowship, by one who has experienced the same problems they run up against, seldom fail to get a satisfactory respronse from most salesmen. "The other type of letters may cost heavily. It is usually an unprofitable hazard to run the shghtest risk of replacing the enthusiasm, cheerfulness, and determination in a salesman's mind with resentment, discouragement and all-around gloom." A salesman who has traveled through the Southwest for 18 years for a St. Louis shoe house not long ago expressed his ideafe on this subject — and he had positive ideas. He drew an old letter from his wallet. It was worn, faded, torn, and patched in the creases, and it carried a date going back about 10 years. It was a letter from the former president of his firm. "Whenever I get a bit discouraged," he remarked, "I dig up this letter and read it. When the writer died, a couple of years ago, I lost a real friend, one who had helped me over a lot of rough places." Then he skimmed through the three pages of the letter, indicating occasional paragraphs that he par- ticularly liked. Here are some of them: A statement of the month's sales reached my desk this morning, and I very much regret to see that conditions in your territory pre- vented your landing a volume equal to, or surpassing, your last year's business for the same month. However, I want you to know, Mr. Landis, that here in the office we are confi- dent that your season's business will sur- prise you and better the record you made last year. It is not the month's nor the season's volume, nor even the year's volume, that we judge a salesman by. It is his years of ser- vice with this firm. And judging your work by results, we want you to know that we are sure we haven't a salesman who could do any better than you are doing right now. We are con- TRAINING AND DEVELOPING 8!) vinced, too, that our force of salesmen is not surpassed by any in the world. Don't get discouraged for a moment! The writer remembers very well a season much like this one, back in 1896. As you probably know, he was traveling then, and his sales fell off to a very disheartening extent. Not only the season but the entire year showed a loss of business. Well, I came in with all the starch taken out of me. I'm ashamed of myself now, when I think of the demoralized state of mind I was in. However, before going out again, I bolstered myself up, got back a little confi- dence in myself, and do you know, the very next year was the most successful year in all my experience. Judged by all the years of my service, the house must have thought pretty well of me, for they took me into the firm. So don't worry a moment over the way things seem to be going. You had nothing to do with the lack of rain and other conditions that hamper your work. If the season, or even the year, shows a loss in sales for you, we have absolute faith in your ability to make it up and more as soon as conditions are normal. "I made it up all right," declared the salesman, as he carefully replaced the letter. Another essential for an effective salesman is confi- dence in himself and in his line, and the knowledge that his house has full confidence in him. The president of a wholesale corporation employing over 150 salesmen understands this, and because he does understand it, he has improved the selling service of his concern to a remarkable degree. "For a long time," he said, *'I had been considering ways to put every one of our salesmen in a good humor every day. About 10 months ago I decided to try a new idea for a month. It proved effective and we have used it ever since, you may be sure. 90 BUILDING UP A SALES FORCE "It is very simple. I give it my personal attention because I enjoy it, and because it keeps me in close touch with the men on the road. "I make it my first duty every morning to dictate a brief, cheerful circular letter, to be mailed to the sales- men in the afternoon. These letters have but little direct reference to the business. I try to make them interesting, amusing, and always optimistic. In every one I aim to put a grain of common-sense philosophy. "The letters have been successful — mainly, I think, because we have been systematic in issuing them. The good effect has been cumulative " The extent to which these letters are appreciated by the salesmen was strikingly shown last spring, when the president took a week's vacation and failed to notify the men that the letters would stop. "When I returned," he says, "there were over 100 letters from men who had kicked because we had discontinued the daily letters. " It is, of course, his systematic knowledge of his men and their problems that has enabled this man to succeed with circular letters where others fail. Many of the salesmen for this concern take enough interest in the letters to send in good ideas and stories for use in connection with them. Here is a typical letter from this series. The idea for it — like many others — came from an incident in the president's day at the office. An old friend came to see me recently, and we talked over a number of things and then somehow got on the subject of hotels. "There's a house down in Louisville," he said, "where I'd rather stop than in any other hotel." "Why?" I asked, "Well, it's a good hotel and they put you in a good humor the minute you're out of bed TRAINING AND DEVELOPING 91 in the morning. In all my life I've never heard a sweeter voice or a more cheerful call than the girl at the house 'phone uses to wake guests up in the morning. "Of course, when the 'phone in your room rings the first time, you just turn over and try to forget it. Then it rings again and you get up a little provoked, with your head per- haps a bit groggy from the lack of the extra sleep you wanted. You're in a bad humor gen- erally and the bad humor sometimes lasts until after breakfast or into the middle of the day. "It does, I guess, when you are stopping at most hotels. "But in that hotel it's different. "'Good morning, sir," drifts through the receiver, softly and pleasantly. 'Sorry to disturb your sleep; but it's 7 o'clock. That's the call you left. Time to get up!' "Somehow or other you usually can't help smiling while you shave. And your mind is as likely as not filled with thoughts that do you good. You recall, perhaps, how you hated to get up and go to school when you were a kid. Gee! How good the covers felt on cold mornings. "'Get up, Bobby, dear!' — you remember how your mother used to sing it up the stair- way — 'It's almost time to start to school, and breakfast's ready. Time to get up, son!' "They make a fellow feel at home." Since my friend left I've thought a good deal about his experience. That hotel is creating business by making hundreds want to return to it just because of the cheerful, sincere efforts of a young woman who is hid- den away somewhere behind an office partition. In our business we've got the advantage over this young woman. We come face to face with our customers. It's well worth thinking about — don't you think so? 92 BUILDING UP A SALES FORCE "To what extent these letters have been the actual means of increasing sales," says the president, "we do not know, of course. But we are convinced they have paid handsomely. We are certain their value is vastly above their small cost in money and time." This executive spent something like 15 years on the road as a salesman. He won his own success by hard work and ability. His campaign of cheerful letters has produced results because he always remembers his own experience. His letters appeal — they are genuine all the way through. HERE'S A TESTED PLAN WHICH OUGHT TO BRING RESULTS FOR CONCERNS OF MANY SIZES AND LINES A manager, who is responsible for results from a much smaller sales force, uses a different method. "Almost every week," he says, "I send to each of our 32 salesmen some article, book or booklet, on some phase of his everyday work. "When I started this practice, two years ago, let- ters from several of the men showed plainly that they resented my apparent attempt to teach them some- thing about selling. However, when I frankly ex- plained that my effort was only to supply them with good ideas that would help them to sell more goods, this resentment disappeared almost at once. "I explained that our advertising department was always hungry for new ideas, and that I thought good ideas should be just as valuable, and acceptable, to a salesman as they are to an advertising man. "Frequently I find excellent articles in magazines and newspapers. Usually, with magazines, I mark the copies and forward them to the men with a letter under another cover. The items in newspapers I merely clip, and enclose with letters. "On one day I ran across a story that brought in a lot of replies. It was a brief newspaper story of TRAINING AND DEVELOPING 93 the capture and release of an American woman by Mexi- can bandits. The climax of this story was the tribute paid to the woman by another captive, Spencer by name, who had been a ranch manager. I marked this part of the article to go to the men: "She was the gamest woman I ever saw," Spencer said. "If she had sniffed and cried the Mexicans would have killed her. She smiled in the faces of her captors. They cursed her and threatened her with death, but she kept on smiling. The bandits did not mis- treat her. They let her go, a tribute to her absolute fearlessness." "In the letter that went with this, I suggested the power of a smile. If it could make a lot of ignorant bandits spare a woman's life, I reasoned, it certainly ought to work wonders with buyers. "Perhaps you will say that this was off the track when it comes to seUing goods. But it happened to be timely and the men Uked it. I find that it is human-interest articles, stories of actual successes, and accounts of how others have overcome obstacles, that arouse interest in salesmen." Another sales manager, whose salesmen sell nearly S2,000,000 in goods annually, follows a plan that he has found unusually successful from the start. "When I took this position," he said, "I found that four departments all were in the habit of instructing the salesmen. The office manager handled all corre- spondence with reference to commissions and expense accounts. If the salesman's shipping instructions were vague or incorrect on an order, the head of the order department promptly would write him a sar- castic letter. Neither of these men had ever sold a bill of goods in his hfe — nor ever expected to. "Frequently, too, the secretary would write an abrupt, dictatorial letter on how the firm wanted its goods sold. Often his instructions could not be fol- lowed, no matter how the men tried, because of con- ditions about which the secretary knew nothing. 94 BUILDING UP A SALES FORCE "Running through a week's correspondence from the salesmen, I failed to find a single letter that did not express some degree of resentment, discourage- ment, indifference, or all three in one. "The first rule I made, therefore, was that all corre- spondence with salesmen must cross my desk. The abrupt, sarcastic, dictatorial letters, I rewrote, and mailed over my own signature. And I have been very careful ever since that not a single offensive hne leaves the office under any circumstances. "There was a gratifying response to my censorship. The tone of the mail from the men changed within a week or two and stayed changed. "Now, when it is necessary to check a man up for any reason, we call him into the office. We do not run the risk of having letters misunderstood. We call in the man and go to the *mat' with him at home. "And he does not go out again until he is satisfied that our position is just, and until we, in turn, are con- fident that the fault has been overcome. We do not consider it fair to our lines, or to the salesman, to have him calHng on our customers with resentment in his heart. A discouraged, disgruntled salesman may be able to take a few orders, but he cannot represent us. "If our salesmen are always cheerful, optimistic, and encouraging, we are sure that our customers will be glad to have them call. So we do everything we can to foster such an attitude in them. "One of the best men on the sales force resigned a day or two after I accepted my position. I went over his correspondence and found that the trouble was evidently due to a personal dislike for him on the part of my predecessor. The man had secured some ex- cellent business, and opened several desirable accounts during his eight months' service with the firm. "I wrote him frankly that I had read many of his letters, that I did not blame him for the stand he had TRAINING AND DEVELOPING 95 taken, and that, in my opinion, the evidence showed plainly he had not been treated fairly. I told him I regretted that the firm had lost his services because I judged him to be, from his letters and from what I had heard of him, the type of man we needed. "He replied with a fine, manly letter, regretting his decision to quit and expressing vexation at having already made arrangements to go with another house. He said that the conditions imposed on him by our office had grown unbearable, but since receiving my letter he was leaving as a friend and would do us a good turn every chance he got in. "I wrote him several times, wishing him success with his new line and offering to assist him in any way I could. His replies were prompt and courteous without a single exception at any time. "He did not go with one of our competitors, and about 30 days after he quit he took the trouble, on his own initiative, to entertain a buyer whom he knew and sell him for us. This buyer came to the factory with a note of introduction to me from this former salesman and bought a handsome opening bill that netted an attractive profit." These are the results of some letters designed especially to boost sales. Another sales manager took special pains to point out in a letter the value that the salesman could be to the house in watching care- fully the credit of his customers. This manager pointed out that more than S 1,000,- 000 worth of goods had been shipped out in a compar- atively short time. He showed the salesman that the possibihty of getting proper returns on this amount rested on the salesmen's judgment on the customer's ability and willingness to pay. He mentioned some recent losses the company had incurred on bad debts, and urged the salesmen not to make friendship the entire basis of credit. He also gave 96 BUILDING UP A SALES FORCE a few helpful hints on how to make sure the customer's credit was good for his purchases. The credit question also was the burden of a series of letters sent out by another manager. He told his salesmen that it was ''as bad to miss a collection as to miss a train," and that ''the salesman who could not collect money was as poor as one who could not sell." He urged the men to go after collections hard, and offered a substantial prize to the man who could show the cleanest account at the end of the year. This poUcy wiped out most of the company's "dead" accounts. And so, we see that the old days of hiring a salesman one minute, giving him a sample case the next, and "shooting" him out on the road in the next, minus all instructions except those to get orders, have passed for all time with progressive concerns. Manufacturers and wholesalers see clearly the im- portance of thoroughly equipping their men for the big sales battle. They realize the need for keeping their men informed on sales questions and tactics, and of instilling into them the confidence and knowledge which brings orders. With methods like those described in this section they have developed their sales forces to high effectiveness, trained their men to cultivate territories more intensively, and thus reduced the cost of selling to an appreciable and appreciated degree. TOURING the Great War business men all over "^ the country came to know the building at Washington which housed the War Industries Board. There men met to learn the Govern- ment's needs and to lay plans for gearing their particular enterprises to the nation's enterprise. Thus the building may be said to symbolize the cooperation and the interchange of economic thought always essential to the greatest progress. The new structure in which the Shaw Publica- tions are now housed is a permanent counterpart in stone of the building that business men Imew 90 well during the war. ORGANIZING FOR INCREASED BUSINESS Edited by THE BUREAU OF BUSINESS STANDARDS ofthmlLW. SHAW COMPANY SECTION 9 Graphs that Check Up on Sale$ GRAPHS THAT CHECK UP ON SALES WHEN the general manager of an eastern com- pany found it necessary to be absent on business in San Francisco for nearly three months, he selected from the reports which came to his desk those which he wanted forwarded to him to help him keep in touch with the business. His statistical department listed these reports and found that they numbered exactly 110, even after careful investigation, which eliminated several as valueless. The company's statistician doubted if the executive could find time to go over all these reports. So he set about figuring out how they could be condensed. When his experirnents were finished he had the 110 reports combined into 12 graphs or charts. These graphs gave a complete survey of the information in the records — and gave it in one tenth of the time. This experience illustrates the practical usefulness to which graphs can be put in almost any type of business. In practically every instance where com- parisons are desired they bring out the important points more vividly than mere figures can. They keep facts from losing themselves. Also, by showing tendencies at a glance^ they save the time of wise executives who desire to make use of past performances when planning for future business. Investigation revealed that the following two classes of information can effectively be shown graphically or on maps to advantage all around: 36 Copyright, 1921, by by A. W. SHAW COMPANY as a part of the Shaw Selling Series HOW GRAPHS CAN HELP 37 I. Sales data a Graph of 1. Sales 2. Salesmen's comparative records 3. Relation of sales to expense 4. Relation of sales to advertising b Maps showing 1. Distribution 2. Routes 3. Sales by territories 4. Prospects by territories IL Advertising data a Graphs of 1. Advertising expenditures 2. Results of direct mail campaigns 3. Follow-up mailings 4. Percentage of replies b Maps showing 1. Distribution of advertising 2. Population reached In considering the records kept graphically by suc- cessful manufacturers and wholesalers let us consider also the best methods that have been found of making these charts and maps inexpensively. The success which the sales manager of a small company in the West has had with graphic charts corresponds with the advantages obtained by the statistician who was anxious to aid the general manager of the eastern company, mentioned before. He uses his graphs to keep track of the results obtained by his salesmen. The cost of keeping the graphic records is moderate, and the information they supply is extremely valuable for comparative purposes. His method is suggestive and probably could be used profitably by any manufacturer or wholesaler desiring a compara- tive record of the effectiveness of his salesmen. As part of his office equipment this sales manager uses a flat-topped desk six feet long, the top entirely Average number calls per day Total sales Brown Smi IWilliams J F M A iVl J J A S N D J F M A M ir J A S N D 15 75,000 14 70,000 13 65,000 12 60,000 11 55,000 10 50,000 / V \ ir ..-' V 9 45,000 n, / r \ \ A r ^ \ 8 40,000 v / ^ \ J V , 7 35,000 (1 6 30,000 N ^, " .'. v» '• ■•, . 5 25,000 t s»' \ ,♦• .' *» M \ 4 20,000 '« 3 1 5,000 2 10,000 1 5,000 \ Average cost per call 10 9 8 I 7 6 5 i 4 / ^ / •s L 3 - /\ ^^ ^ s/ / s/ f V "* ? 1. Figure 20: A monthly record of individual salesmen can be kept on this convenient form. The sales manager using it keeps the records of 27 salesmen on a six-foot length of millimeter paper. Similar charts can be made for weekly records, by increasing the length of the paper. 2S HOW GRAPHS CAN HELP 39 covered by a piece of plate glass. The comparative chart is kept under this glass. It is drawn on millimeter paper. A six-foot length of this paper takes care of the records of 27 salesmen. Figure 20 suggests the framework of the chart as it is arranged for a monthly record. If so desired, the comparisons could be made weekly, or for any other period. To secure the information which goes on the chart, each salesman is provided with a supply of post-cards. He fills out one of these every day and mails it to the office. On it, in the convenient spaces it provides, he lists the number of calls he made during the day, the number of orders he obtained, and their value. This work, all understand, must be done on time. When the cards are received at the office, the information each carries is transferred to the sales- man's individual summary and at the end of each month the figures on this form are totaled and the averages figured for the current period. The entire routine in connection with keeping this chart does not represent more than two days' work a month for a clerk. So it is obvious that a similar plan can be installed and operated at a correspondingly low cost by any sales manager in any line. WTien a new manager took charge of the sales of another house he wanted to know which were the best selUng lines and which lines were pushed by the sales- men under him. To determine this he had a graph prepared showing the sales of each line by months by salesmen for the two previous years. Part of this graph is shown in Figure 21. It shows at once that Peterson and Greene had uniform success with lines A and B. Hanly also had good results with line B but was weak on Hne A. Line C was shown at a glance to be the weak member of the family, while line D evidently was a good seller in some territories but not so good in others. 40 BOOSTING THE SALES VOLUME This chart told the sales manager more about the sales in half an hour than he could have learned in many hours' study of columns of figures. ''I never reahzed before," he said, "what a help it was to have these results in pictures. Hereafter I am going to keep a graph month by month of each salesman's work, and I will have blueprint copies of these graphs made and sent to the salesmen to help them." HERE A SIMPLE GRAPH TOLD A STORY INSTANTLY. AFTER TWO HOURS OF TALK HAD FAILED Confronted by a request from the general manager to show why the appropriation for the direct adver- tising of a certain line should be continued, an adver- tising manager listed in two columns the sales for each month of the preceding year and the advertising ex- penditure for direct mail that month. The figiu-es did not look very imposing. He decided to chart them. The result (Figure 22) told a story at a glance that an hour of explanation had failed to get across to the general manager. The result was that the appro- priation was continued and an additional sum provided to push other lines which needed a boost. With the beginning of a new year one manufacturer decided to find out just how conditions had affected his business. He charted the sales for a period of four years as shown in Figure 23. The result was a surprise even to him. He had not realized that sales had been as low as they were shown to be in one year, and he had not had it forcefully brought to his attention that the sales now were more than $500,000 more than the best mark before the war. The facts brought out led to a strengthening of the financial re- sources of the company to take care of further expan- sion and to prepare for a slump if conditions changed. When one sales manager opened new markets by mail in foreign countries and in the domestic-foreign $ SfiOO 4,500 4,000 3.500 1916 1917 1918 JFMAMJJASOND JPMAMJJASOND JFMAM — i ^ — ^ .^ -'- - tL ^ \ ^ -^ - ^ "x ■> g S 5 z z ;-— - I - ^ -^ 3,000 2,500 aooo = z -^ > 2 ? 5 ^ s 5 V = 1 I - == P -•^ s ^ ~ :^ —I ^ P - ^ = 1.500 1.000 500 015,000) 4.500 4,000 — —^ 7" -^ >^ — ~ ^ -" ^ ~i ^ I^H^ ^ L'-+1 - r^7^ / ^ r' ■ ■- --■ N f" » y ■ ^ J ^1 s . il> yi , ' — • — *-^ , L^ ', •v, ,> , ■^ >4 . /- — 3,000 2,500 2.000 1.500 1,000 600 - - ^- L-. — -,A — »*1 ;— ■^ ^ , ^^-^ ^ y^ — h-H ■\ ■^ " t- ^ i" ^ •~^ -^ -Vr^ <-i'^^ — . _ _\ vA';><5S -«^ — — — ' - — ■ — — — — P — — 1 — 1 — — • -^ e^ — , — , — 1 ilii iinj \J^ r^ — — _^ wmm Li A\ _J — — —^ I — _-H - — — — [ Figure 22: This chart indicates that sales increased in proportion to the amount of direct advertising done throughout the year, and con- vinced the firm that the advertising appropriation should be continued. 41 1,325,000 Sept. Highe st> ^ 1 1 Mar. — 1 ante- bellur n ' Vlar. recor d c 5ef 3t. F 'irst yea r / ct of V /ar 1 C )ct / J 1 T i Mat r-N 1 1 Via r- M J 1 f. \\ N v >ept. J I N V f\ \|lf / 1913 1914 1915 1916 1917 1,954,000 1,500,000 1,000,000 500,000 400,000 300,000 200,000 100,000 Figvire 23 : Charting of sales as shown above led to the strengthening of one manufacturer's resources, thus prepeiring his business for further expansion. During abnormal times, business depression and activity are frequently "guessed" about. Charts like this one give the facts. 42 HOW GRAPHS CAN HELP 43 territory of the Philippines, sales were slow at first and difficulty with the mails led to discouragement. After the experiment had been under way for nearly a year and a half, the sales manager made a graph of the sales. The chart showed that in spite of several bad slumps the general tendency was upward. He decided to continue for the rest of the year and that his decision was wise is indicated by the direction of the fines for the last six months on the chart which you will find in Figm-e 24. In using graphs it is important to arrange them so that the exact figures from which the graph is drawn can be reproduced and so that information explaining sudden changes in the curves may be recorded, accord- ing to one sales manager who uses graphs extensively, and has had very good results from them. This manager keeps graphic records by months of sales, selling cost, advertising, profits, and so forth. These records are kept on 4-by-6-inch cards, which can be filed conveniently and as easily laid out for comparison by executives interested. The space used for the graphic representation occupies one corner of the card. In using such small space the scale has to be chosen carefully to give the right proportions and at the same time to include the entire range likely to be covered. In the illustration (Figure 25) is a reproduction of one of the cards used by this manager to chart his selUng costs for one year. Note that the actual figures are given along the left side of the card. Figures at the bottom represent months. Experience has shown this sales manager that it is difficult to remember from one year to another just what caused a marked depression or increase in costs. For this reason he uses the symbols shown on the graph and makes notes on the cards which explain the sudden changes in afi"airs. 1 75,000 70,000 65,000 60,000 55,000 50,000 45,000 40,000 35,000 1 1 Record of sales for the first two years after opening foreign and domestic foreign territory k-^ ^ ) - - 1 / ^ 1 I \ / \ > / 1 \ ■^ f 1 \ 1 u \ 1 ir ~\ /i 1 1' 1 y"~n 1 1 1 ; 1 ' /' I 1 -^ ,'l l> / -^^^ h ' ^ y l\ 1 /,k / 25,000 k 1 1 1 , v /' ' y •- 1 1 / > / Y-V' Nf v 1 1 S s 1 f -' / S y t \ 1 1 15,000 10,000 5,000 1/ ~?^ s'j / 1 1 1 / 1 ^ ^ / V / 1 1 [ 1 T / h / I K 1 foreign bales mestic Foreign 1 't N ,1^ 1 1 \ Do / 1^' 1 - ! , (t - - 1 M 1 1 M 1 1 1 1 1 1 1 ; ' ' M 1 1 M 1 1 ! M M DJ FMAMJ J ASONDJ FMAMJJASOND 1916 1917 Figure 24: Here is shown one concern's record of sales in foreign ter- ritory for two years. The first year was not encouraging, but the second proved that the aevelopment of this business should be continued. Name Address 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 ' ^ / X" / ^\ S7 / A— Last 6 Salesmen ^ y\ / / B B— Freight Embargo _> A \^ / A 11 12 - Months Figure 25: One sales manager uses the graph reproduced here to chart his selling costs for the j^ear. The actual figures are given at the left, while the figures at the bottom represent the months of the year- 44 HOW GRAPHS CAN HELP 45 This system also is a great help when a comparison is made of costs with sales and the like, as it serves as a means of checking up other departments. This manager uses a similar set of cards to keep a record of the sales and expense of his five sales agencies. By using this system he is able at any time to make comparisons between any two agencies or between the sales and costs of any agency. To get the best results from graphs, investigation indicates, it is important to have them as uniform in design and as easy to read as possible. For this reason one executive has adopted the plan of making all vertical scales at the left of the chart and all horizontal scales at the bottom. If more than one vertical scale is used the second one generally is put at the right although sometimes it is found advan- tageous to have them both at the left. This executive also uses arrows pointing either up or down to show which way the curve should go to indicate advan- tageous conditions. This plan saves a great deal of time in the reading of a large number of charts and is the one generally advocated by specialists who have made a study of graphic presentation. It is often necessary for the sales manager to know exactly how his sajes are distributed to enable him to tell whether his salesmen are covering their territories properly and to determine on promotion work. For this purpose a map often is more effective than a graph. Investigation showed that pin and tack maps have been used successfully by many manu- facturers to plan routes for their salesmen and to chart the number of prospects in a given territory. One concern having a national distribution charted its sales by states on the basis of the amount of sales for each 100 prospects. The result, as shown in Figure A of Insert I, brought out some facts which surprised the sales manager. For instance, in Illinois and New 46 BOOSTING THE SALES VOLUME York where the company had a large volume of salet? the chart showed that these amounted to only a small proportion of the possible sales as indicated by the number of prospects. This resulted in a reorganization of the sales force in these two states and in a more intensive advertising campaign to push the product, and these, in turn, to more business. Another method of indicating much the same infor- mation was used by another sales manager. His system includes the use of dots, each dot representing ."S500 in sales (Figure B — Insert I). This method is considered an improvement over the shading method in that the section of the state having the largest sales can be more clearly indicated by the greater frequency of dots than by shading. With its main plant in Illinois, the map showed a big distribution in that and the adjoining states and through the Northwest. It indicated, however, that sales were lamentably weak in other states. Steps were taken to correct this weakness. This company also has a small auxiliary plant in the South and it will be noted that sales in this region were somewhat increased, probably because of the presence of the plant on the ground. THIS EFFECTIVE MAP PLAN HELPS ONE SALES MANAGER TO KEEP CLOSE TAB ON ALL THE WORK One sales manager has in his office a large map of the United States showing all railroad lines. Pins show how his salesmen are covering the country along each road. The map also shows where the various branch sales rooms of the company are located. For each state in which the comp«-ny has salesmen there also is a separate map. Each map is pasted into the bottom of a shallow drawer and all the drawers are kept in a cabinet. If any one state is divided into two or more sales territories there is a map for each territory made up and filed. Figure 26: One clothing house whose annual ad /ertising appropriation totals $300,000 divides this amount into salaries, direct mailing news- papers, magazines, posters, and miscellaneous, as shown above. Then it divides the amount of each appropriation by months (Figure 27). «7 --25 Figure 27: Here are the divisions of a magazine-advertising appropria- tion of $90,000, by months, as outlined by one clothing company (Figure 26). Of course, the divisions are not equal, as more is spent for advertising clothing at certain seasons of the year than at others. 48 □ Sales less than'500~- per hundred prospects Sale3*500-*lOOO per hundred prospects Sales ''1000-*15OO per hundred prospects Sales *1500 -*2CX)0 per hundred prospects Sales »200O-»25O0 per hundred prospects Toii-ins Covered Complete Route of Complete Route of Figure A: One concern states on the basis of tl prospects. Where sales w were made to bring the INSERT J t9 d 3- le y h ,0 n n h e Figure A: One concern charted its sales by Figure B: Dotting a map in this way— each states on the basis of the sales to each 100 dot representing $500 in sales— gave one man- prospects. Where sales were low extra efforts ager an accurate idea of where more effort were made to bring them up to the mark. should be made in his advertising and selling. Figure C: Tacks and string help determine Figure D; This map, in which branch houses salesmen's routes for one concern. Different are indicated by large-headed tacks, helps one colored strings show the complete route of each concern to route salesmen and set their quotas. salesman and how much of it has been covered. The heavy lines show each branch's territory. HOW GRAPHS CAN HELP 49 Each salesman in a state or territory is represented on the map by a pin with a colored head. One of these pins is placed on the map on each town the sales- man visits. If more than one salesman visits the same town this is shown by a grouping of pins. By this system the sales manager and his assistants have constantly before them a picture of the route each salesman is covering and can check up from the daily reports and tell just where any man is at a given time. "I have found this system very helpful in working out the shortest routes and cutting down traveling expenses," says this sales manager. ''We are able also to check up quickly if a salesman misses a town." The experience of this manager indicates that to get the best results from the map-and-tack system it is best to use a cork base to paste the maps on in the drawers. He also found that short tacks which could be pushed into the map up to the head were more e*ffecti\'e than longer tacks. Anothe^r concern uses a system of tacks and strings to indicate the best routes for salesmen. Figure C of Insert I shows how this concern keeps its salesmen working effectively in their territories. Tacks with heads of various colors are used to represent the different salesmen and the routes are arranged to best advantage with the railroads in the territory. This system has the advantage of being easily adjusted if it is found desirable to change the routing. In working out this plan the sales manager uses one colored string to trace the route and another to follow the progress of the salesman over that route. For example, for salesman A, a white string is used to indicate his complete route. Then a black string is attached to the tack at the starting pointi As soon as the salesman leaves the first town he notifies the office by telegraph or mail. The black string then is fastened to the tack to indicate that the first town eo 75-- 70 Figr tion (Fig for i HOW GRAPHS CAN HELP 49 Each salesman in a state or territory is represented on the map by a pin with a colored head. One of these pins is placed on the map on each town the sales- man visits. If more than one salesman visits the same town this is shown by a grouping of pins. By this system the sales manager and his assistants have constantly before them a picture of the route each salesman is covering and can check up from the daily reports and tell just where any man is at a given time. "I have found this system very helpful in working out the shortest routes and cutting down traveling expenses," says this sales manager. ''We are able also to check up quickly if a salesman misses a town." The experience of this manager indicates that to get the best results from the map-and-tack system it is best to use a cork base to paste the maps on in the drawers. He also found that short tacks which could be pushed into the map up to the head were more effective than longer tacks. AnothejT concern uses a system of tacks and strings to indicate the best routes for salesmen. Figure C of Insert I shows how this concern keeps its salesmen working effectively in their territories. Tacks with heads of various colors are used to represent the different salesmen and the routes are arranged to best advantage with the railroads in the territory. This system has the advantage of being easily adjusted if it is found desirable to change the routing. In working out this plan the sales manager uses one colored string to trace the route and another to follow the progress of the salesman over that route. For example, for salesman A, a white string is used to indicate his complete route. Then a black string is attached to the tack at the starting point. As soon as the salesman leaves the first town he notifies the office by telegraph or mail. The black string then is fastened to the tack to indicate that the first town 50 BOOSTING THE SALES VOLUME has been covered, and so on. This plan enables anyone in the department to tell by a glance at the map just where the salesman can be reached. If there is special business for the salesman to take up in any town along the route, as, for instance, an important collection to be made, this fact is indicated in advance by a tack of a different color. When the black string shows that the salesmen's next stop will be this town a letter is mailed containing special instructions for the task. By using a supplementary card file to keep the salesmen's reports containing the names of the hotels and so forth, it is easy to get in touch with the man on the road at any time. This plan has made it possible quickly to change a man's route. Another concern uses a tack system but instead of using strings to connect the routes it uses chalk lines of different colors to indicate the progress of the salesmen from one town to another. This plan is considered effective as there is not the danger of the strings becoming loose or out of place. The chalk lines also are easy to change if conditions make it advisable to reroute the salesmen. One sales manager uses a tack map to visuahze the branch offices of the company and the territory covered by each (Figure D, Insert I). Another concern — one which has a large number of agencies — uses a tack map to keep a record of changes in the sales force. For example, a blue tack indicates an agency that needs more salesmen, a red tack indi- cates agencies where salesmen are available for trans- fer, a green tack shows that the agent wants a new territory, and a purple tack indicates that for some reason the agent ought to be changed. With this map before him the sales manager is able to act quickly when a salesman applies for a new territory and he can tell at a glance whether there is room for a new salesman and just what territory is available. SIZE OF FARMS OPERATED BY BUYERS OF ONE SPECIALTY Figures are based on information furnished by buyers themseives- _ 65. Z% Operate ^ Farms of Over 50 Acres Comparison between size of farms of buyers of one specialty farmers and the average size of farms throughout the U. S. Size of Farm One Specialty Buyers Average of U. S. 50 Acres and above 89.3 Per Cent 64.5 Per Cent 100 75.4 " 41.9 " 500 20.7 " 2.7 " 1000 10.1 " .8 " Figure 28: This chart indicated to a concern selling a specialty article by mail to farmers the class of farmers they were reaching, and the size of their farms. Further investigation revealed that over 75% of their product was used by farmers working farms of 100 acres or more. 51 REACHING FARM OPERATORS Comparison of Position of Buyers of One Specialty With Average of all U. S. Farmers Position of Average Position of Buyers of All U. S. Farmers of One Specialty 62.1% Owners Managers! 37% Tenants > 63% Owners and Managers Note that only 1.2% of buyers of this special- ty are tenants compared to 37% tenants as the average of the entire country 75% Owners 92% Owners \. and ^ Managers 17% Managers .1.2% Tenants! 6.8% Dealers, I County Agents, Bankers. Misc Figure 29: Another investigation made by this company (Figure 28) was to determine whether its customers were owners of their own farms, farm managers, or tenants. The analysis given above shows that 92% of purchasers of the product are owners and managers. 52 1 3 X — X — X Net Sales Total 4 0--0--0 Regular Edition Gross 6 »--x---x Total Returns y^ > '^- 15,000 _'^X ^2^ \ ^Z-'^ i^ ito,_ -^ j-j. ^ i ^^jt t ^ 1- --^■^ t 1 -I ^, ^Ui\jW' -r-V ^U w^ -i^^\ty\7 t-^^ 7 -.^s.-^ 2 10,000 3 ^,\/j»-/ / A'^^^^TVi! M S2 23*^^5^ hr-irSri. 7r ir7 ^^ i^~->=, *S^ ^-^Z L _tt A-^tr^i^, ^\±^^' T 1^1 l^I^^^s^" -i^ '^^ 4 Z JJ^^22 c t^^---^^^r ^'^^ ir_;3^" -i^'L^L I ^^^^i. ^^^* 4 >^ / / s // -~~ Bro «n /- , \ / ■'N / \ / / Gillen / \ / \ ' [L^ '" Oliver / / y k' 1 / i 1 / Hoc Wil ges / f s 1 ' // 1 s 1 i p f \ 1 \, 1 1 / ! M \ ' 1 / // ^ /— T-/* A/^ ;>^ ' ^ / u- -- ._. — - -- ... \ V, -- — -- — -- — -- -- -- Se pt Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June Figure 32: To keep track of each month's sales by agents and to check these sales against the selling cost to find the most profitable agents, one concern prepared the graphs shown here and in Figure 33. HOW GRAPHS CAN HELP 55 The company keeps this map and others showing territory divisions, sales, and so forth, in a map case built into the wall. The maps are hung on weights like a window sash, so that they can be pushed up out of the way when not in use. In the advertising end of the sales organization, investigation indicates that maps and graphs are equally as useful as in the charting of sales and terri- tories and they often help keep the advertising manager from exceeding his appropriation. As advertising has a direct bearing on the seUing cost we logically may consider these methods here. For example, one clothing concern spends about $300,000 a year for advertising. At the beginning of the year the appropriation is divided up for the dif- ferent classes of advertising expense about as shown in Figure 26 on page 47. THIS PI^AN MAY PROVE HELPFUL WHEN YOU PREPARE TO DETERMINE YOUR ADVERTISING APPROPRIATION With this control chart before him the advertising manager can tell just how much he has to spend for each type of advertising. He then proceeds to divide each amount by months. The seasons, of course, determine to a large extent the amount of magazine advertising done in any one month. For example, in March and April when the spring line is being pushed, the proportion of the appropriation spent is much larger than in July and August. In October and November, when the autumn suits and over- coats come on the market the proportion rises again. How this manager divides his magazine appropria- tion is shown in Figure 27. In a like manner he decides in advance about how he will distribute his appropriation for newspapers, direct mail, and the other items over the year. The item of salaries is, of course, fairly constant for each month. 56 BOOSTING THE SALES VOLUME One concern which sells a specialty to farmers by mail made a careful investigation of its customers to determine the class of farmers it was reaching and in this way to check the quality of its mailing list. The company also analyzed the information obtained to find out the average size of the farms operated by their customers. It was found in this way that more than 75% of the product was used on farms of more than 100 acres. How these facts were tabulated is shown in the chart in Figure 28. For another purpose the company was interested in knowing whether the customers were owners of their own farms, farm managers, or renters. Another analysis of the orders (Figure 29) showed that a large percentage of its purchasers were farm owners. A graph showing the gross production, sales, returns, and net sale total and the net profit per item helps another concern to keep a close record of the effec- tiveness of the agents handling its product. Since the sales depend largely on the advertising and on the attractive appearance of the article, this record also serves to test the effectiveness of the advertising department. How this has worked out for three years is shown in Figure 30. With what line of retailing do we do the most business? Where are our returned goods smallest and what line gives us the greatest profit? These questions caused a lot of worry for the sales manager of a con- cern which makes a specialty selling to retail mer- chants. This specialty is sent out on trial. The sales manager had the information but it was spread over many pages and included many columns of figures. He decided to put the information in more accessible shape. He listed 21 retail lines and prepared a graph (Figure 31) which would show the number of orders from each Une in each section, and in another the actual business after the returns had been deducted. — — — — ' ■ 'U Percentage cost to - FT^ — "~ ~ ~~ Miller 160 — ^ 150 - r I t 130 1 i — 120 JL ± — 110 t r 100 I t Gillen 90 i 1 ^ 80 \ \ ^ \ V. v 70 \ ^, \ y r 60 h 25 V^" »« \ i r J J--' Brown _50^ / \/ ST U"-* } . _ -». gL V >^ « / ** Oliver -•- Cresset ii ^ ^ 2 i \^^^ f- — ^ f r\^§ V^<' ^ Hodges- - 30 Walters- - U^ eS ^-'<- •« _ _ _ _ ^. _i. ._ — 5^'^'' 20 10 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June Figure 33 : It is interesting to compare the selling cost of each agent of one concern, as shown here, with his total sales, as shown in Figure 32. You will note in each instance that as the volume of each agent's sales increases, his percentage cost of selling decreases, and vice versa. ?,7 e 7 6 5 4 3 2 12 1 30 29 28 27 26 25 24 23 22 21 20 19 18 17 1» 15 14 13 12 11 . 10 9 8 7 6 5 4 3 2 11 1 31 30 29 28 27 28 25 24 23 22 21 20 19 18 17 16 15 14 13 12 II 10 10 9 f 1 / Pa yments / 17 / ^ 1 J / / / / r "^ / \ Ci n( el at io IS / _i / t r ' I / / / 1 } 1 ^ J / f J / J r T T / 17 / ; r - , i ' J y / / ^-' St 'ip m in s ^ 1 >^ 1 j^ ^ ^ -^ / / / ^ L^ -> >" n 5( » 10 90 1500 Figure 34: Charting shipments, cancelations, and payments on or- ders for products in this manner proved an excellent method for one sales manager to determine just which lines were most profitable. The figures at the left indicate dates, and those at the bottom value of orders, 58 V.-.-:-Vr.v.vii ::I-g:J'KA] ..'itj'.*'. • ••• ■ .'ffi 83.8 b /. / ( a^ji I .J 58.5 107.6 Figure A: This analysis cernb by states in comj represents 1 ,000 concern lation basis, hence the INSERT II 59 icrs as figure )wable h lines There- »wn to 3tums. orders •eturns )e well agents to find mcern, I high, 53. rst his IS very ;d and 100%. '' mail, .dually ; about le first d after factors one in is easy fitable. cturers iveness )ove a jary to ;ording 1I' ' '•.''^•ii-' N.I), -y. ' •• ••••.vVrv'rK Day of WecW and Date FROM TO MILEAGE ARES PU^LM'^N TOWN > Coupons Rai Used In road F tial . RETAIL DATA AND FIGURES For the manufacturer considering a campaign in the national market, the following list of retail dealers may be suggestive of profitable distributive channels. Analyzed in connection with the tables on pages immedi- ately following these tables, it may be of value in showing the tendencies toward increase or decrease in the number of dealers in various lines. Close examination of lists like these is nearly always interesting and instructive. RETAIL DEALERS IN THE UNITED STATES (From R. G. Dun and Company's list as compiled by the Rapid Addressing Machine Company) Agricultural implements 15,912 Animals, birds, and goldfish, 420 Art stores and pictures 1,900 Automobiles 10,200 Bakers 25,788 Bicycles 5,013 Booksellers and stationers 11,954 Booksellers and stationers (second-hand) 108 Boots and shoes 20,104 Butchers and meat markets 62,798 Carpets 19,316 Cattle dealers and shippers 20,100 China, crockery and glassware 2,861 Cigars and tobacco 40,555 Cloaks and suits 1,988 Clothing 22,713 Coffee, tea, and spice 3,764 Confectioners 35,423 Department stores 1,752 Drugs 43,239 Dry goods 30,787 Electrical supplies 3,272 GRAPHIC SALES ANALYSIS RETAIL DEALERS IN THE UNITED STATES (Continued) Fancy goods and notions (exclusive) 3,759 Feed, flour, and grain 19,839 Fishing tackle 3,885 Five-and-ten-cent stores (independent) 1,054 Florists 8,482 Fruit 10,087 Furs (raw) 305 Fur garments 2,334 Furniture 16,131 Furniture (second-hand) 2,175 Gas and electric fixtures 2,476 General stores 144,933 Glass, oils, and paint 29,533 Grain 16,783 Grocers 172,043 Guns 3,885 Hair goods 1,037 Hardware 20,881 Harness and saddlery 20,084 Hats and caps 16,240 Hides 1,528 Ice 5,429 Instalment houses 1,488 Japanese and Chinese goods 413 Jewelers 22,025 Junk 6,213 Laces and embroideries 384 Lumber 29,669 Mail-order houses 1,304 Men's furnishings (exclusive) 12,387 Milk 11,092 Milliners 26,843 Musical instruments 6,185 Notions and toys 6,892 Nuts 138 Oysters (dealers and shippers) 1,222 Pianos and organs 8,040 Provisions 1,221 Real estate 70,491 Rubber scrap 31 RETAIL DATA AND P^IGURES RETAIL DEALERS IN THE UNITED STATES (Continued) Sewing machines 2,102 Sporting goods 2,410 Stamps and coins 129 Stoves 22,177 Tallow and pelts 1^528 Trmiks 712 Typewriters and supplies 810 Undertakers 17,808 Wool 767 Notice these figures on dealers by lines — 1917 in com- parison with 1913 as shown in the tables on the two preced- ing pages. You find few increases, and a very marked fall- ing off in some lines. It may be QQ.sy to explain the de- creases by the growing economic pressure of recent years. One of the greatest developments in the retail field within recent years is the chain-store idea. In 1914 "Printer's Ink" estimated that there were more than 2,000 chain-store systems in operation in the United States and that in these systems there were in excess of 25,000 stores. Present estimates range from 40,000 to 50,000 stores. It may be noted that the first chain-store sj^stem was started as early as 1859. The second followed 20 years later. The move- ment did not gain any marked proportions until along about 1900. Since that time it has made rapid strides until to- day it is a typical modern factor in distribution of merchan- dise. It is no longer regarded as an experiment and its economic methods of buying and of distribution will no doubt be an increased factor of contention in the future. TOTAL NUMBER OF RETAIL DEALERS IN ALL LINES IN THE UNITED STATES Number in business Grocers 172,007 Plumbers, steam- and gas-fitters 23,501 Men's furnishings 5,582 Lumber 29,655 Hardware 30,446 GRAPHIC SALES ANALYSIS TOTAL NUMBER OF RETAIL DEALERS IN ALL LINES IN THE UNITED STATES, Continued Number in business General stores 61,953 Furniture 16,121 Flour and feed 14,443 Dry goods 32,128 Drugs 49,939 Department stores 1,752 Clothing 22,737 Boots and shoes 20,091 Banks and bankers 27,030 Agricultural implements 15,917 Automobiles 27,702 Garages, supply and repair stations 45,154 Any manufacturer who sells to retailers will find these figures of value. Practically every manufacturer whose goods are sold over retail counters realizes the necessity for training dealers, and this table gives an interesting indication of the general problem of the individual retailer. Certainly, effective help for retailers starts with a clear understanding of the problems they have to solve. PER CAPITA FIGURES BY LINES (Based on an estimated population of 105,000,000) (Retailers) 1 concern to following number of persons Grocers 610 Plumbers, steam- and gas-fitters 4,468 Men's furnishing stores 18,810 Lumber dealers 3,539 Hardware dealers 3,448 General stores 1,694 Furniture stores 6,513 Flour and feed stores 7,270 Dry goods stores 3,2G8 RET.\I[; DA'IW AND FIGURES PER CAPITA FIGURES BY LINES, Continued 1 concern to following number of persons Drug stores 2, 102 Department stores 59,931 Clothing dealers 4,614 Boot and shoe dealers 5,226 Banks and b ankers 3,885 Agricultural implement dealers 6,597 Automobile dealers 3,790 Garages, supply and repair stations 2,325 It is interesting to study the probable effect upon the figures of the next two or three census reports, produced by the war and the period of reconstruction. There are many lines of business which undoubtedly will be seriously affected. And business men in almost any line surely may profit from a knowledge of larger trade tendencies. RATIOS OF MERCHANTS TO POPULATION Number of Number of persons in Number of merchants trade and merchants per 1,000 of transporta- per 1,000 of all gainfully tion per 1,000 total popu- employed in of all gainfully Year lation all industries employed 1850 7.51 27.37 109.20 I860 8.52 29.03 97.38 1870 9.27 27.56 99.50 1880 9.55 28.00 107.60 1890 11.40 29.65 146.29 1900 10.97 28.66 163.96 1910 10.92 26.30 199.28 ("Merchants" include both wholesale and retail merchants. Figures are from "Economics of Retailing" and are based on the thirteenth United States census. No separate classi- fication of wholesale dealers appears in census before 1890). GRAPHIC SALES ANALYSIS To locate territories where retail competition is keenest, and where it is not so strong ; to note from time to time what states or groups of states are showing the swiftest commercial development in certain lines — these are two of the benefits NUMBER OF CONCERNS IN RETAIL States by M Groups q3 2 O Plumbers,steam- and gas-fitters xn bD .9 a 2 o 0) 1 O Group 1 Maine 1,812 227 45 303 242 522 139 109 N. H. 822 173 22 492 100 249 91 81 Vt. 581 115 12 317 152 262 81 138 Mass. 8,799 1,556 244 609 691 305 447 452 R. L 1,428 275 28 93 76 58 58 26 Conn. 2,859 530 59 206 169 238 194 217 Group 2 N.Y. 20,909 4,756 968 1,882 2,160 1,943 1,238 1,327 N.J. 8,322 1,721 221 673 660 486 234 140 Pa. 15,980 2,733 674 1,687 1,971 4,172 1,026 1,394 Group 3 Ohio 10,233 1,209 320 1,447 1,919 1,831 854 1,134 Ind. 6,907 593 126 816 1,268 1,461 620 721 111. 12,647 1,440 453 1,920 2,387 2,528 1,097 1,704 Mich. 4,012 665 116 1,068 1,151 1,128 551 647 Wis. 3,259 403 136 1,022 1,072 1,686 515 415 Group 4 Minn. 2,223 312 98 1,299 1,166 1,613 523 451 Iowa 2,761 413 60 1,707 1,792 1,881 743 299 Mo. 6,432 521 187 1,167 1,438 2,710 701 651 N. D. 263 58 10 788 629 811 209 147 S. D. 257 94 16 610 558 761 208 111 Neb. 1,168 185 65 875 1,053 1,460 520 280 Kan. 2,503 239 69 1,158 1,327 1,501 484 684 RETAIL DATA AND FIGURES which may be derived from the figures given here and on the two following pages. Used in conjunction with other tables in this group, the chart may well prove suggestive of more effective methods for organizing sales activities. LINES BY STATES (Dun's) >. m d s CQ •^ "§1 iles suppl r >> a 73 'Si ca 3 a 'C '3, itomob ,rages,_ d repai ,tions h* Ui OJ w O «^ a 3 <5 ri a O Q O p o pq PQ.O < o i-^ H 484 460 14 413 283 181 85 353 555 6,227 274 235 2 205 207 120 17 187 326 36,03 166 190 3 158 131 105 27 175 305 2,918 1,600 1,635 93 1,027 776 456 45 816 1,675 21,226 203 290 12 94 100 66 5 97 274 3,183 514 610 28 370 275 219 35 464 851 7,838 3,389 4,110 157 1,852 1,793 1,120 574 2,023 4,064 54,265 2,027 1,125 50 583 545 347 103 703 1,468 19,408 2,972 3,450 187 2,177 1,814 1,401 601 1,831 3,082 47,152 1,698 2,050 117 1,349 1,532 1,168 1,002 1,829 2,798 32,490 914 1,865 125 781 751 899 908 1,002 1,450 21,207 1,959 3,850 119 1,620 2,279 1,605 1,566 1,931 3,063 42,168 1,302 1,655 85 1,044 1,096 795 880 971 1,594 18,760 638 995 49 648 617 734 1,002 1,085 1,508 15,784 357 895 52 605 622 1,048 1,070 1,101 1,547 14,882 494 1,800 70 777 742 1,670 1,404 1,681 2,389 20,683 1,418 2,530 38 761 839 1,372 720 804 1,387 23,676 37 463 18 146 81 745 731 521 705 6,362 73 430 15 179 112 627 551 446 636 5,684 202 910 18 329 396 942 916 856 1,198 11,373 428 1,418 94 495 341 1,092 892 996 1,562 15,283 GRAPHIC SALES ANALYSIS NUMBER OF CONCERNS IN RETAIL oT P CO S? O) 73 States 2 by S Groups 2 ^ IS 3 CO ^1 S o3 1 'd :3 O S M hJ ffi O ^ p^^ Group 5 Delaware 612 53 15 88 58 122 35 41 Maryland 3,512 561 74 387 299 862 134 161 Dist. Col. 1,407 161 36 26 54 42 50 Virginia 3,602 249 61 915 346 2,352 283 123 W. Va. 1,441 191 46 330 242 1,727 192 128 N. C. 2,111 108 44 369 309 2,545 245 42 S. C. 1,693 78 19 142 207 1,722 209 41 Georgia 4,121 165 42 240 361 2,764 344 189 Florida 936 79 56 172 207 745 159 36 Group 6 Kentucky 4,283 250 95 329 531 2,288 273 180 Tenn. 3,885 157 43 374 221 1,839 291 160 Alabama 2,408 101 51 236 265 1,950 234 68 Miss. 1,760 56 27 246 206 2,332 138 41 Group 7 Arkansas 2,271 100 30 421 334 1,619 202 105 Louisiana 2,781 137 32 219 182 1,481 119 120 Okla. 2,704 187 80 914 880 1,332 475 275 Texas 5,076 271 183 1,217 1,015 3,297 854 555 Group 8 Montana 261 98 45 248 162 455 72 59 Idaho 225 72 22 202 183 385 85 91 Wyoming 101 41 20 79 75 222 36 17 Colorado 1,903 262 65 412 340 660 207 27 N. Mex. 213 42 10 116 81 445 50 32 Arizona 179 49 14 64 29 225 27 18 Utah 515 102 9 126 54 318 67 66 Nevada 118 27 18 44 36 132 16 15 Group 9 Wash. 1,417 317 82 408 519 812 259 238 Oregon 1,113 282 76 434 293 594 198 148 Calif. 7,182 1,087 358 758 876 1,122 342 289 RETAIL DATA AND FIGURES LINES BY STATES, Continued ■t^ ri in Ct4 00 O O 3 d c3 o d d 5:3 o3 m d d 3 a 'E 'Si o a o rages, su i repair ,tions 00 l-r P o bC S^ d < c3 g « O H 88 115 5 64 42 49 19 74 108 1,588 448 550 34 259 233 249 157 230 420 8,570 104 215 11 87 53 35 8 291 151 2,731 501 660 18 430 159 408 167 66 456 10,796 209 400 25 318 164 303 42 227 302 6,287 524 800 17 292 194 451 32 331 480 8,894 404 487 3 272 149 363 10 211 316 6,326 822 1,240 22 436 235 802 40 392 651 12,866 485 600 8 169 134 232 1 254 474 4,747 734 1,058 30 372 288 599 179 303 453 12,245 613 765 19 399 404 523 125 227 366 10,411 420 942 14 197 154 350 11 185 299 7,885 335 725 5 130 103 366 14 133 197 6,814 364 1,086 9 175 91 468 19 214 323 7,831 440 800 9 237 135 260 131 170 251 7,504 605 1,320 10 398 236 926 407 459 719 11,927 1,774 2,937 13 621 254 1,452 337 877 1,464 22,197 82 295 9 149 105 224 99 266 385 3,014 99 272 10 130 82 193 117 177 24 2,369 48 91 53 47 94 19 88 137 1,168 338 648 27 272 222 322 145 356 556 6,762 61 141 4 34 34 96 21 95 154 1,629 66 94 1 79 51 66 16 124 199 1,311 73 178 6 116 49 102 86 111 174 2,152 29 55 1 39 35 33 9 60 103 770 330 720 23 437 267 364 160 418 686 7,457 211 465 12 191 206 249 133 229 412 5,246 772 1,390 61 768 733 739 279 1,262 2,457 20,475 GRAPHIC SALES ANALYSIS Many a retailer understands selling, yet is not an able merchant simply because other extremely important phases of retail management do not interest him. Perhaps he even doubts the value of obtaining accurate knowledge about his costs of doing business — he may look upon costs as so much useless "red tape." The following table presents a graphic and unusual statement based on the latest available census, showing where a good portion of the retailer's money goes. Note the number of persons employed as salespeople. PERSONS ENGAGED IN RETAILING Retail merchants and dealers, total 1,195,029 Agricultural implements 8,518 Automobiles 4,597 Books 3,118 Boots and shoes 19,346 Butchers 124,048 Candy and confectionery 29,538 Cigars and tobacco 17,728 Clothing and men's furnishings. . 35,273 Coal and wood 24,466 Department stores 8,970 Drugs and medicines 67,575 Dry goods, fancy goods, notions. 65,283 Five-and-ten-cent and variety... 4,331 Furniture 22,209 General stores 88,059 Groceries 195,432 Hardware stores, cutlery 39,663 Harness and saddlery 7,541 Hucksters and pedlers 80,415 Jewelry 29,962 Lumber 26,485 Music and musical instruments. . 5,222 News dealers 7,075 Oil, paint, wall paper 6,818 Opticians 6,284 Produce and provisions 29,639 Rubber goods 493 Cashiers in stores 28,500 Clerks in stores 387,183 GRAPHIC SALES ANALYSIS PERSONS ENGAGED IN RETAILING, Continued Bundle and cash boys and girls 10,866 Decorators, drapers, window dressers 5,341 Delivery men 205,589 Demonstrators 4,380 Elevator tenders 3,075 Store laborers 68,093 Meat cutters 15,405 Salesmen and saleswomen 875,180 Scrubbers and sweepers 276 Here is a different a'lalysis of the same concerns listed in the tables on the foIIowir:g page. By comparing these tables it is possible to arrive at interesting and helpful conclusions. GENERAL SUMMARY OF TRADING CONCERNS IN MASSACHUSETTS* Number of establishments 29,045 Dealing in raw materials. . . 1,682 Dealing in food products . . 14,224 Dealing in manufactured goods 13,139 Total capital invested $ 287,966,456 Raw materials $ 42,897,034 Food products 71,708,282 Manufactured goods 173,361,140 Value of goods sold $1,384,161,383 Raw materials $270,159,171 Food products 448,002,405 Manufactured goods 665,999,807 Total number of wage earners 129,129 Males 90,332 Females 38,797 Total number of salary earners 15,330 Males 13,031 Females 2,299 Retail stores — total 24,522 Raw materials 1,038 Food Products 12,441 Manufactured goods 11,043 *From "The Eoonomics of Retailing," by Paul H. Nystrom GRAPHIC SALES ANALYSIS In the table presented below and on the upper portion of the opposite page, the total amount of goods manufactured and imported is compared with the total population of the United States and with the total number of persons em- COMPARISON OF THE TOTAL AMOUNT OF GOODS POPULATION AND WITH TOTAL NUMBER Manufac- tured goods Imports Total Number (000,000 (000,000 (000,000 of omitted) omitted) omitted) retailers 1850 $1,109 $174 $1,193 174,000 1860 1,886 331 2,217 268,000 1870 3,386 418 3,804 358,000 1880 5,370 446 5,816 479,000 1890 9,372 745 10,117 691,000 1900 13,000 697 13,697 833,000 1910 20,672 1,312 21,984 1,004,000 This table indicates about what ratio ought to prevail, normally, between the various classes of distributive agencies. CLASSIFICATION OF TRADING CONCERNS IN MASSACHUSETTS BY MANNER OF SELLING Value of Number Capital goods sold Wages Salaries Retail. . .24,522 $120,065,311 $444,984,052 $849,075 78,206 Whole- sale.... 3,315 109,952,787 510,016,634 359,150 152,492 Jobbing. 480 16,777,443 81,017,798 56,926 32,924 Commis- sion.... 570 24,255,758 253,670,922 48,048 29,711 Ex port ing 12 237,500 2,492,083 389 627 Import- ing 129 15,516,364 83,540,190 13,644 13,735 Export- ing and import- ing 17 1,161,293 8,519,704 3,254 2,218 RETAIL DATA AND FIGURES ployed. Note that amounts represent millions — with the 000,000 omitted. Analyses of this sort have infrequently pointed out to distributors weak spots in their marketing plans or have indicated the need of investigations. MANUFACTURED AND IMPORTED, WITH TOTAL OF PERSONS GAINFULLY EMPLOYED* Number of commercial Year travelers 1850 1860 1870 7,000 1880 28,000 1890 59,000 1900 93,000 1910 164,000 Total number Total employed in Total popula- trade and number tion transporta- gainfully (000,000 tion employed omitted) 682,000 5,330,000 23 802,000 8,236,000 31 1,244,000 12,506,000 39 1,872,000 17,392,000 50 3,326,000 22,736,000 63 4,767,000 29,073,000 76 6,252,000 38,167,000 92 These tables, made up from reports obtained in a recent year, suggest the extent to which chain stores are becoming an independent distributive factor in several lines. These figures have an added importance due to the fact that the list of lines being handled by this distribution division is growing very rapidly. CHAIN STORES BY LINES Line Chains Grocery 500 Tobacco 250 News-stands 200 Five-and-ten-cent, and so on 180 Oil, gasoline, and so on 5 Drug 200 Stores 8,000 2,500 2,500 2,000 2,000 1,400 RETAIL DATA AND FIGURES Line, continued Chains Stores Delicatessen 5 15 Wall paper 5 15 Gloves 3 10 Furs 2 6 Paper novelties 1 6 Fountain pens 1 4 Total 2,778 30,509 GROCERIES Indepen- Chain dent Total Chains stores stores Greater New York.. 13,513 17 680 12,833 Chicago 7,510 10 130 7,380 Philadelphia 5,200 9 1,262 3,938 Boston 2,829 10 456 2,373 TOBACCO Greater New York.. 2,394 9 439 1,955 Philadelphia 2,350 5 45 2,305 Chicago 1,100 9 172 928 Boston 308 2 16 292 DRUGS Greater New York . . 2,281 11 82 2,199 Chicago 1,106 4 17 1,089 Philadelphia 921 12 53 868 Boston 314 6 34 280 FIVE-AND-TEN-CENT STORES Greater New York.. 225 15 50 175 Chicago 150 3 25 125 Philadelphia 145 4 20 125 Boston 32 2 7 25 ELEVEN YEARS IN RETAIL GROCERY TRADE, GREATER NEW YORK 1903 1914 Increase Per cent All stores 8,750 13,513 4,763 54 Chain stores 215 985 770 360 GRAPHIC SALES ANALYSIS The advantages to manufacturers of the figures in the tables following are apparent. They deal intimately with several of the most pertinent problems of retail management. They help an outsider to grasp the retail point of view, and for those manufacturers who see in the assistance they can give to retail dealers an opportunity to build good will, the retail point of view is practically a necessity. Figures are of little value in themselves. Yet just as soon as you have sets of figures which are in any way comparable, you have, the chances are, a key to some interesting facts. In a word, accurate figures are a starting point rather than an end. Right here many retailers fall down, and it may be that one of the greatest helps manufacturers can give to retailers is in teaching them how to use figures. Too many retailers have installed cost-accounting systems, and then thrown them out again, mainly because they did not know what to do with the information supplied by their systems. To come back to ways by which manufacturers may use the figures presented here, investigation frequently has brought to light instances of manufacturers' sales- men pointing out to some of their retail customers ways and means for cutting down overhead and thereby increasing profits. Not a few of the stores involved were actually saved from financial difficulties and were put on sounder footings by means of advice furnished by manufacturers — advice built on study of just such figures as those which follow. Wages for selling apparently are comparatively low for grocery, furniture, and variety stores in proportion to sales. This is because these lines are characterized either by very frequent small sales or fairly numerous sales at a high average amount for each sale. Local conditions, of course, frequently vary these figures one way or the other. RETAIL DATA AND FIGURES AVERAGE PERCENTAGE FOR SALARIES OF SALESPEOPLE (System, February, 1914) Groceries 7.96% Furniture 8.73% Variety stores 8.86% Clothing 9.49% Dry goods 9.65% Hardware 10.11% Shoes 10 . 51% Drugs 10.93% Jewelry 10.96% The number of times a retailer turns his stock is coming to be a widely accepted measure of his merchandising skill. Even so, many retailers fail to recognize the importance of average rate of turnover statistics for their own lines. The figures given below are averages applying exclusively to department stores, and were obtained by the National Dry Goods Association. Average number of turnovers obtained Line annually Candy 13.27 Skirts and petticoats 7 . 22 Millinery 6 . 63 Coats, suits, and dresses 5.5 Stoves, refrigerators, and cookers 5.45 Shirtwaists 5 . 14 Patterns 5 . 05 Furs 4 . 55 Children's wear 4 . 45 Corsets 4.43 Toys and books 4.42 Umbrellas 4 . 38 Sewing machines 4 . 37 Neckwear and handkerchiefs 4 . 26 Wash goods 4 . 17 Notions 3 .97 Linings 3 . 77 White goods 3.76 Hosiery 3 . 65 Furniture 3 . 65 Turnovers in Representative Lines =Oiu Tumoyw Figiire 33: To pull what is considered a fair profit for these lines up the grade of the cost of doing business, requires on an average the num- ber of turnovers here represented by circles. Corsets, you will note, have the lowest percentage of profit and the highest rate of turnover. GRAPHIC SALES ANALYSIS Average number of turnovers obtained Line, continued annually Jewelry, toilet goods, bags, and belts 3 .45 Linens 3 . 40 Trunks and bags 3 . 39 Hair goods 3 . 22 Muslin underwear 3 . 20 Table linen and towels 3 . 09 Ribbons 3.01 Gloves and veilings 2 . 96 Silks 2.91 Dress goods 2 . 90 Knit underwear 2 . 89 Wall paper and decorations 2.88 Men's furnishings 2 . 73 Boys' clothing 2 . 56 Men's clothing 2.53 Laces 2.50 Infants' wear 2.41 Art goods and needlework 2.34 Embroideries and trimmings 2 . 26 Rugs, carpets, and linoleums ». . . . 2. 18 Shoes and rubbers 2 . 18 China, glass, and house furnishings 2.03 Individual conditions vary the number of turns secured in specific stores. The standards given in this table there- fore require modification when local influences are unusual. The turns obtained in a large department store and in a country general store will differ because of the heavy buying power touched by the city store and its managers' skill. These turnover averages are from several large department stores and a score or more departmentalized concerns in country districts. Number of turns obtained annually : City depart- Country gen- Line ment stores eral stores Books 4 1.5 Candy 15 9 Clocks 2.5 1 GRAPHIC SALES ANALYSIS Number of turns obtained annually: City depart- Country gen- Line, continued ment stores eral stores Embroideries 3.5 3 Furs 5 3 Infants* clothing 5 3 Laces 4 2 Linens 3.5 2 >.Ien's hats 7 4 Pianos 9 4 llibbons 6 2 Stationery 5 2 Umbrellas and canes 11 3 Trunks 5 1.5 Veilings 5.5 2 Wash goods and flannels 5 3.2 National stock-turn averages from over 700 American stores were figured to give the averages for the 10 standard types shown in this list. The turnovers are for the com- plete stocks and have no reference to either the character or the number of the lines carried. Average number of turnovers obtained Type of store annually Grocery 10 Department 7 Variety goods 6 Drug 4.5 Dry goods 4 Hardware 3.5 Furniture 3 Shoe 2.1 Clothing 2 Jewelry 1.5 From the books of several hundred stores carrying depart- mentalized stocks, averages for 12 standard lines were obtained as shown in the table on the following page. GRAPHIC SALES ANALYSIS Average number of turnovers obtained Line annually Notions 9 Corsets 8 Women's ready-to-wear 6 Wall paper 4.2 Men's furnishings 4.2 Underwear 4.1 Hosiery 4 Gloves 3.5 Dress goods 3.2 Silks... 3.1 Domestics 3 Carpets 1.5 PROFITS IN 60 LINES AND TRADES Each of the percentages assembled here gives gross prof- its for an actual line, store, or manufacturing plant. All the distributive channels are included. By combining the figures it is possible, in several instances, to obtain a rough estimate of the cost of getting certain lines from the factories to the consumers' doors. All percentages are based on total sales. TYPICAL GROSS PROFITS Per cent American Family Soap (at full price) 16 . 36 Barrington Hall Coffee (at full price) 20 Borden's Eagle Milk (at full price) 13.33 Campbell's Soup (at full price) 25 Chain grocery stores (three) (49.5% re- ported by the Association for Improving conditions of the Poor) 15 to 49 . 5 Clothing stock (southern store) 20 (average) Collar stock (men's), New York City (cost of doing business, 29%) 26 Cotton dress goods stock 32 to 41 Cream of Wheat (at full price) 16 . 66 Dr. Price's Baking Powder (at full price) . . 23 . 33 Fels Naphtha Soap (at full price) 20 RETAIL DATA AND FIGURES TYPICAL GROSS PROFITS, Continued Per cent Furniture store (operating cost, 31%) 49 Grocery store (cost of doing business, 20%) (Sales, $101,877.00) 25 (average) Hat stock (men's) 39 (average) Hardware (large store) 33 . 33 (average) Hardware line (jobber made 17%) 31 Hardware store (town of 2,000; cost of do- ing business, 25%).. 37.5 (average) Instalment hardware line 62 Ivory Soap (at full price) 20 Kellogg's Toasted Corn Flakes (at full price) 22 . 33 Large department store (seven year average) 24 . 5 Malt Breakfast Food (at full price) 16 . 66 Mail-order house (largest in the world) 25 (average) Meat line (No. 2 loin) 33.33 Meat line (ribs) 40 Meat line (500 lb. steer — cost 13Hc per lb. ; sold for 143^ to 16c per lb.) 12 Neckwear stock (New York City — used as a "loss leader") 26 Pet Milk (at full price) 13.33 Pillsbury's Best Breakfast Food (at full price) 16 . 66 Quaker Oats (at full price) 21 .7 Ralston Breakfast Food (at full price) .... 16 . 66 Ready-made clothing lines (Tariff Board) . . 33 . 33 Restaurant menu (highest profits taken on salads and pastries; lowest on meats) .... to 300 Royal Baking Powder (at full price) 20 . 84 Rumford Baking Powder (at full price) ... 23 . 31 Shredded Wheat Biscuits (at full price) ... 20 Shoe store ($5— $6 lines at retail) 25 to 33 . 33 Shoe store (S6— $15 lines at retail) 45 (average) Shoe store ($4.50 shoes cost $2.40 and $2.65; $5.00 shoes cost $2.85 and $3.25) 40 (average) Syrup line (at full price) 18 Uneeda Biscuits (at full price) 16.66 Variety goods bargain basement 15 to 25 Variety goods store (average cost 5c articles, 40c a doz.; average cost 25c articles, $2.00 a doz.) 25 to 33.33 GRAPHIC SALES ANALYSIS TYPICAL NET PROFITS OF RETAIL STORES Per cent Wesson Salad Oil (at full price) 20 Cash grocery 3 to 5 Clothing stock (southern store) 4 Commissary and general store 8 to 10 Dry good stores (small town) 10 to 12 Dry goods stores (large city) 5 to 7 Furniture stock 18 Grocery 4 to 5 Hardware store (town of 5,000) 12.5 Large department store (average for seven years) . . 3.1 Mail-order houses (average three years; operating cost of largest concerns,15%) 6.8 Variety goods store 10 to 12 Variety goods bargain basement 5 to 10 In the preceding table are given typical net profits for 12 types of retail stores. You will readily note that stores such as groc eries and large department stores, which ordi- narily have a more rapid rate of turnover, have the smallest net profit. This is in line with the contention of many ex- perts that it is better business to take small profits and rapid turnovers than to rely on higher mark-ups. TYPICAL GROSS PROFITS OF LARGE DEPARTMENT STORES Per cent Art goods or needlework 28 Blankets, comforters, pillows, and eo on 27 Cameras 26 China or glassware 32 Clocks and watches 28 Colored dress goods 28 Harness 31 Infants' clothing 30 Leather goods 32 Linings 32 Neckwear (women's) 29 Notions 31 Trimmings 28 Upholstery 33 Figure 45: That all lines of business are very much alike when it comes to the distribution of expense is shown by this chart of itemized average costs in six standard lines. Rent, salaries, and advertising costs in every instance take the major portion of the total expenditure. GRAPHIC SALES ANALYSIS COSTS AND PROFITS FROM 24 STATES GROSS PROFITS (States with five highest percentages) Kentucky 33.86% Alabama 30.50% Minnesota 33.30% Virginia 31.41% Tennessee 33.12% AVERAGE COST OF DOING BUSINESS (States with six highest average percentages) Tennessee 27.34% Nebraska 26.83% Indiana 27.00% Alabama 25.94% Minnesota 27.00% Texas 25.58% AVERAGE NET PROFITS (States with six highest average percentages) Utah 11 .00% Louisiana 9.40% Kentucky 10.66% Michigan 8.00% West Virginia 9.80% New York 6.00% AVERAGE GROSS PROFITS (By population and locality) 75,000-100,000 population 33.23% 15,000-25,000 population 31 .29% 100,000 and over, population 31.07% 50,000-75,000 population 30.20% 25,000-50,000 population 30.00% Farming districts ^ 31 .80% Manufacturing and farming localities 30 . 00% Resorts. 29.95% Manufacturing centers 29. AVERAGE COSTS OF DOING BUSINESS (By population and locality) 300,000, and over, population (lowest) 21 .25% 75,000-100,000 population (highest) 27.03% Shipping centers 24 . 88% Farming districts 25 . 52% Resorts 24.00% Manufacturing centers 23 . 22% AVERAGE COSTS OF DOING BUSINESS Figure 49: Comparison of this chart of costs with that in Figure 50 demonstrates that department stores, purchasing for rapid clearances, overcome high costs by taking small net gains on numerous turnovers. % 42- 39- 36-- Retail Mark-Ups, Costs, and Profits Cost of Doing Business i^ Net Profit (Single Turnover) Figure 50: This chart, assembled from the figures of 579 concerns, shows gross mark-ups divided into costs and net gains. Since only one turnover is represented, the profits on investment are not included. GRAPHIC SALES ANALYSIS DEATH RATE OF RETAILING CONCERNS Dry goods merchants in business 5 years or less. . 17-68% Jewelers in business 5 years or lass 13-50% Shoe dealers in business 5 years or less 23-49% Hardware dealers in business 5 years or less 10-48% Meat dealers in business 5 years or less 36-48% Grocers in business 5 years or less 76-45% Druggists in business 5 years or less 17-43% Cigar dealers in business 5 years or less 18-39% Furniture dealers in business 5 years or less 8-38% Clothiers in business 5 years or less 14-35% The most startling mortality figures come from retail lines. Would it be worth money to you to feel certain that all your retail customers were such good business men that they would stay in business for a long time? The answer suggests the value of these figures. DEATH RATE BY "GENERATIONS" FOR 10 RETAIL LINES (Percentage of total concerns in each "generation" which died within 5 years) Line 1891 1896 1901 1906 1911 Groceries 44% 61% 56% 61% 63% Hardware 40% 45% 50% 36% 66% Paintsand wall paper 62% 57% 40% 55% 69% Drugs 37% 51% 45% 30% 39% Booksandstationery 75% 57% 50% 50% 38% Jewelry 33% 46% 36% 41% 65% Dry goods 50% 59% 65% 57% 39% Clothing 45% 80% 40% 52% 56% Boots and shoes.... 53% 53% 48% 57% 58% Furniture 70% 50% 37% 62% 61% This table shows the death rate by generations of the 10 retail lines that were investigated. Totals such as these impress us with the seriousness of the problem and empha- size the necessity of keeping a whip-handle grip at all times on those facts and principles which have a fundamental and vital bearing on the permanency of any business. RETAIL DATA AND FIGURES HOW FAST 1,615 RETAIL STORES DIED Deaths within Total 5 10 15 20 25 Line deaths years years years years years Groceries 836 614 125 59 30 8 Hardware 74 48 15 6 4 1 Paints and wall paper 78 58 15 3 2 Drugs 115 69 30 13 2 1 Books and station- ery 43 29 12 1 1 ... Jewelry 52 38 9 3 ... 2 Dry goods 142 108 19 10 3 2 Clothing 52 41 9 1 ... 1 Boots and shoes. ... 177 121 32 17 6 1 Furniture 46 35 6 4 1 ... The majority of retail stores that "died" went out of business in the first five years, as the above table shows. Grocery stores, you will note, have the greatest number of "deaths," most of which occur during the concern's first five years of business life. Furniture concerns apparently are the longest "lived" of these retail lines. DEATH RATE FOR 2,550 RETAIL CONCERNS (The rate is given as the percentage of failures to the concerns in business during a period of 30 years total) Line Rate 1. Groceries 65 . 3% 2. Hardware 57.3% 3. Paints and wall paper 66 . 6% 4. Drugs 58.3% 5. Books and stationery 67. 1% 6. Jewelry 52.0% 7. Dry goods 67.6% 8. Clothing 54.7%, 9. Boots and shoes 65 . 0% 10. Furniture 53.4% Death rate for 2,550 retail stores in 10 lines ... 58 . 6% HOW FAST THREE "GENERATIONS" OF RETAIL CLOTHING STORES DIED. COMPANY 1891 1896 1901 1906 1911 1916 DEATH RECORD 1 2 3 4 5 8 7 8 9 10 11 12 13 14 15 16 17 18 19 20 First "Generation' 45% died within 5 years 21 22 23 24 25 26 27 28 .29 30 Second "Generation" 80% died wtttiin 5 years 31 32 33 34 3S 36 37 38 39 .40 41 42 43 44 45 Third 'Generation 40% died within 5 years Figure 53: Between 1886 and 1901, 45 clothing stores started in busi- ness in one section, but only 15 were in business at the end of 1916. The highest percentage death rate, as you will note, appeared among those concerns which started their business life in the second generation. RETAIL DATA AND FIGURES CHANGES IN RETAIL FIRMS IN EDGERTON DURING 10 YEARS Total retail stores in 1890 1896 1900 Total stores, 1890 21 9 7 New firms, 1896 7 4 New firms, 1900 5 Summary 21 16 16 CHANGES IN RETAIL FIRMS IN CLINTON DURING 10 YEARS Total retail stores in 1890 1896 1900 Total stores, 1890 15 8 7 New firms, 1896 7 1 New firms, 1900 T_ Summary 15 15 15 These compilations of the causes of failures are also taken from "The Economics of Retailing," by Paul H. Nystrom. BRADSTREET'S CLASSIFICATION OF BUSINESS FAILURES Beginners' Handicaps: 1. Lack of capital 29.7 2. Incompetence 30 . 2 (a) Inexperience 4.6 (b) Unwise credits 2.0 6675 Personal Faults of Character: 1. Fraud 10.3 2. Neglect of business 2.0 3. Personal extravagance 7 iO Factors Threatening Success: 1. Competition 1.9 2. Failure of others 1.3 3. Speculation in other business 8 4. Specific conditions (disaster, and so on) 16 . 5 2X5 GRAPHIC SALES ANALYSIS CLASSIFICATION OF CAUSES OF FAILURES IN THE RETAIL BUSINESS Beginners' Handicaps: Lack of capital 29 . 5 Incompetence (including inexperience) 24 . Unwise credits 4.4 General expense too high 3.0 Poor location 2.2 Expansion (branch stores) 2.0 65.1 Personal Faults of Character: Fraud 4.0 Neglect of business 4.0 Personal extravagance 4.8 Intemperance 2.0 iO Factors Threatening Success: Loss by storm, flood, fire, and so on 3.8 Sickness 3.5 Failure of others 2.6 Speculation 2.1 Competition 1.4 Closed by "sharks" 1.2 Robbery of store 1.0 Death 8 Loss in contracts 8 Miscellaneous causes 2.9 20.1 There's no questioning the value of information like this (from "The Economics of Retaihng") in regard to any product. Data on the per capita consumption is necessary, most sales managers agree, to the most effective planning of selling and advertising drives. CONSUMPTION PER CAPITA Sugar pounds 81.6 Cotton pounds 20.0 Coffee pounds 10.0 Tobacco. . .pounds 5.7 Cocoa pounds 1 . 25 Soda water $1 . 20 Tea pounds 1.4 Crackers $1.00 Shoes $8 . 44 Flavoring extracts . $1 . 00 Wool pounds 5 . 25 RETAIL DATA AND FIGURES SOME ESTIMATED PER CAPITA CONSUMPTIONS IN THE UNITED STATES Percentage of increase or Per capita decrease since Line consumption 1875 Wheat bushels 6.48 +86.1 Corn bushels 27.3 + 52.5 Sugar pounds 79.9 4-107.9 Wool pounds 6.32 -f- 59.2 Cotton pounds 24.8 +144.5 Coffee pounds 9.33 + 28.7 Tea pounds 0.89 + 38.2 Rice pounds 5.24 —21.4 Bread loaves 52.7 —41.8 Flour and meal pounds 142.13 +43.7 Fresh beef pounds 73 . 1 + 59 . 3 Salt beef pounds 11.5 +21.4 Fresh pork pounds 23.7 + 61.2 Saltpork pounds 23.1 +18.4 Othermeat pounds 16.2 +72.3 Poultry pounds 14 . 1 + 49 . 2 Fish pounds 16.6 + 33.4 Eggs dozens 17.7 +62.4 Milk quarts 74.1 + 43.7 Butter pounds 24.4 +54.3 Cheese pounds 3.3 +12.4 Lard pounds 17.5 +18.7 Molasses gallons 0.75 + 13.2 Potatoes bushels 3.1 +18.1 Fruits $4.26 +52.3 Men's clothing (per adult male).. $27.77 +49.7 Women's clothing (per adult woman) $20.37 + 54.3 Children's clothing (per child under 10) $3.05 +65.9 Fuel $8.01 +43.7 Lighting $2.03 +37.2 Furniture $8.33 +63.8 Books and papers $ 2 . 05 + 72 . 5 Life insurance $ 6 . 67 + 71 .3 Malt liquors gallons 19.75 +185.5 Tobacco $8.44 +85.2 GRAPHIC SALES ANALYSIS INCOME TAXES The total of income taxes as shown here are the latest available on publication of this book. New York leads all the others, both in corporation and individual taxes. States Corporation Individual Alabama $ 887,906.92 $ 200,385.29 Alaska 49,132.34 20,772.03 Arizona 637,993.92 200,330.75 Arkansas 306,310.84 179,413.47 California 6,147,289 . 14 3,870,314 . 24 Colorado 1,789,597.94 1,060,075.91 Connecticut 3,872,638 . 48 3,050,912 . 00 Delaware 2,791,067 . 72 3,666,351 . 92 District of Columbia 579,311.46 1,186,133.33 Florida 227,655.04 305,879.91 Georgia 1,218,831.39 611,777.89 Hawaii 909,818.58 363,880.70 Idaho 217,479.58 176,711.97 Illinois 14,359,537.16 11,739,952.41 Indiana 2,261,049 . 58 1,233,845 . 52 Iowa 1,252,297.30 555,247.24 Kansas 2,349,847.01 568,181.91 Kentucky 1,252,485.55 393,271.63 Louisiana 1,269,121.11 813,542.12 Maine 815,750.20 377,375.05 Maryland 1,401,954.27 1,947,336.47 Massachusetts 9,320,716.63 10,959,847.50 Michigan 6,565,769 . 68 3,627,884 . 25 Minnesota 4,618,464.76 1,814,431.33 Mississippi 246,829 . 38 197,456 . 70 Missouri 4,596,170.35 2,516,416.54 Montana 776,719.99 298,627.47 Nebraska 779,615 . 94 368,710 . 97 Nevada 75,423.06 15,425.53 New Hampshire 283,937 . 07 236,565 . 38 New Jersey 5,250,581 . 86 5,621,910 . 08 New Mexico 300,134.14 82,760.87 New York 46,566,951 . 90 81,495,783 . 31 North Carolina 1,232,609 . 13 551,189 . 51 North Dakota 218,771 . 77 74,159 . 64 Ohio 12,873,403.13 8,066,088.77 Oklahoma 2,231,436.18 4,428,842.32 RETAIL DATA AND FIGURES INCOME TAXES, Continued States Corporation Individual Oregon $ 406,931.70 413,684.24 Pennsylvania 24,238,266 . 36 17,860,341 . 18 Rhode Island 1,339,290.50 1,860,676.67 South Carolina 498,116. 17 81,874.28 South Dakota 182,248 . 15 49, 164 . 33 Tennessee 942,090 . 87 438,684 . 27 Texas 2,611,153.93 2,781,779.69 Utah 1,148,676.94 181,344.05 Vermont 184,547 . 33 369,879. 07 Virginia 1,837,125.64 621,507.06 Washington 1,187,702.79 855,286.77 West Virginia 1,460,908.97 460,138.63 Wisconsin 2,716,523 . 54 1,179,826 . 21 Wyoming 184,694.47 66,361.72 Total $179,572,887.86 $180,108,340.10 An annual report of the Commissioner of Internal Revenue shows the following incomes that paid fees under the income tax law. Taxes were paid to the Government by 357,515 persons. Of this number, 282,806 were married men, 51,729 were single men, 22,980 were single women, and 3,985 were married women who made separate returns. FEDERAL INCOME TAX PAYERS (Incomes that paid tax) 174 incomes exceeding $500,000 69 between $400,000 and $500,000 147 between $300,000 and $400,000 130 between $250,000 and $300,000 233 between $200,000 and $250,000 406 between $150,000 and $200,000 1,189 between $100,000 and $150,000 1,501 between $ 75,000 and $100,000 3,660 between $ 50,000 and $ 75,000 3,185 between $ 40,000 and $ 50,000 6,008 between $ 30,000 and $ 40,000 5,483 between $ 25,000 and $ 30,000 8,672 between $ 20,000 and $ 25,000 16,790 between $ 15,000 and $ 20,000 GRAPHIC SALES ANALYSIS FEDERAL INCOME TAX PAYERS, Continued (Incomes that paid tax) 34,141 between $ 10,000 and $ 15,000 127,448 between $ 5,000 and S 10,000 66,525 between $ 4,000 and S 5,000 82,754 between $ 3,000 and $ 4,000 How do American families spend their incomes? Until a few years ago luxuries were "in the limelight." Then came a period when American families bought few luxuries, and the necessities of life were primar3\ Then again came an unusual demand for luxuries, and with it, what many termed a disregard for the necessities. Where will it stop? What will the demand be in the years to come — for necessities or for luxuries? If merchandise is to have in it a selling idea, according to some progressive business men, it must represent utility. It may be interesting, therefore, to see in this table just how American families are spending their incomes. Luxuries are, of course, included under the miscellaneous column. PERCENTAGE OF TOTAL EXPENDITURES Mis- Fuel eel- Cloth- and lane- Food ing Rent light ous Under $200 50.9 8.7 16.9 8.0 15.6 $ 200 up to $ 300 47.3 8.7 18.0 7.2 18.8 300upto 400 48.1 10.0 18.7 7.1 16.1 400upto 500 46.9 11.4 18.6 6.7 16.5 500 up to 600 46.2 12.0 18.4 6.2 17.2 600 up to 700 43.5 12.9 18.5 5.8 19.4 700upto 800 41.4 13.5 18.1 5.3 21.6 800upto 900 41.4 13.6 17.1 5.0 23.0 900upto 1,000 39.9 14.4 17.6 5.0 23.2 l,000upto 1,100 38.8 15.1 17.5 4.9 23.7 l,100upto 1,200 37.7 14.9 16.6 4.7 26.1 1,200 and over 36.5 15.7 17.4 5.0 25.4 Average 43.1 13.0 18.1 5.7 20.1 (Investigated by the United States Bureau of Labor) RETAIL DATA AND FIGURES BUYING Analysis of Expenses of an Average American Family* Fresh beef $ 50.25 Salt beef 5.26 Fresh hog products 14 . 02 Salt hog products 13 . 89 Vinegar and pickles 4.12 Other food 20.40 Other meat 9.78 Poultry 9.49 Fish 8.01 Eggs 16.79 Milk 21 .32 Butter 28 . 76 Cheese 2.62 Lard 9.35 Tea and Coffee 16 . 04 Sugar 15.76 Molasses 1 . 69 Flour and meal 16 . 76 Bread 12.44 Potatoes 12 . 93 Other vegetables 20.90 Fruit 16 . 52 Rent. 99 .53 Principal and interest on mortgage 12 . 15 Taxes 5.75 Insurance 20 . 98 Fuel and lighting 40. 36 Lighting 8.15 Clothing 107 .90 Organization fees 8 . 90 Religious purposes 7 . 60 Charity 2.39 Furniture and utensils 26 . 28 Amusements and vacations 12 . 30 Books and newspapers 8 . 38 Intoxicating liquors 12.45 Tobacco 10.91 Sickness and death 20 . 52 Other purposes 45 . 14 Total for all purposes $768.64 ♦From the Eighteenth Annual Labor Report of the United States Bureau of Labor. "POURING the Great War business men all over the country came to know the building at Washington which housed the War Industries Board. There men met to learn the Govem- ment*s needs and to lay plans for gearing their particular enterprises to the nation's enterprise. Thus the building may be said to symbolize the cooperation and the interchange of economic thought always essential to the greatest progress. The new structure in which the Shaw PubUca- tions are now housed is a permanent counterpart in stone of the building that business men laiew so well during the war. ORGANIZING FOR INCREASED BUSINESS Edited by THE BUREAU OF BUSINESS STANDARDS ofthmA.W, SHAW COMPANY SECTION 12 Data, Figures and Graphs that Help Sell Your Full Market PRODUCTION DATA AND FIGURES WHICH HELP IN SELLING THE saying, "figures never lie," is not strictly true, you will agree. Figures may be made to misrepresent, but they may also be made a most effective method for ''taking the pulse" of a business. Statistics are dry — no question about that — but their dryness usually is most clearly apparent to the man who lacks imagination with which to picture the conditions reflected by the figures. Figures plus imagi- nation will usually prove mighty interesting to any nian who is actively associated with the business from which the figures were derived. Most sales executives who have taken up the study of statistics as an aid in solving problems of sales management are enthusiastic about them. By means of figures they are able, they declare, to observe business tendencies more accurately than before, and to take advantage of their full significance. Parallel sets of figures — one a standard or normal, against which the other set of actual figures may be compared— show up weak spots in methods unerringly, as a rule. The purpose in this section is to present statistics of value to business in all lines and localities. The task has been one of elimination — to discard figures which held out no particular advantage to business men. For a man may get up a set of figures, if he wishes, on almost any conceivable subject, and be scarcely better off than he was before. 1 Copyright. 1921, by by A. W. SHAW COMPANY as a part of the ."-haw S lling Periea GRAPHIC SALES ANALYSIS Here, on the other hand, each table of figures has been subjected to the tests of utihty and interest to those who read these bulletins. These figures are an assembling of facts in the form of numbers and per- centages, which have a bearing upon the methods and policies described in the other sections. They may be of direct value to you, or they may suggest how you may draw up, easily and quickly, similar information about your own business. In either event, they perform a most useful function. PRODUCTION DATA AND COST FIGURES Have you ever wondered if there are figures available on the business death rate of manufacturing concerns more or less like those on the death rate among men and women? Here are some interesting figures of this sort, based on care- ful first-hand investigation. These figures are important in judging any production problem — for they indicate the importance of knowing all the facts, of carefully allowing for all eventualities, before the cost of producing is finally settled upon. Production plans undertaken without full knowledge of all that may be ahead explain a large part of the business death rate. DEATH RATE OF MANUFACTURING CONCERNS (The rate is given as the percentage of failures to total in the business during a period of 30 years) Line Rate 1. Furniture 53.7% 2. Flour and grist mill products 53.0% 3. Iron-works products 58.9% 4. Printing 48.2% 5. Lumber and timber products 75.0% 6. Boots and shoes 57 . l%i 7. Cigars and tobacco 75 .4% 8. Hosiery and knit goods 30.0% 9. Creamery products 56 . 5% 10. Brass, bronze, and copper products 52. 1% 11. Clothing 43.3% 12. Drugs 68. 1% 13. Automobiles 57. 1% 14. Carriages and wagons 71.6% Death rate for 14 leading lines 57.1% Death rate for 199 other lines 66.9% Death rate for 1,327 factories in 213 lines. . 62.0% 3 GRAPHIC SALES ANALYSIS DEATH RATES BY "GENERATIONS" FOR 14 MANUFACTURING LINES (Percentage of total concerns which died within each 5- year period) Line 1891 1896 1901 1906 1911 Furniture 62% 25% 58% 39% 45% Flour and grist mills 16% 33% Iron-works 44% 33% 44% 50% 50% Printing 33% 60% 33% 40% 40% Lumber and timber 60% 75% 66% 66% 50% Boots and shoes 50% Cigars and tobacco.. 52% 62% 63% 45% 77% Hosiery and knit goods .... 33% Creamery goods.... 100% 60% 100% 75% 50% Brass, copper, and bronze 75% 50% 66% 50% 40%, Clothing 33% 50% 14% 42% Drugs 66% 80% 90% 33% 80% Automobiles 100% Carriages and wagons 63% 92% 41% 33% 20% EXPECTANCY OF LIFE FOR A NEW MANUFACTURING BUSINESS In business 5 years or less 6 In business between 5 and 10 years 4 In business between 10 and 15 years 5 In business between 15 and 20 years 1 In business between 20 and 25 years In business between 25 and 30 years MORTALITY FOR 33 PLANTS In business 5 years or less 17 In business between 5 and 10 years 5 In business between 10 and 15 years 5 In business between 15 and 20 years 2 In business between 20 and 25 years 1 In business between 25 and 30 years PRODUCTTON DATA AND FIGURES 5 These tables are based on figures showing the number of concerns that "died" in less than 30 years. Wholesale and retail chances for life, as indicated by figures secured through investigation in these lines are shown in Section 11 of these bulletins and should bo referred to in analyzing these figures. HOW LONG WILL IMY FACTORY PROBABLY LIVE? Chances in 10 to live Line 10 Years 15 Years Furniture 5.0 4.2 Flour and grist mills 8.1 5.4 Iron works 5.6 5.0 Printing 5.7 4.2 Lumber and timber 3.4 2.0 Boots and shoes 7.1 4.2 Cigars and tobacco 4.3 2.9 Hosiery and knit goods 8.3 6.6 Creamery goods 2.5 2.5 Brass, bronze, and copper 3.5 2.8 Clothing 6.6 3.3 Drugs 2.8 2.8 Close analysis of business mortality figures suggests that the rate is increasing somewhat. It is quite obvious, of course, that keener competition, increasing costs of doing business and more constantly fluctuating market conditions are in large measure responsible for this increase because they are more uncertain factors today that they were 10 or 15 years ago. While many concerns are "safe," to all intents and purposes, no business need feel wholly secure. It is too easy to skid. DETAILED "DEATH RATE" RECORD OF FACTORIES INVESTIGATED In business 5 years or less 123 In business between 5 and 10 years 26 In business between 10 and 15 years 8 In business between 15 and 20 years 1 In business between 20 and 25 years 3 In business between 25 and 30 years CAUSES FOR BUSINESS DEATHS MANUFACTURING Inflexible advertising policies One-man domination Carelessness in making contracts Overlooking new demands Neglect of established line Poor fire protection Unwise experimentation Unstandardized product Concentration on unprofitable line Interference of stockholders Exorbitant overhead expense Lack of systematic methods Diffused attention Difficulties in getting raw materials Heavy borrowing Not investigating market before starting Over-production Bad buying Poor design Too much waste and spoilage Inexperience Trying to change market to fit product, Lack of capital rather than product to fit market Poor equipment Too much competition Building on another's reputation Antiquated selling methods WHOLESALE Eagerness for big profits Lack of supply for private brands Lack of organization by lines Indiscriminate extension of credit Failure to cooperate with other lines Failure to foresee changes in style Too much competition Poor collection methods Failure to advertise Unwillingness to help the retailer Overbuying Handling inadequately advertised lines RETAIL Failure to investigate the trade Undue eagerness to make a big splurge Unwise selection of clerks Labor difficulties Failure to build a store personality Bad health Ignorance of overhead expense Failure to take a legitimate profit Bad accounting and poor coiiections Poor stocks Overbuying Increasing cost of doing business Cut-rate competition Poor equipment Poor delivery system Unsupported advertising Lack of capital Small margin of profit Poor location Returned goods Figure 1: These are some of the leading causes for failure in the locality investigated among the three classes of business. Each cause has accounted directly for a number of failures. Frequently it was found that failure resulted from a combination of several causes. ~ "■ 19 n a- ^ -^ / MARCH Inquirlas > / / I 1917- / ^ / ,^ ^ e / ^ ^ 4 1914 1916- 3 / .- ^ = / ^ ::S^^ >- < p^ ,- <^ w / / z' ,' ''^ '■'1 E ^ Y .< ^ / -• - ^r^ -i " -f 3 4 > ( J i <■ 10 11 1 2 1 3 1 41 5 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Figure 2 : To be sure that its business is receiving a proper volume of inquiries, and that the strength of the follow-up is right, one concern uses the graphs shown above, and also those shown in Figures 2 and 3. ■ , , - - / ^ -- _ . " " ' 1 ~ ' ~ - -_ - 6 ,1317 _ '' / >I913 :z:::::i,4^sj6. -- Z 7 7/ ::/ — itii — --- - ' '^ u - -- s r 7-'-7-/- — s A I /-/-'- -?vi' = -. ,-'_ 1 /'/- -y — --- - --/.-lit /i^''" . / . ,<-/-7l'/ --/•!_, 7 I / IR-y y 7 / ' -.- - 4 / Z ,'• Z - - - - IL* ,^ / V" ±t" ^ - iiiY-y .i^ '" j(l.' /J . \\ / ^ /^ ^ yy \ y^ J n y ■/ . ' /. ' > " / 1 /y' \ y J— ^T j\{\k.<\\\ ' - ' - - — .;,.,.,., .0.. .,.....>...>.. .,».,„„«.,»„,„„ Figure 3 : Sales are plotted on this Figure 4: On the 18th of March, monthly chart, which compares re- as this chart shows, sales were sev- sults with those of previous years. en days ahead of the previous year. 7 1 /!»H ' SALES :::;'":::^':"'^is5 Accumulative 7 7^1?!? by Montht ^-_-, ''-;,- tt f t L Xt -_/. / . ,<:r ..-..-Z?.^ 7^ . /_-i'-J .^ -^ •J 7 z / ,^ .jiT! ^v i X - 1 / ,;'"«'\/ ' .... 5..... _ / , f z_i5 .__,i3i 1.. . /^ ':\.':..L..c':... S.- ^ /I' -? 7-,' - , -Z?;- ..,.-.: 7 ,'m_ ,.^ ,' iwV--^. ' .^ I /^ ^ / y ::::;, :?^^^;e.;!: / ^ ^ y /' :^^v, ;>.:::: . s' £- - ... 2/1 ' T J»" Feb Mlf Apr Mly Jun« July Aug Sept 01 Ntr. Oac- 1 ,!'• '_ ^ GROSS INCOME "" 7 I •^"u" .u * ? in y ,!' 12 Z .- i( . _ ^... ,.._ ' ;'2 " : : 2 5 lu ..^ < ^ ., !" ./'.._ ,i !..(':. s . ' ,'<< y 1 :: : : % : . y ^^P";2'::::: * ii ^__ i^ -j^^KIE ---,<; - 1 ._. 7"""i 5^,2 21 .' wi i« s ....: ---^---s ° / 3 ' ::'',!' ' l'--f-- : : :: i^Sj : :::::;?::::2::::: y.//_Zl/._ _ ,' I ,5'^z/ ,t ,' _ ZE --.J < if\//.' __.^/Z'^ : / ,,.'... -.^,^2^ ^-/.. ^' ./$,?-__, ^__,. -^O-^ .'^-,^-- \\\Vt'X~,V'.'--V-V- ' ,=$ ,,,-=j- ID Jan. Feb Mv Apr. M« June Jut» Aug. S«Bl Oct t •/-' / L f \ 7 / (i y. // / // •J y / 19„ /\ ' 1/ ^ y t.'l ' ^ '' \fl ' / / / u ' / / / /. —- — 'I- -V J/^ ■/J. ' f(fc J«n Feb M« Apr Mey June July Aug Scplj Ot Nov 0«i. 1 1 1 M< GROSS INCOME ompaiison of 1915 wttb 18Q - t \ 1915 y 1 A \\ / \\ 19B \ \ I \ ) > T- 1 / V \ \ \ i»« \ \<^ \ s \ \ \ ^ ] / \ \ \ IMS \ / 1 ln\. Feb Me> Ap. M«, June Jul, A«g S«»t Otl NO...0M j Figure 7: To interpret sales flue- Figure 8: This chart showed that tuation, the advertising costs are 1918 sales were running like those kept cumulatively for each year, of 1915 and helped check a slump. 8 PRODUCTION DATA AND FIGURES 9 INDUSTRIES AND MANUFACTURERS PER CAPITA FIGURES BY LINES (Population estimated 98,000,000) Line Number Capita Ratio Artificial stone products 3,548 27,621 Bookbinding and blankbook-making 1,124 87,189 Boots and shoes 1,355 72,325 Bread and other bakery products. . . 25,963 3,778 Brick, tile, and pottery 3,634 26,968 Butter 4,356 22,498 Canning and preserving fruits and vegetables 3,153 31,113 Carriages and wagons 4,601 21,300 Cheese 3,082 31,797 Clothing (men's) 4,830 20,293 Clothing (women's) 5,564 17,613 Confectionery 2,391 40,987 Cooperage 1,259 77,751 Copper, tin, and sheet-iron work . . . 4,527 21,648 Cotton goods 1,220 80,328 Electrical machinery and apparatus 1,030 95,146 Flour- and grist-mill 10,788 9,084 Foundry and machine-shop products 14,446 6,784 Fur goods 1,322 74,130 Furniture 3,192 30,701 Gas (illuminating and heating) 1,284 76,324 Hosiery and knit goods 1,622 60,419 Ice (manufactured) 2,543 38,580 Jewelry 1,914 51,202 Liquors (malt) 1,250 78,400 Lumber and timber products 27,249 3,596 Lumber (planing mill products) . . . 6,061 16,151 Marble and stone work 4,901 19,995 Mattresses and spring beds 1,000 98,000 Millinery and lace goods 2,079 47,138 Mineral and soda waters 5,463 17,939 Patent medicines and compounds. . . 2,903 33,755 PrintingandpubUshing(bookandjob) 12,115 8,089 Printing and publishing (newspaper and periodicals) 19,317 5,073 Saddlery and harness 2,551 38,416 Ship- and boat-building (wooden) . . 1,068 91,760 Slaughtering and meat-packing 1,279 76,622 jO_ GRAPHIC SALES ANALYSIS Line, continued Number Capita Ratio Structural ironwork (not made in steel-works or rolling-mills) 1,235 71,255 Tobacco, cigars, and cigarets 13,515 7,251 Turpentine and rosin 1,394 71,011 You will find in the group of tables on the pages immediately following a number of ideas useful in, or adaptable to, many lines of business. Probably yours is among them. These tables are taken from "The Wool Industry," a Shaw pubhcation by Professor P. T. Cherington, and cover various phases of the wool industry. For business men in other lines the usefulness of these statistics lies chiefly in the tendencies they indicate. For example, take this quotation from the preface: "Early in this investigation it was observed that the characteristics of the woolen and worsted industries are determined, not so much by problems of raw material supply, or of cloth production, as by the problems involved in marketing the finished fabrics. It became evident, for example, that the present relative importance of the output of worsteds as com- pared with woolens is not due to the greater number of sheep being grown which produce wool suitable for such fabrics. On the contrary, it appeared that what- ever connection exists between these phenomena, the change in the character of the demand for fabrics is the cause, and the change in the character of wool- growing the effect rather than vice versa. Again, the large scale of the worsted mills and their marked geo- graphic concentration seem to be largely due to the conditions under which staple worsteds are sold. In other words, it was plain that in both the woolen and worsted industries the casual forces in the develop- ment of the production activities are the wants and habits of the buying public." PRODUCTION DATA AND FIGURES 11 There you liave it — the ultimate consumer is the "boss" even of the largest trade and industrial devel- opments and tendencies. The manufacturer and dis- tributor may have a lot to do, of course, with shaping his needs and habits, but that is another question. Carrying further the analysis of wool establishments, we have here a table with some features of the concentration by states. These figures are taken from the census in the Tariff Board Reports. Number of estab- lishments United States 587 Connecticut 36 Maine 55 Massachusetts 94 New Hampshire 33 New York 30 Pennsylvania 104 Rhode Island 21 All others 214 Cost of Product materials value (millions) (millions) $65.6 $107.1 5.1 8.4 7.6 12.8 19.8 32.2 4.7 7.7 2.9 4.9 10.2 16.0 2.9 4.7 12.1 20.1 The rapid growth of worsted manufacture is shown in this table, also reproduced from the census contained in the Tariff Board Reports. Note the tremendous increases all along the line during a period of 50 years. 1909 1904 1899 1889 1879 1869 1859 324 226 186 143 76 102 3 Number of es- tablishments Capital (mil- lions) $295 $162.4 $132.1 Combing ma- chines (number).. 1,925 1,312 1,194 Spindles (thousands; 2,624 1,618 1,371 Looms (num- ber) 45,270 30,910 26,372 1,909 5,144 116,128 $68 $20.3 $10 i 673 288 161. 755 240 200. 1.2 12 GRAPHIC SALES ANALYSIS 1909 1904 1899 1889 1879 1869 1859 Value of ma- terials (mil- lions) $207.7 $109.6 $77 $50.7 $22 $14.3 $2.4 Value of pro- duct (mil- lions) $312.6 $105.7 $120.3 $79.1 $33.5 $22 $3.7 How worsted establishments are concentrated by states is shown here. Comparison of this table with that on page 9, shows that worsted manufacture is confined to a few states to a greater extent than is ordinary woolen manufacture. Three cities alone — Lawrence (Massachusetts), Providence, and Philadelphia — produce the greater part of the output. Number of estab- lishments United States 324 Connecticut 17 Massachusetts 74 New Jersey 21 New York 15 Pennsylvania 99 Rhode Island 67 All others 31 Cost of Product materials value (millions) (millions) $207.7 $312.6 7.1 10.1 66.0 106.0 18.3 29.6 8.2 12.7 43.3 59.4 48.1 69.8 16.5 24.6 The total amount of fine wool retained in the United States for consumption during the 10 years ending with the first of the year 1915, and the percentage of these totals represented by imported wools, is given in this table prepared by the National Association of Wool Manufacturers. FINE WOOL Retained for Percentage Fiscal consumption of year (million pounds) imports 1904-05 426 31.54 1905-06 393 24.99 1906-07 390 23. 50 1907-08 346 16.71 rRODUCTIQN DATA AND FIGURES 13 FINE WOOL, Continued Retained for Percentage Fiscal consumption of year (million pounds) imports 1908-09 476 34.60 1909-10 467 29.90 1910-11 366 12.38 1911-12 404 21.02 1912-13 384 21.00 1913-14 441 32.84 1914-15 526 44.91 Examination of this table makes clear the connection between the scale of operation and the nature of the two great groups of products, staples, and novelties. For example, by comparing the yardage of worsted serges and the other chief worsted items with the yardage of woolens having the largest totals, and by observing how many more groups of products are necessary for listing woolen mill products than worsteds, it is easier to understand why large-volume plants have so much more important a place in the worsted than in the woolen industry. Woolen Industry Worsted Industry Items Sq. yds. Value Sq. yds. Value (milhons) (millions) (millions) (millions) All wool: Wool cloth and men'swear... 35.1 $24.5 5.7 $4.7 Worsted coat- ings, serges, and suitings, men'swear... 5.0 4.3 114.5 97.5 Woolen over- coatings, cloak- ings, and so on, men's or women's wear. . 13.6 10.2 1.0 1.0 Worsted overcoat- ings and cloakings, men's or women's wear 1 ,2 .4 .5 14 GRAPHIC SALES ANALYSIS Woolen Industry Worsted Industry Items, Sq. yds. Value Sq. yds. Value continued (millions) (millions) (millions) (millions) Wool dress goods and so on, opera and similar flan- nels and similar all wool dress goods 25.5 13.7 3.5 2.6 Worsted dress goods, cashmeres, and so on, for women's wear and buntings 1.9 1.1 103.8 52.0 Carriage cloths .... 1.2 .6 .... .... Flannels for under- wear 3.3 .9 Blankets 4.4 2.5 Mohair dress goods .... .... .3 .1 All other all wool.. .9 .5 1.8 1.3 Cotton mixed woven goods : Cotton mixed woven goods, total all types 3.6 1.6 Union tweeds, cassimeres, cheviots, etc., for men's wear . 15.3 6.2 Overcoatings and cloakings 4.2 2.3 .... .... Sacking, tricots, dress goods for women's wear, and opera and similar flannels 4.2 1.7 .... Flannels for under- wear 7.0 1.3 Blankets 1.7 .6 All other woolen mill products — cotton mixed woven goods 1.1 .4 .... .... 15 r is) INSERT I in ba inj an m 63 id J n r -7--^ « "} • I IMONII NjD- ) • Insert I: Whether or not the distribution of your product is based on density of population, you will find this map interest- ing. Each dot represents 500,000 people. An ordinary map- and-tack distribution sometimes is confusing, as it may make certain parts of the country appear more favored than others. This map forestalls that objection. It shows how the United States would look if the states corresponded in size to their populations A comparison of the "size" of states such as Massachusetts and Texas, or New Jersey and Montana, for examples, on a population basis, presents some decidedly inter- esting and surprising facts. By checking sales volume against this map, you can tell if your distribution is what it should be. x^i PRODUCTION DATA AND FIGURES 15 Woolen Industry Worsted Industry Items, Sq. yds. Value Sq. yds. Value continued (millions) (millions) (millions) (millions) Cotton warp woven goods: Wool filled cassi- meres, doeskins, jeans, tweeds, and so on, for men's wear 44.0 11.0 1.1 ,8 Worsted filled cassimeres, doe- skins, jeans, tweeds, etc., for men's wear 3.3 1.2 25.9 13.7 Wool filled dress goods and similar goods and repel- lants 12.2 2.6 ...... .,.. Wool filled over- coatings and cloak- ings 1.9 3.9 ..... Worsted filled dress goods, delaines, cashmeres, and so on, and stuffs for women's wear .... 64.4 14.5 Domett flannels and shirtings ... . 4.5 .9 .... .... Cotton warp blan- kets 8.9 2.5 Horse blankets. ... 4.1 1.6 Carriage robes .... 2.8 1.3 .... All other cotton warp goods 8.1 1.3 1.9 .7 Only four cities in the United States are prominent in woolen manufacture. A count of firms indicated as handling woolen or worsted goods, classified somewhat roughly, gives figures as shown in the table given on the following page. The total value of products in 1905 was S355,000,000, and in 1910, $485,000,000. 14 GRA Items, continued Wool dress good and so on, operj and similar flan nels and simila all wool dresi goods Worsted dresi goods, cashmeres and 80 on, fo women's wear anc buntings Carriage cloths. . . Flannels for under wear Blankets Mohair dress good All other all wool . Cotton mixed woven goods Cotton mixec woven goods total all types Union tweeds cassi meres cheviots, etc. for men's wear . Overcoatings and cloakings Sacking, tricots, dress goods foi women's wear, anc opera and similai flannels Flannels for under- wear Blankets All other wooler mill products — cotton mixed woven goods PRODUCTION DATA AND FIGURES 15 Woolen Industry Worsted Industry Items, Sq. yds. Value Sq. yds. Value continued (millions) (millions) (millions) (millions) Cotton warp woven goods: Wool filled cassi- meres, doeskins, jeans, tweeds, and so on, for men's wear 44.0 11.0 1.1 .8 Worsted filled cassimeres, doe- skins, jeans, tweeds, etc., for men's wear. ... 3.3 1.2 25.9 13.7 Wool filled dress goods and similar goods and repel- lants 12.2 2.6 ..,<. ., .. Wool filled over- coatingsandcloak- ings 1.9 3.9 ...«• Worsted filled dress goods, delaines, cashmeres, and so on, and stuffs for women's wear .... 64.4 14.6 Domett flannels and shirtings ... . 4.5 .9 .... .... Cotton warp blan- kets 8.9 2.5 Horse blankets .... 4.1 1.6 Carriage robes .... 2.8 1.3 All other cotton warp goods 8.1 1.3 1.9 .7 Only four cities in the United States are prominent in woolen manufacture. A count of firms indicated as handling woolen or worsted goods, classified somewhat roughly, gives figures as shown in the table given on the following page. The total value of products in 1905 was S355,000,000, and in 1910, $485,000,000. 5 Woolens and worsteds alone 179 29 14 3 Woolens and worsteds combined with other lines 39 8 3 6 Sales offices of woolen and worsted mills 5 4 3 6 Branches of houses whose head offices are elsewhere 14 2 2 Head offices of houses with branches in various cities 3 4 Houses handling both imported and domestic woolens and worsteds .... 14 A direct count of concerns manufacturing men's ready-to- wear woolen and worsted clothing, shows the following dis- tribution. You will note that certain localities have special- ized in certain types of products. MEN'S CLOTHING MANUFACTURERS ^ ^ I g ^ .2 S -^ ^ O pq PQ Suits and cloaks 643 50 17 42 Skirts (woolen) 153 33 15 23 Children's cloaks and suits 157 1 .... 15 Auto coats and rain coats 51 . . 2 C3 ■■§ a > ^ a 03 o C3 3 o u c o ■ ^^ G pin c3 :y u O ^ C/} CO 1 13 24 76 5 9 27 20 4 17 The figures presented in the following tables are intended to give you an idea of the amount of raw materials used in the manufacture of essential products. These statistics were compiled by the United States Bureau of the Census. In some instances where actual consumption figures were not available, the production figures are given. These figures, of course, do not include any wastage which occurs in the manufacturing process. COTTON INDUSTRY (Cotton goods, including cotton small wares) Material Pounds Cotton 2,335,344,906 Domestic 2,259,312,974 Foreign 76,031,932 Cotton yarn 126,707,003 Cotton waste 80,044,061 Starch 71,774,574 HOSIERY AND KNIT GOODS INDUSTRY Material Pounds Cotton 75,416,023 Wool, in condition purchased 7,068,788 Equivalent of above in scoured condition. . . . 5,582,839 PRODUCTION DATA AND FIGURES 19 HOSIERY AND KNIT GOODS INDUSTRY (Continued) Material Pounds Shoddy, purchased 7,482,553 Wool waste and noils, purchased 8,586,261 Yarns, purchased: Cotton 216,987,611 Worsted 10,370,004 Woolen 6,140,265 Merino 4,014,609 Silk and spun silk 982,753 Yarns made in the establishment using — Cotton 69,171,277 Woolen 8,316,349 Worsted 223,404 Merino 20,856,989 WOOLEN INDUSTRY (Exclusive of carpets and rugs) Material Pounds Wool, in condition purchased 488,368,690 Domestic 320,298,916 Foreign 168,069,774 Equivalent in scoured condition 301,004,252 Hair 33,447,534 Camel, alpaca, and vicuna 4,659,409 Mohair 3,187,950 Domestic 2,444,561 Foreign (Turkish and so on) 743,389 Other animal hair 25,600,175 Cotton 21,399,731 Domestic 18,412,493 Foreign (Egyptian, and so on) 2,987,238 Tailors' clippings (rags, and so on) 41,517,552 Shoddy, mungo and wool extract, purchased 24,052,730 Waste and noils of wool, mohair, camel hair, and so on, purchased 32,629,812 Wool waste and noils 31,957,327 Mohair noils 604,985 Camel, alpaca, and vicuna noils 67,500 20 GRAPHIC SALES ANALYSIS SILK INDUSTRY Material Silks • Pounds Raw 17,472,204 Spun 2,112,972 Artificial 914,494 Organzine and tram, purchased 3,377,972 Fringe and floss, including waste, noils, and so on purchased 2,402,960 Yarns, other than silk: Cotton (not including mercerized) 12,617,292 Mercerized cotton 1,494,586 Woolen or worsted 610,588 Mohair 710,108 All other 353,780 IRON AND STEEL INDUSTRY (Steel Works and Rolling Mills) Material Tons Iron and steel : For furnaces and hot rolls — Pig iron, including ferroalloys 19,076,889 Pig iron 18,712,304 Ferroalloys — spiegeleisen, ferromanga- nese, and so on 364,585 Scrap from outside sources, including old rails not intended for rerolling 4,803,617 Ingots, blooms, billets, slabs, and muck scrap bar, rails for rerolhng, and sheet and tin plate bars (from outside sources) 6,508,249 Rolled forms for further manufacture (from outside sources) — Skelp 176,717 Wire rods 146,425 Iron ore 835,338 AGRICULTURAL IMPLEMENT INDUSTRY Product Number Produced Cultivators 908,297 Harrows 700,820 Plows 1,615,852 Seeders 61,970 MANUFACTURE OF AGRICULTURAL IMPLEMENTS I Chioigo > MoUne S Racuie t Springfield Ol 5 Aubum N y 6 Sa Bcod, fald 7 Peoria, ni ^ Richmond Ind 9 Louisnlle. Ky. »J4.S4«.M9 (1900) «,M7.014 5.1 !7.079 4.0J1.16J 1,890.301 2,744.001 1.309.')63 3.151,161 1J37.388 (1900) Figure 9: This map from "Selling Forces" shows how the manufac- ture of agricultural implements is distributed. It is interesting to note the concentration of over 70% of this industry in and around Chicago. ^{jovernment Map 5howina ftrcentaqe of Increase m Population Dun n^^ Louisiana ca^ Maine J'^^O Kansas 1,501 Rhode Island 1»428 Oklahoma 1'411 Washington 1'271 Nebraska l'^o7 New Hampshire I'inn Colorado 1'129 Arkansas nTc Vermont 91o West Virginia 911 Oregon »48 South Carolina °^^ Mississippi °f^ Alabama Jjjf Florida l^l South Dakota Jf? North Dakota ^H 30 GRAPHIC SALES ANALYSIS TOTAL NUMBER OF MANUFACTURERS IN ALL LINES IN EACH STATE, continued States Manufacturers Delaware 492 District of Columbia 292 Utah 272 Idaho 244 Montana 228 Nevada 61 New Mexico 59 Arizona 55 Wyoming 37 Total .139,411 To find the number of people in the country in proportion to your factory — that is, the average number of persons your factory serves — look under the "per capita ratio" column opposite the industry in which you are engaged. For example, the average boot and shoe factory serves 72,325 people. This figure, together with the others listed in the following table, are based on an estimated total population in the United States of 98,000,000. COMPARATIVE DATA AND FIGURES FROM WHOLESALE LINES THOROUGH knowledge of what it costs whole- salers to do business cannot come in amiss for any distributor. You will find much of interest in the tables in the following pages, covering most of the hues of business in which wholesalers are necessary to most effective distribution. Some sets of figures, obtained from various sources, are of general interest to business men who are on the lookout for larger business tendencies and develop- ments. Others of the tables bring to light facts per- taining more especially to certain lines of business. Both kinds are important, you will agree, to effective planning for the future. Today, more than ever before, sellers of goods are looking ahead. The correct solution of present-day problems is just as vital as before; but so great and so far-reaching are the changes of to- morrow likely to be, that it is an imperative task of sales management as far as possible to gage and an- ticipate future business conditions. As a fact, it is vital that every wholesaler know not only what his selling possibilities are, but what his costs in every detail ought to be. Progressive men are looking into this question of costs in the light of future conditions. But first, they necessarily have their "house in order." They know to a certainty what it is costing them to get business in their entire selling field, what they are pajdng to pack, ship, and distribute goods to cover present sales. GRAPHIC SALES ANALYSIS The international scope business is reaching today calls for an analysis of wholesaling such as has never before been attempted. What are your expenses? What are they in proportion to your sales? Percentages of this sort are important. They point the way to busi- ness success or failure. In these pages are figures and percentages of this type for various lines of trade. A glance through the pages should tend to crystallize for wholesalers much extremely valuable cost and sell- ing information. For instance, if you want to know how much con- cerns are paying for rent in proportion to sales, you'll find the figures here. In fact, wherever business men are faced with present-day problems in selling, these figures will help in the solution. WHOLESALE DATA AND FIGURES Did you ever wonder how many wholesalers there are in the United States? These figures will give you some idea as to the number and show in what lines they are engaged, too. Produce takes the lead with 7,785. The smallest number of dealers listed are the sponge wholesalers, who number but 37. In checking up on these figures it will be interesting as well as helpful to compare them with similar tabulations given in the manufacturing and the retail sections . WHOLESALE DEALERS IN THE UNITED STATES (From R. G. Dun and Company's list as compiled by the Rapid Addressing Machine Company) Line Number Agricultural implements 240 Bakers 620 Boots and shoes 522 Butchers and meat markets 781 Butter and eggs 1,194 Carpets 83 Cheese 263 China, crockery, and glassware 340 Cigars and tobacco 1,991 Clothing 160 Coffee, tea, and spices 547 Drugs 668 Dry goods 725 Electrical supplies 424 Fancy goods and notions (exclusive) 786 Feed, flour, and grain 1.572 Fish 950 Florists 1»765 Fruit 1.831 Furniture 307 Glass, oils, and paint 605 GRAPHIC SALES ANALYSIS Line, continued Number Gloves 63 Grain 1,210 Grocers 3,840 Hardware 928 Harness and saddlery 314 Hats and caps 201 Honey 113 Hosiery 1,105 Jewelers 815 Junk 189 Men's furnishings (exclusive) 315 Milliners 424 Neckwear 315 Notions and toys 802 Paper 905 Produce 7,785 Seed 597 Sponges 37 Sporting goods 423 Stationery 391 Tobacco (leaf) 592 Wall paper 284 Willow and woodenware 131 RECAPITULATION OF WHOLESALE TRADE Towns 1,000 2,500 Over Total below to to 1,000 2,499 24,999 25,000 Wholesale grocers. . 107 250 1,369 1,261 2,987 Wholesale dry goods .. 1 14 136 526 677 Wholesale hardware 4 149 401 554 Wholesale drugs . .. 6 16 189 432 643 Wholesale jewelry. . 4 10 63 751 828 Wholesale fancy goods and notions 5 3 37 362 407 Wholesale boots and shoes .. 4 76 501 581 Wholesale toys . . .. 15 392 407 Total . 123 301 2,034 4,626 7,084 GRAPHIC SALES ANALYSIS LOCATION OF WHOLESALE TRADE T3 « «J £ 9 W)-I3 g States o I -S §) « >.§ 5 K I Q Q ^iE^fSl Connecticut 43 11 5 9 10 2 8 4 Maine 29 8 2 7 8 1 7 8 Massachusetts 76 30 48 60 22 7 23 87 New Hampshire 16 3010000 Rhode Island 12 5 13 6 4 3 4 2 Vermont 8 3 1 1 2 2 New Jersey 49 3 4 9 11 12 7 New York 196 38 223 112 112 70 77 68 Ohio 123 27 67 51 37 44 33 23 Pennsylvania 173 49 77 90 63 52 29 64 Alabama 89 16 3 17 10 6 4 9 Delaware 10 2 1 1 1 1 1 Florida 76 6 15 6 6 2 1 1 Georgia 190 15 5 35 21 4 6 19 Kentucky 85 9 2 9 15 8 9 5 District of Columbia.... 11 2 4 2 4 3 2 Maryland 43 12 21 22 18 25 14 24 Mississippi 70 7 2 16 9 5 North Carolina 205 10 16 24 5 1 12 South Carolina 73 5 3 7 9 2 1 Tennessee 93 22 6 25 19 14 19 25 Virginia 126 30 2 15 14 10 6 24 Wet Virginia 64 15 2 12 12 5 3 8 Illinois 112 14 86 27 29 21 36 33 Indiana 75 12 13 15 19 9 14 6 Iowa 44 23 20 20 7 7 14 Michigan 71 16 20 28 16 13 11 10 Minnesota 37 12 23 3 13 6 13 Nebraska 24 8 22 6 2 4 2 North Dakota 16 1 South Dakota 12 3202000 Wisconsin 35 9 14 17 6 5 31 Arizona 14 3011010 Arkansas 88 6 1 10 12 2 Colorado 19 3 11 9 6 6 2 Kansas 43 9 6 5 2 2 3 WHOLESALE DATA AND FIGURES LOCATION OF WHOLESALE TRADE, Continued oD « 2 S Sd"-Z3 9 States c3 ^^§3a>»fl ",« 2 1 I b 2 1^ Hi 6 a >^ Q Q ^g Hfg-g Louisiana 71 8 8 18 11 8 9 Missouri 82 18 43 14 10 13 25 New Mexico 13 1000040 Oklahoma 62 8 3 4 2 1 3 2 Texas 198 30 7 33 20 4 14 8 California 53 23 26 7 23 15 17 Idaho 63000010 Montana 11 6 1 7 1 2 Nevada 4 1 Oregon 07414222 Utah 10 4 2 7 5 1 3 4 Washington 20 9 11 3 2 4 6 3 Wyoming 70000000 Indicated typical and attainable cost-of-doing-business figures for wholesalers are presented in the following tables. The total figures shown here indicate apparently that whole- sale hardware concerns have the highest cost of doing busi- ness and that it costs wholesale grocers less than the other lines studied. It was apparent early in the nation-wide in- vestigation among wholesalers conducted during the prepara- ation of these bulletins that the volume of sales had a direct influence on the cost of doing business. For this reason the concerns were classified according to whether their sales were $1,000,000 or more, or from $500,000 to $1,000,000, or less than $500,000. It was also found that sectional influences affected costs. Firms doing business in the West and along the Atlantic seaboard were found to have higher costs than those in the Middle West. The western concerns' costs were from 1.5% to 2% higher, while many eastern concerns reported costs about 1% higher than the average for the Middle West. Wholesalers in the South, it was found, usually had a somewhat lower cost of doing business. GRAPHIC SALES ANALYSIS COSTS OF DOING BUSINESS FOR WHOLESALERS (Annual sales more than $1,000,000) Indicated Indicated typical attainable Line costs costs Groceries 10.3% 8.8% Clothing 17.8% 15.6% Hardware 23.5% 18.8% Electrical goods 18. 1% 15.7% Shoes 15.8% 11.9% Drugs 14.6% 12.4% Dry goods 12.8% 10.6% (Annual sales $500,000 to $1,000,000) Indicated Indicated typical attainable Line costs costs Groceries 9.0% 7.5% Clothing 16.1% 12.8% Hardware 19.2% 16.7% Electrical goods 18.1% 15.7% Dry goods 12.8% 10.6% (Annual sales less than $500,000) Indicated Indicated typical attainable Line costs costs Groceries 7.2% 6.3% Hardware 17.8% 14.9% Electrical goods 17.0% 13.3% Figure 13: Indicated typical total cost percentages from seven whole- sale lines for various size concerns are shown here in graphic form. The grocery, hardware, and clothing columns indicate, as you will note, how costs of doing business increase as a business increases in size. Figure 14: These columns are the indicated attainable total cost percentages in seven wholesale lines, also given in graphic form. Com- parison of this chart with that shown in Figure 13, brings out clearly what reduction of expense reasonably may be expected in these lines. Figure 15: This graph represents cost-of doing-business figures aver- aged from the books of scores of wholesale concerns located mainly in the Middle West. Excessively low and high figures were not considered. Figure 16: The concern whose cost-of-doing-business figures are charted here is one of the oldest in the country. Its costs offer a striking example of the steady rise in the operating costs of a business. INSERT III ^ I. DEC. Insert I determi — eithei ful. Y. Jrogress e falling Simple aluable. /i/[^r~~~--~-J/olume of Retail Trade in the United States i (/lV^S^37// MOKJT- jC ^rX /iv--^^^ i\ /~~^DAK.\ 'l^^^^y-'^^ /""^^ON / \ C"^^ — ^ l-\-.-\ MIN(N. /' ^^-v 'p:&-^~-\. Jlfl' ^^f i ■ ) ' ; s. (dak. \l8^ } \ IOWA ) 2 \ 62/86 So 22 fL-^ NEBR, 34 Y^L.x 1 '^^" ; CO.??. )- t Y ,, ^"-nV>^8 97 i MO. 51 \10 ( — ■— s ; KAN /Sr^6 \ TE?,i|N, J^ '"n . CAR ^ I ~/~ — 1 Ju \ / -^R'2. i NJMEX. \ ! i^" —d^ S.CABy^ 1 ARK y" '"' ' '\ „^ ^^\_^ 1 / -J-J \ i 33 \'2 1 ALft.\ GA \ 88y 60 46 ff- M15S TEXAS \ X / A \ lf5|^^^>-^i:^^»""\ \ 47 54 \\ VOLUME OF VOLUME OF VOLUME OF w VOLUME OF CITY RETAIL TRADE CITY RETAIL TRADE CITY RETAIL TRADE CITY RETAIL TRADE 1 New York Cily 1.150,333.790 26 Louisville, Ky. 47,762.000 51 Nashville, Tenn. 23.411,400 76 Manchesler, N, Y. 15,656,600 2 Chicago, III. 500 000 27 Jersey City, N. J. 45 951.750 52 Lowell. Mass. 22,649,000 77 Elizabeth, N, J. 15,604 3 Philadelphia, Pa. 342 2S Columbus, Ohio 975,600 63 Tacoma, Wash. 22,540,000 78 Troy, W. Y. 15,583 4 Boslon, Mass. 177 811 050 29 Rochester, N. Y 283.400 54 Houston, Tex. 79 W.lkes-Barro, Pa. 15,351 208 5 St. Louis, Mo. 151 30 Oaklard, Calif. 3! 720,800 55 Trenton. N. J 22,318:600 80 Jacksonville, Fla. 800 6 Cleveland, Ohio 134 814 600 31 Toledo, Ohio 310,800 56 Hartford, Conn. 22,180,000 81 Fort Wayne, Ind. 15:331 600 7 Ballimore, Md. 117 200 32 Atlanta, Ga. 3! 111,600 57 Reading, Pa. 21,976,200 82 Evansville, Ind. 15.215 600 8 Pittsburah, Pa. 115 818 36 58 Youngslown, Ohio 21,677,000 83 Erie. Pa. 9 Detroit, Mich. 114 JOO 34 Omaha, Neb. 59 Sprmghcld, Mass. 84 E. St. Louis, III. 14:94' 600 10 Los Angeles, Calif. 100 35 Richmond, Va. 31 337^400 60 Ft. Worth, Texas 20312:400 85 Haaisburg, Pa. 14,40: 000 II Buffalo, N. Y. 93 600 124,800 61 Albany, N. Y 20,839,800 86 Peoria, 111. 12 San Francisco, CaliT. 92 703 37 Spokane,' Washington 30 62 Dos Moines, la. 87 South Bend, Ind. 13:78! 200 13 Milwaukee, Wis. 87 307 38 Worcester, Mass 32 562^800 63 Lawrence, Mass. 20,'l 12^000 88 Savannah, Ga. 13.761 000 14 C.nc.nnal., Oh.o 82 200 39 New Haven, Conn, 64 Schenectady, N. Y. 19,903,800 89 Johnstown, Pa. 800 15 Newark, N. J, 81 40 Memphis, Tenn. 2< 799;00O 65 Kansas C.ty. Kan. 19,887,400 11216 600 16 New Orlearis, La, 74 349 400 41 Scranlon, Pa. 66 Camden, N. J. 19,121,940 91 Holyoke, Mass. 13,216 17 Washington, D, C 72 42 Fall River, Mass. 67 Duluth, Minn, 18,899,000 92 Brockton, Mass. 810 18 Minneapolis, Minn. 72 690 eoo 43 Grand Rapids, Mic - 25 658!20O 68 Wilmington, Del. 18,853,000 93 F^artland, Me. 12:773 400 19 Seattle, Washington 69 800 44 Dayton, Ohio 444,800 69 Oklahoma, Okla. 18,588,600 94 Charleston, S. C. 12,146 20 Kansas C.ty, Mo 59 45 Peterson, N. J. 24 919,740 70 Yonkcrs, N. Y 17,970,840 95 Possaic. N, J. 11,483 21 Porlland. Ore. 59 600 46 Dallas, Texas 24 905,400 71 Norfolk, Va. 96 Bayonne, N- J. 11,182 i80 22 Indianapolis. Ind 54 47 San Antonio, Texas 72 Waterbury, Conn. 17:394:600 97 Hoboken, N, J. 23 Denver, Colorado 52 160 000 48 Bridgeport, Conn 2< 3151800 73 Ut(ca, N. Y. 98 Somerv.llo, Mass. 120 24 Providence, R- 1. 50 ooo 49 New Bedlord, Pa. 74 Akron. Ohio 25 St. Paul, M.nn. 49 446 to6 479.800 75 Lynn, Mass. 10:392:320 Insert III: As dealer sales are an exceedingly important factor in determining distribution and selling policies for so many distributors — either manufacturers or wholesalers— this map will be found help- ful. You will find the cities classified according to volume of retail trade, as explained fully in the key given below the map. Perhaps comparison of your own sales volume with the total volume of retail trade for these 98 cities will help you to locate the districts where addi- tional advertising or selling effort could be most profitably expended. Figure 19: This graph is used by one concern to watch the progress of successful letters to prospects and to check on those which are falling down. The total returns from each letter appear by months. Simple plans like this for locating result-producing methods are highly valuable. 1805 1906 1907 14 Seven Ye: Rising Ci ^ /^ y^ ^^ Figure 15: This graph i aged from the books of sc the Middle West. Excess: " 1880 1885 1890 10 How the ( Ha! W ^ «• ^""^ ^ Figure 16: The concei charted here is one of tl striking example of the st JAN. FEB. MAR. APR. MAY JUNE JULY AUG. SEPT. OCT. NOV. DEC. Figure 19: This graph is used by one concern to watch the progress of successful letters to prospects and to check on those which are falling down. The total returns from each letter appear by months. Simple plans like this for locating result-producing methods are highly valuable. GRAPHIC SALES ANALYSIS AVERAGE COSTS OF DOING SOUTHERN WHOLESALE Average for Ala. Ark. Fla. Ga. La. Selling Expense .0266 .0195 .0246 Salaries, sales force .0160 .0088 .0142 Commissions Sales traveling ex- pense 0101 .0099 .0115 Advertising, in- cluding catalog . . .0011 .0100 .0024 Shipping and Warehouse 0105 .0100 .0113 Wages — receiving, shipping, stock 0108 .0010 Drayage and Ex- press 0002 .0010 Management and Office 0132 .0174 .0174 Manufacturing and office salaries 0183 .0118 Printing and sta- tionery 0040 .0014 Office supplies 0001 Postage 0016 .0018 Credit and collec- tion 0005 .0015 Fixed Charges — Upkeep 0062 . 0054 . 0075 Rent, including warehouse 0003 . 0032 Heat, light, and power 0005 . 0003 Insurance, credit, casualty 0023 .0013 Taxes, mercantile and corporation 0044 ,0015 .0234 .0165 .0266 .0116 .0080 .0045 .0005 .0004 .0088 .0124 .0098 .0102 .0013 .0022 .0180 .0202 .0152 .0171 .0036 .0027 .0018 .0002 .0004 .0091 .0186 .0037 .0016 .0004 .0016 .0013 .0037 .0026 INSERT IV Greneral average of each item .0247 .0146 .0030 .00813 .00216 .01028 .00766 .00167 .01658 .01310 .004018 .00121 .00166 .0093 .0086 .00706 .0007 .001617 .00415 Insert IV : In this map of the United States are shown the dividing lines to meet the individual selling needs of the distributor — whether whole- Atlanta. Just which counties are included in each district is explained pared for the Bureau of Business Standards, and can be used profitabl.v between the nine important sales districts of the country, as indicated saler or manufacturer. County lines, rather than state lines, are fol- fully in the key given below the map, as you will note. Note also the by every distributor who is interested in national or regional sales. Its by careful investigatioru A different type of shading has been used for lowed, and were determined after a careful examination into economical information given concerning population, land area, and population per chief advantage consists in malcing it possible to route salesmen more eachsertion. These districts may be combined or subdivided, of course, railway travel. In this particular instance, the home office is located in square mile for each of the nine districts. This map was specially pre- economically and applying concentration where it is most needed. WHOLESALE DATA AND FIGURES BUSINESS— FROM MEMBERS OF THE GROCERS' ASSOCIATION General N.C. s. c. Okla. Tenn. Texas Va. average of each item .02125 .0150 .0438 .0077 .02359 .0155 .0010 .0261 .0148 .0050 .02652 .0160 .02 .0150 .0247 .0146 .0030 .0050 .01005 .0108 .00652 .0050 .00813 .0018 .0010 .0005 .0019 .00216 .0081 .0062 .00737 .01005 .0157 .0137 .01028 .0062 .0062 .0073 .0038 .00853 .0225 .00766 .0025 0146 .0078 .01394 .0228 . \J\JOKJ\J .0221 .0164 .01658 0112 .0078 .01026 .0215 .01787 .01310 0012 0012 0025 .0008 .0003 .000846 ^0020 .00311 .0010 .00149 .004018 .00121 .00166 0020 .000145 .0020 .00075 .0093 0150 .0160 .0097 .0054 .0093 .0025 .0086 0050 .0120 .0026 .00243 .00706 0012 .0003 .0006 .0007 0012 .0012 .00225 .00179 .001617 .0062 .0068 .0044 .00364 .00415 G Average for ... Selling Expe Salaries, sales fc Commissions. . Sales traveling pense Advertising, eluding catalc Shipping and Warehouse. Wages — receiv shipping, stoc Drayage and press Management Office Manufacturing office salaries Printing and tionery Office supplies . Postage Credit and co tion Fixed Chargi Upkeep Rent, includ warehouse . . . Heat, light, . power Insurance, cr( casualty Taxes, mercai and corporat WHOLESALE DATA AND FIGURES BUSINESS— FROM IMEMBERS OF THE GROCERS' ASSOCIATION General N.C. s.c. Okla. Tenn. Texas Va. average of each item .02125 .0150 .0438 .0077 .02359 .0155 .0010 .0261 .0148 .0050 .02652 .0160 .02 .0150 .0247 .0146 .0030 .0050 .01005 .0108 .00652 .0050 .00813 .0018 .0010 .0005 .0019 .00216 .0081 .0062 .00737 .01005 .0157 .0137 .01028 .0062 .0062 .0073 .0038 .00853 .0225 .00766 .0025 0146 .0078 .01394 .0228 . \JKJOKJVJ .0221 .0164 .01658 0112 .0078 .01026 .0215 .01787 .01310 0012 0012 0025 .0008 .0003 .000846 ^0020 .00311 .0010 .00149 .004018 .00121 .00166 0020 .000145 .0020 .00075 .0093 0150 .0160 .0097 .0054 .0093 .0025 .0086 0050 .0120 .0026 .00243 .00706 0012 .0003 .0006 .0007 0012 .0012 .00225 .00179 .001617 .0062 .0068 .0044 .00364 .00415 GRAPHIC SALES ANALYSIS AVERAGE COSTS OF DOING SOUTHERN WHOLESALE GRO- Average for Ala. Repairs and depre- ciation Miscellaneous Expense 005 Telephone and tele- graph Association dues Charity and unjust claims Damage and break- age Expressage on re- turned goods Losses and Bad Debts 0056 Interest on Cap- ital 6% 0090 Interest on Bor- rowed Capital 6% 00L5 Total Cost Aver- age 0689 Ark. Fla. .0003 Ga. .0001 La. ,0143 .0027 .0030 .0033 .0024 .0005 .0004 0007 .0009 .0048 .0095 .0070 .0075 .0069 .0040 .0619 .07695 .00052 .00034 .00044 .0002 .00001 .0108 .0099 .0082 .08715 .0012 .0002 .0010 .0017 .0132 .0040 .0920 WHOLESALE DATA AND FIGURES BUSINESS— FROM MEMBERS OF THE CERS' ASSOCIATION, Continued General average of each N. C. S.C. Okla. Teirn. Texas Va. item .0012 .001 .0022 00130 0028 .0081 .0120 .00288 .00217 .00115 .0052 .00428 .00385 .., .0003 ... , .. .00125 ... ... .00177 ... ... .0004 ... .. .00135 .. .00018 .0003 ... ... .00102 ... .. .00073 .0003 ... ... .00625 ... ... .0001 ... . . .00171 .. .00001 .0025 00665 .00645 .00903 .0050 .00649 .0078 0108 .0070 .0146 .0025 .0088 .0075 0046 .0010 .00698 .0037 .0043 ,06695 .0507 .07909 .07445 .09272 .0700 .07462 THE AVERAGE LIFE OF CONCERNS MANUFACTURING Furniture. Flour and grist mills ^10.7 Iron works 8.6 Printing 6.7 Lumber and timber 7.0 Boots and shoes 7.5 Cigars and tobacco 7.5 Average for these 14 leading lines Average for 213 other lines. .6.5 years Hosiery and knit goods 10.0 year* Creamery goods 5.0 " Brass, bronze, and copper_5.4 " Clothing 9.2 " Drugs 5.3 " Automobiles 5.0 " Carriages and wagons 7.0 ". General average for manufacturing concerns. .7.2 years 7.0 " .7.0 " WHOLESALE Bakery goods Boots and shoes. Butter and eggs- Cigars and tobacco 6.5 Clothing ___6.6 Confectionery 9.2 Dry-goods 7.5 Flour and feed 7.6 _6.6 years .10.0 " _5.3 " Fruits Groceries- Hardware. Lumber Meats Paints, oils and glass- Paper Produce _ 6.2 years .10.9 " _ 8.5 " _ 7.4 •• . 6.5 " -6.1 - _8.5 " _7.5 '• General average for wholesale concerns. .7.5 years RETAIL Groceries. Hardware. . 7.1 years .7.9 " Paints and wall paper_6.7 Drugs 7.8 Books and stationery 6.9 Jewelry — Dry-goods - Clothing — Boots and shoes - Furniture . 7.2 years .6.9 '• .6.4 " .7.4 " .6.8 " General average for retail concerns. .7.1 years Figure 26: This chart provides a summary of the average length of life of the manufacturing, wholesale, and retail concerns that continued in business less than 30 years. It is interesting to compare the length of the "lives" of concerns selling the same line in these classes of business. GRAPHIC SALES ANALYSIS DEATH RATES BY FIVE-YEAR "GENERATIONS" FOR 16 WHOLESALE LINES Percentage of total concerns in business which died within each five-year period Line 1891 1896 1901 1906 1911 Bakery goods 100% 60% 25% Boots and shoes 60% Butter and eggs 100% 22% 80% 66% Cigars and tobacco.. 50% 100% 60% 60% 50% Clothing 50% .... 33% Confectionery 33% 60% Dry goods 50% 100% Flour and feed 58% 66% 25% Fruits 60% 75% 55% 50% 62% Groceries 16% 66% 100% 50% 50% Hardware 50% .... 25% .... 100% Lumber 40% 55% 42% 50% Meats 66% .... 100% 66% Paints, oils, and glass 100% 33% .... 62% 100% Paper 33% 75% Produce 80% 80% DEATH RATE FOR 28 WHOLESALE LINES This table shows the death rate by generations in the 16 lines of wholesale concerns that were investigated by the Bureau of Business Standards. (The rate is given as the percentage of failures to the total concerns in business during a period of 30 years) Line Rate 1. Bakery goods 30.0% 2. Books and stationery 70.0% 3. Boots and shoes 50.0% 4. Butter and eggs 70.7% 5. Carpets and oilcloths 50.0% 6. Cigars and tobacco 79 . 1% 7. Clothing 37.5% 8. Confectionery 41 . 1% 9. Crockery 50.0% 10. Drugs 42.8% 11. Dry goods 33.3% Wholesalers Lines 18S8-18M 1885 1900 ^1905 1910 1815 Bakery Goods and Confectionery CofTVany No, I Confectionery and Fruite dynpany No. 1 Company No. 2 . Ciuart Company No. 1 Company No. 2 _ __Sisniries Dealers in Business between 1886 and 1890 _ « Siflnifies Dealers in Business between 1895 and 1900 - Ck)al Company No. 1 — _— — Commission Goods Company No. 1 Company No, 2 Company Na 3 1 . Creamery Supplies Company Na 1 Company No. 2 - Dry Goods Company No. 1 DruflS Company No. 1 Fruit* Company No. 1 • »^ .. _ Groceries Company No. t Company Na 2 General Merchandise Company Na t Hardware Company No. 1 Notions Company Na 1 ^^ J Figure 28: Seven wholesale or jobbing houses were in business in one town in 1886. Only two existed in 1915, and one of these, although it is still in business, is now a retail store instead of a wholesale concern. The Superior Buying Chart For Spring and Summer Season PaDrIc: Cotton Numben ,J^^ Cm toe Walfthl: 11 W«44bl Summer Welabi |i wx;. Lot Number and Prtce: i: 1 = tl 2I S* fl e! I: i^: = : «: il s: ^: rl 3 = 3z 5! J.8 ?: sj 5; il il 3^ 1 i AJabMDB Afiioaa ACkkOM^ OJJIoroU Colortd* CODDVCUCUI ■ ■ A {} ■ HI ■ A A n H n gg /^ ■ft A A ^ A ■ ■ ■ n«rld« CMTlla IJaho Itllnoto Indluu riS==:== 1— J ^ Lc ^ lJ ^ LJ 1 — 1 -rr-r 1 ' L-J i=r ^ U = U-l LJ L^ -v^^i^ — i^ n ^ - III E zz ^ M g TTTiTT a IV h(^. Ma»J — — — — — — — 1 — CODE:- ■ Beat Seller Second Beat A ThWBeat A Fourth Beat — ■r*n««w*» T.IM li.h \rrm„™1„4 -■+-1 -r-t- t ■]■■■ Figure 29: Investigation indicates that the chief cause of retail dry goods failures is overbuying. One concern uses this chart, showing which of ita lines are selling best, as a guide to buying for retailers. GRAPHIC SALES ANALYSIS DEATH RATE FOR 28 WHOLESALE LINES, Continued Line Rate 12. Flour and feed 55.5% 13. Fruits 69.2% 14. Furniture 46 . 6% 15. Groceries 68.7% 16. Hardware 70. 0% 17. Haj^ and straw 70.0% 18. Lumber 58.4% 19. Meats 71 .4% 20. Men's furnishings 16.6% 21. Millinery 50.0% 22. Optical goods 25.0% 23. Oysters, fish, and game 75.0% 24. Paints, oils, and glass 68.4% 25. Paper 50.0% 26. Produce 58.3% 27. Tea, cofifee, and spices 50.0% 28. Wall paper ". 25.0% Death rate for 492 wholesale concerns in 28 lines 51 . 0% WHAT CHANCE OF LIFE HAS A WHOLESALE CONCERN? Chances in 10 to live Line 10 Years 15 Years: Bakery goods 6.2 3.7 Boots and shoes 7.1 5.5 Butter and eggs 1.6 0.8 Cigars and tobacco 3.5 2.5 Clothing 6.6 6.6 Confectionery 6.3 5.4 Dry goods 7.5 5.0 Flour and feed 4.7 3.1 Fruits 3.9 2.1 Groceries 5.8 5.0 Hardware 7.5 3.7 Lumber 5.3 3.2 Meats 3.3 1.6 Paints, oils, and glass 4.0 3.3 Paper 8.8 7.7 Produce 5.7 4.3 TOURING the Great War business men all over the country came to know the building at Washington which housed the War Industries Board. There men met to learn the Govern- ment's needs and to lay plans for gearing their particular enterprises to the nation's enterprise. Thus the building may be said to symbolize the cooperation and the interchange of economic thought always essential to the greatest progress. The new structure in which the Shaw Pubhca- tions are now housed is a permanent counterpart in stone of the building that business men knew so well during the war. THIS BOOK IS DUE ON THE LAST DATE STAMPED BELOW AN INITIAL FINE OF 25 CENTS WILL BE ASSESSED FOR FAILURE TO RETURN THIS BOOK ON THE DATE DUE. THE PENALTY WILL INCREASE TO 50 CENTS ON THE FOURTH DAY AND TO $1.00 ON THE SEVENTH DAY OVERDUE. '^Hi ' ^^ 1955 11^ APR 4 1984 APR Q iQ^i K..^ft 28 m^ jTlsV* APR 15 1* atf OCT 11 ^3e APR 9 1947 Oc*1^'^^'- tT \70c" ■'■■•^ fiB-r-^^^^ LD 21-100nc7,'33 YD 0i07« UNIVERSITY OF CAUFORNIA LIBRARY