get the same commission, which would you do? That is what the salesmen did! They not only did that, but automatically that meant that if the room you are in represented the field where the second-hand machine was and the whole area of New York City represented the area where no machines were, where the salesmen could go out and create a new sale, they stayed in your room, and all the competitors' salesmen followed each other. One competitor's salesman followed another competitor's salesman around the rat chase to try to take a prospect's old machine away from him and give him a new one in place of it, because the salesman got his commission on it, and it was easy money. Just as soon as that practice was eliminated and a penalty put on the trading in of second-hand machines, and the salesmen given a reward for the cash sale, exchange sales dropped in three months from seventyone per cent to twenty-two per cent. THE IMPORTANCE OF CALLS IN SALESMANSHIP In every success in selling that the writer has ever had anything to do with, the basis of that success has been in the number of calls that a salesman makes. You cannot make sales unless your salesman makes a call. He has to see the people and interest them in what you are trying to sell. Everybody holds up his hands in horror at the idea of paying a salesman for making calls, but that is what you do when you pay him a salary. Regular salaries do not stimulate a salesman to his best efforts. It is better to give him a drawing account and pay him so much for every call he makes against that drawing account. You can send out a circular in an envelope for ten cents apiece, and the destination of most of these circulars is the wastebasket. Why not pay your salesman ten cents to call on a man, and say, "Mr. Jones, I am from So-and-so, and I want to talk to you about so-and-so"? It is worth more than the circular, because it does not get thrown in the wastebasket, because the man has to listen to him to that extent. You do not pay unless he says that to the man. If you can teach a man what to say about your product, I do not care what your product is, and you can make him go through the motions of seeing people and making that statement about your product twenty times a day, there is not any product AN ILLUMINATING SALES SCORE CARD Showing how a typewriter company increased net return on the -Average cash price per machine sold. (Left Scale) ----Avg. amt. allowed for exchanges per machine sold (Right Scale) in the world where he will not connect with some sales. You cannot continue to expose yourself to the disease that often without getting measles. There was a salesman down in Louisville that had been hanging on by his eyebrows. He just sold a minimum amount of goods— enough almost to justify his drawing account each month, and, of course, with the old drawing account system, which is a horrible handicap to a man. He starts out in debt to the company fresh every month, and the first three quarters of the month's work he is just making up a debt and, oh, how we love paying debts! This is the position you put your salesman in when you work under that plan. The bonus system was all figured out and the salesmen were told: "You haven't got any debt to pay. All you have to do is make calls. If you make enough calls and demonstrations the price of those will pay your drawing account in cash, and all the commissions you make on sales will be 'velvet.' Of course, the commission is a little smaller, but you ought not to mind that.” Now when they were told this the "wise guys" did not believe it. But the man we are discussing, not being very smart, believed it. He went out and believed he could make money that way. type He went to the tallest office building in Louisville and started at the top. He walked into the first door he saw and said, "Mister, want to buy a typewriter?" and the man said "No!" He went to the next door and said, "Want to buy a writer?" and the man said, "No!" He made eighty calls a day that way, and was paid for them. The first month he made nine sales. That was more than he had ever made in a month before. Some of the people in the company were very much concerned and thought the salesman was being paid a tremendous commission for those sales. However, they were assured there was no cause for worry and induced to let the experiment run along. The next month the people that fellow called on began to call him up. Remember, he was a rotten salesman-he is yet-but they started taking machines away from him. There were people who said, "Yes, I want a typewriter. I haven't seen a salesman around here for ages. Come in, for God's sake, and let me buy it," and he sold those people. The second month he had twentyeight sales, and he has been averaging over thirty sales ever since. Thirty sales a month is pretty good, and he has done it just simply because he has exposed himself to the sales. REWARD FOR SALES After one has worked out a system for making a salesman call on prospective clients and pressing the argument in favor of the merchandise the next step is to decide on the most profitable lines of trade, and stress the reward for sales in these lines, so that it will be easier for the salesman to make money doing the thing that will be difficult than the thing that is easy. For example, it is, of course, easier to trade out an old machine at a large allowance and sell a new machine, thus securing only a small cash difference, than it is to make a straight sale of a new machine for all cash; but, if the reward to the salesman is scientifically adjusted so that the salesman with the same effort will make more money on straight cash sales than he will make on many more of the easy exchange sales, the salesman rapidly finds that the way to make money is to go to the places where typewriters are not placed and create new business rather than follow a competitor's salesman around from one office which is stocked up to another trying to get out exchanges. It is on this basis that the bonus system has been worked out for the sale of typewriters and the results are shown in the accompanying chart (see page 299). That is all there is to the Taylor System, just common sense, just finding out what you want done, getting a policy outlined, deciding just how much effort is required to execute the various steps of that policy, and then paying for those steps on a square and just basis to your salesmen. In that way you are bound to get results. The acid test of any business policy, in the last analysis, is this: Is your business policy square to your customer and profitable to your salesmen? Is it square to your salesmen and profitable to your house? If you can answer those questions in the affirmative there is not any business policy that can possibly fail. Absolutely, it cannot be done. You cannot answer these questions in the affirmative and have your policy wrong. Development-The Strategy of Industry By W. S. CARPENTER, JR. Vice-President, E. I. du Pont de Nemours and Company, Wilmington, Del. T HERE should be no need for introductory remarks to a chapter on promotion or development. Both words spell progress, and progress is the slogan of our business world today with its constant search for the key to new doors of opportunity. The modern business organization, large or small, will make progress in exact proportion to the amount of foresight shown by its directing forces. This is so axiomatic that its repetition would be without excuse but for the fact that the business history of the world records many instances of decay overtaking once prosperous industries merely because their executives failed to march in step with the times. While it seems primary to repeat that the incentive to invest capital is to secure profit on that capital, it is not unusual to find instances not alone in individual companies but even in entire industries, where the administrators have considered as their object the securing of what they believed to be a reasonable percentage of profit figured on the selling price of their product, and have lost sight entirely of that all-important relation between profit and invested capital. It is perfectly obvious that this relation can be the same only in case the yearly turnover is equal to the invested capital, whereas in fact, the annual sales may vary from the fraction of the investment in one industry to several times it in another. "Promotion" as used in the business world today has many applications. It usually means the expansion of sales, the searching out of new markets for the established output and the devising of new ways to reach these markets. Often it means little more than advertising. But a discussion of this subject along these lines would leave untouched the largest meaning of the word the definition which points a way to hitherto untried, though related, lines of business or to the development of new ideas to be applied to lines already established. With this meaning in mind it would be well to change the title to "development" instead of "promotion," and follow the new lead into a |