Music Trade Review -- © mbsi.org, arcade-museum.com -- digitized with support from namm.org
DECEMBER 13,
1919
THE MUSIC TRADE
REVIEW
iiimiiiiiiiii
PIANO TRADE GOOD WILL— WHA T IT
REALLY IS AND HOW TO PROJECT IT
A Concrete Definition of One of the Most Valuable Business Assets of the Piano
House and Suggestions for Protecting It, Written by Waldon Fawcett
When the vice-president of the Columbia
Graphophone Co., in a recent address to deal-
ers and salesmen, strongly recommended the
cultivation of good will he "said something"
that, in the estimation of the nation's fore-
most business doctors, should be taken to heart
as conscientiously by piano merchants as by
the class of music tradesmen for whom the
prescription was originally prepared. Granted,
for the sake of argument, that this theory is
correct, it is interesting to note that this is
nof merely a case where business men (piano
tradesmen included) should take a given tack in
business building, but where they are already
taking it.
Seeking Protection for Good Will
The U. S. Commissioner of Patents recently
informed the writer that his institution is
literally swamped by an unprecedented flood of
applications for the registration of trade-marks.
As though suddenly awakening to their oppor-
tunities, wholesale and retail merchants are
matching manufacturers and producers in their
eagerness to secure Federal protection for the
expressions of their commercial individuality.
For months past applications for trade-mark
enrolment have been coming into the U. S.
Patent Office to the tune of more than 1,000 a
month, or at double the rate that prevailed a
year ago, or that might be accounted normal.
No wonder the Commissioner had to send a
hurry call to Congress for five additional assist-
ant examiners of trade-marks.
What, the reader may ask, has all this to do
with good will? Simply that trade-marks af-
ford the most convenient and most effective
medium for the capitalization of good will. A
stimulus of interest in the authentication of
trade-marks betokens a kindling appreciation of
the value of good will and a desire to give this
"intangible" asset whatever protection may be
invoked-
By the by, it is to be noted that
a number of influences have been co-operat
ing to bring about in the rank and file of re-
tail merchants a fuller realization of the practical
worth of well-grounded good will. Campaigns
of education, such as that of the Columbia Co.
interests, have been partly responsible, undoubt-
edly. So has the dawning conviction that in
the days to come, when the present "seller's
market" is a thing of the past, we are in for a
period of highly ihtensive competition. But we
must not overlook in this same connection what
we might characterize as a negative influence
to the same end, namely, the jolt on good will
recognition which many a merchant sustained
when he came to pay his first bill of war taxes
to Uncle Sam.
War Taxes Emphasize Value of Good Will
Before our present schedules of internal rev-
enue taxes brought their sobering effect to the
piano tradesman the average merchant in the
trade paid little heed to the dollars and cents
side of good will. No doubt he had a vague
appreciation iof the help that good will gave in
selling, mayhap even classed it as one of the
assets of his business, but nine chances out
of ten he had never set an appraisement oppo-
site it in his bookkeeping operations. Then,
out of a clear sky, came the disillusionment of
the income and profits taxes to let him repent
at leisure his easy-going habits of inventorying.
More likely than not the merchant was help-
less. It was too late, with the tax collector at
his door, to readjust his capitalization to take
credit for the good will that represented the
cumulative advertising and selling investments
of his whole business career. But at least this
costly experience has given your observant mer-
chant a new perspective on good will. Once he
is out of this difficulty he will probably not again
be caught napping.
Supreme Court Defines Good Will
To find a wholly satisfying and all-embrac-
ing definition for the good will that is coming
into its own as the acknowledged keystone of
the business structure is by no means easy.
Indeed, the task is paralleled only by the diffi-
culty of translating that elastic and much-
abused word "service." No less an authority
than the Supreme Court of the United States
once estimated that good will "is the disposition
of the pleased customer to return
to
the place where he has been well treated." That
seems to express the good will ideal very satis-
factorily and particularly so as regards the good
will built up by a retail merchant.
Without venturing wholly to defy the axiom
that nothing in this world is certain except
taxes and death, it may be said that established
good will comes as near as anything can to
enabling the piano merchant to mortgage to-
morrow. It is that working of the commer-
cial law of compensation that enables him to
expect future patronage in direct proportion to
the satisfactory dealings in which he has been
a principal in the past. In no line of trade,
assuredly, more than in the piano field is there
directly applicable the principle upon which
good will is founded—that one good turn de-
serves another. Mlusical instruments are not,
to be sure, articles which the average house-
holder purchases every day in the year, but,
on the other hand, it must be remembered that
the purchase of a piano is apt to be regarded
by the purchaser as a transaction too impor-
tant and involving too large an investment to
allow of experiments if there is a quarter in
which satisfaction is assured. That is where the
inherent good will of the well-respected piano
wareroom comes in. Nor does this good will
necessarily have to operate at first hand, as we
might say. Its influence may, in the case of
an old-established piano house, descend from
one generation to another and it may be com-
municated by the experienced buyer of musical
merchandise to the inexperienced prospect who
is new to the field.
In so far as major sales are concerned the
magnetism of good will in the retail piano
business may operate at longer intervals than
it does in the case of the corner grocery or
the neighborhood druggist, but it is a mistake
to suppose that there does not figure in piano
trade good will that element of "habit" that
is the backbone of good will in certain other
classes of trade. The purchase of sheet music
could always be made a means to bring back
old customers at more or less frequent intervals
and latterly the importance assumed by player
rolls and talking machine records has empha-
sized the "habit" equation in good will.
Capitalizing Public Favor.
While we are on the subject of good will in
its guise as the science of habit-forming, it may
not be amiss to point out an advantage that
rests with the merchant. Many retailers, piano
merchants no less than the rest, have been
wont to look upon good will as something
worth all it might cost to a manufacturer, but
not so readily "pinned down" by a retailer. As
a matter of fact, the distributor, if he will only
realize it, has all the advantage on his side.
We see the manufacturer or producer who is
covetous of vested good will taxing his in-
genuity to devise means, as one might say, to
tie a string around the finger of the buying pub-
lic. He puts deep thought into the coining of
a trade name or pays out "good money to fash-
ion distinctive "dress" for his goods—all that
he- may identify himself and his wares to the
buying public. The merchant may advan-
tageously do all of these things also, but there
is not the same compulsion that exists in the
case of the manufacturer because the retailer
has ready to his hand factors that enter help-
fully into the building of good will, namely, the
familiar location of his store, its impressive
outward appearance, and finally his own per-
sonality, which latter the manufacturer could,
at best, inject only at second hand.
The Ideal Form of Good Will
The ideal form of good will, from the stand-
point of the merchant, would appear to be that
wherein there is team work between the good
will of the retailer and that of the manufac-
turer. Indeed, the latest approved "school" of
merchandising is that wherein the manufacturer,
instead of selfishly or with singleness of pur-
pose seeking to create good will for himself
alone, or for his product, undertakes to build
good will for the retailer who represents him
and, through the latter, for the specialty in which
the two have mutual interest. As luck would
have it, the piano industry was one of the first
to exemplify this new cult of co-operative good
will cultivation that is now coming so rapidly
into vogue. As a matter of fact, piano manu-
facturers had, many of them, assumed this ad-
vanced attitude long before other sections of the
business community came to realize the impor-
tance of the idea of joint responsibility for
good will.
One definition sometimes given is to the ef-
fect that "Good will is the result of service
rendered." If that estimate be accepted it is
at once apparent to what an extent the good
will of the piano manufacturer or other musi-
cal instrument maker is dependent upon the re-
tail merchant or accredited agent who has re-
sponsibility for representation of the line in a
given territory. That the retailer sets the
gauge not only of his own good will but like-
wise that of the manufacturer is all the more
apparent when the merchant holds, according
to the custom common in the trade, an exclu-
sive agency. No piano sale ends with the de-
livery of the instrument. There is a possi-
bility that the sale was made almost solely by
good will, but even so that chapter of the good
will record ends then and there and a new
chapter opens. Upon that new chapter—the
pyramiding of good will through service—will
depend the fate of the sales that should come
after.
While the retail merchant has, other things
being equal, a better opportunity to build up
good will within his sphere of influence than
has a manufacturer who sells at long range,
it must be recognized that to counter-balance
the advantages enjoyed by the merchant are
multiplied liabilities. In so far as the distribu-
tion of a product to ultimate consumers is con-
cerned the producer is likely to have to watch
only one point of contact, namely, his adver-
tising. If his advertising attracts rather than
repels, if it extends a cordial handshake rather
than an indifferent greeting, he has, presumably,
done everything that can be done to nurture
good will. On the other hand, the retail mer-
(Continued on page 11)