Music Trade Review -- © mbsi.org, arcade-museum.com -- digitized with support from namm.org
APRIL 28, 1923
THE
MUSIC
TRADE
REVIEW
The Dealer's Collection Department
The Second of a Series of Articles Dealing With the Proper Management of That Part of the Retail Organiza-
tion Which Brings in the Cash—/. L. Cotter, Vice-Pre si dent of the Hallet & Davis Piano Co., Outlines
the Fundamentals of Successful Collections—Systems Cannot Create Good Paper
The way in which the selling policy of any
retail organization affects the work of the col-
lection department, which was dealt with in the
first article of this series, is so important that
further consideration of this essential point
must be given. In considering this factor the
following interview with J. L. Cotter, vice-presi-
dent of the Hallet & Davis Piano Co., Boston,
goes deeply into this side of the question.
"I have always said that it did not require
any particular amount of brains to put a sale
on the books, but it required real brains to col-
lect the payments as written by the salesman,"
said Mr. Cotter.
"One of the rarities in our trade is the sales-
man who has the judgment in the first place,
and the nerVe in the second place, to turn down
a sale that he knows is little better than a fifty-
fifty chance, hoping to get by with it with
the credit man. If sales were left entirely to
the judgment of the salesman the man in charge
of the collection department would have a sweet
time of it, indeed. So the ultimate result in the
cash drawer bases itself on the credit, the terms,
the price, the policy of the house.
System Cannot Make Good Paper
"There are many systems for collecting pay-
ments on lease paper, most of them good as far
as system goes^ But 'system' does not make
good paper out of what is poor in the first
place. The policy of the house reflects itself
in the past due on the books. You can safely
bank on that. The right policy, strictly fol-
lowed, cannot produce poor sales, and I main-
tain that, barring unforeseen conditions that
cause a slump, in the form of strikes, bad
weather, poor crops, etc., that kind of a house
will show mighty little past due.
"I know of a successful Western dealer who
started in alone, made a big success, has a big
sales force now, who invariably told his cus-
tomer that he had sold him the instrument in
good faith, that he understood the customer was
able to meet his payments when due and that
he would expect those payments to be made on
the date due, not thirty or fifteen or ten days
later, but on the day. His argument was that
the only way he could finance his business was
to collect his money from his customers, that
his manufacturers expected him to meet his
obligations, and the only way he had to meet
them was to collect just as closely from his cus-
tomers as his manufacturers collected their bills
from him.
Terms Depend Upon Sales Methods
. "To my way of thinking, the date of the last
payment on a lease depends almost entirely on
the way the sale was made and the kind of
customer sold. You can't make a silk purse out
of a sow's ear no more than you can make 100
per cent leases out of poor sales. I hear and
read so much about collections and it is gen-
erally some intricate system, follow-ups, this
and that scheme or letter. My advice to the
dealer who is worrying over his past due is to
sit down by himself and do a little analyzing
of his own policy, if he has one, and, I am sorry
to say, many do not really know what a policy
means. Let him ask himself how many meet-
ings he has with his salesmen, and does he
stress on the point of the salesman being abso-
lutely honest and candid with his customers,
wary of promises.
"He should look into the matter of terms and
see if he is selling on longer time than neces-
sary. There is no doubt in the world that the
long term is what creates the past due. Shorter
time, bigger cash payments, fixed prices and
candor with the customer about meeting those
terms will cut down the past due. It may de-
crease sales, but it will increase profit and elimi-
nate worry.
*
Fixed Prices and Terms
"I wonder how many of the dealers who have
a lot of past due are selling their goods at fixed
prices and terms. I wonder how many of them
have no fixed prices, but take all the traffic will
bear, whenever possible, and go just as far the
other way just as often. I do not believe that
the house that sells at fixed prices, sticks to
those prices, compels its salesmen to get fixed
terms and has the right kind of a credit man, is
worried much about past due in normal times.
"The failures in the piano business have not
been-because of lack of sales, but too many sales
of the wrong kind, and no collection system or
collection wizard can save any house that puts
90 per cent of its thought and efforts in sales
and 10 per cent in collecting the money.
"I have all sympathy for the collection man-
ager. He is generally the goat. His house
watches his past due percentages, but gives little
thought to the quality of paper outside of so
much down and so much per month. No won-
der the collection man grows gray and crabbed.
He carries a load that is not of his making, a
load that could be easily lightened if more atten-
tion were paid to the sales end, and I mean by
that the quality part of the sales.
"Of course, a man handling a large amount of
lease paper must necessarily have ability, pecu-
liarly fitted for that work. It is a trying posi-
tion, for his sphere in life consists mostly in
asking people to pay their debts, and in time
they become more or less hardened, for which
they cannot be blamed. Eliminate the rotten
paper and see how quickly they will brighten
up. I have heard it said that it takes a hard man
to be a successful collector, a man who hews
lo the line. I absolutely disagree.
Good Will and Business
"I have always firmly believed that there
should be something more than buy and pay
in any transaction in our business, that there
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should exist a sort of friendly feeling, a senti-
ment, if you please, existing between factory
and dealer. I know it has always been so with
me. Why not with the customer who buys from
the dealer? The old saying of 'molasses will
catch more flies than vinegar' holds good in
business, and I do not mean by that that we
should 'spread it on,' but a genuine feeling of
friendly interest.
"Too many collection offices use the 'Dear Sir'
and 'Dear Madam.' It is just as easy to begin
the letter 'Dear Mr. Smith' or 'Dear Mrs. Smith.'
Doesn't it sound friendly? Don't you think it
will make Mr. or Mrs. Smith feel a little closer
to that house? Too much of the form letter
in the average collection office, too much cold-
blooded stereotyped requests, demands, etc., will
fail to bring proper results.
"Put a little warmth in the letters. They
will get better results. I care little about forms,
systems, etc. As I have stated previously, the
past due depends in the first place on the policy
of the house. Then with any kind of an effi-
cient collection man and a simple system the
percentage of past due will cease to trouble
and the dealer and collection man can get some
rest."
TIME PAYMENTS IN CUBA
It is estimated that about 75 per cent of the
pianos sold in Cuba at the present time are paid
for on a monthly instalment plan, according to
the Department of Commerce. In some cases,
the instalment payments are made over a period
as great as thirty-six months. This necessarily
involves a considerable capital outlay on the part
of the piano merchants, as they are unable to
obtain corresponding credit terms from their
foreign suppliers.
The Collins & Son Music Co., Logansport,
Ind., have moved into attractive new quarters
at 310 Pearl street, one of the most advan-
tageous business locations in the city.
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