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JUNE 2, 1923
THE
MUSIC TRADE
REVIEW
The Dealer's Collection Department
The Fifth of a Series of Articles Dealing With That Part of the Retail Organization That Brings in the
Cash—Actual Collection Plans That Dealers Are Using With Success—Telephone and Per-
sonal Letters the Basis of Most of the Efficient Systems in Use
As has been stated in previous articles on
retail collection methods, no general collection
system exists which can be expected to work
with 100 per cent efficiency in every locality
and_ under all conditions. But the dealer by
adopting a section of one system and a section
of another which by actual experience best suits
his needs, can build up a method of his own
that should prove distinctly efficient.
As a matter of fact, a half-dozen piano houses
in the same city may use successfully a half-
dozen different methods, although they do busi-
ness with the same class of people and under
very similar conditions. As an instance of this
fact we will take the city of Chicago, where
several concerns interviewed used as many dif-
ferent methods for instalment collection.
The Starr Piano Co.'s Plan
The Starr l'iano Co., for instance, sends out
a statement each month five days before pay-
ment is due setting forth the details of the
account, such as the amount of the instalment
due, the interest, the instalments past due and
the interest past due. The statement bears the
request that the customer remit promptly by
bank draft, Post Office or express money order.
To the form is attached a blank for the use
of the customer in remitting so that the original
bill may be preserved as a record of the account.
This company states that it does not have
very much trouble with collections and the cus-
tomer usually remits promptly, sending back the
blank duly filled in. The blank is found to be
very serviceable in preventing errors and is
carefully filed after due entry is made on the
ledger.
The Starr Piano Co. has discontinued form
letters altogether as it has found that each
case is different and that delinquent customers
can be followed more closely and successfully
with a personal letter rather than a form sys-
tem. When a letter is sent out copies are seldom
made, the record of the sending of the letter
being placed directly on the ledger where the
information is readily available at all times.
The Werner Co.'s System
Alexander Stinson, of the Werner Piano Co.,
Chicago, has adopted what he terms an "Atten-
tion System," the operation of which he de-
scribes as follows:
"We inquire of every customer how they are
concerning health and employment. If family is
well and they are employed and over three days
behind in their account we send them a personal
letter calling their attention to the matter.
"Another method we use in getting collec-
tions promptly is to give the customers all the
attention possible. We will often send them
a little music book or a music roll gratis when
they arc behind in their payments and really
shame them into paying. We find this method
very effective, as the customers like attention,
and when he or she sees that you are interested
in them they will try to reciprocate and send
the payment along.
"By giving our customers attention and keep-
ing after them with a steady demand we have
found that our accounts are 97 per cent good.
We have 2,700 open accounts on our books
and out of all these accounts they are not 3
per cent behind. This is due to watchfulness
and the attention we give the accounts.
• "During the month of February we took 500
sample accounts to work on and we received
508 payments, which shows that there was no
trouble at all with these accounts, but that they
were, in fact, overpaid in some instances.
"We do not use form letters of any kind,
except a form when the party leaves town. We
have found that a form letter insults a well-
meaning customer and a bad account needs a
personal call."
The M. Schulz Plan
For successfully handling instalment accounts,
F. P. Bassett, vice-president of the M. Schulz
Co., has been operating with very satisfactory
results an automatic envelope system.
In carrying out this system all papers per-
taining to each individual sale are placed in
one individual envelope beginning with the sales
memo, the contract, the mortgage, the delivery
ticket, copies of letters, tuning receipts, etc.
The envelopes are filed alphabetically and as
payments are made the envelope is placed back
in the file and as it is placed in back of the
other envelopes it automatically shoves the ones
that have not paid up.
Every ten days the envelopes arc gone over
and personal letters are sent. A record of each
letter, however, is not kept. When it is found
that some of the envelopes habitually keep in
the front they are taken out of the regular file
and marked with a red stamp so that they can
be given attention every five days.
It is found that by keeping in personal touch
with customers through the medium of letters
and the telephone the best results are accom-
plished. The telephone particularly is found
most effective and rapid in taking care of ac-
counts, so each envelope bears the telephone
number of the customer. After the customer
has been called up once and gives an excuse
the clerk in charge of collections waits until
the day upon which payment was promised
before calling again. Then there is reason to
make a definite demand for a check.
Mr. Bassett states that his company has used
many forms, but after working out the auto-
matic envelope system it was found the best of
them all and it has followed it exclusively for
fifteen years.
The Baldwin Co. Plan
Another well-known house which has discon-
tinued form letters in the handling of collection
accounts is the Baldwin l'iano Co., where F. H.
Bauckmeyer is in charge of the collections.
With this company all accounts are handled in-
dividually by personal letters. A loose-leaf
ledger system is used and when a letter is sent
a notation is made directly upon the ledger
page opposite the account, which facilitates the
checking of the customer's record.
The accounts are followed up every five days.
In order to save time in checking them through
the ledger they arc entered under two separate
heads, up-to-date accounts and past due ac-
counts. By this method a glance at the proper
sheet enables the collection manager to give
immediate attention to the accounts that need
it and he does not have to waste time in looking
over others that are in good shape.
As soon as the contract is secured the account
is entered on the books and the proper time to
follow it is noted.
When payment is made a line is drawn
through the accounts so that only those that
need attention are left visible. The list of
accounts is made up every month and when the
account in the up-to-date column runs over a
month it is put in the past due column to be
t ansfcrrcd back to the good side when all over-
due payments have been met.
Accounts that are not settled on giving
formal notice are followed through the medium
of personal letters and telephone calls, the latter
method producing particularly good results.
One Chicago manager takes issue with the
statement that proper selling will serve to elimi-
nate the majority of collection troubles, for his
house is particularly strong on watching credits
at the outset and makes an investigation from
headquarters regarding the customer's financial
status instead of accepting the salesman's esti-
mate. Yet, with this watchfulness, the collec-
tion department finds plenty to do, not guarding
against those who are seeking to defraud the
company out of the instrument or its money,
but against those who, intentionally or not, are
careless in meeting payments when due and
thus cause the account to run two or three
months longer than specified in the contract.
Every account that runs a month over contract
is costing the dealer actual money through loss
of interest on the amount of capital tied up.
From the collection man's angle, too, the type
of customer who is able to pay but careless
about paying is the hardest to handle, because,
unless great diplomacy is used, he is very quick
to take offense and his enmity is bad for busi-
ness. It is for this fact particularly that the
smooth reminder over the telephone or the
carefully worded personal letter is most de-
sirable.
NEW BUILDING FOR REINHARDT
Memphis Firm Leases Four-story Building,
Which Will Be Devoted Entirely to Music
MKMPHIS, TKNN., May 29.—Keinhardt's Music
Shop, Inc., has leased the four-story brick build-
ing at 104 South Main street, which will be con-
verted during the Summer into a modern struc-
ture, exclusively devoted to musical firms. The
building, when remodeled, will be occupied by
the Vesey Piano Co., the Reinhardt School of
Band and Orchestra, and by a number of in-
strumental and voice teachers, the latter to be
quartered in soundproof rooms. The new build-
ing will have more than 12,000 square feet. The
result will be that complete bands and orches-
tras may be equipped without the annoying
delays Memphis has always been accustomed
to.
Among the novelties here will he Memphis'
first complete bell and xylophone department.
Also, there will be teachers of almost every
known musical instrument in the building. The
idea of complete music service began several
years ago with teachers in connection with
Reinhardt's band department. The ready re-
sponse has made the thought grow into an insti-
tution. Upon occupancy this Fall the structure
will be known as the Reinhardt-Vcscy Building.
TRAVELERS' YEARBOOK ISSUED
Attractive Souvenir Volume, Including Por-
traits of Present and Past Officers, Is Published
As a souvenir of the convention season the
National Association of Piano Travelers has
issued a most attractive souvenir year book con-
taining portraits of the majority of present and
past officers, together with a full list of the
membership and the annual report and message
of the president of the Association, Geo. H.
Bliss. The book is well printed and substan-
tially bound, in a stiff cover and should prove a
very pleasing memento to the members of the
Association and their friends.
NELSON DEVER INCREASES CAPITAL
STKUBKNVIU.K, O., May 30.—The Nelson Dever
Music Co. has increased its capital from $55,000
to $100,000, according to court papers filed.