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H 5 NEVT YORK
PUBLIC LIBRARY
338144A
ASTOH, LENOX AND
THE
RLVIFW
J1UJIC TIRADE
VOL. LXXXIV. No. 1
Published Every Saturday. Edward Lyman Bill, Inc., 383 Madison Ave., New York, N.Y., Jan. 1, 1927
Single Copies 10 Cents
$3.00 Per Year
Bring Back a Reply From the Debtor
in Each Step of Collecting
A Series of Letters Used- by a Baltimore Music Dealer Which Has Succeeded in Doing This Very Thing
—A Dun Is Just as Disagreeable to the Retail Merchant as It Is to the Man Who Owes This
Money and This Dealer Stresses That Fact — An Article by Fred E. Kunkel
OT everybody can sit down and write col-
lection letters which collect, but anybody
can use tried and proven plans which
have brought home the bacon for others. Here
is a method which has proven quite successful
for one music trade dealer in wiping out some
of the old overdue accounts. He got tired of
carrying a lot of accounts well in arrears, so he
decided to clean them up with a sweeping col-
lection system, placing them in suit, or charging
them off to profit and loss.
"In the modern age of the budget plan, the
instalment sale and the deferred payment idea,
or whatever guise extended credit may parade,"
says this retailer, "it is becoming increasingly
more difficult to collect .overdue coin.
"More people are buying houses to-day than
ever before, and automobiles. And so long as
we are living in an age of 'credit' it becomes
necessary to adjust the yardstick of collections
accordingly. I would like to do an all-cash
business, but, of course, selling pianos, that is
impossible.
"So since every extension of credit involves
its necessary percentage of risk, I found it neces-
sary to inaugurate and keep in good running
order a good plan for collecting the past due.
In fact, a successful collection policy is a para-
mount necessity if you want to keep old ac-
counts cleaned up.
"I used to rack my brains and scratch my
head for just the right kind of an entering
wedge into the pocketbook of this minority. So
one day when I was hard pressed for ideas I
got together everything I had ever used in the
way of catching old accounts on the wing and
bringing them down to earth. I sifted this ma-
terial until I had what I conceived to be the
best plans for winning results.
"Each step in my collection chain is aimed at
drawing fire from tie debtor, either in the form
of a promise to pay soon or a partial payment,
or some tangible evidence on which to predicate
future action. The first step in the chain is to
make the statement-of-account in triplicate just
as soon as it runs behind. Then, instead of wait-
ing fifteen days or a month, I get busy on my
delinquents just as regularly as clockwork.
"The original of those triplicates is first sent
out, with a statement typed on it: 'Haven't you
forgotten something? We have certainly missed
N
it at this end—'that check to cover this account!
How about you?'
"If no response comes in ten days out goes
carbon copy No. 1 with another typewritten
statement: 'This is your second reminder. The
r
HE silence of inertia is perhaps the
greatest obstacle which the retail music
merchant has to overcome in bringing his
past due accounts up to date. Here is a sys-
tem used by a Baltimore music merchant
ivhich has been eminently successful in
bringing returns from the past due accounts
on his books. It makes the debtor know that
dunning is as disagreeable to the merchant
as it is to the man who receives the duns—
and it has brought home the bacon as a
result.—EDITOR.
--*
£;.
original reached you ten days ago. What do
you say to sending us a check in full or at least
on account right away?'
"If no response comes to this in another ten
days, out goes carbon copy No. 2, with this type-
written statement: 'This account is becoming
mouldy in my ledgers. How about a check and
starting a clean sheet?'
"Any one of this chain of go-getters can gen-
erally be counted on for some results, but sup-
posing all three statements are disregarded,
which happens in about 40 per cent of past-due
cases. It is apparent that more drastic action
is required when the customer ignores these
direct overtures at settlement.
,"Now I begin my 'reasonable excuse' letter,
which gives the customer an opportunity to pay
by hiding behind a logical excuse and without
other embarrassment. I try to warm the patient
up and to keep the account from getting chilled,
so ten days later out goes this letter:
" 'Perhaps you have been sick! Or you may
have been in Florida or California for pleasure!
Or any number of things might have happened!
" 'If so, won't you please tell us about it, so
we may know why our statements of account
mailed you in the last thirty days have been so
neglected.
" 'A check—in whole or in part—will answer
my purpose, but I must get this account cleaned
up soon, or at least headed in the direction of
an early settlement.
" 'May we count on that check, be it large or
small—by return mail?'
"Generally, this brings a response from the
remaining 40 per cent. Seldom does this letter
go unanswered from that sheaf of stale accounts,
for the debtor is given a cloak under which to
hide his delinquency. Any reasonable excuse
will suffice. What we want is the cash along
with it. And if that does not come we keep the
debtor warmed up again when the next ten-day
period rolls around, those who still fail to re-
spond getting this letter:
" 'Sending you statements of account—
" 'Writing you letters asking for money—
" 'It's out of my line—I'm a business man, not
a lawyer or a collection agency. I don't like it
at all, any more than you like to receive them,
but something has got to be done about this ac-
count. Either you have to pay it up or I have
to pocket the loss—and I'm certainly not going
to do that without taking the matter to court.
" 'Why not save me this disagreeable task of
writing you letters or driving me to making
actual threats. I don't want to do it. It's not
good business. But you are driving me to it!
" 'Now naturally I'm going to do one of two
things—but you can save all that by sending me
a check now in whole or in part. What do you
say?'
"If no response is received—yet here again we
always get a percentage of replies—the time is
now shortened to five-day periods, in order to
cut down on the psychological paying resistance
of that particular debtor. It is only another ag-
gravated case of constant dripping wears away
a stone. And it's all done in this same pressing
vein—no hard-boiled collection method—no
severe businesslike tone to it—only friendly
conversation, aimed to getting under the skin of
that debtor and making him come across.
"The trouble with most business men is that
they lose patience, grow exasperated and wax
eloquently profane, with the net result that not
only does the collection letter fail to bag its
{Continued on page 4)