Music Trade Review -- © mbsi.org, arcade-museum.com -- digitized with support from namm.org
11 m e n t
gister
If the Money s Not
HERE
•
It's Not Profit
Courtesy National Cash Register Co.
tion. After the installation our service man
must check up on its performance. We have
four expert service men who check up on every
installation after the sale is made. In this way,
we -eliminate complaints and reduce them to a
minimum.
"Another thing that we think is important in
selling on the deferred payment plan is the fact
that the time to provide for the collection of
money on time payments is before the mer-
chandise is delivered. By tying up with a good
credit rating bureau and using it consistently we
find that repossessions are reduced to a mini-
mum. The next step is to follow up the ac-
counts closely when payment is due. The time
spent in keeping careful track of payments
keeps the customer warmed up to paying on
time, and keeps him from growing callous.
"The salesman who sells easy terms instead
of a good instrument at a fair price is not only
not rendering service to the customer, but he is
also of no value to the store. Instalment terms
should always be reserved for those who find
immediate cash payments inconvenient.
By stressing on cash and saving the in-
terest and carrying charges, it is fre- .
quently possible to sell for all cash and
at least on 30 days. We sell only on
time when it will be a distinct benefit
to the customer and when he wants a
radio badly enough to go in debt for it
and then keep on wanting it and paying
for it.
"Most dealers fall down in selling
terms instead of merchandise. We sell
radios and the terms are merely in-
cidental.
"The first thing the average customer
asks is how much the down payment is
to be and if the salesman instead of
answering him by saying it is 25 per
cent down turns around and asks him
how much he can afford to pay down,
we find that the customer's pride fre-
quently asserts itself and he names a
figure above the required minimum.
"By getting a large down payment it
also helps to reduce the average amount
of all outstanding notes and makes
future payments easier to handle. In
this way, less collection effort is required
than by using a small down payment and
large monthly sums. At the same time
you get more satisfied customers and sales
stick.
"The maximum terms under which our radios
are sold is a carrying period over 10 months
because we find that the fewer the months be-
fore payment is completed the less the finance
charge to the customer and the less is the sales
resistance.
"Another thing is that it never pays to accept
an instalment customer until you are sure not
only of his good intentions, but also of his
ability to pay. If he is overloaded with other
credit obligations, he will hardly be in a posi-
tion to buy a radio on time.
"Married people are generally safer than un-
married people, and many times more depend-
able. Single men and women are likely to
travel from place to place, or float from job to
job. Home owners are also better risks than
renters.
"Once having signed up the customer, the
work of the deader or salesman has not ended,
for it is essential to
insist upon the pur-
chaser living up to the
terms of the contract
which he has signed.
We find that even cus-
tomers who are good
credit risks anil well
intentioned are likely
to skip two or three
payments unless there
is a prompt check-up
as soon as there is a
Constant Checking is Essential
9
delay in meeting one single instalment.
"The logic of • getting a substantial down
payment is that the customer immediately
secures a sizable equity in the instrument
and if the terms are right, that equity grows
rapidly, so that should interest in the radio
or other musical instrument lapse, the customer
will have so much invested that he will not be
likely to resort to some subterfuge in an effort
to have the dealer repossess it. In short, the
more money the customer has paid the less
trouble he will be from the collection stand-
point."
Reproduced herewith are several forms used
by Smith's Radio Store in following up ac-
counts. Much trouble is avoided by sending
out the first card in advance of the date of
payment to notify the customer that an in-
stalment is due. It is found that a great
majority of customers appreciate the notice
because it prevents the matter from slipping
their minds. The second card is mailed very
soon after a payment has been skipped and in
a surprising number of cases brings their re-
mittance. The third card puts it squarely up
to the customer to cither make a payment or
offer some sound excuse.
The three cards illustrated are found to
serve the purpose in a great majority of cases,
and, as they are in printed form, it is not a
very expensive matter to have a clerk fill them
in and mail them. When the cards do not
bring the desired results, it is, of course,
necessary at times to write a special letter, do
some telephoning, or send the collector.
The main idea of course is to get the
money in without delay, avoid accumula-
tive balances, and likewise the nuisance
of making repossessions. Firmness at the
outset will convince the customer that
the music house means business and
that a contract is a document to be lived
up to. When this idea is properly im-
pressed upon the mind of the buyer, col-
lection troubles are practically eliminated
and payments come in promptly.
At Smith's, however, the slogan is
that proper selling means easy collect-
ing. If the customer makes a substantial
down payment and is clearly informed
regarding the terms of the contract, the
collection problem is greatly simplified.
In fact, it is hardly any problem at all.