Music Trade Review

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THE
MUSIC TRADE
REVIEW
Some Opinions Concerning Premiums.
What Premiums Do for Business—How the United Cigar Stores Company Has Developed a Huge
Premium Line—Some Concerns Have Found It Highly Profitable to Offer a Line of Premiums
—The Plan Has Not Been Used to a Great Extent in the Piano Business, but Premiums Are
Used Successfully in a Variety of Trades—A Reader Affirms That Premiums Increase the Pro-
portion of Cash Business—Some Houses Find It Easier to Hold Trade by a Premium Offer
Than to Compete on a Quality Basis With a New Concern—Others Affirm That a Premium
Is the Badge of a Cheap House and Usually Accompanies Shoddy Goods and Questionable
Methods — Regular Houses Say That They Do Not Have to Give Bribes for Business—A
Timely Topic Discussed in a Broad Way and Some Points Worth Reading Emphasized.
T
HE giving- of premiums has of late come into vogue in a num-
ber of trades and there are not a few piano men who have
been favorably influenced by the glib tongue of a good advertising
solicitor to enter into an arrangement whereby some of their in-
struments have been offered for premiums.
Therefore, what the premium does for business is a topic which
possesses some interest for the average manufacturer and merchant.
Writing along these lines, Roy W. Johnson says in Printers'
Ink : "In considering the premium proposition, many people run into
one of two false conclusions. Either they reason that the articles
given must be so cheap that nobody really wants them, or that they
must be so expensive that the offer will be sensational. In the first
class might be named various lines of cheap books, and the class of
goods which are advertised as 'a beautiful present' with each pur-
chase of a certain amount. It is surprising what utterly worthless
things can be found in such connections, and the funny thing about
it is that they must have cost fully as much as something really
useful. You can get a respectable pie plate for a nickel at the ten
cent store, so the wholesale rate must be something less than that.
Yet some merchants will hand out as a premium an unhandsome
and useless paper-valentine affair, which without any doubt cost
more than the pie plate. The first requisite for a premium is that
it be something people really want.
"The second requisite is that it be something they can get.
This is where the spectacularly expensive things are barred out.
A grand piano is a fine thing to covet; a trip to Europe is some-
thing we all anticipate some day; but even if everybody has an
equal chance—on paper—to win the piano or the trip, you are going
to please two people immoderately, and you are going to disappoint
hundreds. It is far-better to split the cost up into sections, and
provide a reasonable gift for the people who otherwise would go
without. Moreover, many a woman will not try for a piano, be-
cause she thinks 'she can't get that anyway/ whereas if you offer
her a silk umbrella she will send all her friends to your store so
they can get one too.
"One of the most successful premium givers in this country,
the United Cigar Stores Company, lists a large number of pre-
miums in its catalogue, the most valuable of which, a cut glass
punch bowl, figuring on a basis of 5 per cent, of the total sales, is
worth just $43.75. There is a great advantage in having a line of
premiums which can be obtained within a reasonable length of time
by the average person. A man is likely to get discouraged if the
object of his desires is too far in the future. It is unwise, however,
to go to the other extreme, and make the premium so easy to get
that it doesn't seem to be of any value to the giver.
"Incidentally, it may be remarked right here that a poor pre-
mium is worse than none at all. A fountain pen that leaks, or a
vacuum cleaner that doesn't clean will hardly attract more trade
from their possessors.
"Many concerns have found it highly profitable to offer a line
of premiums which appeal to the children. It is a familiar road
to the hearts of the parents, and needs little comment. It will be
found wise, however, to study the situation pretty carefully, and
not list articles which will, meet with parental disapproval. Many
a boy would be tickled to death with a toy pistol, yet it might not
prove a good road to his father's patronage. And after you have
listed an article, with the conditions under which it may be obtained,
it may be a difficult matter to persuade the customer willingly to
accept something else in its place.
"To summarize: the ideal premium is something that people
want, something that they can get, and something that is unobjec-
tionable.
"Now we come to what is, perhaps, the most important con-
sideration. What do.premiums do for a business, anyway? What
has been the experience of those who have used them? In what
ways does the money invested come back with interest?
"The concerns which have adopted the premium method assign
various reasons for it. First: Premiums get new customers be-
cause they are offered more for their money. The store which
offers the goods and premiums at the same price another store asks
for the goods alone, will get the preference in many cases. In
many lines where competition is close and price cannot be made
an inducement, the premium is a big factor.
"Second: Old customers are held to the concern which treats
them well. A few articles of daily use in a man's home serve as a
bit of personal contact with the store which gave them to him. In
a sense, the premium represents so much advertising space for the
store in the homes of its customers.
"Third: Premiums increase the proportion of cash business.
They are usually granted only upon the total of cash sales, though
this rule is flexible, and some concerns report that the saving in the
cost of clerical work and collection of accounts amounts to a large
proportion of the cost of the premiums.
"Fourth: The person who has started to accumulate coupons
from a certain store is not so likely to be drawn into spasmodic
bargain purchases elsewhere. She will come to the store which
gives the coupons, and pay a slightly higher price, if necessary, to
get the credit on the premium she wants. And conversely, the little
coupon often makes a cut in prices unnecessary to get people into
the store.
"Fifth: The old established house, whose product is standard
and of known quality, often finds new competition advertising
quality strongly. In a case of this kind it is easier to hold the
trade by a premium offer than to compete on the quality basis with
the new concern. Since everybody knows the quality of the goods,
it is a waste of money to advertise it, when customers can be held
in line with a premium.
"Sixth: By offering premiums to clerks and dealers for
orders of ^ certain size, and for weekly sales, dealers may be in-
duced to stock goods, and their clerks encouraged to push their sale.
This as an adjunct to magazine and newspaper publicity. The pub-
lic urged to demand the goods, from the outside, and the clerks
encouraged to sell them from the inside.
"Seventh: Sometimes premiums arc given which will suggest
the purchase of goods to supplement them. For instance, a set of
books given with purchases amounting to $100 may be made to
suggest the further purchase of a bookcase to hold them. A
{Continued on page 7.)