Music Trade Review

Music Trade Review -- © mbsi.org, arcade-museum.com -- digitized with support from namm.org
NOVEMBER 22,
1924
THE
MUSIC TRADE
REVIEW
How Church Handles the Delinquent
A Series of Collection Letters Used by the John Church Co. of Chicago, Which Have Successfully Brought the
Past Due Down to a Very Low Figure—Beginning to Collect Before the Account Is Absolutely
Due One of the Secrets of the Success of This System
ROMPT collections represent one of the
secrets of business success where instal-
ment accounts are handled, for it is in
keeping those accounts paid up that the dealer
is in a position to gather sufficient cash to keep
his business operating and expanding. It is good
collecting, too, that makes the instalment busi-
ness worth while, for it forces the customer to
observe strictly the terms of the contract, make
payments promptly, and maintain an interest in
the instrument purchased until such time as he
has a sufficient equity therein to make a repos-
session a losing proposition for him.
It is a noteworthy fact that music merchants,
as a rule, are inclined to give a very satisfactory
amount of attention to their collection problems
as is evidenced by reports gathered recently
by The Review showing a remarkably low per-
centage of past-due accounts. In collecting,
however, as in everything else connected with
business, there are two methods, the economical
and the costly, and, inasmuch as every dollar
spent on collections means that much taken
from the net profits of the sale, the more eco-
nomical the collection method the more satis-
factory it is.
The majority of music houses are forced by
the nature of things to employ the services of a
collector to make calls on a delinquent cus-
tomer, either assigning a member of the regular
staff to devote his attention to that work at
intervals; having a special man for the purpose,
or employing an outside agency, although the
last method is not generally considered good
business inasmuch as a member of the regular
staff is more likely to consider the maintenance
of the customer's friendship than is the out-
sider who seeks only to produce the cash.
The ideal collection method, of course, is that
which uses the mails so far as possible in keep-
ing accounts paid up, for the careful systematiz-
ing of collection work through the medium of ;i
card system makes it possible for a single clerk
to handle all the routine and leave only the:
most flagrant cases for personal handling.
How the John Church Co., Chicago, Does It
Among the concerns which have found the
mails to represent excellent collection mediums
is the John Church Co., of Chicago, this depart-
ment being under the direction of J. J. Prender-
gast. It is held that much of the success of
the John Church system lies in the fact that the
collection work is begun before the account is
due, a notice of the payment due being sent to
the customer five days before the scheduled
date. This first notice is printed on a slip, en-
velope size, with space for the amount due on
the contract and for interest. The name of
the company and address and a notice to the
customer to bring the reminder with him when
making payment are also printed on the slip.
This advance notice is found to be one of the
most successful means for cutting down col-
lection work for the reason that it reminds the
customer of the coming obligation and gives
him a chance to settle accordingly. Even the
best intentioned customer is very likely to for-
get the exact date upon which the monthly pay-
ment is due unless he takes the trouble to main-
tain a general record of his obligations himself.
Where the oversight is likely to be innocent,
the advance notice proves a convenience to the
customer, and where the forgetting is inten-
tional, the advance notice kills one chance for
a:i excuse for non-payment.
Simplifying the System
The sending of the advance notice, as well as
of the follow-up notices in letters, has been de-
veloped to a point where it is more or less auto-
P
matic. As each new account is opened, the
details of the account, including the customer's
name and address, are placed upon a card which
comes up automatically before the collection
clerk at stated intervals, is so simple that a
single girl can operate it satisfactorily under
instructions from the collection manager.
In cases where payment is not made promptly
only three days are allowed to elapse before the
customer receives a second notice, also printed
upon a slip, envelope size, simply stating "We
would appreciate your kindness in sending pay-
ment which became due
192..."
This second notice has been found to bring in
a very satisfactory response from well-inten-
tioned customers, but should it fail of results
there is still another slip sent to the customer a
few days later bearing wording "This is to re-
mind you your account is slightly in arrears.
Possibly this matter has been overlooked. Your
prompt remittance will be appreciated." This
special slip is printed in red and black and is
also of envelope size and has been found effec-
tive because it impresses the sensitive customer
with the idea that it is a regular form and he
has not been picked out for special dunning.
Some Snappy Collection Letters
In cases where the various printed slips do
not bring in the desired payments, and they are
comparatively few, the collection department
proceeds to send out in regular order a very
complete series of collection letters, four in all,
which, with the original printed notice, makes
five communications received by the customer
before more drastic action is taken. The four
collection letters arc, in order, as follows:
Collection Letter No. 1
We would appreciate your kindness in re-
mitting us payment of $
past due on
your account, and extend our thanks in advance
for your prompt attention to this matter.
No. 2
We have received no reply to our former
notices advising you in regard to your account
which is past'due.
We sent you statement showing the amount
in arrears, and you will oblige us very much by
paying the same at once.
If impossible for you to comply with our re-
quest, kindly advise us by return mail when we
may expect payment to be made.
We sincerely trust that this matter will re-
ceive your prompt attention and that we will
have no further occasion to write again regard-
ing the same.
No. 3
Are you aware of the fact that this is the
fourth notification we have sent you relative
to your account?
We are at a loss to understand your seeming
neglect of the matter and your persistency in
ignoring our former requests for settlement of
the amount due. We cannot see the necessity
of our writing you so often, as we feel that we
are entitled to at least the courtesy of a replv.
Even if you cannot pay the amount just now,
you should frankly let us know the reason why,
and when you will pay. It is much easier to
pay each instalment on the day it is due than
to let it drag along until nearly time for the
next one. We know how it is and that is why
we urge you to pay promptly each month ac-
cording to your contract.
We want our business relations to be pleas-
ant, and we respectfully request that you com-
ply with the terms of your agreement by send-
ing us at once the amount due and making
arrangements to take care of all future pay-
ments as promptly as each one matures.
No. 4
Five times we have written you regarding
your account and as yet we have failed to re-
ceive payment or your reason for withholding
settlement. We are forced to infer from your
continued refusal to answer our letters that it
is your intention to evade payment and make it
necessary for us to resort to stronger and more
unpleasant measures to effect this adjustment.
As we wish to afford you the opportunity
of an amicable settlement and save you the em-
barrassment and expense of having this matter
taken to court, we have decided to allow you
five days longer in which to make payment.
Your refusal to arrange this matter within that
time will result in our placing the contract in
the hands of our attorney for final disposition.
The "Delinquent" Letter
It sometimes happens that even the four reg-
ular collection letters fail to bring response and
in such a case there is sent to the customer who
is three payments or more behind what is
known as "the delinquent" letter reading as
follows:
We are compelled to call your attention to
the amount delinquent on your account. Ac-
cording to our records there is the sum of
$
past due. This is not in accordance
with your agreement and we cannot allow the
account to rest in its present condition indefi-
nitely.
When we entered into the contract with you
we expected the strictest fulfillment on your
part. You promised to pay a stipulated amount
each and every month until the full amount
was paid. You have fallen down on your
promise. We have fulfilled our portion of the
agreement and feel that we have been patient
and lenient in your case and that ample time
has been allowed you to adjust the matter.
(Continued on page 9)
Pratt Read
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