Radio broadcast .. (1922-30)

Record Details:

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SERVICE do you or your customers pay ? By JOHN S. DUNHAM <? K V Radio Service, Inc. The Service Department of a Successful New York Dealer Operates at a profit Without Any Aid from the Sales Department. A Charge Is Made for Installations, Free Service Is Limited to Ninety Days, Parts are Sold at List Prices, Service Labor Is Charged for at a rate of $2.50 per Hour, and the Customers Are Pleased! \ N ORDER to make his service department pay a profit the radio retailer must charge for service at a rate not less than two and one- half times the net cost of the labor, free service must be limited to ninety days, and list prices must be charged for all parts and accessories sold on service calls. This basic principle has been strictly adhered to by a large and successful dealer in the New York metropolitan area and it has been largely responsible for permitting the service department of this dealer's organization to pay a profit without any aid from the sales department. This dealer employs the highest class service personnel obtainable, pays high wages, and endeavors to give the ut- most in satisfactory service to the customer. His customers understand thoroughly at the time of sale that there is a definite limit to free service, and he has found by experience that after the free period they are quite willing to pay good prices for the really excellent service he provides. He sells sets, without cutting prices on any items, in a city which is the largest and worst hot-bed of price cutting in the country, and is making a huge success doing so, because he renders super- lative service and charges fair prices for that service. And there are a few others, in the New York area and scattered over the country, who are doing the same thing. When the average dealer wakes up to the fact that the individual radio user wants good service and is willing to pay a good price for service which is good, and that knowledge causes the dealer to give good service and charge for it, then, and then only, will he begin to make a justifiable return on his investment in the radio business. Before radio broadcasting became prominent, this particular dealer had made a success selling other musical instruments. Now he has built up a successful and rapidly-growing radio business which was large enough last year to keep busy an out- side service force which averaged about ten men. It is worthy of note that only one make of radio is sold. Installation is charged for at a price which permits the best of antenna equip- ment and a real job of installing, with something left over to help take care of the free calls during the ninety-day period. The installation charge is added to the list price of set and equipment, and is credited to the service department. The cost of the free service given is not charged to sales, "but is en- tirely borne by the service department. None of the items of service cost is charged to sales, thus relieving the sales de- partment entirely of that usual item of selling expense. And the reason no service has to be charged to sales in that organization is simply that the service department operates at a slight profit. The way in which every radio dealer's service department may be operated at a profit will be considered in greater detail in this article. However, first we will review briefly the mis- takes made by the average radio retailer, who, in common with the average retailer in other lines, is without any definite knowledge of the cost of operating his various departments; that is, the accounting system employed is not sufficiently de- tailed to show exactly where loss is being experienced or where a profit is being made. In this connection it has been our ob- servation that the cost of rendering satisfactory service is usually the most neglected item, and that most of those who embark in the enterprise of making their everlasting fortune by selling radio receivers actually lose money because they underestimate the cost of service. This is not only true of dealers who have just entered the radio business but also of many of those who have had years of experience. 18 • • NOVEMBER 1929