The talking machine world (Jan-June 1928)

Minimize Repossessions by Remedying the Causes An Analysis of the Repossession Problem Will Determine Causes and Pave Way for Solution By R. J. Cassell R. J. Cassell, formerly collection manager of Grinnell Bros., Detroit, the author of this interesting article on repossessions and their causes, is the author of "The Art of Collecting". Other articles by him on various phases of the music business will appear in forthcoming issues of The Talking Machine World. — Editor.) NOW I don't guarantee to solve this problem of doing away with repossessions; in fact if I could do so the radio and talking machine industry could and would pay me a fabulous compensation, but I do believe that if we analyze the subject carefully we can get at the cause and then it is up to each one of you to apply the remedy. If we can do this we have at least made a step in the right direction, for this is truly the big leak in the business, and one that should be held down to a minimum. This problem involves every department of the business to a greater or less extent, so I believe it is logical to take it up from the standpoint of departments. The prime offender we will take first, the sales department. The salesman, in his great desire to make the sale, may think only of closing the deal when it might have been better to have kept the goods in the store. Why? The customer may be a crook or some other undesirable character, but the salesman overlooks this phase of the matter and thinks only of getting the name on the dotted line. Such sales are repossessions in their inception. Then, too, does the salesman know anything about the customer's financial ability to pay for the goods purchased? I believe that the radio and talking machine business take longer chances in this direction than most other lines of business. The more knowledge the salesman has and the better the class of customers to whom he sells will surely cut down his repossessions. This has at least been my observation in studying the work of a large number of salesmen. Effect of Side Promises Another fault of some salesmen is to make side promises, which cannot be kept by the house. I have in mind one where the customer was told he would be given an unlimited guarantee. This sale stood at a stand-still for months until a special adjuster with tact and salesmanship resold it. This was in reality a repossession, as it cost the firm time and money to resell the goods. I could illustrate at greater length, but space will not permit. Don't make side promises and don't let your salesmen do so if you want to avoid repossessions. Then there is the customer who is not properly sold in the first place. We might call it a forced sale. The salesman is too anxious to close without creating sufficient desire in the customer's mind for the goods. The customer may not fully realize that he has bought something until the collection department begins to insist on payment. I have known customers to say they never signed a contract. They didn't know that they had purchased an instrument, as they thought they were only renting. This leads to the remedy of explaining your contract fully before you have completed your sale. Do so and avoid repossessions. You have all had experience with the interest clause. Don't be afraid to give the customer a clear understanding of this part of the contract. It means thousands of dollars to the house, and if the customer is not properly sold on the interest and discovers the fact in the early stage of the sale it may lead to repossession. Then there is the direct misrepresentation by the salesman with the intent to deceive. This is fraud and acts like a boomerang when the customer discovers that he has been deceived. He loses confidence in the house and lets the instrument come back. Yes, and not only is it a repossession, but he tells his friends not to deal with such a house. The loss cannot be estimated. While no reputable house would intentionally do this they must see that none of their salesmen do so, to prevent repossessions. False Financial Reports Then there are false financial reports sent in by some salesmen who try to put it over on the house. A merchant may turn out to be a peanut vendor or a street musician. A farmer may be a day laborer, and I have known of cases where the customer was actually on the town and yet expected to pay for an instrument. This kind of business is sure to result in repossessions. In most localities musical instruments are sold to foreigners. There are some foreigners who are all right and pay without any trouble, but there are a large number who do not know their own names in English and when they move they change their names or spell them differently so that it is very difficult to locate them. You should have a pretty good knowledge of who they are before you sell them. Some go back to their native land and they will take radios, or talking machines, and such accounts must be charged to profit and loss. Know the foreigner to whom you sell and his ability to pay before you make the sale. The Collector's Job So much for the sales department. Now let us take a survey of the collection department and its effect on repossessions. I have demonstrated that business houses that keep up their collections according to the terms of contract have the smallest number of repossessions. Therefore, the manager and collector should see that the customers pay exactly according to the contract. The old idea that it is best to coax them along does not prove to save sales, but results in repossessions. The manager must co-operate with his collector and not take collection cards from him and lay them on his desk and say he will attend to that account and then let it go from day to day without attention. If the manager takes collection cards out of the collector's hands he will do more harm than good and the sale may be a repossession. Co-operate with your collector and encourage him in his arduous duty to stop repossessions. The collector must use tact and judgment in getting the money or he will antagonize the customer, who may not say anything but will let the instrument come back. There is a custom of some houses to sell almost any one who can make a down-payment without regard to who the person is. This practice prevails to some extent in every business. Then is it any wonder that quite a percentage of instruments are repossessed? You cannot blame the firm entirely, although they are very lenient, for they rely on the manager and salesmen to get a good class of busi R. J. Cassell ness, and the directors cannot see the customer or his home, but have to rely on the report of the salesman. It is to the best interests of the house and the salesman himself that he tell the truth about his customer — to the end of a less number of repossessions. Overselling and overterms cause the customer to get discouraged, as he cannot keep up the contract, and unless a new contract is taken the instrument is repossessed, after having been used for several months, and the manager is thoroughly convinced by his own collector that the goods should be brought in or payment made immediately. Faulty merchandise may cause dissatisfacin the mind of the customer and he will judge the house from the experience he has had with it. I recall one instance where it was necessary to give the customer a large discount and also an agreement to put the instrument in good condition. Be careful that the goods are in good condition before delivery, if you want the sale to remain sold. The accounting department can keep customers satisfied by avoiding errors in accounts, statements and notices. The death of the customer, over which we of course have no control, may cause a repossession. In such cases investigate at once the heir's circumstances, and by prompt action the estate may be able to pay out on the account or pay cash and prevent a repossession. Divorces frequently cause repossessions. A good plan is not to act too hastily, as often the parties become reconciled and will continue. So make haste slowly in such cases, but keep in touch with conditions, and avoid repossessions. The problem of service is a big one and many lines of merchandise nowadays are sold largely on the service the house gives. This is one of the leading sales arguments of the Ford Automobile Company. In your business see that the customer gets all that is promised him. These small matters may lead to dissatisfaction, and this is the mother of repossessions. To sum up, as the lawyers say: All departments have a duty to perform to prevent repossessions. Service and courteous treatment by all employes will go a long way towards keeping the goods sold. A sale well sold to a reliable customer with a good down payment and followed closely by the collection department in a tactful way is pretty sure to pay out. All salesmen and business owners are with me in a desire to cut down repossessions. They spoil your good work and lessen your showing, tie up merchandise in poor sales, and are a continual source of worry to every one. 10