Exhibitors Herald (Dec 1919)

EXHIBITORS HERALD mm AMERICAN'S SALES POLICY STANDS TEST System Adopted Eighteen Months Ago Has Been Proved Success Th roughout Country By SAMUEL S. HUTCHINSON President imeriean Kiim < umiiiiin. N RESPONSE to your Ss*jL invitation to take the -r floor. I beg to address J? 1 the house on the sub "^fc. *V ject of an amendment — fjpfr\^*~*\ an amendment to an 1 J^T ancient and honorable saying: to-wit. that "the proof of the pudding is the eating thereof." Cervantes, as you remember, called a proverb a short sentence drawn from a long experience. Even so, I'd make bold to blue-pencil this particular short sentence to make it read: "The proof of the pudding is how you feel two hours after you eat it." From its literal side, there isn't a doctor, dyspeptic or student of dietetics who will not stand ready to O. K that revision without a moment's hesitation. Taking it by its metaphorical handle, so will every business man. statesman, general, campaign manager — any one in fact whose job it is to map out plans that, however soundly they may be based, are only experiments after all until they have emerged unscathed from the fires of the practical test. The proof of the pudding is, indeed, how you feel two hours after taking. And by the same token, the proof of any new policy is where it lands you and your business after it has been in operation for a reasonable length of time. * * * The particular "pudding" at which I am shooting in this articb ;s the unique policy of film distribution which the American Film Company adopted a year and a half ago, as a means of acquiring absolute control over its sales plans, effecting a material reduction of the unnecessarily high cost of distribution, and making possible the application of that saving to the betterment of exhibitor service. Seventeen months ago we gave effect to a selling policy which at that time constituted a radical departure from prevailing cjstom. It involved an arrangement with the Pathe Exchange. Inc whereby we employed our own sales representatives, responsible solely to us, but stationed at the various Pathe exchanges throughout the country and utilizing the equipment of those branches. These salesmen are expected to devote their effort^ exclusively to the "Flying A" product, selling our features direct to exhibitors, and making their daily reports to our headquarters in Chicago. In attending to the physical handling of the films — shipping, billing, collections, inspection and repair of films, sending out of posters, cuts and other advertising accessories — the Pathe organization maintains practically the same relation to the American Film Company as the clearing-house maintains to the several banks which it serves. And just as the clearing-house marks one of the greatest of modern time-and labor-saving devices, so does such a co-operative plan as that which the American Film Company has entered into with Pathe Exchange mark a new standard of efficiency in methods of film distribution. In view of the point to which the Pathe organization has carried its particular line of specialization, it is perfectly qualified to perform such services with a maximum of satisfaction and a minimum of friction and waste. * * * Since instituting this arrangement for disposing of the purely mechanical functions of the distribution, we have been able to control our selling policy from headquarters just as effectively as we control the company's production policy. And the results are all in favor of a continuance of the present system. Xot only has the perfect co-ordination SAMUEL. S. HIT(H1\*<>\ President of the American Film Company, WMO h:is just niinouneed the fourth of his Den series of production. of the two policies brought greater harmony of effort in all departments of our organization as well as wonderful impetus to our sales, but it has meant closer contact with exhibitors — a n d through them with the picture-going public that sways the showmen's decisions— to say nothing of the elimination of a vast amount of wastage that was inevitable with the previous system of distribution. As one of the trade papers, in commenting on the supreme sanity of the new move, expressed itself last year: "The American plan is simply doing what is done in other lines of business, where the wholesaler handles many com 111 peting lines of goods, giving no preference to any one, but simply filling orders as they are created by the quality of the goods and by the manufacturers' selling efforts and enterprise. "We haven't too much of selling and advertising effort today — that is not the trouble. We have too many routes over exchanges. These routes can be greatly diminished without interfering in the least with the field of any manufacturer, and with the result of greatly reducing the present unnecessarily high cost of distribution. "\\ hat is to keep other companies from following the pathway that has been opened?" * * * Nothing whatever. And the fact that since July. 1918, when the "Flying A's" present sales system went into effect, a number of other big producers have followed suit, furnishes indisputable proof that the pathway was wisely chosen. Certainly it presents itself as the quickest and least laborious route to the goal toward which we are all headed: namely, high-quality productions, efficient exhibitor service, and a forward-looking policy, plus a steadilygrowing return on our investment of money, work and experience. To one familiar, from the inside, with the intricate workings of the motion picture business, it is not hard to vision a number of other big producers have every large producer will find it to his own benefit to take advantage of some such solution of the problem of distribution, with all its ramifications and peculiar difficulties. At any rate, the signs today would all seem to be pointing in that direction. * * * One of the by-products of our present direct control of sales in which we have found greatest cause for pride is the inauguration of a bonus system for the benefit of our sales representatives. The plan, which is just beginning to pay cash dividends, is stimulating "Flying A" salesmen to greatly increased effort by giving them a proprietary interest in the features they are selling. The modus operandi is as follows: When a new production is completed, we figure the cost as accurately as may be and charge each branch with its prorata share of the investment. As soon as collections on that picture in any one field reach the assigned quota, the representatives at that branch begin to cut in on the surplus rentals, each salesman receiving a stated percentage of all collections that accumulate thereafter. Inasmuch as this bonus policy is slated to apply throughout the full life of the picture, it will readily be seen that a live salesman will enjoy each month a very respectable check "on the side." representing his share of the bookings on pictures for which the expectancy has been passed.