THE COST OF BUSINESS

Taranaki Daily News, 23 December 1930, Page 4

THE COST OF BUSINESS

EXTRA MEN OR ADVERTISING. *Td rather spend the money for extra salesmen than for advertising,” remarked a manufacturer. The answer is supplied by Mr. Lee E. Donnelley, a wellknown American businessman, who says: “Anyone who cares to analyse the subject keenly from an economic standwill discover some astounding opportunities for cutting selling cost by using advertising. Assuming that you put on two salesmen and that these men are experienced, they will cost you, including salaries and travelling expenses according to your own estimates £3OOO a year. “Now if each man averages four calls a day for three hundred business days, ho will make twelve hundred calls and two men will make twenty-four hundred calls a year. These should represent repeat calls on prospects at least once every sixty days. Now, if both of these nien call every sixty days, they are limited to calling on four hundred firms six times a year, including present customers and prospects. “By simply dividing £3OOO by four hundred prospects we discover- that each prospect that you work with one of these two salesmen costs £7 10s. In other words you get six calls by one salesman on one industrial concern for £7 10s. Tho only thing that makes this high cost per prospect profitable-is- the possibility that you will find one out of a dozen who will buy in sufficient volume to carry this exorbitant cost. \

“As compared with £7 10s per prospect for six calls per year by a salesman, the advertising I have planned will give you twenty-six calls, a call every other week on each of the same four hundred prospects and about thirteen thousand others for 5s per prospect. Here is a difference of six calls against twenty-six calls, a difference of £7 10s against ss. Look on advertising as the rankest kind of speculation if you wish, and good common business experience tells'you plainly that advertising has possibilities that cannot be achieved by other methods. “I don’t claim that this advertising will sell a pound's worth of goods for you. It might, as in the case of the company, but no advertising man will counsel an industrial concern to expect advertising to do it all. “What this advertising will do is to help the salesman in the field to do his work more thoroughly, more effectively and cover more prospects. We have known of cases where advertising has increased the calls per salesman one hundred per cent. I think you will . be willing to admit that an advertising campaign on your products would enable a salesman to make one more cal’ .rj,.. day, , and remember yhile it is doing

this the same advertising is reaching 13,600 prospects, some of whom are customers, or have been customers and therefore helping to keep them sold or helping to resell them. “Thin is not -an argument against salesmen. There is no one in the whole ■business world that believes more jn salesmen than the professional advertising man, because he understands the exact functions of advertising, and the exact functions of a salesman. He knows that advertising has no more chance of replacing or performing the functions of salesmen than the moon has of shining as bright as the sun. ‘‘However, you have had the occasion to observe perhaps in your own expert--euce how a preliminary letter to a ,prospect has seemed to open up the way for the discussion of business, and the closing of business. Just recall one of those instances, and you will have a vivid, picture of just what twenty-six insertions of advertising will do for your salesjpeji—not on© of tKem, but <lll of tncm.