Cyclopedia of Commerce, Accountancy, Business Administration, v. 01 (of 10)

by American School of Correspondence

THE MAIL ORDER BRANCH

When the mail order branch is spoken of it does not refer necessarily to an exclusive mail order business, but the term is used to identify the department in any concern which uses the mails to promote sales. While there are many exclusive mail order houses, employing no personal salesmen, there are practically no exclusively personal salesmanship houses. There may be no effort to secure direct orders in this manner, but the mails are used to influence sales. Extensive circularizing campaigns are conducted for the purpose of making known to the consumer the merits of certain commodities, which are sold only through dealers. In the sense here used, such campaigns are within the province of the mail order branch.

Form Letters. An important factor in the conduct of the mail order branch, is the use of form letters. In a campaign intended to secure direct orders, the form letter takes the place of the personal salesman.

The form letter presupposes a uniformity of conditions. It is written to appeal to certain desires of the recipient; its arguments are based on the supposition that the same desire exists in the minds of all to whom it is sent, and that the same arguments will cause its readers, as a class, to yield to those desires.

The result of a form letter campaign depends on the extent to which the letter fulfills its mission in adapting itself to the conditions of the class to which it is sent—its adaptability to the mentality and environment of its readers. The same argument will not appeal to the mechanic, farmer, merchant, and banker.

The failure of most form letter campaigns can be traced to one of two causes—failure to adapt the letter to existing conditions, or lack of judgment in selecting a list for a trial. The goods offered may be used by plumbers and lawyers, but the same letter should not be expected to pull with both classes. Like the selling talk of the personal salesman, the letter should be changed for each class.

Other conditions, also, must be studied. Iowa may have harvested a bumper crop, while Kansas suffers from a drought; mills in the Pittsburg district may be running overtime, while Buffalo is in the midst of local labor disturbances. All of these local conditions influence the results of the letter campaign.

As to lists used for trials, the more usual mistake is in the use of too small a list. Some sales managers, who have mailing lists of from 25,000 to 100,000 names, profess to try out a letter with a list of 300 to 500 names. A list of this size is not sufficient to give an actual test of the pulling power of any letter. Some of the most successful letter salesmen give it from their experience that the very smallest list from which a safe test can be made is 1,000 names.

Keying Form Letters. It is just as necessary to key form letters as to key magazine ads. The key makes it possible to trace results. The question of keying is most important when a series of letters is used—which is true in most campaigns—for it then becomes necessary to check the returns from each letter in the series. When one letter only is sent to a given list, the replies received from that list can be safely credited to the letter.

There are several methods of keying form letters, among which are the following: the reader may be requested to address his reply to a certain department; he may be offered a sample or some novelty; or the letter may be written in the first person singular so that replies will naturally be addressed to the writer.

The writer confesses to a preference for the last named method. The average mail order buyer likes to feel that he is receiving personal attention—that there is someone in the house to whom he can write, instead of addressing the house. A personal touch can be put into the letter signed by an individual that is impossible in a letter signed in the name of the house.

Fig. 21. Detailed Record of Form Letters Mailed

There are those who contend that only the name of the house should be used, that the name of an individual should never be signed to a letter, and who have printed on their letter heads the phrase: "Address all communications to the company, not to individuals."

While it is perfectly proper to use every legitimate means to keep the name of the house before the public, there is a good deal of senseless fear that the prestige of the house will be usurped by the individual. In some quarters this fear has resulted in the adoption of ridiculously extreme rules and regulations. One incident in the personal experience of the writer will serve to illustrate the point. Having occasion to request a favor from a certain manufacturer—a favor which would be granted, if at all, by the advertising manager—and knowing the advertising manager personally, he addressed the request to him, using his title in connection with the name of the firm. Somewhat surprising was the following letter, received a few days later:

Dear Sir:

We have your favor of the 12th, addressed to our Mr.————, and your request will receive the attention of the proper individual.

Our method of handling correspondence is such that, to insure proper attention, all communications should be addressed to the company. We request that you observe this rule in the future.

Yours truly,

No more reason for the fear that the house will be injured by the personality of one of its correspondents can be seen, than that the personality of the salesman will have greater weight with customers than the reputation of the house. If the personality of an employe—be he a personal salesman or a correspondent—is worth anything in a business way, the benefit accrues to the house that employs him.

There is one other objection to the use of the name of the writer of the letter, and it comes from the United States Statute making it a criminal offense to open mail addressed to another. But this objection can be easily overcome; any employe whose name is used will sign an order authorizing the opening of letters addressed in his name, unless marked personal.

Fig. 22. Record of Sales Resulting from Form Letters

Form Letter Records. A copy of each form letter written should be kept permanently. The copies should be filed in a manner that will make it easy to refer to them. For this purpose an arch file or binder is most satisfactory. The letters themselves may be punched for the file, or the loose-leaf scrapbook idea can be adopted, pasting several letters on one leaf.

Each letter should be given a number for the purpose of identification, whether or not it appears on the letter itself. The copies should be arranged in the file in numerical order, but where there are several departments or divisions using form letters, they should be divided by departmental indexes.

It is also well to keep a second copy of the letter with a sample of the enclosures, as the enclosures may have an important bearing on the results. These copies may be preserved in the manner suggested for filing copies of ads and printed matter.

When a form letter is written, a record form, as shown in Fig. 21, should be started. This may be on a card or loose leaf; the latter is preferred on account of the larger space for the record. The heading shows the No. of the letter, the subject, name of the writer, its No. in the series to which it belongs—first, second, or third—the enclosures, and the names of any special lists used. The body of the form provides for a record of letters mailed during the year, with a monthly record of total costs.

The sheets are arranged in the order of letter Nos., in a card file or a loose-leaf binder.

The reverse of this record form is ruled, as shown in Fig. 22, to provide a record of sales resulting from the use of the letter. Sales can be entered daily or weekly, but the daily record is recommended.

The methods of obtaining the details for these records is described later.

Follow-up Systems. A necessary and very important factor in the success of a business transacted through the mails, is the follow-up system. And in a business in which sales are made by personal salesmen, the follow-up is used for certain purposes, and is as important as though used to secure orders.

To follow-up is to keep after, to keep in touch with, and to keep a certain subject before certain individuals. Whether used to secure orders or make collections, the idea of the follow-up is the same, though it is better known as a system for promoting sales.

The follow-up arises from the same necessity that compels the personal salesman to call on a prospective customer more than once—often many times—before the first order is secured, and continue to call to hold his trade. The follow-up simply makes use of letters and other literature to take the place of the personal salesman.

Mechanically, the follow-up system is a system or method that insures the sending of the right literature at the right time. Letters—both form and special—catalogs, booklets, folders, circulars, and mailing cards are all used in the process of following up the prospective purchaser; the automatic method of showing when each piece of literature in the series should be sent, is the follow-up system itself.

Fig. 23. Vertical File Drawer Equipped as a Tickler

Tickler Method. The simplest method of handling the follow-up system is to use a tickler in which to file memoranda or correspondence by dates. A tickler consists of a file equipped with a set of indexes numbered from 1 to 31 to represent the days of the month, and 12 indexes printed with the name of the month. The monthly indexes are arranged in order, and the daily indexes are placed in front of the monthly indexes in numerical sequence. The file may be a vertical correspondence file, a card tray, or a flat desk file.

In using the tickler for a correspondence follow-up, letters are filed back of the index representing the day on which the subject is to receive attention. Each day the letters filed behind that day's index are removed, and after receiving attention, are filed ahead to the next follow-up date.

If it is desired to have a letter come up for attention in another than the current month, the day of the month is noted on the letter, and it is placed back of the monthly index. On the first of the month, the index for the previous month is placed at the back of the file, which brings the current month's index to the front. All papers that have been filed back of the monthly index are then distributed by dates. A correspondence file drawer, equipped as a tickler, is shown in Fig. 23.

For a small amount of correspondence, the use of the tickler is very satisfactory, and it is also used to excellent advantage for keeping track of the many matters that require attention at a future date. A tickler should be included in the equipment of every office, no matter what the line of business.

Card Follow-up. For most extensive follow-up systems, the card index is used, for the reason that a card is easy to handle, occupies but little space, and can be adapted to any classification desired. A card is used for each prospective customer, or name on the list to be followed up, and should bear the name and address and a brief history of the efforts made to secure an order, or accomplish the object of the follow-up.

In operating a follow-up system—especially if the object is to sell goods—the correspondent should have before him a history of the efforts previously made to secure an order. He should know what letters and other literature have been mailed just as the personal salesman knows what arguments he has used. When form letters have been used it is not necessary to have copies of the letters in each case, but they should be identified by their numbers, or otherwise. Records of these letters, by date and number, can be made on a card, so that the card itself will give the correspondent a complete history of the case. The correspondence—letters from the prospective customer and copies of special letters to him—can then be filed in the regular way, and is accessible at all times.

The oldest method of operating the card follow-up is to use the tickler index in a card file. The follow-up is operated in exactly the same manner as described for the correspondence file tickler, except that the cards are filed ahead instead of the original correspondence.

Fig. 24. Card Used for Follow-up

A typical follow-up card is shown in Fig. 24. At the head of the card is the name and address of the prospective customer, followed by the credit rating, the business, and the source from which the name was obtained—whether from advertising, a special list, or from a traveling salesman. The body of the card is ruled for a record of letters mailed, form and special letters separated. When a letter is sent the No. and date—if a form letter—is entered, and in the file column is noted the number of days the card is to be filed ahead—as 10 days or 30 days. If at the time specified, the next form letter in the series is to be sent, provided no response has been received, the No. should be noted on the next blank line in the No. column, so that the letter can be sent by a clerk, without consulting the salesman.

When the cards come from the file, those on which no form letter is indicated for the next follow-up should be referred to the correspondent. If he considers a special letter advisable, he should have all previous correspondence attached to the card, that he may know just what has been done to land the customer.

Cross-Indexing the Chronological File. One of the disadvantages of the tickler or chronological index, described above, for a follow-up is the difficulty of locating a card, when the date under which it is filed is unknown. A letter may be written on June 10, and the card filed ahead to June 25; on June 16 a reply may be received which makes it necessary to find the follow-up card, but to do this it is necessary to look through all of the cards filed between June 16 and June 25. If the card is not found, the chances are that on the 25th a regular follow-up form letter, which will make the system appear ridiculous, will be sent.

Fig. 25. Follow-up Card with Alphabetical Tab

To so file the cards that any one can be found by name, without interference with the automatic features of the follow-up system, is an important consideration. This can be accomplished by the use of a card like the one shown in Fig. 25. It will be noted that this card bears a small tab or projection, on which is printed the letter B. These tabs are cut 1/20 of the width of the card and are in twenty positions across the card. This allows for twenty subdivisions of the alphabet, the A tab being in the first position, B in the second, etc.

In filling in a card, one bearing the letter corresponding with the first letter in the name of the correspondent is selected—a B card for Brown, an S card for Smith. Now since B is always printed on a tab in the second position, and this tab is always the same distance from the end of the card, when the cards are filed, all B tabs will be in a straight line from front to back of the drawer.

No matter under what date it is filed, if Brown's card is wanted it will be found by looking through the row of B tabs in the second position from the left. Regardless of the number, all tabs printed with the same letter are found in one row, making it possible to file cards by date and cross-index by name.

Fig. 26. Follow-up Card with Movable Tab to Show Dates

Cross-Indexing the Alphabetical File. An improvement over the cross-index of the tickler, described above, is the method of cross-indexing an alphabetical file in a manner to insure a follow-up on a specified date. A card without tabs, as shown in Fig. 26, is used. Across the top of the card is printed a series of numbers representing the days of the month. This may include all of the numbers, from 1 to 31, or the month may be divided into five day periods.

In connection with this card a metal tab, which can be attached at will, is used. One of these tabs is placed over the number which represents the date on which it is to be followed up. The card is then filed, indexed by name.

THE SALES DEPARTMENT IN THE NEW YORK OFFICES OF J. WALTER THOMPSON COMPANY

The numbers being printed in the same position on every card, all tabs placed over the same number will be in a direct line in the file. The cards to be removed for the follow-up on a certain date are those bearing tabs over the number representing that date. On June 20, for illustration, all cards with tabs over No. 20 are taken from the file. When letters have been written, the tabs are moved to the next follow-up date, and the cards returned to the file.

Fig. 27. Card for Combined Daily and Monthly Follow-up

This method of cross-indexing with movable tabs permits of the filing of the cards in any manner desired, with the knowledge that the follow-up date will be surely indicated. The tab method is also used for a combination of daily and monthly index. On the card shown in Fig. 27, the names of the month are printed under the date. For a follow-up in a later month a colored tab is used to represent the monthly index, while a black tab represents the day of the month. To illustrate, we will suppose that the card is placed in the file on Oct. 5 and the next follow-up date is Nov. 10; a black tab is placed over No. 10, and a red tab over No. 2. The card will not be disturbed on Oct. 10, as the red tab indicates that it is to be removed in a later month, but on Nov. 1, the red tab is removed from the card, and the black tab will bring it to notice on Nov. 10.

Lists of Customers. Every concern whether it secures business through the mails, by means of personal salesmen, or both, should have a list of its customers properly classified and arranged for easy reference. This should be something more than a list of names and addresses; certain essential facts about each customer—such as his business, the name of the buyer, the credit rating, and amount of purchases—should be recorded.

All of this information can be placed at the head of the ledger sheet, but it never should be necessary for another department to consult the records of the accounting department for information needed daily. The information given by the customers' list is of most value to the sales department and should be kept in that department.

Fig. 28. Monthly Record of Purchases of a Customer

For customers' lists, cards are most largely used, and are most satisfactory. Cards are readily classified, new names can be added at will, and old names are removed without disturbing the balance of the list or the general arrangement of the cards.

The follow-up card can be used as a customer's card, but should be moved from the follow-up to a separate file; or a new card can be made when a prospect becomes a customer.

On the back of the customer's card a form similar to Fig. 28 should be printed. This is intended for a record of the purchases of the customer and provides for a monthly record, covering a period of five years. The amount of purchases is entered monthly from the ledger. In a business in which the purchases of each customer are infrequent, each order should be entered with the date, in place of the monthly summary.

Classification of List. The value of a list of customers is greatly enhanced by a careful classification of the names. Lists of those engaged in the different trades and professions can be bought, but no list is so valuable as one made up of the names of those who have answered your advertisements, or with whom you have done business.

Fig. 29. Card File for a Classified Customers' List

Most houses sell goods to those in different trades or occupations. A manufacturer may sell different lines, or the same line, to jobbers, retailers, and consumers; a mail order concern may sell to farmers, mechanics, and small retailers; a retailer may sell to men and women. To sell each different line to a different class of people, requires different arguments—a new line of selling talk must be used in each case. While the personal salesman has an opportunity to size up his prospect, and make his argument fit the individual, the letter salesman must fit his argument to a class. To drive home the right argument, he must be sure of the class to which his prospect belongs. He cannot hope to form the personal acquaintance of his prospects, but must rely on a proper classification.

The classes into which a list of customers and prospects should be divided depends on the nature of the business and the class of goods sold. It might be manufacturers in different lines, the different professions, retailers in several lines, or all of these combined into one list.

With a card list, any classification is easily provided. If the number of classes is small—not exceeding seven or eight—the classes can be indicated by the color of the card, a white card being used for one class, blue for another, etc.

For a more extensive classification, cards with numbered tabs, as in Fig. 29, are used. It will be noted that there are twelve of these tabs, and that they are numbered from left to right. In the follow-up systems, from which this illustration is taken, each number represents a certain line of business.

Suppose that No. 1 represents manufacturers; if all manufacturers on the list are to be circularized, only those names recorded on cards with the No. 1 tab are addressed. Now if the business is one dealing in specialties, it may be that the specialty to be sold will depend on the position held by the prospect—a sales manager will be more interested in a book on sales methods than in one on factory methods. To further classify the list, colors are used.

In the system referred to, eight colors are used. Seven of these represent occupations of prospective customers, while the eighth is used for customers. A manager or executive officer is represented by a blue card, a sales manager by a white card, etc. When a prospect becomes a customer, the card is removed from the follow-up file, the amount of the sale is entered on the back, and it is placed in another file reserved for customers. At the same time a red card is placed in the follow-up file for use in further circularizing. The tab on the customer's card shows his business, but the occupation is not so important since he is already acquainted with the house and its goods. A more familiar tone can be adopted in letters to a customer, than to a prospect.

A complete classification, such as provided in this system, is of immense value to a letter salesman. Suppose he wishes to address all executives—the blue card is used; if he wants to reach customers who are manufacturers, red cards with No. 1 tabs are the ones used. He can make his letter fit a particular class and be sure of the class.

Classification of Sales. There are certain lines of business in which a second order for the same article is seldom received from any customer. An example is the music business. The chances of selling a customer a second piano are remote, but the fact that he has purchased a piano is a sure indication that he will be interested in certain classes of music. Book publishing is another example. A man who buys a book on advertising, or commercial law, or auditing is quite likely to be a buyer of other books on the same or kindred subjects.

Fig. 30. Card for a Classified Record of Purchases

In a business conducted through the mail, a classified sales list that shows at a glance what classes of goods have been sold to each customer furnishes an excellent guide for further circularizing. On such records it is not necessary to show the amounts of purchases—the class is the important item.

Fig. 30 shows a card used for a record of this kind. The goods are divided into four classes, indicated by the letters at the head of the columns. When the first sale is made, the name and address are entered on one of these cards, and the date indicated in the proper column. A movable tab is placed on the upper edge of the card, over the letter that indicates the class, and the card is filed. As subsequent purchases are made the dates are entered, and if the purchase includes another class of goods, another tab is placed on the card. In time, one card may bear four tabs, indicating that the customer has bought goods in all four classes.

When new goods are received, they can be brought to the notice of those customers whose purchases indicate that they are most likely to be interested, without disturbing the other cards.

Indexing Customers' Cards. The best manner of indexing customers' and prospects' cards depends on the size of the list. A list of a few hundred names is best indexed alphabetically. A large list should be indexed geographically—according to location.

The geographical index consists of index cards printed with the names of the states, and sets of indexes bearing the names of the cities and towns in the different states. The state indexes are arranged in alphabetical order, and back of these the town indexes are filed alphabetically. The cards are filed back of the town indexes, these also being arranged alphabetically. When the number of names in a city is large, the cards are further subdivided by alphabetical indexes. In states where the list is small, an alphabetical index can be substituted for the town index, the letters representing towns; names of customers in Alton would be filed back of the A index, those in Springfield, back of the S index.

An advantage of the geographical index is that a definite territory can be covered by the letter salesman, or the personal salesman can go over the list and find out the condition of the trade in his own territory.