Show Y MORNING MAc MA MAl c ADVERTISING HERMO STAT mR FOR nE DEALERS I cry erY Business Owes Pro Pro- Pro Pro-I tion a Percentage of I I I I Its ts E. E Earnings By SAM M. M GARBER GABER BER B ing Counsellor Indianapolis Ind from the Motor World February 8 lost ost of at us have lost our appetite because we have learned they t theY are followed by slumps Bus Bus- ss 58 flows naturally In to curves and that I something that has to be accepted elthe change In seasons But ab ab- I I ally heavy advertising followed unnaturally light advertising tends make sharp peaks and valleys and andall andall tha that 1 tall all have a vote vote vote-on on automobile dealer has nas r early Nearly every I through a course of sprouts In I morales the past two or three years I I knows that this applies In his own VVe e. e We know one dealer who dur- dur J to the extent t. t approximately 10 per cent of his ss sales In advertising have haved ree ree per cent would probably d him nearly as many cars To To- when he is desperately In need advertising he has utterly nonee no noney noney ney nee to spend There are few deal- deal who ho have not had a variation of oft inexperience experience t he he h point Is that nearly everyone In motorcar business today will live g nough to see other peaks and and j leys legs not so pronounced we hope worthy of the most intelligent that can be developed Sales ales s and the ways wars of building sales fal ing the past year have given many caler lealer a harried look and have led k dealers directly up to the door of and into a quandary over most productive methods of a ad- ad and the sanest most eco eco- eco eco- leal ical provision for tor it from the avail avail- the n first place what is adver- adver ng ng It defies accurate definition ut the same as electricity But as the case of electricity we know the I i. i gs gg it will do and how to make it them We Ve know that men have ad I I d and found their business grow- grow I I tWe We VVe know that they have stopped and found business fall- fall oU off We know that some kinds I advertising are better than others k ow that advertising has to be on trust and relied upon bese be- be f se O of Its general known effective effective- V ITe like ike to think a of advertising I ther ether in newspapers letter camas cam cam- ns as billboards or what not simply I Ja matter of show windows The Thee e show windows you buy and the there thero ro re attractive and convincing you the better people will know jand and your product and the more 1 can take for tor or granted when you call calla a prospect with an order blank In You simply buy white fill It with something The There re paper you can buy up to a ataro taro tain point and the more effective effective- It the more you can take granted who believes In these ipie maxims of advertising and we eve leve eve there are few who do not can ply fily regard advertising as less in- in than a set of books a clean neat courteous salesmen or pod od stocks of parts They are things J t simply nave have to be accepted had access to the books r ill large merchandising organization hh made ht made an Investigation among sands of motorcar dealers to deter- deter i problems and results of orcar orear advertising I was discovered that 60 per cent 1 i. i I of the prospects are either definitely sold or orr lost as far as that seasons season's business is concerned on the frs first selling sellIng sell- sell I Ing try 30 per cent on the second and 10 30 per cent on the third I By y se selling try is meant a call with witha i a determination to sell Toll Yoh may have taken the man and his wife fora for fora a ride you may have considered the value val of his present car and you may have spoken to him on numerous occasions occasions oc oc- regarding the merit of the car which you represent but today you call on him to get his order You want wantI it now today Sixty per cent of such calls result definitely in a a. sale or no sale The first try has a high rate of finality I This gets back to the point of at how much you can take for granted when you call on a man for an order If It as the result of ot national advertisIng advertising advertising advertis advertis- ing combined with word-of word mouth comment he has confidence in the carand car carand and the company that manufactures it if It as the result of newspaper advertising ad advertising ad- ad billboards and so o forth combined combined com com- again With Ith this highly important word-of-mouth word comment he knows something of you as a dealer your standing and your service and has unconsciously unconsciously unconsciously un un- un- un consciously seen the points of national advertising given specific local emphasis emphasis em emphasis em- em if through direct advertising literature and letters he ho has been ac acquainted acquainted acquainted ac- ac with the salient m features of the car its appointments I its performance records its Its' comfort its local clientele its new body styles I and all of the other subjects to which direct advertising lends itself if you youcan youcan can take all of ot these things or part I of them for granted when you go after I his order the efficiency of your first tries is bound to be somewhat in In- In creased That is what advertising does It enables enables' you you to start farther over In Inthe Inthe inthe the book It It It saves saves- time It enables you to spend the time talking turkey which might otherwise have to be de devoted devoted devoted de- de voted to strengthening his opinion on minor points with which he should already al already already al- al ready be familiar We Ve now come tot e question pf of how I I. I TH t I most most intelligently to spend c our money on oh this time saving promotion and how b best st to regulate our advertising expenditures over a period of years There Is something to be gained we believe by looking lo to the older better established for light on on this subject Department stores clothing I stores in fact tact nearly all successful retail retail reI re- re I tail tall stores which have been successful over a period of years have established a definite policy on the expenditure of money for tor advertising By long long and andin andin andin in some cases painful experience i hey they have ha arrived at certain percentages They know that a certain amount of adver advertising will Viii produce d d. certain amount of ot business These people average average approximately 5 per per per- percent cent of gross sales year In and year out In Increasing Increasing increasing In- In creasing their appropriation slightly when it becomes necessary t td stimulate stimulate stimulate late the demand While they have not been in business business busi busi- I ness long enough to determine percentages percentages percentages per per- with any arly like degree of accuracy accuracy accuracy ac ac- ac- ac curacy some of the tire companies j I have shown good advertising generalship general general- ship They have found for tor example I that a certain amount of money spent I on advertising fabric tires in small mall smalltown town papers results result in a certain Increase increase InI In- In crease in fabric tire Ure business In those I I localities They have attacked weak points and seen the business rise lIl like e t a thermometer with with witha a match under It lt As S an n example I of f the accurate a degree de- de i we 1 gr gree t to which some m other lines of C re retail retail re- re tail tall merchandising have calculated I advertising expense we shall shall- shall quite quite from a recent pamphlet Issued by Hart Schaffner Mark for their dealers They give the experience of ot one dealer deal deal- er who took five years to learn learn- his lesson I son It has been compiled complied as follows fol- fol follows lows The first season he planned to save money and and only spend an amount equal to per cent of gross sales for advertising ad advertising advertising ad- ad instead of ot the normal 6 5 per cent During the second season he lost so 0 much business per cent below belo the previous season that an advertising advertising advertising adver adver- appropriation Hon of per cent of or last seasons season's faes saes aes became equal in inthe Inthe inthe the second season to to-an to an advertis advertising ng expense of 39 per cent of the second I I I I I seasons season's business s. s He appropriated 4 68 per cent of ot the second seasons season's business for the third seasons season's advertising Business increased so rapidly 74 per cent over the second season that the advertising expense turned out out to to tobe be only per cent instead of per cent of the third seasons season's business He evidently thought that the business business business busi busi- ness was growing so fast that he didn't need to bother about advertising lie He I appropriated only 24 per cent of the previous seasons season's business and saved I the rest During the fourth season he lost so much 36 22 per cent of the third seasons season's seasons season's seasons season's sea sea- sons son's business that the advertising appropriation turned out to be per percent percent percent cent of the current season as again 24 per cen cent t of the last Having learned his lesson he went even farther than the 5 per cent usually usual usual- ly recommended and appropriated G. G per cent for advertising His business business- Increased to suCh an extent during the fifth season per percent percent I cent that his advertising appropriation turned out to be only 5 per cent of f I the current seasons season's sales after atter all This dealer learned that an attempt to save money by cutting down the adI ad advertising advertising ad- ad I percentage defeats Itself The business drops so fast when you do Insufficient Insufficient In In- sufficient promotion that the percentage percent percent- age of expense soars due to the de decreased decreased decreased de- de creased volume It Is possibly Impractical for a motorcar motor motor- car dealer to his determine advertising with the same degre of accuracy In Inthe Inthe Inthe the first place he Is selling a comparatively comparatively comparatively high priced specialty rather than a staple and his market probably probably probably ably never will be quite so responsive Our investigations have shown that thai appropriations run all the way from 1 per cent or less Jess up to 10 that and t with few exceptions th there re is little relation between one years year's appropriation and the next The information which we get from successful dealers indicates' indicates that by averaging their business over a period of five years ears It allows a margin from 3 to 5 per cent for promotion work Three per cent Is a safe working basis bass There are two ways a dealer a-dealer can ap ap- ap 2 P roach hi his advertising campaign n He i can come home from the ca cathe cal the salesmen together and say Now Nov boys I have promised the factory the that we can sell sixty cars in the no nex next thre months so get busy with you prospects We are going to run a biad bi big ad Sunday and 1 I want you to get som BornE names together because we are going goin to shoot out some letters Or like a general Directing a campaign campaign campaign cam cam- he can sit down at the first c o othe 01 the year and on the basis of 3 pe pel cent let us say of his estimated gios business he can map out an ing framework which will preservE and strengthen local good will toward towar his hie house and the product he represents seats and will definitely educate hi hl market in some of ot the merits of his product and the sallen salier advantages of his proposition There are various means at hand ham One is a series of ot newspaper a ads s. s 1 I II necessary they can be small but the must be consistent More he can approach his market list of twenty twenty the mail mall With a mailing ty prospects for every car on his and a monthly letter or circular hcan h hcan can put the law of averages on hi sales force The gross expense of promotion can be small and it can b be predetermined and it leaves a for more mOTe Intensive methods when occasion oc caslon casion requires Then when h he comes home from th the factory he can run his big ad Sunda and shoot out his letters and keep th the telephone busy and the demonstrate full of gas and his salesmen on thi th street and he has a foundation to wor worl on In the e spring and fall he can Gan taki talu advantage of seasonal opportunities b increasing the size of his n space and can Intersperse his monthly mailings with personal letters iron fron salesmen to selected lists And all th the while his framework his plugging away is there as a background back back- ground round and he will find the ground more fertile Not only that but h In will const constantly find some of the seed which he planted a few months previously pre previously ready for the harvest Both his hid newspaper and direct ad should be designed to start star where the national copy leaves off ott th thE whole Idea being to reduce to the lowes possible minimum the amount of ot information in formation which it is necessary for th thi salesmen to give their pros prospects before getting vetting down to brass tacks and and- th thE contract to contract to save time in the prospect prospects office to make the Important first tr trl successful Experience has also proved that lo to local 10 cal al advertising whatever its nature should preserve as nearly neally as possible the he ph physical characteristics of or the company's com corn pany's national advertising Unity o 01 physical appearance and find unity of message mes meso sage rage over a long period will give tm tn mind nind something to tie to People havE hav grown rown to trust the little HUle Dutch gir with a stick who so persistently chase dirt lirt The rho uniformity idea has been used to e excellent advantage by uY c cigar U I l stores Victor and Dodge Brothers I I A situation may be affected by slie- slie t cial conditions The dealer may represent rep- rep I resent a new car Or he may nave navell I J taken on a line which has had poor r ll representation and has a black eye eyes eye s j locally from a service standpoint In r i such a case he will have to make a aI I I I capital investment in local good will before he can even start to determine 1 i a definite margin Such con I make It difficult to lay down any hard I j and fast rules or to recommend any i percentage for general application I There are certain points however I II I I which are beyond doubt I I 1 Every business which is worthy 5 s I of ot the name has a sufficient margin j I to allow for the development of the thet t succeeding years year's business Three percent per percent percent I cent can b bl be taken safely as a starting startIng startIng start- start Ing Ing- figure f 1 I 2 2 Once established this margin r should be consistently adhered to e 3 This margin should provide e i 1 manly marily for a year-round year month month after after after- fertilization campaign to be sup sup- 11 by more Intensive e effort as ase 5 e j the occasion requires S 31 I Wo We believe that a g general S 31 i I tion of these basic rules would have havea havee e a steadying effect on the motor-car motor motorcars s I business and are sure that a specific I application of them to your own busIness business bus bus- iness less would round off ott the peaks and andI I the valleys and would make advertising advertising adver adver- I a more efficient and dependable e I factor In your sales program |