ASTER 
 
 NE 
 
 NO. 
 
 IVE 
 68 
 
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Author: 
 
 rtnell corporation 
 
 Title- 
 
 ractical 
 
 nus 
 
 sfor 
 
 compensating salesmen. 
 
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 MASTER NEGATIVE # 
 
 COLUMBIA UNIVERSITY LIBRARIES 
 PRESERVATION DIVISION 
 
 BIBLIOGRAPHIC MICROFORM TARGET 
 
 ORIGINAL MATERIAL AS FILMED • EXISTING BIBLIOGRAPHIC RECORD 
 
 U *•* %^' \J 
 
 
 ■~nf. 
 
 Dcurbnell oorporatiorit Chicago, 
 
 ••• Praotioal bonus plans for compensating sales- 
 men with suggestions for applying to various lines 
 of business, compiled by J.C.Aspley. Chicago 
 
 15 1. 29| om. (Special report, no. 17) 
 
 Mimeographed. 
 
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 DARTNELL COHPORATION 
 
 PRACTICAL BONUS PU.NS FOB COMPENSATING SALESMEN 
 
 SPECIAL RKPOHT NO. 17 
 
-*if' 
 
 j»f~ 
 
 ^^Z5Z~ 
 
 LIBRARY 
 
 School of Business 
 
 
THE PURPOSE) OF THFS RRPORT 
 
 This is the fourth revised odition of a report issued 
 by us three years ago describing the testa used by 
 The American Tobacco Company in selecting aaleEraen. 
 la preparing this report, w<^ have included these 
 original teats, together with other teats used by 
 various sales managers. 
 
 It is not our thought in compiling this information 
 to lay down any series of tasts which can be bodily 
 adapted to your business. We do not believe that the 
 science of sales management has as yet progressed to a 
 point where salesmen can ba selected mechanically. To 
 pick men who will make good, is still largely a matter 
 of bkill on the part of those making the choice. 
 
 But we do believe that it will materially assist a 
 sales manager to pick a better class of salesmen by 
 having access to tho best mathods of sales managers 
 in every line of business, and it is to that end that 
 we have issued this report in its revised form. Even 
 if the information herein contained only serves to 
 give you one idea that you can apply in picking men, 
 we believe it will be worth its cost several times 
 over to you. 
 
 t t s 
 
 With this report we also include several forms for use 
 in selecting and qualifying salePinen. In the case of 
 the salesman's application blank, we are prepared to 
 supply you with a quantity of these blanks. The price 
 is $6.00 a hundred, plus $1.00 additional if you wish 
 them imprinted with your firm name at the top. 
 
, /^^^^^DlV^ 
 
 i. 
 
 SPECIAL REPORT NO. 17 
 
 PR ACTIO ;^L BONUS PLANS FOR COMPENSATING SALESMEN 
 
 WITH SUGGESTIONS FOR APPLYING TO 
 
 VARIOUS LINES OF BUSINESS 
 
 LIBRARY 
 SCHOOL OF BUSINESS 
 
 Compiled by 
 J. C. ASPLEY - CHICAGO 
 
1 I 
 
 Jv-^ 
 
 T" 
 
 
\^ 
 
 « 
 
 1-^ 
 
 PURPOSE OF THIS REPORT 
 
 This report is a fourth edition of a brief report first issued 
 in 1916 dascribing the Beechnut Packing Company's new plan of com- 
 pensating salesmen on a "Task and Bonus" basis. We have, however, 
 added two other new plans of similar character, and made certain 
 additions to the original report which we trust will materially add 
 to its suggestiveness. 
 
 Seme idea of the growing tendency of sales executives to favor 
 bonus plans, with a task feature, is obtained when we say that the 
 entire 2000 copies of the first edition of this report ware complete- 
 ly absorbed within a few months after being issued. Wa personally 
 know of 49 firms who have adopted the plan with changes to suit their 
 particular requirements. 
 
 In this connection "Advertising and Selling Magazine" points out 
 in a recent editorials "Th6re_arja i)j^„ AS_tual coun t only 420 concerns 
 in the United States wh o have anything like a moderA pl^ir-of u^lng 
 either a prize or a bonus. Siiil fewSf havs aRy'"s ales manuals, or 
 eve^rTn*"fact contrbTTn any detailed way their salesmen. 
 
 "Th ere are probably not more than inno nnr^c^.arnR in tb g Uaited 
 
 Stateslfho use anything 15ut tne'omSTre' and fire method of handling 
 salesmen, or have anything lik e "modern plan of paying their sale^ 
 
 me>i. In fact the great majority of manufactuxers are still letting 
 "■"fEeir salesmen sell their personality or else plain merchandise with- 
 out a fleck of service." 
 
 An intimate knowledge of conditions leads us to believe that 
 these figures are somewhat understated, but it is quite true that 
 ccmparatively few concerns are alive to their opportunities for 
 increasing the productiveness of the sales force through the use of 
 scientific bonus plans. But the movement is spreading rapidly, and 
 the next few years is sure to see some great strides made toward 
 more efficient sales management. 
 
 As the basis of all scientifi c sale s management must rest on / 
 a flexible method of co mpensating salesmen > s o that sales energy may 
 b'e*"directed to bSSt advantage, we feel that the subject covered in 
 this report if not of immediate interest to our subscriber?, is one 
 about which they wish to be fully informed. Wa tried to make this 
 report as brief as possible, setting down all the vital facts with- 
 out an over-use of words. 
 
RinriEW OF TYPES OF BONUS PLANS IN USE 
 
 In gathering the material for this fourth edition of our report on Bonus 
 Plans for Compensating Salesmen, it was decided to make some inquiry among 
 the 2,000 subscribers to The Dartnell Sales Service to determine; (l) the vari- 
 ety of bonus plans in use; (2) the salient features of each plan and its 
 adaptability to specific lines of business and (3) to single out those plans 
 which experience seemed to indicate most nearly met the requirements of 
 actual usage* 
 
 Out of a total of 250 questionnaires sent out, 153 replies were received. 
 Of these, 77 or over 50^ reported as using some sort of a profit sharing 
 
 plan. There seemed to be a general disposition evident in all the letters 
 received that in order to solve the problem of a satisfactory plan for com- 
 pensating salesmen it is necessary to "_3plit" something with the men - not a 
 
 year afterwards as provided by the straight salary plan, n ot on th e basis of 
 mere volume whlcii tends to direct the salesman's efforts along undesirable 
 lines - but to "split" it as the salesman earns it, giving him an inducement 
 to work along lines that will build for the future. 
 
 A brief review of how this condition is being met through the bonus 
 methods of subscribers replyi):'g to our questionnaire may prove interesting 
 as well as suggestive: 
 
 THE SLIDING COMMISSION PLAN: Particularly suitable to a business mar- 
 keting a "one tim$" soecialty, such as an automobile, office appliance, bonds 
 or the like. A series of g oals is laid out f or each man, according to terri- 
 tory, ability and season, and as e^ch goal is reached he automatically in- 
 
 i( 
 
 \o' 
 
 (2) 
 
 creases his ccmmissions on his total business. For example, if a salesman 
 
--4»- 
 
 sells $5,000 worth he gets 8ay 20% ^n his months busi ness, but if he w^rks 
 extra hard and is able to close the month with sales of |6,000 he automatically 
 advances his commission to 22/J, and so forth. In using this plan it is well 
 
 to guard against cancellations by requiring a small cash payment with order. 
 BONOS ON HARD SELLING PRODUCTS: A wid.3 variety of concerns in many lines of 
 business selling a number of products find this plan especially practical. 
 Sometimes the bonusis^aid by grouping the products arid^paying^an inc reased 
 commission on different groups. For instance, in the dry goods field an ex tra 
 1% commis sion is quite com ^y paid on notions, ribbons, and ready-to-wear 
 
 goods. In the same way concernssoi: 
 
 both bulk and packaged products 
 
 often offer a special bonus on packaged goods sales, as this busines^^has 
 
 greater repeati ng quali ties. 
 
 SALARY , ElIEIliI^£.MP COMMISSION PLAN: The operation of this plan necessitates 
 
 running an acagiiat with each salesman charging him with his salary and travel- 
 ing expenses. Credit his account with his percentage of sales , figured in 
 cash collections. Whenever the credit exceeds his ^larj^and expenses h e is 
 
 - - I T | - | - III II I I '"" •" ' " "" '" ■■'- ■■■■ I 'l""' " 
 
 entitled to a profit-sharing check. These checks are generally issued month- 
 
 ly. The item "percentage of 
 
 ," referred to above is an arbitrary percent- 
 
 age determined by the management, and represents the profit aiter oyerhead and 
 
 ^— >^»»«»— 1 1 ■ '" " 
 
 similar items have been deducted. In addition to this bonus on net profit, 
 
 this^^lan also pays a ccmmissicn acaording to sales to certain classes of.. 
 
 trade -- there being one commission for large dis tribu tor Sj,^another for small^ 
 
 1 11 ■■ » ■»« 
 
 distributors, another for brokers, etc. This plan has been used by the Hood 
 Tire Company with very good results. 
 
 BONUS ON NET PROFITS: This plan calls for d ividing_^_ter^^ ^ 
 
 classes, (l) city; (2) suburban J (3) co untry . Each month salesmen in the 
 
■■ a Q«i « 
 
 * 
 
 Strictly city seo tions are credited^ with 25^ of their gross profits, au burbaa 
 salesmenwiiiLSOfoj suburban and some counitry trad© 355^1 and provincial sales- 
 men with 40^. These percentages take caro of increased expense of working 
 provincial territory. Salesmen are pai d a liv ing salary, withthe privilege 
 of drawing against their credit in case of emergency. Bonus i s paid at the 
 end of year. Urider this plan salesmen are not required to keep expense 
 accounts, as that item is averaged up and included in percentage of profits 
 salesman is to receive as bonus. This plan is used by E. P. Sanderson & Co.. 
 of Boston. Gross profits are figured c m thecost of the goods delivered to 
 the warehouse, regulated by current market prices--without regard to actual 
 
 cos 
 
 t. Tiie salesmen in this way get no benefit of speculative contracts or 
 
 gain from appreciation, and losing nothing through decline of market values 
 All allowances, cash discounts or deductions of any kin d are dedu cted from 
 the gross profits. 
 
 _JXGlSfij 
 
 based on hi„9 salary. If h^ exc eeds hi 3 task, he gets^aJionus. This plan was 
 used effectively by Arb uckle Brother s when they put Yuban Coffee on the NdW 
 York market. The Arbuckle contract provided a sa lary of from $20 to |25 a _ 
 week, and a bonus of one to two cents a po und (according to whether the goods 
 were bulk or package) on mont hly delivered sales in excess of a given number 
 of psaia43* ^i 0' lost accjounts were cliiarged back against salesman's bonus. 
 The additional earnings of the salesmen under this plan ranged from $5 to $75 
 a month, and averaged between $40 and $50 a month. The average cost per 
 salesman for this campaign was about $32 a week. ^^ 
 
 The three bonus plans detailed in the following pages can be adapted to >> 
 nearly every business employing salesmen. ^ 
 
 
-«6" 
 
 A PROFIT-SHARING PLA^f WHICH ENABLES SALES?iEN 
 
 TO FIX THEIR OWN COMPENSATION. 
 
 / 
 
 The plan herein outlined has been developed 
 and is now successfully used by Clawson and 
 Wilson Company, a large Buffalo wholesale 
 dry goods house. The data Is presented 
 through the courtesy of J. W. Wilson, vice- 
 president and general manager. 
 
 ADVANTAGES OF PLAN OVER OLD METHODS --- Sales executives have generally ccmQ to / 
 realize that the old salary and ccmmisaion methods of compensating salesmen are 
 rapldlj beccming inadequate for the ne?5ds of modern business development. These 
 
 m 
 
 athcds did all right when goods were bought, but this condition is passing. 
 
 Today goods are, or ought to be, sold. S o it is essential that sales mana gers 
 give gfi ririia tViQy^t^t to compensat ion methods which will reward salesmen auto- j^ 
 matically on the basis of their value ^:o the house as busi ness builders and not 
 order writer^. The disti nction i s important. 
 
 Of the many angles that have been developed to meet the new conditions few 
 equal, from an angle of practicability and simplicity, that worked out and used 
 by Clawson & Wilson Company of Buffalo, N. Y. This concern has tried both the 
 salary and commission plans. It found the salary plan undesirable because it 
 
 . ^^-^ 
 
 thev did. Too often the men were rewarded on the basis of what the house thought ^^L.^^^ 
 
 -^-^ ' , (t^c::^ 
 
 th ey did . Again, a salesman who su^iceeded in increasing his sales materially by ^ 
 dint of hard work, was sometimes compelled to wait for several months before he 
 1^8 r ewarded for that extra effort, by an adequate raise in salary. — Hii^ the 
 
 y 
 
 company felt was not fair to the salesm en, who ought to really share the pro_ fit ^ 
 on ea.^h salo at t he time it is made» and not be required to wait . 
 
 Some of these major objections to the salary plan were overcome in the 
 
c ommlsaio n plan, but this too, was imsa tisfaoto ry because it encouraged men to / 
 push the articles which they sold easieist. To encourage the salesman to direct 
 selling energy along lines that would be to the house's best interest s -- and by U*-^ 
 the same reasoni ng to the salesman's own best interests, the management decided ' ^^^ 
 on a plan of compeuaation that enabled salesmen to automatically regulate their 
 own ealaries and finp.nnrage^th em to keep expenses down to.^J ^_very lowest point 
 
 coiisi stent with results. 
 
 DETERMINING SALESMAN'S PROFIT: The plan in a nutshell is t o group all the ^ 
 
 products sold according to the margin of pro^ijb they offer the house. The 
 salesman is told just what thejprofj-t is in each item. Wnea his orders come in, 
 the accounting department credits his account with the profit on that sale. At 
 the end of the period the profit on all sales is totaled up. Can cellations , 
 retur ned good s on former orders and expans es deducted , and th e^ salasnian is paid 
 a predetermined portion, ol,this net profits 
 
 What this portion should be^depflndawi. several factors. O ne important _ 
 factor is the nearness of the territory to the home office\ The company finds 
 
 way* i^aiiiMMi£Mi«ii»M.i>L--|fc »t>.i.iii — ynwiW^WM— — ^^^ - 
 
 it easier for the salesmen to sell near Buffalo, than in the middle western 
 states. So the sa lesman working nearer the home office gets a smaller portion 
 of the profit on his work than a salesman working say, upper Michigan. Other 
 te rritorie s are those sometimes spoken of as in the " nur a i^I_c p nd i t io n" . On 
 these territ ories the company is willing to take a temporary los s, knowing that 
 eventually a good business will be built up under strong, constructive salesman- 
 ship. So th e salesman workin g this sort. oiLA-larr it ory, quite often get s a 
 premium from the comp any sis^ well as wha tever profit b e i,s able to make. — Aj^n 
 some salesmen are better business builders than others. While their immediate 
 sales may not be as large, they take pains to make better customers as they go. 
 This is work which the company will^^sh^ on for years to come. The company 
 
•• — O " *■ 
 
 can well afford to allow that WinH nf a ist* i*»c»|Tf>!^n n, fnr greater share of the 
 profits on his work, than a salof^man who travf^M ovBr the territory skimminyj 
 the cream from it, and leavina: «--»v,'^r > rr„ ^^ foV=, r^i-e of itself. 
 THE PLAN IN OPERATIONi As stafp^, the pl«*> svgge^ hei here is not in any sense 
 experimental, an d can be adopted by pny buslno^s where it is desired to en- 
 courage salesmen to pui>h more prnfitabJ" i?r-c,^ m^intfti n prices and keep d own , "^ 
 
 expense accounts. This plan lets the m** -^ sh are profit s j.uring a per iod of 
 
 prosperity , and shoulders them '^^ ^>^ ^-rnp ^.f fh^ }n<^^ \n n j^eriod of depression. 
 
 A year like. 1919, for ^nsten^^**, ^«^ an unusually good one for moat con- 
 
 > 
 
 cerns. Salesmen wrote a lot of business and profits were high. This year, in 
 justice to the salesman, they win ^^ave ^^ h^ ^\v^r^ « rp^^«rd for good work last 
 
 year 
 
 . Salaries will have to be increase's, or 1f the profit has grown materi- 
 
 ally in the case of a cnmmiBsion line, the salesman's commission 8h)uld be in- 
 creased. Most concerns are doing thin. Ynt u any^^^^-- -- - ^n happen that 
 this year should bo a poor one, many of thene concerns w.iuld have to carry 
 this added burden of increased s^^l^ng pxpense -- and worpe yet, they might 
 have to carry it even longer, unless the rial'isinen would tBke a cut, 8^meUil.i g 
 no business man likes to consider. 
 
 A still furliifir advantage of this profit sharing feature is that i t tenda i^ 
 to attract better salesmen. CJawacn & Wilson have men who m-^ko as high as 
 
 $10,000 a year under this plan, who would have to be c('nteut with a $5,000 sal- 
 ary w«re they working for a concern using the old ?«ilary plan. But a man who 
 can make big profits for himself is to be welcomed, because the success of the 
 company depends largely on what he gets out of his territory. P utting on a 
 salesman who can get twice as much business out of a territoryii^meaQa jore than 
 double profits from that territory for the company, because it costs no more to 
 travel a good salesman than it does a poor one. 
 
--9-- 
 
 TASK AND BONUS PLA ;I OF COMPENSAT: 
 SALESMEN ON POINT BASIS 
 
 Taia plan was originally used by the Beechnut 
 PackiivgCajSBan^ but haa since been adopted by a 
 number of concerns in varying lines of business* 
 T* t1 r a rti^^'"lar] . Y suited to a business wher e 
 salesmen ere to be rewarded for performing ta s k 
 not of a direct sales nature. 
 
 s 
 
 ADVANTAGE OF POINT METHOD OF COMPENSATING SALESMEN: A survey of several lines 
 of business show that in practically every field, sales tasks are unequal. 
 There are some products wh ich are easier to sell than ot hers; some classes of _ 
 trade that ar e more desir able to the firm; .nme^siness which is not desirable 
 at all. Yet i t is customary to compensate Bal68men _o«^aj8ro33_ basis --_elther 
 a commisBion on net sales or. a salary tftsg-i oft ft" ^"'^"^^ showing. 
 
 It ia an o pen question whether such a basis of compensation is fair to the 
 house or fair to the salesman. Why should a salesman taking the line nf leas 
 resistanos. selling products that offer a small margin of profit or that are 
 widely advertised, get the same reward as another salesman who is selling more 
 profitable bills and who is building up a more stable business within his terr: 
 tory for the house? In an effort to correct this weakness of present method3__e. 
 compensating salesmen the Baechdut Packing Company recently experimented on t^ 
 of its selling divisions what is called a "Taek & Bonus System" for salesmen. 
 
 ;ha main object of this method ia to develop Ahe 
 
 -rfiBINCIPLS OF THS POINT SYST 
 
 salesmen nlnnpi-fl^ p>.nf^tBhiB linss t a themselves and to the Company. For those 
 things which the company wants done, a reward is offered in the form of points. 
 Contrawise, a penalty is fixed for a salesman who does the things the company 
 
 does not want dafiBV''At_the_isd of the year the number of poini3_are tojtaled U£_ 
 
 and a bonus'^ihid the salesman acccrdirg to his record. As a matter of fact it 
 
-..10-- 
 
 is not in reality a bonus as the money represents what would ordinarily be paid 
 a salesman anyway. T he only difference is that wha t he is paid he earns-^^and he 
 earns it in such a way that he knows he earns it. Thas the feel-tnp ; ^Qr ^ipiQ^ aynnnf 
 
 '~"^ '■■ '■■M 
 
 salesmen that they are not being paid all they are entitled to is elimlpfttfld^ 
 
 D STERMINIKQ _THS _BASIS O F REWARDj) The irethod used by the Beechnut Packing Com- 
 pany to determine what number of points to allow on different products, and for 
 different work is to use as a common denominator the work of least resistance. 
 
 " *OljK:-^K^«.i«Mawi^r«^Mn^M«^ 
 
 raB9«*Wr^«<"l**«*«l 
 
 " H I g m i F W B^ — a i iw-w" 
 
 For example Beechn ut Bacon is th e easiest product^o sell. So a dollar sale of 
 Beech nut B acon is fixed at one point and upon that standard al l other values are 
 
 ^ ~ . /^ 
 
 determlned ^ccording to the added difficulty in selli ng. This can easily be de- vT. 
 termined by consulting the sales records. For example the sales record might 'x \ | 
 shew that Beechnut Catsup was three times as hard to sell as the bacon, so a -^j^^ir V 
 s alesman would b e entitled to a credit of Jbhree points for every dollar's worth \ui^ 
 
 ' ~~ Ar/ 
 
 of catsup sold, *' 
 
 The reward for other sales factors is fixed in the same way, handicapping 
 
 the easy things and rewarding the difficult. For example, this company is very 
 
 a nxiou_s _J^ receive reports from their salesmen as to the advertising being used 
 by dealers. Und^r__th e^ old method of coi MpenBation the salesmen would not take 
 the tim e to send in these repor ts -- thsre was nothing in it for them. Now a 
 salesman ge ts one point c redit for each report sent in and he overlooks no 
 chance to run up his points. Similarly h a^ geta pointfl for every call made,_ 
 which gives an incentive to make more calls per day -- a good thiog as every 
 sales manager knows. 
 
 V 
 
 4" 
 
 POINTS MY BE CHANGED FROSd MONTH TO MONTH i Whe_n a seasonable product is being 
 sold it will be found advisable to chanije the points from month to month. Seme 
 products will sell easier in winter than in summer. This extra reward tends to 
 
 ^ 
 
 balance up the output on products which would otherwise fluctuate considerably. 
 
—11— 
 
 In this connection it might ba interesting to kaow how some of the concerns 
 operating on a fluctuating quota basis adjust their monthly business with the 
 seasons. Take for example the plan followed by the Burroughs Adding Machine 
 Company as described by F.M. Dodge, of that company, at the World's Salesmanship 
 Congress, "Agency quotas", explained Mr. Dodge, "are not divided into twelve 
 equal parts, for experience has proven in our case that more business can be se- 
 cured with an equal amount of effort in December than could be in January." 
 
 "The proportion of our years quota assigned to each month are as follows^: 
 January 8%, February 7^, March 8^, Apri l 8^, M:xy 8^y Ju ne IC ^ y July ij , August 
 1%, S eptember 8l. October g^NQvember 9^, December 12^^^" These figures of 
 course apply only to such a business as that of the Burroughs Company, but the 
 significance of the method of determining the sales expected is that it is based 
 on the ease of getting business rather than en book shewing. For instance a lot 
 of salesmen will not show an increase i:i December over the other months, for the 
 reason that most salesmen set a mental quota of their own on what ought to con- 
 stituie a "good" months business, and when they have attained that figure they 
 lay down on the job. 
 
 WORKING OUT THE BONUS: In rating salesmen for bonus the task is set at thg^ 
 m inimum salary so that a salesman receiving |2 Q a wee k^ would require a mark of 
 5000 points per week. With this for a basis it is simple to figure out the bonus 
 to be paid the others -- the thirty dollar a week man would have his task set at 
 
 750 Q points a week and so on, . He would have to make these points before he would 
 receive a bonu?, and the bonus would be paid on all points he made over his set 
 
 tafik, i?7-^^t the bonus to be paid ^iflQunts to is determined by the net r 
 
 in 
 
 the bu<=5ln9ss. It should be made enough, however, to look very tangible to a ' 
 S8.1esman and should be paid to him annually, rather than monthly as in that way 
 it becomes' a- sort of bank account which is human nature to desire to add to. ' / 
 
— 12— 
 
 KEEPING THE RECORDS: It is bent to lefjufi thA V^^ping r.f t^t? r^^nnt^Ha to the 
 
 salesman. This avoid s conflict a nd rImq saves clerk hire. As a moral check, 
 however, it is well to have the records inspected cne day a aonth or twelve 
 times a year. The salesman does not kaow whether cr not his records are 
 
 che cked once a we ek or once a month, and as the inspection will bring to light 
 any dishonesty on t he aalesmau'a part it is safe to trust them entirely. A 
 c heck of 3,000 salesmen operating on this plan showed that less than ten men 
 were_di4ihone8t., In order to simplify the work as much aa poaaible, so as to 
 require but little of the saltsman's time some sort of a aheet should be pro- 
 vided which he can fill out each day. 
 
 WORKING OUT SYSTEM FOR SPECIFIC BUSIxNESS: The above will give a general in- 
 sigh% into the possibilititrH of the system as it might be applied to almost 
 any business. Just what work should be rewarde d or penalized, howaver. mu st ba 
 dfttftrminft.i hy t.hft nftt^r'*" Qf '^he buHJriH^^a t,i «hir^h the Fyetem will be applied, 
 A& a suggeatioa a .iipeciEnen system suitable f^>r a. light maft^faoiuring bufiineaa 
 is herewith offered. Frcm this specimen it should be easy fcr any concern in 
 any line of business to work out an adequate system of their own. 
 
 NOTE - In connection with thli plan we have been frequently 
 asked how salesmefj's expenses are taken into coniiideration. 
 Tne reason that no provision has been made for saiesmeii's 
 operating costs in table of points shown here, is tnat wg 
 D0ssi^bie__ijb is beat to t {^ »n arbitrary expense ai: 
 over wnich a tral esman cannot rq , Tnin allowance will vary 
 from $2.50 to |5'.00 a day (sXiriusive of mileage) accord- 
 ing to size of town, and its location. 
 
POINT AND BONUS SYSTEJ.I SUITABLE FOR A CONCfi!RN SELLING A LINE OF STAPLES TO 
 
 SMALL DEALERS OR AGENTS. 
 
 Credit for Selling Desirable Products 
 
 Basis of Reward One Point per Dollar Sale 
 
 (a) Easy Selling Advertised Product 
 
 (b) Products Offering Double Not Profit 
 
 (c) Products Offering Triple Net Profit 
 
 (d) Products Especially Hard to Sell 
 
 (a) Praduotft That Have Very High R^^peat Qualitie3 
 (f) Products That Are Being Closed Oat 
 
 Credit for Securing Particularly D«^irab1e B i'^in*»S8 
 
 (a) New Customer who discounts bills 
 
 (b) New Customer who pay?^ within 30 days 
 
 (c) NbW Customer who takes 60 days or over 
 
 /^Half-Credit when Order if? received by Mail 
 
 Viiae Quarter Credit when order is closed by Office, 
 
 Points 
 
 Points 
 
 Credit 
 
 Dnbtt 
 
 1 
 
 
 2 
 
 
 3 
 
 
 2 
 
 
 2 
 
 
 2 
 
 
 200 
 150 
 100 
 
 i «» ^ •» 
 
 Penalty for Loss of Customer "Six M.jnths without Baying 
 
 L 
 
 V 
 
 Credit for Co-ODeratlr? with Cre-I't D~'--.t f.m^nt 
 
 (ft) Information which Re^^ulta in Saving Account 
 
 (b) Local Irvestigation of N^^w Account 
 
 (c) Valuable Information Regarding Old Account 
 
 Penalty for Bad Debt through Failure to Report 
 Penalty for Bad Debt not Due to Salesman 
 
 CredH f^r C'^-ODeratine with Advprti Bit a; p^tiart ment 
 
 (a) Report on Dealer Advertising Activities 
 
 (b) Getting Dealer to use Store Advertising Matter 
 
 (c) Getting Dealer to use Dealer Electrotypes 
 
 (d) Securing toiling List from Detaler 
 
 C'^edit ir^r Co-operflti>^^ with Sale^ Dep^rtmenJ; 
 
 (a) For every report turned in 
 
 (b) For Calls made without sales 
 
 (c) Information of interest to other departments 
 
 Penalties and Rewards for Qual ity of Sfile' mnnf^hi p 
 
 (a) Misrepresenting facts 
 
 (b) Complaints from Customers 
 
 (c) Gaods Returned "In addition to credit" 
 
 (d) Falling off in Sales Over .la&t year. 
 
 100 
 60 
 50 
 
 2 
 
 10 
 10 
 10 
 
 1 
 
 2 
 1 
 
 153 
 
 100 
 50 
 
 1000 
 600 
 100 
 100 
 
—14-- 
 
 RATING PLAN WUH BONUS 10 DOTRLOP BAT.F.SMFN 
 
 AND INCR1«1ASF, RFFIGIF-NCY 
 
 This plan w-in used by a l^rgirjaMl^aaloJblli'Be 
 in an effort to providB f^n inc qntive for their 
 
 salOBme n to bQcomo bQi^teii,hiiaJUl§lg_P '^^ ^ "' "^' " « 
 In this case the bnnuEi i3 paid on the man^5 all- 
 around efficiency^ rather than on hi 3 abili^.j 
 to secure iinuiediate buBiness. 
 
 BASIS OF PLAN: The keynote of this method of paying r-alesmen bonuses over and 
 above their regular coifflDission or sa:iary, is that a salesman may be a big busi- 
 
 nes3 producer, yet if he could only correct certai n glaring 
 
 -^ -. — r- a 
 
 he would 
 
 X 
 
 be a far more valuable man to the bouse. For example, every sales manager knows 
 
 the salesman who is indifferent regarding hia correspondence, or w ho is carele ss 
 in mak ing out o_r ders, or ta ctless in handling complaints,^-. . Under the straight 
 salary or commission plan the aalesman feels that if he is able to sell a cer- 
 tain amount of goods, he is entitled to certain earnings. He seldom takes his' 
 personal shortcomings into consideration. There is no inducement, save an 
 appeal to reason, which the sales manager can hold out to get him to correct 
 these weaknesses. 
 
 This sy stem of paying bonuses provides thi s incentive, and places at the 
 sales manager *s command a valuable means of develcping salesmen. It literally / 
 pays the salesman for making a better and more efficient salesman out of him- 
 self. It also serves to bind him closer to the sales manager, inasmuch as 
 the system of grading is left entirely in the sales manager's hands. 
 RATING SALESMEN FOR BONUS: The sales manager marks each Lialesman at the end of 
 
 every month according to the quality of his work for that month. T he a ctual 
 features Q.t_a man's work on which he is to be graded, depends entire ly up on the 
 buiiijoess. Bat the following grading^ are used by a wholesale house which wants 
 
—15— 
 
 to develop salesmen who will iricreaso t>al83 by making better dealers* 
 
 I ntegrity (indicated by letters of complaint) 
 Aggressiveness (shoivn by new accounts opened, etc,) 
 Ijlduatry ("shown by number of calls made, etc.) 
 Ec onomy (indicated by expense account) 
 "Salesmanship (determined by large profit sales). 
 
 At frequent periods each salesman is rated or graded by the sales manager 
 
 on each of these points for past work. Thus a salesman may be graded; Integrity 
 
 80, Aggressiveness 90, Industry 60, Eaonnruy 75. Salesmanship 100. A veraging up 
 
 tb eae gra dings, he would show a general efficiency reco rd for that period of 81. 
 
 HOW BONUS ISPAID> This grading would be published in a Bales bullet in, and 
 
 all the salesmen would be listed in the bulletin, with the one havios the hlgh- 
 
 t avtra^xaiiai^mJiiie top. The moral effect of th is publicity is impor tant. 
 But more important to the Ra-lf^^man is the bonus itself. 
 
 The _b nu 3_lj_UxfijdUb#. tto-^managamauU fta4 &gm^Q'lJJ.Jl ^^^^^°°^^®^ ^^ ^^t 
 
 mon th's busines s. The percentage of this total bonus allowed the sales force 
 which each man will receive depends on his average efficiency grading, A salesman 
 w ho av^rage3 jL00l^txb.tLXetji_set amount, say $50 for the raonth ^^^er^nd^ajbo^^ lus 
 salary. If he mishandled a customer, and the customer wrote in and complained, 
 he would be marked down by his sales manager, and his average efficiency grading 
 wuuld be much lower - say 75%. In that case, the of|endiDg saie^^man would pay a 
 penalty for his shortcomings, and would have to be satisfied with a $35 bonus. 
 
 This_4aan_i3_very flexible, and can be worked out with a little thought to 
 Rult an y bu siness. I t is well, however, to k oep the rec ■ 
 
 the cover of letter-sizod filing folde^r^, so that all co rrespondence and mem os 
 
 ' ' * II — ■ — ' 
 made from time to t ime can be kept together in side the folder until the end of 
 
 the month. Thig plan provides aminunitioa to use in explaining to a sale sman 
 
 just why he cannot get 100^ of l^i^_^ojl»^3 that^^month. 
 
 nch salesman on 
 
•^ » tt t lamStatite ^A-Jii v mM^f rtv 
 
 jST 
 
 
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 m 
 
 
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 — - ir— ■ — 
 
 ■« 
 
 J 
 
 ■■'fl 
 
 J^ 
 
 
 VALUABLE both for the data it contains, and as a place 
 for systematically keeping information and statistical 
 data of your own. Letter sized. Divided into twelve 
 sections by leather tabbed indexes. Each index tab is lettered 
 in gold: "Market Data" "Book and Articles" "Mailing Lists" 
 "Stimulating Salesmen", etc. Under each classification are 
 filed numerous loose-leaf p&iies summarizing sales plans and 
 ideas, statistical data and other vital information needed in the 
 management of a modern sales department. 
 
 L 
 
 Over 10,000 of These Desk Books Now in 
 
 Use by Sales Managers 
 
 No well-equipped sales department cm afford to be without it. It will repay its 
 cost many times every month. It summarizes in a few hundred boiled down letters 
 the picked sales plans of America's most successful sales executives. Invaluable for 
 working out sales campaigns, re-organizing the sales force, for house organs and sales 
 bulletin material, assigning sales quotas, etc. Every plan fully described with all 
 working information. 
 
 Some of the Information the New Dartnell Desk Book Contains: 
 
 Plans for Speeding Sales: Graphs that show 
 salesmen business they are missing; Ratz plan for rout- 
 ing salesmen; plan for developing all around efficiency; 
 checking methods to show territory conditions, etc., 
 etc. 
 
 References for Sales Executives: List of 
 articles that have appeared in Sales Management 
 Magazine, Printers' Ink, Advertising & Selling, The 
 Mail Bag, and other publications of value to a sales 
 executive. Lists of books relating to sales manage- 
 ment and selling. How to arrange this data. 
 
 Vital Sales Statistics : Statistics for reassigning 
 quotas; analysis of auto registrations by states; chart 
 analysis of retail sellmg data; charts showing when 
 farmers buy; market data for developing the small 
 town market; automobile expense data; etc. 
 
 Model Forms for Sales Uses: Application 
 blanks for salesmen; Report forms; Territory ancJysis 
 records; form of nottfs used in giving salesmen stock; 
 salesmen's employment records; salesmen's contract 
 and dealer agreement forms; etc., etc. 
 
 Price, complete with black leatheirette ring binder, set of leather tabs, 
 extra note sheets, and two hundi-ed pages of reference data^$7.50 
 
 Sent on Approval, Subject to Return, if Not Satisfactory 
 
 The Dartnell Corporation 
 
 Publishers of Books and Reports for Sales Managers and Salesmen 
 
 1805 Leland Avenue, Ra\enswood Station, CHICAGO 
 
Date Du( 
 
( 
 
 De56 
 
 Dartnell Corp. 
 
 Special repott #17 ♦ 
 
 B'H«^^ 
 
 V -' 
 
 COLUMBIA UNIVERSITY 
 
 003205 
 
 565 
 
 l^^\\ ^\^oo 
 
 MAY 131994 
 
 MAY 1 1 1927 
 
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