The following paragraphs about Patterson's attempts to motivate his employees are taken from The Sales Strategy of John H. Patterson, by Roy Johnson and Russell Lynch (Chicago, 1932), Pages 300-309. (The picture to the right is that of the first NCR sales training class.)
Enlisting The Interest Of The Salesman's Family
Old N. C. R. men like to tell the story about Mr. Patterson's cooking school. On one of his frequent trips to Europe he became impressed with the relation which a man's health had upon his success. He met a doctor in England who had some very decided ideas on diet and exercise as a stimulant to creative thinking. So when he came back to America, the first thing he did was to turn the welfare hail into a riding academy for his executives and open a cooking school for their wives. It was made mandatory that every executive's wife or mother, attend the school and learn how to cook according to the newly imported principles.
Of course, the story of the riding academy and the story about the cooking school have taken on a good many frills in the telling and retelling, and they have been set down as just another Patterson eccentricity. But back of the cooking -school idea there was as usual, a well grounded principle and a good deal of shrewd business thinking. Mr. Patterson knew that behind the success of every man, there is usually a woman. He knew the power for good or bad that a man s women folks had on his productive capacity. And he decided to harness that power for the furtherance of the National Cash Register Company.
The cooking school was far more than an attempt to teach the wives of N. C. R. executives those principles of diet which his new physical director advocated. It was intended to convince them that they were just as much members of the great N. C. R. family as their husbands; that they had definite responsibilities in life and that the measure of their husband's success depended quite as much on their efforts as his own. Mr. Patterson knew that if a man's home influences were right, if his wife became really interested in his success, he could get immeasurably greater returns from the large salaries that he was paying to his executive personnel. And while the men chafed a bit at having to get up at six o'clock to go horseback riding, and while the women fussed some about "The Old Man's" interference with the way they ordered their homes, the fact remains that just as soon as the women began to take a greater interest in making their husbands successful, their husbands became more successful and the company became more successful. The good results which followed the experiment with the cooking school at the factory, caused Mr. Patterson to cast about for some way to expand the idea. If he could increase the effectiveness of his executives by getting their wives to take more interest in their success, he could just as well increase the effectiveness of his sales agents and their salesmen by enlisting the interest of their wives. Thinking as he always did in terms of sales, it seemed to him that if he could hit upon some plan to bring each salesman's women folks' influence to bear on increased sales, that he could double, and even triple, the business that these men were sending in.
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Incentives for a Better Family Life
But how to do it, that was the question. Mr. Patterson realized, of course, that the salesman's family had a direct stake in his earnings. The more commissions the salesman earned, the more money there would be for the family to buy the things they wanted. If he could stimulate those wants; if he could go with his salesmen into their homes and suggest to them that they ought to have a new piano so Mary could take music lessons, or a better furnished living room so that Mary's big sister Jane, would have a more attractive place to entertain her boy friends, or a new dinner set so that the minister would get a better impression of the family's social standing,he knew he could cause the salesman's wife to want those things so much that she would make it her business to see that her good husband got out early in the morning, and stayed out until late at night.
But, of course, that wasn't feasible. Mr. Patterson did make it a point to visit as many salesmen as he could at their homes. He deliberately tried to make his salesmen dissatisfied with their lot in the world. He encouraged them to live better; to move in a higher social circle and to want new automobiles, better furnished homes and the other luxuries that go with success. But what he was looking for now was some means of increasing the salesman's family wants on a wholesale scale. Not doing it just once in awhile, but doing it continuously and systematically. Out of that thinking was born the prize incentive plan, now a part of every well balanced sales policy, but at that time used by only a few patent medicine companies and publishing houses in lieu of money. Mr. Patterson made a list of the things that he thought every salesman's wife would like to have. A new davenport for the living room, a fine silver table service, a projection machine for Johnny, an exercising machine for the whole family.
And to this list, for the salesman who was not married, he added items which men wanted, but were not likely to buy out of income-a wrist watch, a traveling bag, a swell lounging robe or perhaps a set of imported golf clubs. He had pictures made of these things, and he published them in a special issue of the N. C. R. News. He sent copies to every salesman in the organization. He sent another copy to the wife of every married salesman. And he told them to pick out whatever they wanted. He explained that these things were going to be given to the salesman, in addition to his commission, in return for special effort. Below each illustration was printed the number of "points" a salesman had to earn, to win that particular prize.
Mr. Patterson, as we have pointed out more than once in the course of this book, almost invariably worked towards specific objectives himself, and the objectives he placed before his salesmen were likewise specific with very few exceptions. In this case, the objective was 110 per cent of quota. The salesman who barely succeeded in "making" his quota for the period was entitled to nothing in way of extra rewards, but the extra effort for the extra 10 per cent would bring rewards that were lavish and even extravagant. Assuming the salesman started with a quota of one hundred points for the. three months' period, he would be entitled to one "credit" for each per cent of his quota that he turned in. All orders received in Dayton up to the first mail on April 1 would be counted in the contest, but no "credits" would be computed or issued until the orders totaled 110 per cent of the quota. Then the whole one hundred and ten "credits" would be issued at once, and any subsequent credits earned would be added. Thus if the salesman made only 108 per cent of his quota he would not qualify as a winner at all, while by making the extra two points he would have 110 credits exchangeable for the merchandise prizes listed in the company's annual catalog. There were no limitations on the way in which the salesman might dispose of his credits. He could "spend" them as he saw fit. Or he could let them accumulate by waiting until the next contest period arrived in the Fall, and work for one of the more impressive awards.
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Prizes and Performance
As usual when any new idea is proposed there were some salesmen who had different ideas. There are always a few of these men in every sales organization. Some wanted money instead of the prizes. They pointed out that they could buy their own prizes locally, or that they needed the money more than they needed a new chair or a new watch. Some of them felt, and they were honest in their belief, that if they had the money they could apply it toward the mortgage, or use it to pay the grocer bill. But Mr. Patterson knew human nature better than they did. And, he knew what he was doing. The plan of offering merchandise prizes became a fixed part of N. C. R. sales policy, and annually produces thousands of dollars worth of added volume for that company.
Later on the use of merchandise prizes developed to a point where a large catalog was necessary to make the complete display. A new catalog was issued-and for that matter is still issued-every year by the company. In it are shown as many as five hundred prizes. Every prize was carefully selected. Every prize was shrewdly calculated to whet the desire of the salesman. And it is interesting to note, that only merchandise of the highest quality was offered. No cheap or shoddy prizes ever went out to salesmen of the National Cash Register Company, a feature which some companies have overlooked in adopting the prize idea to their own business, with disastrous results. As evidence of the soundness of the plan you can visit the home of nearly any top salesman in the N. C. R. organization and his wife will proudly tell you that the chair you are sitting in was won by her husband in such and such a year for leading the local sales organization. There are hundreds of N. C. R. salesmen whose proudest possession is a gold watch presented to them by Mr. Patterson for some sales achievement. It is doubtful if money could buy many of the prizes which have been won by loyal N. C. R. salesmen. It is safe to say that if the prizes had been money, it would have been soon spent and forgotten. Mr. Patterson knew this. He knew the great value of putting something in the home of every man that would remain there for years to come as a monument to that man's ability. He knew that every time the salesman showed his prizes to a friend, that his confidence in his ability to sell cash registers would be raised one more notch, that his loyalty to the company would be increased one more degree and most important of all they continuously reminded the whole family that the company appreciated and rewarded extra effort.
It is not surprising then, that using such strategy, Mr. Patterson succeeded in building up unprecedented loyalty among his men. It is an open secret that when one of the N. C. R. sales executives left the company some years later to take over the management of a competing cash register business, that this executive adopted the fixed policy of not hiring any National Cash Register salesmen. Not that he had any scruples about hiring away Mr. Patterson's men, but simply because he soon learned that most Patterson men are so thoroughly saturated with loyalty to the National Cash Register Company, its founder and its products, that they are totally unable to generate sufficient enthusiasm for a competing product to successfully sell it.
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