Good public relations conducive to larger profits

In this era of social consciousness, as noted in preceding pages, a business is expected to be operated on a high plane of ethics, with every regard for the needs, desires, and feelings of the people with whom it deals. In other words, a business is expected to operate in the public interest. To carry the argument still further, a business, no less than an individual, is expected to respect and observe the dictates of good manners and good taste.

Such an objective, however, may not be understood by the stockholders of a corporation. Since a corporation is owned by its stockholders, they naturally feel that they are entitled to receive dividends at regular intervals. Consequently, they may take an unhappy view of a management which seems to lay so much stress on operating in the public interest that it is neglectful of one of the cardinal functions of a corporation, namely, that of earning a profit.

As a matter of fact, it is conceivable that public interest and good manners and good taste might be interpreted as meaning that a business should be given away-presented outright to some deserving university or philanthropic foundation, or surrendered, lock, stock, barrel, and cash surplus, into the public domain.

The truth of the matter is, however, that sound public-relations practice, besides establishing and maintaining a corporation's status as a "good citizen" and as an institution well worthy of public esteem is sooner or later reflected on the asset side of the corporation's balance sheet. Some of the effects of good public relations in making for larger profits are directly and easily discernible. Other effects, less tangible, become apparent only over a longer trend. The aggregate benefit, however, as many a corporation has found, is well worth while-well worth the investment in money and in energy that a sound public-relations program entails.

A sound public-relations program accelerates sales

If we accept the concept that the public-relations functions encompass and direct the functions of paid advertising-and this concept seems sound and logical-then the favorable influence of public relations upon the sales of products and services becomes so obvious that it needs no detailed spelling-out here. Among advertising practitioners, it is an axiom that no product can succeed with advertising that, without advertising, would fail. Not even high-pressure ballyhoo will fool enough of the people all of the time. Conversely, in today's competitive market place, no product, however worthy, which hides its light under a bushel, can long survive.

Beyond the range and reach of paid-for advertising, however, a sound public-relations program facilitates the work of a producer's salesmen by "conditioning" the public mind to accept the product and its producer. 3. The case of E. R. Squibb & Son. Through the medium of paid-for advertising and by means of point-of-purchase promotional material, the firm of E. R. Squibb & Son has virtually staked out as its own the principle that "the priceless ingredient of every product in the marketplace is the honor and integrity of the maker."

It is true that the honor and the integrity of the "House of Squibb" have been upheld and made manifest to a large extent through product-quality. In line with the old observation that the proof resides in the pudding, it may be said that, in the case of pharmaceutical products, the proof resides in the package or the bottle. Nevertheless, in no small measure, the honor and integrity of Squibb have been upheld and made manifest by a public-relations program. This is a program which "begins at home" with the corporation's top executives, and then moves outward through the channels of trade to the consumers, creating throughout its course a favorable impression of Squibb.

Thanks to that program, consumers know about Squibb and know about it favorably, and so do the people "in between" who handle Squibb products and accelerate their flow from their points of production to their points of consumption-the wholesalers and their salesmen and the retailers and their salesmen. These dealers are the "middlemen," unhonored, unsung, and sometimes criticized as being economically unnecessary. Nevertheless, as every merchandiser knows -or must learn-the "middlemen's" approval and endorsement are essential, as well as their merchandising cooperation; otherwise, a manufacturer's products will languish and die in dusty warehouses and on back-room shelves.

Ask a retailer his opinion of one of the companies whose products he sells, and he is likely to say: "They're a good company. They make good products that we can sell at adequate profits. And they treat their dealers fairly. They're interested in our welfare."

Obviously, good public-relations practice is something more than idealistic intentions; something more than advertising and publicity. In business, good public-relations practice is a way of life.

A sound program protects product-reputation

If good public-relations practice is a way of life, and not mere window dressing, it must concern itself with such basic matters as product-design, product-construction, and product-use.

When Packard invites the world to "ask the man who owns one," Packard relies, in part, upon a half-century of learning how to build good automobiles. In part, Packard knows that its product can speak for itself. But Packard also knows that, to a car-owner in Any-town, Anystate, U. S. A., Packard is not a nebulous corporation that lives and moves and has its being in Detroit. To that car owner, Packard is the fellow down at Main Street and First Avenue who holds the Packard franchise. In Anytown, he is Mister Packard.

It follows, then, that what the Packard owners in Anytown think about Packard and what they say about Packard cars will be influenced greatly by what they think about Mr. Packard and his salesmen and service chief and service mechanics.

Use of a public-relations manual as a guide to good practice

As an aid in the practice of good public relations, a public-relations concern prepared for the dealers of an automobile manufacturer a tailor-made public-relations manual. Highly detailed, the manual went into such matters as the virtues of clean and attractive business premises. It offered advice on how to answer the telephone, and on how to deal with complaints. It talked about money matters -about how important it was that the buyer of a car should understand every financial detail of the transaction, so that he would know in advance the exact amount he was paying, and exactly what this money covered. Similarly, it dealt with mechanical service and the charges therefore.

In addition, the manual bore down particularly hard on the keeping of promises. "If you make a promise to a customer," it counseled the dealers, "do your utmost to keep it. But, if you see that you'll be unable to meet the deadline, call the customer on the telephone and explain why."

In a buyers' market, the customer is king. The fact remains, however, that even a monarch can be reasoned with and brought to understand. Once he understands, King Customer will say to his friends: "That outfit is all right. They're fair and square -and friendly." And on the balance sheet, whether of a retail dealer or of the manufacturer whose products the dealer sells, friendships appear as sales for today and as foundations for the sales of tomorrow.

Protection against infringement and imitation. Operating alongside an advertising program, a well-rounded public-relations performance helps to guard against the inroads of infringement and imitation by staking out and establishing priority.

Recently, a manufacturing concern "unveiled" a new trade-mark character. It introduced this new character to the trade and to the consuming public by means of a nationwide campaign of paid-for advertising. The company recognized the fact, however, that it had created a symbol which competitors, and even non-competitors, might like to imitate or adopt in toto.

Accordingly, to reinforce its position as the symbol's originator, the company converted the character's adoption into news. This presented no problem, because there was an interesting story in psychological research behind the symbol's selection. In the form of publicity releases-public-relations "tools" which will be dealt with in some detail later on in these pages-the story went to newspaper editors, newspaper columnists, and radio commentators. Since it was apparent that the story was news, the editors and columnists and commentators passed it on to their readers and listeners.

Thus, in effect, the manufacturer's trade-mark character became a public figure, widely recognized. As a consequence, any imitator or infringer of that character would find himself confronted, not only by the trademark laws, but also by the far more difficult barrier set up by public recognition and public acceptance of the character as belonging to the manufacturer who originated it.

Creation of understanding. As was previously brought out in the case of the automotive industry, public-relations techniques serve to bring about a better and a friendlier understanding between seller and buyer in the more or less intimate relationships of day to day business. On a broader scale and without personal contact, other techniques may be employed to bring about better understanding of long-range corporate policies and methods.

Consider the situation of a corporation that is owned by 350,000 stockholders, employs more than 20,000 persons and operates in 28 states-Cities Service Company. For good and sufficient reasons, Cities Service decided to divest itself of the power-and-light business, and to divert its major activities to petroleum and natural gas. Here was a shift-over that would touch the lives and affect the feelings of thousands of persons. How was it to be explained and "sold"?

Cities Service's director of business development, Merle Thorpe, is a former newspaperman, former teacher of journalism and former editor of Nation's Business. He decided on a magazine as the best medium for conveying information about the activities of Cities Service. As a result, one of the country's finest and most ambitious house organs came into being.

Appropriately named Service, this magazine goes to all employees and to a selected list of stockholders. Service conforms to a carefully planned editorial formula, and presents material in the following categories:

• Material designed to create pride on the part of employees and stockholders, and confidence that the company keeps alert to the future through research and improvement in facilities.
• Articles about industries which are the company's biggest customers.
• Articles about the company's executives, designed to disclose the fact that its men are human and friendly. The natural assumption is that the company must be human and friendly, too.
• Articles about how the various company subsidiaries serve their communities.
• Articles, written by outside authorities, about the company's products and uses.
• Good-natured humor about foibles in the oil industry.
• "Popular" explanations of the economics of the company's operations.

Constituted thus, the magazine, Service, has been doing a broad-gaged selling job. The employees like it and believe it and look forward to receiving it, and so do the stockholders. It has brought in thousands of letters of comment, acknowledgment, and suggestion. From its pages, magazines, newspapers and trade publications have quoted liberally.

Dispelling misunderstanding

Public-relations techniques may also be applied to the task of dispelling misunderstanding. Such practice has often been particularly helpful in creating good plant-community relationships, that is, relations between a company and the people of the communities in which its plants are situated. By telling its story, and telling it in full, many a company has succeeded in converting into good-will.

Since World War II, industrial concerns have frequently found themselves in a position where they have been accused of polluting streams and of fouling the atmosphere with smoke and fumes. During the war, a certain degree of pollution came to be looked upon as a necessary evil, an unavoidable by-product of the all-out war-effort program. With the coming of peace, however, people in many industrial communities began asking: "What excuse is there now?"

This caused plant managements, on their side of the fence, to start asking themselves "Don't the people know the facts? Don't they know what we've been doing, and how much money we've spent to abate these nuisances?" The blunt fact is that the people did not know because they were not told.

As a result, many a plant management suddenly found itself endowed with a new interest in community life, a new interest in what newspapers in plant communities were saying editorially, and a new interest in the tenor of discussions in such potent groups of people -and of voters -as the communities' federations of women's clubs.

In instance after instance, the use of a simple formula provided the means of clearing up the misunderstanding which the community had of the situation. In the first place, the company continued its research and engineering efforts which had as their objective the elimination of the pollution to as great an extent as possible. In the second place, the company told the story of its progress and its plans for the future. It told that story fully to all persons who were in positions to pass it on to the public, such as newspaper editors, club leaders, educators, and public officials.

The practice of creating good plant-community relations. Just as a corporation, within its field, hopes to be regarded as a "good citizen," so an industrial plant, operating in a community, hopes to be regarded as a "good neighbor." It seeks to make itself not only known but favorably known. As a means of doing this, it uses the columns of the community newspaper and perhaps the pages of its own magazine for its employees, to reach out to the community's people. In addition, through the medium of what is called "open house"-an arrangement by which, at regular intervals, the plant is thrown open for public inspection-the company invites the community's people to come a-calling.

The people come. They look around. Guided by the company's employees, who are their own fellow townsmen, the people tour the works. They see what makes the place tick. They see how carefully the management safeguards its people's lives and limbs. They see the facilities, activities and plans which the management has provided for its people's comfort, security and future happiness. They see the products made. And they hear how these products are carrying the company's good name, and also the name of their community, around the world.

The result? What other result can flow from that kind of get-together but better understanding and, for the company, greater respect and heightened prestige?

Influence on public movements and trends

On a broader scale, public-relations techniques may be applied to the task of directing public movements and trends, and even of creating new trends.

Consider fashions. In a motion picture released at the beginning of the week, a popular feminine star wears an unusual hat. By the week-end, that same hat, or a reasonable facsimile of it, will be gracing many a retail display window on New York's Fifth Avenue.
Coincidence? Ask the public-relations woman who "planted" the hat in the movie in the first place.

Although it sounds incredible now, it was not so long ago that no woman of good repute would be seen smoking in public. Then one day on that same Fifth Avenue, there appeared as if out of the blue sky of that sunny morning, a whole bevy of young women, all beautiful, all quite obviously respectable-and all quite openly smoking cigarettes!

Another coincidence? Disregarding the moral aspect, a point on which there might still be some argument, ask the public-relations man who hired the models through a photographic-model agency, supplied them with cigarettes, and told them what to do. He would tell you that, in the interest of a cigarette company, the young ladies' morning stroll up Fifth Avenue created news. Across the continent, newspapers printed the picture of these young ladies. Then, all of a sudden -and again sidestepping the moral issue- eminine smoking in public had become socially acceptable.

To cite still another instance, consider cigars. For a certain length of time, the cigar industry, with deep and poignant concern, watched the motion-picture industry, which was unaware perhaps of the end-result effects, go about the business of associating cigars with gangsters. Without a cigar, so the picture industry seemed to believe, no gangster's make-up was complete.

Finally, an emissary of the cigar industry went to moviedom and said, in effect: "Look, to be a gangster, a man doesn't have to smoke a cigar. Some gangsters don't smoke at all. Besides, despite the damage you've done, cigars still are smoked by respectable men! But if you keep this up, you'll ruin us; for already we're hearing that many women are asking their menfolk not to smoke cigars because cigars are smoked by guys like Al Capone. Won't you have a heart?"

As a result, moviedom apologized and said that it would mend its ways in respect to associating cigars with gangsters. Today, with perhaps a rare exception here and there, when you catch a movie gangster in the act of smoking, he may be inhaling the fumes of an opium pipe, but never the aroma of a fine cigar.

The case of Revere Copper and Brass Incorporated

An ideal program for any commercial organization is one which performs a public service, and therefore is good public relations, and at the same time helps to sell goods. A good illustration of such a program is provided by a project of Revere Copper and Brass Incorporated, undertaken with active support of its chairman of the board, C. Donald Dallas. Mr. Dallas was chosen by Forbes' Magazine of Business as one of the 50 contemporary leaders of American industry. He is a man who is exceptionally alert to the opportunities presented by public relations.

One of the biggest fields for further expansion in the use of copper is provided by home-building. Copper has unquestioned advantages for many purposes, but it has a handicap in that its initial cost is higher than that of competitive metals. The relatively high price of copper appeared to be the reason why less enduring metals were used generally in the low to medium-priced houses which builders were offering a nation in the throes of a housing shortage. Revere raised the question, however, as to whether the price was the only reason why copper was not used to a greater extent.

With advertising and public-relations counsel, Revere looked into this matter and found that there were contributory reasons. It found, for instance, that merchant builders often dispense with the services of architects for the purpose of saving on costs. Merchant builders are primarily interested in making as large a profit as possible since they build for sale and are sometimes known as "speculative builders." By dispensing with architects, who are guardians of quality in home-building, these merchant builders have no pressure brought to bear on them to make use of copper as the more durable metal. Furthermore, relatively few prospective home-owners insist on the use of copper, since they usually do not know about the advantages of this metal and therefore do not look for it in a house. In any case, a house-buyer is not likely to notice whether copper has been used or not. When the walls, roof and plaster go up, the metal used in such items as the plumbing, flashing and heating becomes hidden. Even sound-quality builders, who would like to incorporate the hidden values, have little incentive to do so in a competitive market.

The Revere Quality House Institute

Revere organized the Revere Quality House Institute to encourage better quality in "speculative" building, not only in respect to materials, but also in respect to workmanship and design. Through various means, architects and builders were brought together to work out plans for better houses of moderate cost. It was provided that such houses would earn the Institute's seal of quality, thus giving the purchaser a means of knowing that the house was well built, and making him willing to pay the small extra sum involved in the cost of a house of enduring construction.

As an encouragement to the builder, Revere arranged to help him merchandise the houses. Each new home development became the nucleus of a big promotion, with special newspaper supplements, support from civic bodies, and cooperation of housing and financing institutions. This led to national magazines publicizing Revere quality houses in recognition of the high interest which these houses had for their readers. Revere's local advertising was amplified by the advertising done by the department stores which provided the furnishings for the model houses, as well as by the advertising done by the builder, his suppliers, and by various national advertisers whose products were used.

Revere kept this program in the public service category by insisting that quality should rule throughout and not merely in the use of copper. Revere also made it a point not to demand that Revere copper be used. Needless to say, few builders or architects who have participated in the program have specified other brands of copper. Revere, however, did not rely on such an outcome. It felt that the company would gain in any event from the good-will of home-owners, architects, and the better class of builders.

After initial successes, an opportunity came to broaden the program through affiliation with a national research organization, enabling other manufacturers to participate directly. Nevertheless, such a good beginning was made by the Revere Quality House Institute, and such an impression was made on the public with organization as originally set up, that the Revere name was continued through the establishment of the Revere Quality House Division, Southwest Research Institute, which functions along the lines of the original program. 13. Public relations in Canada. The importance of public relations is recognized as widely in Canada as it is in the United States. A typical instance reported by Public Relations News, New York City, concerns the Public Service Commission of Halifax, Nova Scotia, which has successfully maintained friendly relationships with the community in which it operates.

Halifax is a city of 90,000 people. The Commission was founded in 1944 to manage and control the city's water system. With no traditional inhibitions, the Commission, from the beginning, has treated the citizens and taxpayers as though they were shareholders in an enlightened corporation, valuable as partners, and entitled to all information available as to the acts and policies of this public service organization.

The first job was internal. Service men and office staff-all employees who come in contact with the public -were given a thorough course of job and public-relations training. Executives were given special indoctrination. Now, almost everyone on the payroll takes part in civic activities. Executives appear as speakers before all sorts of organizations throughout the area.
The plant was cleaned up. Trucks were painted a new orange tint with the public-relations cartoon spokesman, "Willing Water," appearing in royal blue on each of these vehicles. Service men were given new uniforms, and were introduced to the community in the same way as a progressive new industry might present its personnel to the public.

A campaign of weekly advertisements in the two local newspapers was initiated with "Willing Water" as the Commission's emissary. These explain to the public why it is sometimes necessary to tear up a piece of new pavement; why garbage cannot be dumped in the watershed areas; why trees and shrubs cannot be cut; why preservation of the forests is vital to the maintenance of the water supply.

Executives of the Commission give fifteen-minute talks on similar subjects over the local radio stations, and they maintain close and friendly relations with the local press.
An effective service to the school system has been developed. Commission officials lecture to students in class rooms and assemblies. High school students are given open-house tours through the plant. Special tours of the engineering works are offered to students of technical high schools, as well as to those headed toward careers in engineering. This relationship has developed to the point where the news of the Commission is carried regularly in school papers.

Several times a year, at parties and picnics, "Willing Water" plays host to employees and civic leaders. These activities have reduced service complaints to a minimum and have assured public support for appropriations. They have also made easy the job of attracting the highest type of employee to the payroll. Halifax citizens have thus learned to believe in the sincerity of the Commission's slogan, "Efficiency with Courtesy."

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