"I left Chicago in June of '29, just a few months before the Crash. Chester Bowles and I started in business with seventeen hundred square feet, just the two of us and a couple of girls. July 15, 1929--this was the very day of the all-time peak on the stock market.
As I solicited business, my chart was kind of a cross. The left-hand line started at the top corner and ended in the bottom right corner. That was the stock market index. The other line was Benton & Bowles. It started at the bottom left-hand corner and ended in the top right-hand corner. A cross... When I sold the agency in 1935, it was the single biggest office in the world. And the most profitable office."
Well, this is an interesting case study, I thought. Maybe I should pay attention. The most amazing thing about Hard Times is how familiar it seems. The passages talking about bubbles, business cycles, people's incredulity at how all this happened is really eerie. So how did Benton & Bowles kick butt in the depression? Here are some best practices:
- They essentially invented audience research. When they heard a lot of people listening to "Amos and Andy" on the radio, they bought it straight away. They put a Pepsodent spot on and sales went through the roof. They worked with George Gallup. They listened to customers. This was new stuff. Lesson: Marketers who listen to their customers in new and powerful ways will win the battle for fewer dollars.
- Radio was the newest new media at the time. Basically, they were investing like crazy into stuff that the big agencies didn't understand yet. They were young--late 20s--and didn't know any better. Lesson: Those who master the next wave of media will rise above the fray. Mobile? Social? Something we haven't seen yet??
- Once into radio, they perfected "audio illusion". Example--they cast two people in one role on "Showboat", a program to promote Maxwell House Coffee. A sexy singer for the audio, and a known actress for the voice. They also started adding in sound clips of the coffee brewing and pouring. Sales doubled and quadrupled, crushing store brands. The other agencies were angry because it was improper to do these things at the time. Lesson: Just because things are done one way, don't fear doing it a totally different way. Thinking outside the box is critical.
- Once this guy had a lot of money, he was able to buy businesses at bargain basement prices. He bought Muzak for next to nothing and built it into a national behemoth. Lesson: Keep some powder dry. The really good investment opportunities are starting now. Once you buy, own and retool. Pretty good time to be a PE company, even if Carlyle is laying off.
- He also comments on how he was able to add incredible talent at low prices because of the glut of labor supply. His salesmen improved every year as they could screen more and more applicants for these jobs. Lesson: Keep hiring channels open and be pickier than ever.