TIME, OCTOBER 5, 1953
SELLING
The Cleanup Man
Should Dick have suspected that the baby was not his own—especially as he had been married to Kathy for only seven months? After all, the doctor, to protect Kathy, had said that the baby was premature. Then a nurse who was trying to woo Dick away from Kathy tipped him off that the infant was a full-term child. What Dick didn’t know was that Kathy had been married before—for only a week (her husband was killed in an auto crash). Kathy, who thought her first marriage was all a mistake, nevertheless felt so guilty about not telling Dick that she could hardly bear to face him; instead started lavishing all her affection on the baby. And Dick, feeling neglected, began to respond to the advances of the nurse. Will the marriage be shattered? Or will Dick learn the truth in time to save it?
As millions of housewives tuned in The Guiding Light this week at the same time (1:45 p.m., E.S.T., weekdays), same station (CBS), most were sure—or almost sure—that things would come out all right, as they eventually do in the sweet-sad world of soap opera. There was also no doubt that things would come out all right for the program’s sponsors: Procter & Gamble Co.’s Duz soap and Ivory Flakes. As any junior advertising executive can explain, soap operas “get more advertising messages across to the consumer”—and sell more soap—simply because the housewife can absorb the messages for hours on end while she goes about her household chores.
No soapmaker is more aware of this theory than Procter & Gamble’s President Neil Hosler McElroy, as handsome, ruddy-faced and well-scrubbed as one of his own radio heroes. P. & G. was in the advance guard of soap opera, helped start it on its interminable way more than 20 years ago with The Puddle Family. P. & G. writers were among the first to learn that the trick is to spin the story out to fantastic lengths, with a flood of tears to wash away every smile. This year, with 13 soap operas on the air, P. & G. is the biggest advertiser in the U.S., will spend an estimated $30 million in network radio and TV, $15 million in newspapers and magazines.
On the Soapbox. The addition of soap operas to American culture has been under constant attack for years. To every complaint, the soapmakers have a crisply pragmatic answer: they are written as they are because that is what their audience wants. When asked what he thinks of his soap operas, P. & G.’s President McElroy, no steady listener himself, is apt to get up on one of his own soapboxes: “The problem of improving the literary tastes of the people is the problem of the schools. The people who listen to our programs aren’t intellectuals — they’re ordinary people, good people, who win wars for us, produce our manufactured products and grow our food. They use a lot of soap.”
By soap, he also means synthetic detergents—the fast-growing competitor of old-fashioned soaps. (Made of alcohol sulphates and sodium phosphate. Though “detergent” actually means any type of cleanser, including soap, in popular usage it now means one based on chemicals instead of natural fats or oils.) And the way the selling spiels of P. & G.’s soaps and detergents deride each other’s qualities is often completely bewildering.
“Those new detergents may be all right for dishes,” warns pure (99 44/100%), mild Ivory Soap on The Road of Life, “but your hands aren’t made of china.” Young Doctor Malone, on the other hand, plugs a liquid dishwashing detergent: “Joy’s lotion-soft suds feel so good on your hands.” Ma Perkins suggests “Brand new Oxydol [with a] new detergent formula,” to get clothes “whiter than sun-white.” But according to The Guiding Light, “Duz does a wash like no detergent can—it’s the soap in Duz that does it!” On Life Can Be Beautiful, life can really be beautiful if Tide is used (“Gets clothes cleaner than any soap”); on Backstage Wife, Cheer’s “blue magic” guarantees “the whitest, brightest and the cleanest wash possible.”
Since each of these programs also plugs other cleansing products (Drene and Shasta shampoos, Ivory Snow and Flakes, Spic and Span), it is a wonder that the housewife can ever make up her mind which one to buy. But as long as she buys one, P. & G. will be happy. It makes them all. Now the nation’s largest soapmaker, P. & G. manages to sell 119 bars, boxes, bottles and cans of its products every second of every day, every day of the year. Its share of the U.S. soap market has risen from 30% in 1925 to 40% in 1951, While Lever Bros., the No. 2 soapmaker, and Colgate-Palmolive-Peet Co., No. 3, napped, P. & G. took 69% of the detergent market.
The Tide of Revolution. At a time when many a U.S. businessman fears a recession and the threat of much tougher competition, P. & G. is a prime example of 1) how to sell goods despite recessions, and 2) how bitter competition both inside and outside a company can make it grow. Although P. & G.’s practice of letting Ivory Soap dispute the claims of detergent Tide makes little sense to many other businessmen, P. & G.’s McElroy thinks that it is the only way to keep his soap salesmen on their toes. He is never happier than when all of his products are busy fighting each other for sales.
The most notable example of P. & G.’s habit of competing with itself was its introduction of the synthetic detergent. It was, says McElroy, “the first big change in soapmaking in 2,000 years.” The company, licensed to work with German patents, brought out its first detergent, Dreft, in 1933• But its use was too specialized (i.e., for fine fabrics and dishes), and not until 1945 was P. & G. able to begin marketing an all-purpose detergent, Tide.
Though P. & G. still turns out some 500 million bars of Ivory Soap a year— enough to give everyone in the world
four baths—Tide was soon revolutionizing the washday habits of the U.S., and the tide of revolution began to sweep soap flakes and granules on to the back shelves. Among the hardest hit was P. & G.’s own Oxydol, Iong a top national seller with the devoted followers of Ma Perkins. Distressed at their falling sales, Oxydol men scurried to the P. & G. research people who had caused all the havoc by their development of Tide. Could they do something for Oxydol? No soap, said the research department; detergents are the coming thing. Well, then, how about letting Oxydol in on the bonanza? President McElroy agreed, and the product was converted. “New Detergent Oxydol” has since climbed back to fourth place among washday products, is still growing.
Tide continued to grow so fast that last year Neil McElroy supplied it with some more competition. He brought out Cheer, another detergent, which settled into second place (third: Colgate’s Fab).
Opening the Door. The revolution that P. & G. fathered not only gave its old-fashioned soaps new competition, it opened the door to competition for the whole soap industry from the chemical makers, who supplied many of the raw materials for the detergents. Monsanto, backed by huge research funds, introduced All, persuaded washing-machine makers to hand it out to their customers. General Aniline brought out Glim, a liquid detergent for dishwashing.
To counteract such competition in detergents, Neil McElroy last week was test-marketing a whole list of new products: Lana, a home permanent for bleached or frizzled hair; Fluffo, a new shortening to compete with P. & G.’s famed Crisco; Gleem, a new toothpaste “for people who can’t brush after every meal” (P. & G. is sure that includes just about everybody) ; Zest, a detergent bar for baths and showers.
Bright Young Men. For all his high-powered selling methods, the nation’s No. r soap salesman is no backslapping glad-hander in the tradition of the American drummer. At 48, Neil McElroy, a towering 6 ft. 4 in., given to conservative clothes, is a methodical man, with a quick smile and the unruffled air of a winning poker player. His wavy hair is greying, his blue eyes sharp. He keeps his 210 lbs. in trim shape with plenty of tennis.
Up by 7 every morning in his 15-room grey stucco house in Cincinnati, McElroy breakfasts on whatever suits his fancy, e.g., bacon & eggs one day, chocolate cake the next (“I figure eating cake in the morning doesn’t hurt the waistline”). He is at work before 9—but not always in his office. He spends much of his time seeing the company’s big team of “bright young men” and visiting his 35 U.S. plants. One of the most public-spirited businessmen in the U.S., McElroy devotes up to a third of his time to such functions as Community Chest, Cincinnati’s Citizens Development Committee and the National Citizens Commission for Public Schools. He doesn’t keep up with all his own soap operas (there are too many), listens in only when driving his car. He seldom brings work home with him, spends plenty of time with his handsome wife Camilla (who often accompanies him on business trips) and their three children: 17-year-old Nancy Sue (“Bitsy”), now a Bryn Mawr freshman; Barbara Ellen, 15; chunky Malcolm Neil, 10 who McElroy describes as a “champion consumer.”
One reason McElroy seldom becomes excited in the excitable world of soap is that Procter & Gamble has been decentralized until it is virtually a cluster of separate organizations, each with its own boss. For every P. & G. product, there is a “brand man” who takes full responsibility for results. If sales slip, it is up to the brand man to find out why. If an ad goes sour, the brand man gets on the agency’s back. If more production is needed, it is up to him to try to get it. And when a competing company puts out a product at a lower price or with a new “wonder” ingredient, P. & G.’s brand man must know about it and have a comeback. Broad company policy is set by Chairman Richard R. Deupree, McElroy and the other directors. But the big operating decisions are made by McElroy himself, and they, are usually made with quick efficiency.
McElroy belongs to the new breed of scientific salesmen who base their selling not on emotional appeal but on facts & figures. Are sales slipping in Milwaukee? Research will find the reason why. Is there a new product to be sold? Charts and tables are at hand to tell exactly what the new product should be and how to sell it. “Mac is especially tough on accuracy,” says one colleague. “If you want to tell him something, you have to have complete support for your statement. Don’t guess, and for God’s sake don’t just give your opinion.”
“Blessed by the Pope.” P. & G. learned long ago not to take any assumption for granted. Once an advertising layout was proposed, using the traditional prescription symbol 4; researchers found that 40% of the women they interviewed had no idea what it meant. Another time P. & G. planned to use the word “concentrated” in an ad, discovered that many housewives thought it meant “blessed by the Pope.” President McElroy and everyone else at P. & G. constantly bear in mind the fact that woman is fickle—and her memory short. She must be constantly reminded of the product she loves. For example, during World War II’s materials shortage, P. & G. dropped Chipso, once the nation’s No. 1 packaged soap. At war’s end, Chipso was put on sale again. But P. & G. was amazed to find that housewives had forgotten an old favorite, so Chipso was dropped for good.
In the low-price field, a housewife’s loyalty is ephemeral. Just when she is reaching for a cake of Ivory, her eye may be caught by a competing brand with a premium of a tube of toothpaste thrown in, or new promises of health and happiness. The selling lures must be constantly changed. For years, contests were P. & G.’s most successful promotions: it has given away well over $1,000,000 in cash and prizes, including some 300 autos, and a handful of life annuities of $1,000 to $1,200 a year. Right now, P. & G.’s Camay is running a $50,000 contest to get new customers (“I like new Camay with Cold Cream because . . . “). But McElroy’s admen think the days of contests are numbered, since prizes nowadays have to be tremendous to raise much interest. (To promote its Dial soap, Armour & Co. last week announced a contest with a producing oil well as first prize.)
All this super-selling started in 1837, when British-born William Procter, a candlemaker, and Irish-born James Gamble, a soapmaker, married sisters’ and went into business together. At the beginning, they peddled their crude soap and candles in a wheelbarrow in Cincinnati, then a frontier town. But as the region grew up, the company prospered. Soon its wares were being shipped by boat to New Orleans, Louisville and Pittsburgh, and gross sales rose to $1,000,000 a year.
P. & G. got its first mass-production orders in the Civil War, when it supplied all the soap for the Union armies of the West. Then, one day in 1875, a forgetful workman made a mistake that was to mold the company’s future: he left his soap-mixing machine running during lunch hour, thus turned out a batch of soap full of tiny air bubbles. It seemed a dreadful mistake, but somehow the batch got out of the factory.
Soon P. & G. was swamped with orders for “more of this floating soap.” (In the years since then, P. & G. admits to only two documented instances of cakes that sank—probably because the air bubbles had been squeezed out during storage.) In church one day, Harley Procter, a son of the founder, found a name for the new product in Psalms: “All thy garments smell of myrrh and aloes and cassia, out of the ivory palaces whereby they have made thee glad.”
Up in Smoke. Gradually, the Gambles drifted out of company operations; the Procters, a cool and quick-thinking
breed of businessmen, carried on. (But not out of ownership. Cincinnati Philanthropist Cecil H. Gamble, 69, grandson of Founder James, is currently a P. & G. director and one of the biggest single stockholders. No Procters are connected with P. & G. today.) One day second-generation President William A. Procter was lunching at his club in downtown Cincinnati when a messenger brought word that the factory was on fire
P. & G.’s vast warehouse supplies of fats and oils were going up in smoke. Instead of rushing to the scene of the disaster, Procter went to the telegraph office, dispatched wires and cables to the oil markets of the world, bought all the oil futures he could. Not only did he thus avoid a squeeze at the hands of speculators but he had plenty of raw materials on hand when P & G.’s new plant, Ivorydale, opened in Cincinnati’s suburbs.
The forward-looking Procters knew how to take care of their employees as well as themselves. They pioneered (1887) in profit sharing, and last year P. & G.’s employees got $8,000,000, or 8.7% of total company profits before taxes. Colonel William Cooper Procter, third-generation boss of P. & G. and a leading Episcopalian layman, had a still more modern idea. For years P. & G.’s production had fluctuated with the buying whims of wholesalers. If the wholesalers thought prices were heading higher, they loaded up; if prices seemed to be going down, they cut back sharply, and hundreds of P. & G. employees would be laid off. Colonel Procter reasoned that soap output should be governed by actual consumption of soap, a fairly constant factor.
Procter forthwith cut down on outside middlemen, and by setting up a network of P. & G.’s own distributors. flattened out the peaks and valleys. In 1923 P. & G. installed its guaranteed-employment plan, first of its kind in the U.S., and assured hourly workers 48 weeks’ employment a year. In those days, such advanced management methods were nothing short of revolutionary. Today, they are considered a normal part of labor relations at P. & G. They have cut employee turnover from 133.7% to less than i% a year, kept the company unhampered by outside unions and major strikes, and left it free to concentrate on its main job of selling. P. & G. treats its top men with equal 1 generosity. President McElroy, who started out with P. & G. as a $100-a-month clerk 28 years ago, now earns $240,000 a year.
Economics, Bridge & Poker. Neil Hosier McElroy was born in Berea, Ohio, on Oct. 30, 1904, and raised in Madisonville, a suburb of Cincinnati, where his father was-a high-school physics instructor, his mother a grade-school teacher. It was a strict Methodist household. but father and mother McElroy sensibly decided that if their three sons were to learn the ways of the world, they might as -well do so at home. Instead of having their boys hanging around the local pool hall, they installed a pool table of their own. On Sunday evenings the family gathered for a weekly concert, with mother at the piano, the boys playing the clarinet, flute and French horn, and father McElroy singing.
In their spare time, the boys worked to help make ends meet, in line with the family philosophy: “God will provide if you will get out and scratch.” Neil mowed lawns, shoveled snow, wrapped bundles in a laundry, worked in a can factory. By the time he finished high school, he had saved $1,000. Like his brothers before him, he applied for a Harvard Club scholarship (“because it was available”), took a competitive exam and won.. –
At Harvard, he earned part of his way playing for dances at Wellesley with a band of his own (he played piccolo and piano). He played center on the basketball team, headed Sigma Alpha Epsilon, Harvard’s last remaining national fraternity. He majored in economics (B average), neither smoked nor drank (he likes an occasional drink now), but was not above staying up all night playing low-stake bridge and poker.
Running Hop. After college, McElroy got a job at P. & G. as mail clerk in the advertising department, learned the ins & outs by reading mail from P. & G.’s house-to-house selling crews, ad agency and distributors. He planned to go back to Harvard Business School, but he traveled so fast in P. & G. that he never did. After a stint selling soap, he was made manager of the company’s then small promotion department. At 26, he was sent abroad to help take over a small soap plant in England, there got a good education in a diversity of problems: manufacturing, purchasing, delivery.
Back in the U.S., McElroy got his first big chance in P. & G.’s advertising department. His boss, tending a sick wife, was often absent, so it was up to McElroy to run things. Says he: “It was the kind of a situation bound to lead to the hothouse development of a man—or break him completely.” Gradually McElroy’s ability caught the eye of P. & G.’s longtime President Richard R. Deupree.
For years P. & G. products had gone their separate ways, taking care not to step on one another’s toes. But in the late ’20s, the company had brought out Ivory Flakes, started production of granulated soap, bought up Oxydol, Lava, Duz. McElroy had a new idea for selling them: Why not have a free-for-all, with no holds barred? “At first,” says he, “some of the more conservative members of the company cringed at the idea of having a punch taken at ourselves by ourselves.” But eventually McElroy won his point, persuaded his elders that the way to keep fast-growing P. & G. from becoming too .clumsy was to have it compete with itself.
President Deupree, a supersalesman who played a big part in P. & G.’s big expansion, liked the idea. He also pushed the company heavily into radio and soap opera. As McElroy moved up to advertising manager, vice president and president (Deupree became chairman in 1948), he built the individual “brand management” system that gives P. & G. its competitive drive today, and the research staff that has kept new P. & G. products rolling on to the market.
Radioactive Wash. P. & G. values research so highly that six out of every 100 employees are engaged in some kind of research project. At the company’s new $5,000,000 Miami Valley research lab-oratory, McElroy’s special pride, -more than a hundred scientists work over their test tubes, taking competitors’ products apart and putting new ones together.
Sometimes research leads P. & G. far afield. Long a seller of cellulose (a byproduct of cottonseed crushing) to the chemical and plastics industries, P. & G. recently found the demand far bigger
than it could supply. President McElroy’s solution was typical. He bought 560,000 acres of pineland in Florida, set up a $35 million plant to produce cellulose from wood pulp, now has his researchers testing ways to use the part of the pine tree not used for cellulose.
P. & G. laboratory workers can often be found sitting between troughs of sudsy water, an arm resting in each, to see how the skin reacts to different soaps and detergents. Clothes are soiled with radioactive dirt, “Geiger-counted” after every washing. Researchers work daily on such questions as: What holds dirt on cloth and skin? What do suds accomplish? (Mainly, they accomplish sales. Nonsudsing detergents often work just as well, but many women won’t buy them.)
P. & G. hires housewives to wash clothes in the laboratory as they would at home, maintains a beauty shop where a woman employee can have her hair shampooed free—half with a P. & G. product, the other half with a competing shampoo. The company keeps a staff of bakers busy developing new recipes for Crisco and its bakery-trade shortenings (latest treat: a chocolate-coated ice-cream cone), is now working with soybean oil in the hope of cashing in on the boom in “frozen custard” and other ice-cream substitutes.
Use & Compare. When the laboratory people have finally perfected a new product, P. & G.’s marketing operation begins with all the precision of an amphibious landing. A staff of 12 5 P. & G. girls (not too pretty, lest they attract too many marriage proposals; not too homely, lest they jump at the first offer) travels all over the U.S., talking to half a million women a year, handing out new products for housewives to “use and compare.” Though P & G. has a long list of product names already patented and ready for use, its ad agencies often run contests to get new ones. They must be easy to re-member, simple to pronounce on the radio, fit well into advertising slogans (“Tide’s in; dirt’s out”).
When a new product hits a “test market” city, P. & G. trucks roll slowly down the streets while teams of men swarm in & out of houses handing out samples. Big changes in a product are often made during such test-marketing. Cheer was first put out as a white, detergent. Then someone suggested that it be dyed blue and tried out. The blue not only sold muchbetter (especially among women who used bluing in their wash), but it also supplied a catchy ad slogan: “It’s new! It’s blue! It’s Blue Magic!”
Headaches & Rewards. All P. & G.’s careful planning, diligent research and hard selling have their rewards. Only once (in the commodity collapse of 1921) has P. & G. shown a loss; since the war, its sales have more than doubled—to $85c million in the last fiscal year (net: $42 million). But growth has also brought some headaches.
For their grandiose advertising claims, the soapmakers are often in trouble with the Federal Trade Commission. P. & G. admen have a simple explanation for the free-handed promises: “Have you ever listened to women talk? They never say, `That’s a nice hat.’ They say, ‘That’s absolutely the cutest hat I’ve ever seen. Women talk in hyperbole. So that’s the way we’ve got to talk to them. It’s the only language they understand.” Nevertheless, P. & G. has had to stop claiming curative powers for its shampoos, that Camay “will keep the skin young,” that Tide and Cheer will get clothes as cleat without rinsing as other products wil with rinsing. When FTC cracks down P. & G. complies promptly—unless it tai prove its claim on the basis of its research.
Last year, in the waning days of the Truman Administration, the justice De partment’s antitrusters brought a civi suit against P. & G., Colgate and Lever charged the three with monopolizing the soap market by exchanging price information. Under its new Republican bosses the justice Department still plans to try the case. But since a grand jury studied the case for 18 months and found no cause for criminal action, McElroy i sure he will win.
Neil McElroy is just as confident abou his company’s future. But if sales start t, slide, says he, “We’ll find the reason why Then we’ll give it hell.” It is a long-stand ing P. & G. belief that if a man invents better mousetrap, no one will beat a pat. to his door unless he goes out and tell people about it. Neil McElroy does not intend to let anyone forget about his mousetraps.
