In the early 1900s, Robert Collier was a mining engineer at a West Virginia coal mine called the Powelton Mining Company. In those days, brokers collected orders from large customers and bid those to the mine with the cheapest price, keeping most of the margins for themselves.
When times were good, the mines competed against each other for labor and transport rates and the miners worked 3 days a week. When times were tough, the mines outbid each other for the lowest price and the men worked only 1 day a week.
Amidst this ruthless environment, Robert Collier had an idea. It turned out that the coal from the Powelton mines was great for making gas. So Collier sent a letter to every gas company within several hundred mile radius.
Here’s what the letter said:
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How much are you paying per cubic foot for your gas? If we can show you how to cut the cost by a fourth, are you interested enough to prove it?
The XYZ Gas Company in Cincinnati has cut its cost by a fourth, and here are the figures as given in a letter from their Superintendent.
The ABC Company of Indianapolis have had similar experiences. We’ll be glad to send you the exact figures from each if you will take the time to read them.
But better than any figures from other plants is this chance to write new figures of your own in your plant. Send the enclosed card, without money.
On receipt of it, we will ship you a carload of Powelton screened gas coal, our regular standard quality.
Test it. Try it any way you wish. At the end of your tests, figure how much gas you get per pound of coal, and what that gas cost you!
If you don’t find that the Powelton Coal has saved you at least 25% on your cost, then that carload we send you won’t cost you one cent.
But if you do see where you can save from 25% to 33% of the cost of your gas, then you are to give us your contract for all the gas coal you use for the next year, at a price of $1.25 per ton f.o.b. Powelton, W.Va.
Remember, no savings – no cost. But if we save you 25%, we get your contract. Is it a go?
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Robert Collier got a ton of new business using that letter. After solving the coal problem, he turned his attention to the coke produced by Powelton mines. This was harder to do.
They did a lot of analysis to find the best use for their grade of coke. They spoke to lots of foundries. But were unable to find the best use for their coke. Then a foundry in St. Louis, the Bucks Stove and Range Company asked them and several other mines to send a sample of coke.
The Bucks Stove and Range Company had a reputation for using the best ingredients regardless of cost. Within days the Powelton Company had received an order from Bucks. Upon winning the order, Collier finally learned a good use for their coke.
It turned out that their coke had unusually high carbon content. It meant that while good coke could melt 8 or 9 tons of iron, the Powelton coke could melt 15 tons of iron. In terms of savings, the Bucks Company spent only 47 cents on Powelton coke instead of the usual 90 cents to melt a ton of steel.
It was an easy decision for Bucks Company.
Robert Collier’s focus on customer needs allowed him to have a successful career as a copywriter. His letters are so good that they are still studied to this day.
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