Do You Sincerely Want To Be Rich? (9 page)

isarmed by the trick of restating it, in terms more extreme than any the prospect was likely to use. Thus Eli Wallitt has explained the correct counter for a salesman to use when the prospect says he has no money. The salesman says: 'Oh gosh, I'm sorry, I didn't realize. Listen, I could lend you a few bucks to eat for a few days.' Whereupon the prospect hastily explains that things aren't as bad as all that… and the salesman is back in the game with a chance.

    Even now, a dozen years later, pupils of Cornfeld's who rose to be boss salesman, and executives of IOS, still fall back on the same devices in conversation. A reporter dealing with the IOS high command in the weeks after the crash would often find himself confronted by an immaculately-preserved figure of unflappable presence.

    The reporter gently frames a question which suggests that this immaculate figure and some of his colleagues might have been concerned in unorthodox financial operations. The IOS man's face lights with grave understanding. 'What you mean,' he says, 'is I was overcome with greed. That's absolutely right.' The reporter can scarcely do other than mutter shocked disavowal of any such intention. Such self-flagellation was the survival of a dialectical device sharpened in a thousand 'presentations'.

    The vital discipline that the salesman had to acquire was that he must be prepared to humiliate himself: whatever happened, he was the winner if he came out with the prospect's signature on a contract in his pocket.

    That is not quite how the veterans put it, but that is what the words mean. 'When you go out selling,' said George Landau, one of the great masters, 'you have to put your ego in your pocket.' He did not mean 'ego' in the technical, Freudian sense.

    He meant that when you go out selling you must school yourself to put your pride in your pocket.

    The gambits an IOS salesman had to learn only began with his 'sincere smile'. The lore of 'closes' was especially elaborate -the 'close' being the move in which the customer is brought to sign. Its ultimate development seems to have been the 'sign-or-tear-up' close, a piece of dramatics in which a contract, and a fountain pen, are placed before the prospect, and he is given the challenge to use the pen, or tear up the paper. This was regarded as a dangerous technique, only to be used by a master salesman, confronted with a prospect stubbornly refusing to see what was good for him.

    The art of supplementary dialogue was probably raised to its highest point by Philip Bell, a flaxen-haired Australian with a visionary and innocent eye, who specialized in selling IOS programmes linked to life insurance. He recommended goosing the prospects with this kind of phrase: 'Let's lean over your executor's shoulder for a moment. How long is it before your widow is working?' Or: 'Have you ever seen a bankrupt family?' Or, he suggested, a salesman could tell the prospect 'about the letter you once saw which said, "I don't want you to think my husband didn't love his family. It's just that he didn't plan to die at this time." '

    It was on the basis of learning and elaborating such devices that the IOS salesmen convinced themselves that selling was a 'profession'. But in the end, it came down to 'putting your ego in your pocket' - a process of unrelenting emotional control, in which every nuance of human intercourse was directed towards persuading a prospect to give his money into IOS’s care.

    The salesmen often compared themselves to missionaries, and certainly they shared the missionary's belief that he has the duty to impose his will upon others. But there the resemblance to missionaries ended. Converts without commissions would not have interested them.

    Perhaps the best way to illustrate what sincerely wanting to be rich meant, in practice, is to look at four young men from one particular Geneva training session. Three made good, in IOS terms, and the reasons why the fourth man failed to make the final grade tells us a good deal about the IOS system.

    Some fifteen recruits turned up for the class of July 1959. One was George Landau, a tall, dark man with a surprising resemblance to Boris Pasternak. He had been born in Poland, brought up in Russia, and reached America after many hardships. He first returned to Europe as an optical engineer with Westinghouse working on the atomic powered lighting for the 1958 Brussels Expo. Returning next year for a vacation, he saw Bernie's advertisement and moved in with some relatives near Geneva.

    Landau was the star of the course - he is said to have floored Cornfeld once or twice with questions about the applied science of selling. He served his apprenticeship in the military market at Orleans, where he teamed up with Don Q. Shaprow. Landau and Shaprow formed a partnership, which lasted ten years, in which they agreed to split all their commissions, and all their expenses.

    By the end of 1959, the Landau-Shaprow team had earned enough to finance an expedition into new territory. Together with Gladis Solomon, they set off for West Africa. In time they raised enough money to follow some Dutch prospects back to Holland. There, they set up their own independent IOS territory, setting up headquarters and branch offices with their own money, and - most important - advancing money to new salesmen to get them on the road. Landau went on to become No. 4 in the unofficial IOS hierarchy, after Cornfeld, Ed Cowett and Allen Cantor.

    Ben Heirs and Howie Dressman did almost as well. Heirs was an ex-USAF officer, who went off after the course to sell to American servicemen in Spain. After a spell in Japan, he rose to be executive vice-president of IOS Financial Holdings, which controlled the IOS banks.

    Dressman had been a teacher in New York City. He went to sell in the Far East, where he ran the Philippines operation before coming back to Geneva and a sales executive's job.

    Oddly enough there was only one man on the course who had sold mutual funds before. This was a cheerful, shortish, broad-shouldered New Yorker named Lou Ellenport. At nineteen, Ellenport was already selling securities for a 'boilershop' - a roomful of men with telephones, extolling shares to farmers, and other moneyed but unsophisticated persons some distance from Wall Street. The key to boilershop cost-control is to keep down the phone bills: true experts work with a three-minute egg-timer beside each phone. If the prospect isn't hot in three minutes, down goes the receiver, in mid-sentence if necessary.

    In 1958, Ellenport had come over to Europe to sell for one of Cornfeld's rivals in the military market. It was hard work scratching out $50 a month, however. The end came in the small French town of Chaumont; Ellenport simply walked into the local IOS salesman's hotel room and surrendered with the memorable line: 'I'm your competition, and I haven't eaten for two days.' The IOS man - 'a very gentlemanly type' -obliged with a five-spot, and sent his defeated rival back to Geneva to be re-indoctrinated.

    Ellenport's first sales assignment was the US base at Glyfada in Greece. But after only a few months there, earning some $400 a month 'by lamming away at those goddamned sergeants with granite-like persistence', it suddenly struck Lou, not by any means for the last time, that the grass might be greener elsewhere.

    He had read in the monthly bulletin, which Bert Cantor, and later Thad Lovett, got out for the homesick salesman, that George Landau had struck a gusher to the tune of $150,000 sales a month in, of all places, Liberia.

    Eager to prove himself as good a salesman as Landau, Ellenport belted off a cable to Bernie, pleading to be turned loose on some civilians. And Bernie cabled back: 'Go to Libya!'

    Oil had been struck, the first of what is now the major Libyan field, in June 1959. Travelling by ship to Alexandria, and then in an ancient Opel Kadett with a German girl friend, through El Alamein and Tobruk and all the battlefields of the Western Desert, staying in hotels so primitive that 'the fleas were walking away with the sheets', Lou reached Tripoli on October 9.

    It was easy enough selling to the oil men. The snag was that the Libyan government refused to give you a visa for more than three months. Early in 1960, Ellenport had to move on, to be replaced by two more itinerant IOS men.

    And so began his extraordinary odyssey. For the next five and a half years, sometimes alone, sometimes with another IOS salesman as a companion, sometimes with the faithful German girl, Ellenport roamed the earth, always searching, as Captain Ahab sought the great white whale, for the lush territory which would enable him to settle down, and never quite finding it.

    From Tripoli, he went to Tunis, then to Madrid, where Ben Heirs warned Lou sharply off his beat, then to Lisbon. (We will mention only the places where he actually sold mutual funds, or tried to.) Then to digs with a vicar and his unmarried daughter in the Norfolk village of Sculthorpe, near a us Strategic Air Command bomber base. It was a top security base, and Lou was eventually thrown off it. He drove the Opel all the way across Europe to Ankara. Then Izmir, Adana, Iskenderun, Beirut, Lattakieh, Amman, Jerusalem, Tel Aviv and by boat via Marseilles, to Algiers.

    In Beirut he waited for days to board the flagship of the US Sixth Fleet, only to find himself barred by the executive officer, who had the dealership to sell another mutual fund himself.

    In Algiers, somebody tossed a grenade into a cafe where he was sitting and a few days later someone started firing rifle shots a few feet above the car. ‘I didn't want a commemorative plaque at 119 Rue de Lausanne, it wasn't worth getting killed for!' So back to Geneva, to Holland, to Belgium, and then, by way of Manila, to Singapore.

    On September 21, 1961, at 10.30 at night, Ellenport landed in Indonesia, and there, for the first and last time while he was with IOS, he really struck it rich. From the very first evening when a man from the US embassy lent Lou his house complete with servants, everything went well. As for selling, it was like shaking fruit off the trees. 'Plop, plop!' Ellenport remembers wistfully, '… down they fell, nice and ripe.'

    In nine weeks, working the embassies, the foreign business community and the oil camps in the jungle, Lou and another salesman between them sold $1.5 million worth of the Dreyfus Fund.

    He flew straight up to Tokyo, and met Bernie Cornfeld there on New Year's Eve 1961. Bernie was full of congratulations, and this emboldened Ellenport to ask for the right to set up a territory of his own. This was something that depended upon Cornfeld's decision, as well as upon sales performance. Cornfeld would not give Ellenport a territory. Instead, he gave him $1,000 and a gold watch.

    Then Bernie asked what Ellenport was going to do with the money his sales breakthrough had earned him. Ellenport said he was thinking of putting it into Fidelity, one of the big, established American mutual fund groups. Cornfeld exploded. 'With Bernie, you're either the greatest guy in the world, or you're nowhere,' says Ellenport in wry recollection.

    Cornfeld's fury sprang from the fact that he had turned IOS into a formally organized company. And he had plans for it which went very much further than continuing to sell other people's mutual funds. Look, said Cornfeld, couldn't Lou see that he ought to invest in IOS itself? To do otherwise would be 'self-destructive'.

    Eventually, Ellenport borrowed $21,600 against the commissions he had earned, in order to take up options for shares in Bernie's new company. Now Ellenport must earn enough money in commission to pay for the shares. Until he had done that, he was hooked.

    (Those who have never worked as a salesman might suppose that a salesman's income comes only from what he sells himself. This is not so: he may also share in the commissions of those under him in the hierarchy through what are known as 'over-rides'. At the bottom of the IOS scale, a salesman shared part of the commission on each sale with those who had recruited and trained him. As he rose through the grades, he became entitled to a growing share of the commission on his own personal sales. Eventually, he was allowed to recruit other salesmen, and exact a share of their commission in turn.)