There was a time when being first in the Yellow Pages meant survival.  With the major shift to web search and community directories, names like this may (hopefully) be a thing of the past.

The news about Yellow Pages these days is pretty grim.  The San Francisco Board of Supervisors has imposed delivery restrictions that effectively ban Yellow Pages distribution.

But in the small towns around the Midwest, the news for community directories has been entirely different.

In an effort to spread some good news (and blow our own horn), I’ve put together a series of press releases to highlight real, tangible local growth in print advertising.

Cedar Lake, Indiana Economy Comes Roaring Back with 44% increase in local business advertising.

Edinburgh, Indiana Economic Indicator Rises 22% on Local Advertising Surge

Anamosa, IA economic indicators up 20% over last year for small businesses

Pecatonica, Illinois Economy Shows Promising Growth

Hobart, Indiana Businesses Thrive as Local Economy Experiences Upturn

Indianola, Iowa Businesses Surge Ahead as Economy Rebounds

Fort Atkinson, Wisconsin Economy Shows Solid Recovery, 21% increase in local business advertising

Will these drops of good news change the thinking of the non-believers?  Not likely.

But for the family owned businesses that serve tight-knit communities, they may be happy to know that they are not alone in appreciating fantastic local directories.

Starting a business is like rolling a snowball downhill. At first it takes all of your energy just to pack together a few handfuls of snow. Once you’ve made the snowball, you have to push and push and push to build up some weight.

The heavier the snowball becomes, the more snow it picks up. If you can get it moving fast enough down a slope, it will take off on its own gaining speed, size and momentum. It needs both mass and speed to keep rolling.

When a new business opens, it has to expend tremendous effort to pick up the first few customers. Each successive customer comes a little easier than the one before it, but there’s a catch.

Just like rolling a snowball downhill, if a business can’t pick up customers fast enough, it will not gain the momentum necessary to take off.

A Yellow Pages advertising program by itself will not generate all the customers necessary for a business to be successful. However, it contributes by adding additional customers that boost the company’s momentum.

Explaining that a business needs to add customers just as a snowball needs to add snow may help an advertiser visualize how Yellow Pages can help him.

Special thanks to Tom Davis, author of “The TRUTH about Yellow Pages” for this story.

What will you tell your grandkids?

My college roommate’s Uncle Howard was a wealthy businessman who gave millions of dollars away .

His most visible gift was the “Touchdown Jesus” mosaic on the Notre Dame’s Library.

While attending Notre Dame in the 1920′s, he sold World Book Encyclopedias door-to-door.

He became a school teacher and continued selling encyclopedias after graduation to supplement his salary.

I asked Uncle Howard to tell me about “Black Monday” when the stock market plummeted in 1929 triggering the Great Depression.

He said he wasn’t worried.  Earlier that day, he sold a set of encyclopedias and had $50 in his pocket.  If everything went to pieces, he still had $50 and knew he could get by.

He sold right through the depths of the Depression.  It wasn’t easy, but he never slowed down.  To his customers, encyclopedias provided education, and education meant opportunity for a brighter future.

Surrounded by problems, Uncle Howard delivered solutions.

He rose through the World Book ranks and became the number two person in the company working for Marshall Field.  Uncle Howard earned a small override on every sale, and he amassed a fortune.

Today, we are surrounded by fear, turmoil and uncertainty.  A young person may someday ask YOU what it was like back in 2008, and how did YOU respond?

What will your role be following the Great Crash of ’08?

Will you be defeated by circumstance, or will you provide solutions and support to others?

I hope that I will be able to say that I chose to be a
victor rather than a victim.  In the midst of calamity, I saw
opportunity.

Have a prosperous week.

Dick Larkin

ps. Next time you see “Touchdown Jesus,” remember Uncle Howard, a man who refused to relinquish control of his destiny.

This is a well produced video describing the benefits and services offered by YPG, Canada’s largest directory publisher.

While the service isn’t new, given YPG’s strong sales force and customer relationships, it marks a solid movement toward giving advertisers what they want.

Extending beyond the printed directory, and YPG’s own websites such as YellowPages.ca, advertisers who want a strong presence on Google will be interested.

The challenge comes with accountability and advertiser expectation.

How many leads or sales should an advertiser expect from a $500 monthly investment?  What if they are spending $10,000 per month?

Accountability without a well established frame of reference and customer expectation is a dangerous thing.

This will probably be very successful, but less profitable than the company’s print directories.

That’s because $10,000 spent in print is vastly more profitable than $10,000 spent buying leads online (because traffic has a high cost that does not go down as an advertiser spends more, it actually goes up).

AT&T will no longer be publishing residential listings in Madison, Wisconsin.  This follows their trend of eliminating residential listings in Milwaukee, Austin, Texas, and Atlanta, Georgia.  This should make the environmentalists happy.

It’s interesting timing to announce the elimination on the same day that they begin delivering directories.

The 2010 Madison AT&T Yellow Pages is reportedly 1/3 smaller than the previous edition.

In an article on the Wisconsin State Journal, AT&T spokesman Chris Bauer said that there were better sources for residential listings.

“Customers often keep their own personal phone books in their cell phones or on a list on the refrigerator or by the phone. They have school directories, church directories, and they have the Internet.”

My employer, American Marketing and Publishing, publishes the HomePages community directories throughout Wisconsin, and we will continue to list all residents in all of our directories.  In the tight-knit communities we serve, residential listings are very important to the residents.

As a competitor to AT&T, I’m thrilled that they’re doing this, because it makes our product even more useful.

As a cheerleader for the Yellow Pages industry, I’m disappointed in AT&T for the move.

The reason AT&T dropped the residential listings was to save money.  I respect that.

The problem is that residential listings drive heavy usage.  Five years of data at WorldPages.com found that nearly half of the searches were for the business name or for residential listings.

By eliminating the residential listings, AT&T is also eliminating a significant chunk of their user base.

So do you think that they would lower advertising rates to compensate their loyal advertisers for the reduced usage?

Of course not.

In fact, most of the advertisers are not aware that the listings have been dumped.

Is it any wonder why local business owners feel such animosity toward the Yellow Pages industry?

The reduced utility further weakens the AT&T printed Yellow Pages as a local advertising vehicle, and will cause fewer advertisers to renew in future years.

So where will people find residential numbers?

Well, if they use their phone to dial 411, AT&T charges $1.25 to $1.50 per call.

So they charge the advertisers the same rates, they save money by not publishing the white pages, and they make money for providing the information that used to be free.

As my friend Vinny would say, “You got a problem with dat?”

The big Yellow Pages publishers have had financial problems, and business is business.

But it seems like they’re hell-bent on hastening their own demise.

Last January, we announced a contest to our sales reps to reward consistent performance.

It’s really simple.  We started with 150 sales reps who represent HomePages Directories in Illinois, Wisconsin, Ohio, Indiana, Iowa and Kentucky.

Make a sale.  Every day.

Our directories serve small businesses that serve mostly local customers.

The Yellow Pages ads start at around $385 per year.

But the ads don’t sell themselves.

As long as a rep made a sale, any sale, they advanced to the next day.

We put out a big honkin’ award.

The last man (or woman) standing would drive off in a new Saturn Astra (or $16,500).

The winner of the contest is Joe Brien.

Joe is a remarkable sales rep who has made at least one sale every day since September 2008.

At our company meeting yesterday held in the Duke Ellington Ballroom at Northern Illinois University, Joe chose to receive a check for $16,500 because he already drives a nice car.

Congratulations, Champ!  You served hundreds of appreciative small businesses, and were rewarded for your good works.

I received word from an old friend that he is interested in selling his small (around $1 million revenue) independent Yellow Pages publishing business.

It’s located in the Southern United States, and would need to be owner operated to be successful.

The owner has experienced health problems, and needs to sell to someone who can jump in and lead the sales effort.

If you are seriously interested, please send me your complete contact information at Dick [at] ypcommando [dot] com.

I will forward your information to him, and if he is interested in contacting you, he will.  i will not disclose any information about the business as he does not want employees or competitors to know.

So is owning a directory business a good idea, or is it jumping onto a sinking ship?

I can’t speak for this individual business, but here are some of the characteristics about Yellow Pages businesses.

• Directories have fairly high fixed costs, and fairly low marginal costs.  In other words, once you cover the cost of purchasing listings, printing, and distributing, sales are highly profitable.  You basically have the costs of sales commissions (around 25%) a very low cost to produce the ad (under $20) and hardly any cost to add it into the directory.  So a well developed directory becomes very profitable.

• I’ve found that advertisers like the concept of internet advertising, but they will pay for the reality of traditional media if the cost and risk are offset by the value delivered.  A low priced, well developed local directory will almost always outperform online media dollar-for-dollar for the local advertiser.  This is especially for smaller towns, not so much for major metro markets.

• You own your media, and can control the quality.  Selling ads on Google is not a sustainable competitive advantage because everyone can do the same for one advertiser.  If you invest in and produce an outstanding local directory, you alone control who is featured and how.  You set your own rates, and make the book as good as you want it to be.

• Directories publish every year, so you can build a very strong renewal business over time that rewards loyal customers.

• You can outsource the back office operations to a handful of outstanding companies that do everything but sell.  You can invest your money into selling, and let someone else produce the final product.

On the bad side . . .

• Yellow Pages is widely considered to be a dying media.  If you doubt the viability of printed media, you will be right.

• Cash flow for directories can be tough.  Many advertisers expect to pay after the book is delivered, but sales reps need to be paid upon sale.  A number of directory companies have fallen on  hard times because of cash flow rather than product usage.

• Competition is fierce.  There is no end to the number of advertising requests that local merchants get.  That’s why good sales people are so valuable.

If you’re interested, send me your complete contact information to Dick [at] ypcommando [dot] com

January 18, 2010 is the date of our annual company meeting at American Marketing & Publishing, LLC.  It’s when we bring all of the sales team and office employees to Northern Illinois University for one day of reflection, direction, and motivation.

2009 was a remarkable year for the HomePages Directories.  We expanded our publishing footprint by adding over 40 new markets, entered into two new states (Iowa and Kentucky) and grew our sales by 18%.

We now publish over 300 community directories that serve small, medium, and very large businesses.  A HomePages Directory ALWAYS contains more local business participation than any other directory, in print or online, because of the value we deliver and the hard work our sales teams put forth.

It’s very common for a HomePages Directory to include an ad from a woman who washes dogs as well as an ad from the local WalMart (that was purchased by the local store manager).

So this week, coming into our company meeting, our reps are braving the elements to reach more business owners and help them spread the word.

The reps will bring their contracts into the sales meeting, and one of the orders will be drawn to give away this television to a lucky sales rep.

Rock on, team!

My friend Joe Brown at Kenyon Design Group reworked this ad into a much more beautiful ad.

The advertiser had been running this ad in a large number of directories for years.

The advertiser explained that this ad was originally designed by a Dontech rep with 30 years of experience.

The problem is that it is not visually appealing.  Since women make 85% of local buying decisions, it is certainly less than optimal.

It also doesn’t do much to build trust, build value, communicate benefits.

Here’s what Kenyon Design did with basically the same content.

The advertiser increased his advertising from 3 books to buying 23 triple-truck ads.  He’s since expanded his advertising with the HomePages, and has been highly effective.

I highly recommend Kenyon Design Group as a top notch Yellow Pages Ad Designer.