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Wednesday, March 13, 2013

WE NEED ANOTHER $200,000 ON THE BOTTOM LINE

If the drapes on the glass window in my office were open, I could see into Technical President Jack Abely's office, and he could see into mine. We  both overlooked the atrium, and the floor which housed our circulation department. Our offices protruded out of the face of the Third Avenue building, mirror images of each other.In June, my phone rang. I answered, knowing it was Jack.. My back was turned to the massive window that went from floor to ceiling.  "Turn around," he instructed. I did. He was waving me to come over to his office. I crossed over to the other side of the floor, wondering, "What have I done now?" As I entered his office, he asked if I wanted a drink. He poured two scotches. It was about three in the afternoon on a warm summer's day. Before I could take my first sip, Jack said, "We have a major problem. Charlie Mortiz (who would become chairman of D&B in January, 1985) just called. Dun & Bradstreet is a bit behind  budget and Charlie wants another $200,000  from  Technical Publishing. As a publicly held company D&B regularly focused on its year-end numbers, crucial to its share price.

Graphic Arts Monthly had already budgeted a seven percent growth for '84, and I was stunned when Jack hit me with a bombshell. "I'm asking the bigger magazines to  raise ad rates five percent in July," he advised.. It was the first time in five years of working together that I disagreed with his decision ."I won't do it,"  I countered. He gave me one of his piercing stares of intimidation, but I wouldn't budge. I finally spoke, "We've both been in the publishing business for more than 25 years. Name one publication you've worked on that has raised ad rates in the middle of a year." He couldn't. While I stared at my drink, he called several of the other publishers, and each one agreed to raise rates.. I was in a dangerous position, but I stuck to my guns. "It would ruin my credibility with advertisers," I said.. There was silence for a couple of minutes as I considered my options. A past experience clicked in my head, and I knew I had a solution to my dilemma. I.  asked, "How much do you need from GAM?" He shot back, "$40,000". I finished my drink, stood up and gave him a thumbs up as I left his office.

Five minutes later he called to ask how I would generate the income. "Trust me, it's not illegal," I assured him, without revealing the details of my plan. I called Beth Hogan, our marketing manager, and Mary Oelz, who headed our classified ad department, into my office. I outlined the brainstorm I had, and told Mary she would have responsibility for the project. Over the next couple of days I drafted a letter to recipients of the magazine, printing companies in The U.S. and Canada. It noted that we had been sending GAM at no charge for the past 55 years. With printing and postage expenses escalating, we were asking that they send $15 to insure they would continue to receive the publication in the future. With the letter we included a card for them to fill out when sending in the remittance. It emphasized that the payment was tax deductible. Mary's name was on the enclosed postage paid return envelope so the checks would be properly delivered.

Later that month we executed the plan. The total cost of the mailing was $12,000 and we needed more than 5000 responses to achieve our goal. I sweated it out for about three weeks. Jack had no knowledge of the strategy until the mail room mentioned that Mary Oelz was getting thousands of envelopes. The accounting department also advised him of the receipt of the checks. When he discovered what we were doing, he called. "You sent out a begging letter," he stated rhetorically. "I prefer to call it my mendicant missive," I responded. Jack asked, "How did you do?" We netted $64,000. He couldn't believe it. The next year we refined the process and netted $90,000. The fact that readers were willing to pay for the magazine gave us an additional plus to our sales pitch.  I was extremely proud that I had executed the mission without upsetting our advertisers. A follow-up on this letter will appear  in a future blog covering 1986.