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Battling Ma Bell: alternative Yellow Pages arrive in Central Arkansas seeking bite of $12 million advertising market.

Battling Ma Bell Alternative Yellow Pages Arrive In Central Arkansas Seeking Bite Of $12 Million Advertising Market

About all Terry Shannon had when he decided to hook horns with the Bell Company was an office the size of an apartment and a dream as big as Texas.

The big dream was to publish a telephone directory to compete with South Central Bell. The apartment was a small one in Lake Charles, La., he opened after boarding up a real estate business in Paris, Texas. In four years, his independent telephone book has more pages than the Bell book in Lake Charles and generated $1.2 million in advertising revenues last year.

"I'm getting their attention," Shannon says.

Now he's come to Little Rock to try to sell and publish a directory here and to answer the question, "Why do we need another phone book?"

It's easy, Shannon answers. His book will offer half-price ads in a consolidated telephone directory of central Arkansas. The company, Consolidated Directories Inc., has been in Little Rock for three months selling ads for a directory to be published in April that will reach from Hot Springs to Conway to Cabot to Benton.

Southwestern Bell officials, as with most in these parts, aren't too familiar with CDI. But they boast that the Bell directory, without competition in Little Rock since the two-hand phone days, is a better bargain because of its overwhelming coverage and tradition. Especially because CDI isn't a book at all yet.

"Not to bad-mouth my competition," says Dick Brown, Southwestern Bell Yellow Pages division manager, "but he's taking on an enormous task. I'd hate to go against our company."

David Vs. Goliath?

The proposition of an alternative to the Bell book arises from the 1984 AT&T divestiture ruling, which mandated separate Bell companies be created from AT&T to allow more competition in the telephone business. Among the specifics was that Bell companies must sell their telephone listings to competitors.

Once a company buys names from Bell, it can sell ads and publish its own telephone directory. Shannon thought it was a great idea.

"I saw an area-wide telephone book in Paris, Texas, and it was the best telephone directory I had ever seen in my life," he recalls. "Everybody used it."

Shannon wanted to choose a city in which only Bell had a directory. A real estate man in an area where the land market fell apart, he moved to Lake Charles and opened his business in an apartment.

Shannon's CDI cut rates in half and took 27 towns and communities into its book. The company has printed four books, has a 3,800-SF headquarters and is shaking up Bell a bit. South Central Bell placed a three-quarter page advertisement in the Lake Charles newspaper telling readers to "hang on" to their Bell telephone books and not to discard them when "another" directory is listed.

"When our book comes out they say, `Honey, the new directory has come out.' And do you know what they do with the other one? They throw it away," Shannon says.

CDI published a directory for Pine Bluff last year; a second comes out later this month. CDI set up a Little Rock shop in March on the west side in an office decorated with little else than motivational hand-written messages taped to the walls.

"People think we're doing something radical here," says Calvin Cowart, CDI Little Rock sales manager. "But it's not. It's going to fly. It's going to happen."

The Sales Pitch

Cowart tears a reporter through his sales pitch, thumbing through CDI's Southwest Louisiana book to compare ads with the Bell Lake Charles book. In a single, dramatic motion, he rips out a full-page ad. "Don't believe what we're saying. Call this guy and ask him if people use our book," Cowart says.

A call to Joseph Cironi, president of the Chamber of Southwest Louisiana in Lake Charles, received the following comment. "He's a real entrepreneur, an excellent competitor, and he has played a very solid role in the community," Cironi says of Shannon's company.

The CDI book resembles a Bell directory. It's a big floppy book with white in the front, yellow in the back and two fingers doing the walking on the cover. The "walking fingers" aren't a licensed trademark and competing directories use the symbol to grab customers.

Cowart flips his binder to a central Arkansas map. The CDI directory will service Little Rock, Conway, Cabot, Jacksonville, Lonoke, England, Benton and Hot Springs. To reach customers in these cities now, Cowart explains, an advertiser must buy space in several books. The Jacksonville connection is a major selling point for CDI: Though Jacksonville residential listings are in the Bell Little Rock directory, the book is not distributed in Jacksonville because that city is serviced by GTE. An ad bought in Little Rock isn't distributed to Jacksonville.

Cowart stresses that people will use the directory because it will list friends, relatives and services in other towns and could save on directory assistance calls.

Pricing Pages

Then there's the price. A full-page ad in the Bell book costs more than $20,000; a full-pager in CDI is $11,075. "We have one telephone directory and we do it at one-half of the costs," Shannon says.

That's all well and good, says Yellow Pages manager Brown, but if few people read the ad, is it really half price? He explains that Bell studies have shown that four of five people use the Yellow Pages weekly, and the Southwestern Bell directories in Arkansas cities with competing phone books - Fort Smith, Hot Springs, Fayetteville - hold 85 percent of the usage.

"The half-price is a relative comparison," Brown says. "We know that we reach 85 percent of the people. Using that, I'd say someone is grossly overpriced."

Brown says several companies have tried successfully to launch a Little Rock directory. He says people away from Little Rock use the city's directory, obtaining copies by "hook or crook." For example, the company places Little Rock directories at the city's airport almost daily because they're taken regularly.

Brown emphasizes Bell's long commitment to the area, and says he doesn't resent competition. "People have asked us about this new directory. We tell them simply to get assurance that before they pay any money, they get a product."

No sweat, Shannon responds. "We know what we can do," he says. "We'll do it like we did in Lake Charles, La. It's just numbers."

Shannon is shooting for $2.7 million in ad sales for the first book. The Bell has from $10 million to $12 million.

Naming Names

A major expenditure for CDI not yet set is the price of the listings. In Lake Charles, CDI paid 8 cents a listing. In Pine Bluff, it was 45 cents per name. At 45 cents a name, costs would be an estimated $56,000 to buy only the Little Rock-North Little Rock residential listings.

However, Shannon, 39, is confident and excited. He did this interview while on vacation in Crested Butte, Colo. "When I leave here, all I've got on my mind is Little Rock, Arkansas."

PHOTO : DUELING DIRECTORIES: CDI's Lake Charles, La., phone directory generated $1.2 million in advertising revenues last year.
COPYRIGHT 1990 Journal Publishing, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1990 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Consolidated Directories Inc.
Author:Hathorn, Clay
Publication:Arkansas Business
Date:Jun 18, 1990
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