Category Archives: View From The Corner Office

Interviews/commentary from the senior most managers in the industry

View From the Corner Office – An Interview with Richard “Rick” Hanna, Executive Vice President, Sales & Marketing, Dex One

Rick Hanna jumped into the deep end of the pool nearly two years ago when he was appointed Executive Vice President of Sales and Marketing of Dex One Corporation, responsible for all sales and marketing functions.  Hanna did have the advantage of extensive background from the technology and telecom sectors to help him navigate a company and sales organization in the midst of monumental change, all within an industry undergoing equally significant transformations.  With responsibility for leading the company’s transition from a product-centric to a customer-centric organization, the company is moving quickly to transition from a mostly print centric publisher to a provider of  a wide range of print and digital products.

Most recently, Hanna served as President and CEO of RRA Partners LLC, working with companies focused on broadband network deployments.  Prior to joining RRA Partners, Hanna served as Chief Operating Officer at Motive Inc., where he led the sales, marketing, operations and product development functions.  He has also held a variety of senior leadership positions at at AT&T, Cidera, the small/medium business division at MCI, MFS-Intelenet, and Teligent.

We recently had a chance to sit down with Hanna at the SMB Digital Marketing Conference, to discuss his insights on the changing realities of selling advertising to SMBs, the challenges of reshaping Dex’s sales organization, and the pending merger of the company with SuperMedia.  Obviously there were a number of areas specific to the merger with SuperMedia that Hanna could not discuss, but I think you will enjoy some of the insights he could provide.  And we even didn’t hold it against him that he is a graduate of the University of Central Connecticut.

YPT:  Have you found any surprises since you joined industry nearly two years ago?

Hanna:  One of the first surprises was that yellow pages was actually a growth industry as recently as 2007, so the market is shifting rapidly.  Now it’s a constantly evolving market.  As I said in my presentation this morning, if you believe you’ve caught up, you’re probably still in denial.  But back to your original question, I’ve found it’s really not much different from other industries I have worked in such as the AT&T Long Distance SMB division.   The cultures were very similar.

YPT:  How long was merger with SuperMedia in the works?

Hanna:  We originally started discussions last fall.  They kind of quieted down over the winter, but then started up again seriously this spring.

YPT:   When do you think the merged group will be able to get things turned around and begin so see increase revenues, and ongoing profitability?

Hanna:  I can really only speak to the trajectory Dex One is on.  We had been seeing strong growth of upwards of 50 percent in our Digital product revenues recently.  The combination of our Dex Bundles, Dex Guarantee Actions (DGA) and digital growth, has us on a trajectory to turn positive by 2015.

YPT:  Was the shift from print to digital products as much an issue caused by the poor economy, as it was market demand?

Hanna:  We have gotten more aggressive with our digital products as our customers have become savvier as to how to use these digital products.  More and more SMBs are beginning to grasp the importance of leads and not worry about the platform that generates them.  They know their customer base is changing and shifting but they aren’t sure how much or where they are moving to.  Most business owners know they need have some presence on Google with at least a $200-$300/month investment.

YPT:  So why then is Dex One best positioned to capitalize on this shift?

Hanna:  The exciting thing is there really is no dominant, “700 lb. gorilla” in this space.   There are a lot of smaller players trying to serve SMB with a variety of products, but only a few have the full product suite that Dex One offers.  Even more important is the long standing relationships our sales force has with our SMB customers. They have depended on us for years to help market their businesses. Now, with our digital portfolio and bundles they are trusting Dex One for print and digital services.

For Dex One to be successful, we first needed to build the system and support structure to handle the new products.  We also needed a revised, sharpened hiring focus, in order to make sure our sales force better matched our current market opportunity. We are hiring more digitally savvy sales people, including New Business Hunters, which is different for Dex One.  This process took time to get in place across our national sales force.  It took us about 4-5 months to really gain momentum in refreshing our sales force.  We have learned a lot and now have over 1,000 new sales people in our force, representing a 60% refresh over the past two years.

The combination of the investment in digital products, our 21st Century sales force, and sales automation tools have really paid off for us in 2012.  Our Digital grow will be around 40% for 2012, and our bundle penetration will achieve our target of 60% of our revenue in Dex Bundle, including our Dex Guarantee Actions product.   Currently, we are running above 70+% penetration on our bundles, which means better retention, increased revenues and a very solid base to sell more new products to our customers on an ongoing basis.

We have also changed “ how” we call on our customers. In the past, our sales cycle was more of an annual basis, tied to the print cycle of the directory. Now, we are calling on our customers on a continual basis. We call it “1, 3,7, 11” – which are the first, third, seventh, and eleventh months of an annual cycle. We measure their results, sit down and review product performance, and in general, provide a higher level of service to our customers. This requires our sales force to be more efficient. This is where our efforts on sales force automation, especially delivering automated proposals on the sales reps iPads, makes a big difference.

Additionally, we have a sophisticated, search platform that really sets us apart; our DexNet platform, which sometimes internally is referred to as “science project that went well.”  We have a team of algorithmic PhDs in Santa Monica working on improving our platform each day. It is more than a full time job to keep up with the myriad of changes that Google, Yahoo, and others make to their algorithms on a constant basis.  This business is just too complicated for small boutique digital consultants or agencies to effectively serve the typical SMB customer, who spends $300-$500 a month on their digital marketing. Our biggest competitor in SMB is this local digital consultant, or as we call this segment “I got a guy.”  With the market changing as fast as it is, we truly believe the best-informed marketing consultant/sales representative will win the day in the SMB marketplace. This is again the reason why we are investing in comprehensive, multi platform training for our sales and support teams.

YPT:  How have you changed the profile of the sales people you are recruiting?

Hanna:  We found that just having multiple years of digital background wasn’t enough, especially if you are missing the core selling skills.  Making sure you are matching their skill set to the specific job is critical.  Base retention sales is very different than new business prospecting. We had to make sure we were recruiting the right skill for each of our positions. Even with an improved hiring profile in sales, we still have to expect that a 30% turnover is normal in large SMB sales forces.  This is part of the culture change as well. We have to be able to balance our sales relationships with our customers, in conjunction with the transformation to a cutting edge, marketing services sales force.

YPT:  With this expanded product set, are the days of the one call close gone?

Hanna:  Fading, maybe not totally gone, but heading that way.

I do believe the bigger change is the multiple call plan I mentioned earlier. By servicing our customers during the year on a more regular basis, the renewals and new product sales happen more organically.

For new business, we are training to be more prepared going into the first call. Plus, with our automated proposal and presentation tools on the iPad, we can accomplish a lot more on the first call.

Our goal is to be as efficient as possible, as the old saying goes, “time is money.” Bottom line, we want to make sure our customers and prospects alike fully understand our value story, and are confident in their purchase decision with Dex One.

View From The Corner Office – An Interview with Oscar Sousa Marques, CEO of Directel Macau Ltd.

View articles are intended to be limited to interviews with the most senior  leaders in the industry.  This month we continue the series in a recent interview with Oscar Sousa Marques, the CEO of Directel Macau Ltd.

If you have the chance to visit Macau, you should jump at.  The small island has a rich history dating back to the Qin Dynasty (221–206 BC).  Portuguese traders first settled in Macau in the 16th century and subsequently administered the region until the handover on 20 December 1999 to China. Macau (Chinese: 澳門), is only 29.5 km(11.39 sq miles) in size and with a population density of 18,428 persons per square kilometer is the most densely populated region in the world.  95% of Macau’s population is Chinese; another 2% is of Portuguese and/or mixed Chinese/Portuguese descent.  The country in addition to Hong Kong, is one of the two special administrative regions of the People’s Republic of China.  Location wise, Macau is situated about 60 kilometers (37 mi) southwest of Hong Kong, or about an hour’s ride from Hong Kong on high-speed hydrofoils, which run about every 15 minutes each way during the day.  The territory’s economy is heavily dependent on gambling and tourism, with the gambling industry generating over 40% of the GDP of Macau.  Currently there are 30 casinos, several of which should be familiar to those of you that visit Las Vegas:   Wynn Resorts, Las Vegas Sands, and a partnership with the MGM Mirage.

Directel Macau is the only true multi-platform yellow page publisher/media company in Macau. In less than a decade Oscar Sousa Marques has lead the company thru an evolution transforming them from a Yellow Pages print only focused company to a multi-product advertising consulting company connecting buyers and sellers.  Its products include the official Macau Yellow Pages published under contract from CTM – Companhia de Telecomunicações de Macau, the local telecommunications company, which mostly serves the local population.  Because of the increasing influx of visitors to Macau, the company has added a number of tourism-related products such as the Macau Tourist Guide, the Macau Tourist Map, the Macau City Map and the Macau Leisure Time (3D-Map).  Its online strategy includes multiple websites, such as (Yellow Pages website) and (online tour guide).  To support advertiser transition to these digital products, the company also provides web hosting, web-design and mailing lists services.

Oscar Marques started with Portugal Telecom in 1994.  He has had assignments in Vienna, Portugal, and then launched a new Yellow Pages effort in Uganda.  In late 1998, he was asked to go to Macau and has been there ever since.  He is currently the President of ADPAI – the Asian Directories Publishers Association Inc.   He has degree in Economics from the Universidade do Porto.

YPT:  Give us some background on how the company is structured?

Marques:  The company was originally owned by Portugal Telecom, the Portuguese telecom incumbent, until late 2007 when it was divested and acquired by some local investors that included the management team, myself and Filipe Santos who had been the Asian Director at that time.  An investment group, Macau Ignite Media, then later acquired 49% of the new company, so we have a diverse but experienced management team and Board.

Currently Directel has a little over $2.5 million in revenues (US) from a committed and enthusiastic team of about than 30 people, who work in an environment that encourages responsibility, teamwork, innovation and success. Our sales team has a deep knowledge of the local business community and are thus ideally positioned to serve it efficiently.

YPT:  Tell us about your current product mix and what new products are you working on? 

Marques:   When I first came here we had just the Yellow Pages so we have certainly broaden our portfolio.  Print yellow page products still account for 50% of our revenue.  We have an existing contract with a local telco which includes both white and yellow pages in English and Portuguese versions.  We also publish an English and Portuguese print yellow pages with just business white page listings, as well as a Chinese version.   We also still do a “fax” directory which actually has more emails and website addresses than anything thing else in it.

For the travel and tourism segments, we work closely with MGTO, the government agency that is involved in tourism.  In print products for this segment, we have hotel versions of the yellow pages with a reduced heading set and in both a larger and small trim sizes (so they will fit in the bedside draws in the hotels).  We use a high quality paper in the hotel products, which allows us to compete with local magazine advertising.  We have several tourism map products in several languages.

Our digital product set includes several different websites, and services to help businesses that don’t have websites already built.  We are currently developing online 3D mapping solutions as well as local mobile search technology that will deliver new and more versatile products and services in the very near future.

YPT:  That’s a pretty robust number of products.  What challenges does that present to your sales team?

Marques:  Directel currently has 30 people about half of which are in sales achieving a little over $2.5 million in revenue (US).  We have a natural monopoly here on print Yellow Pages.  But we do have competitors on the map products so we have to be creative in how we bundle our products, both print and digital, to provide a true value for the advertisers.  We have added several different languages to our tourism products including Korean and Japanese.  We are considering another version in the Indian language.

Online we have multiple websites and languages and even social media products.  Our online strategy is to be the overall portal that people come to for a range of products.  We have begun integrating Groupon/coupon type features into the online products and expanded services such as allowing people to purchase tickets and other items.  All of this allows us to help position any small business for all of their advertising needs, not just yellow pages.

One newer service we have been offering is website creation in coordination with a local government department who sponsors up to 70% of any costs involved in creating a website.  From the website, we can help them evolve in Facebook, mobile and other features.

YPT:  What is the biggest challenge you have with your sales team?

Marques:  There are actually two.  One is finding good talent.  We are facing a large challenge in our recruiting efforts.  We are actually lucky to have low turnover in our sales team but it is becoming more difficult to recruit top people as unemployment is at 2.3% here, mostly due to mostly to restrictions on amount of immigration to Macau.  This policy has really hurt other small companies here even more.  Originally it was designed I think to prevent the casinos from sucking away all of the local talent.  But a lot of small businesses such as restaurants are telling us they are closing sections of their business because they can’t find enough wait staff, cooks, etc.  This of course then impacts how much advertising they want to do.  Of course, we are all competing with the casinos for staff, so we have to offer the full range of holidays, very competitive pay, and lots of benefits to keep our people.

The second challenge for sales is having the sales reps evolve to be solutions providers for smaller businesses, and not just be an order taker.  The market has certainly evolved and our products have evolved to match those changes.  The bigger product set results in a more complicated sale for reps.  We have found that developing new products hasn’t been that difficult, but getting the sales reps to embrace it and sell it can be the biggest issue.

YPT:  How have you had to change how your train and equip them to be successful in the market?

Marques:  Our sales reps now all have laptops.  This year we may move to Galaxy tablets.  We have to use tablets with the Droid operating system since we still have a lot of clients that have Flash video in their websites.    We would like the reps to average 4-5 visits a day but between the complexity of the product and getting around in the traffic here in Macau it isn’t easy.

On assignments, we do have reps follow themselves into sales they have made the prior year.  The biggest change is that we are moving to a full year relationship with our clients and away from specific product campaigns.  Instead the rep will visit their advertisers 2 or 3 times a year and just manager their overall spend over the course of the year, not by campaign, but more in groups of products that are closing.  Relationships are culturally very important to business people here.  It is a big part of the culture.

YPT:  Has your business changed any since the changeover from the Portuguese to the Chinese?

Marques:  In many ways, business has actually been better for us since the handover to the Chinese.  Things have been more stable and reliable.  We have an excellent relationship with the local government groups here, and that really did change since the handover.

YPT:  Who was the biggest mentor in your career?

Marques:  First and foremost, my parents who, with their very different career paths, showed me that if you work and persevere you will get what you want.  In the Yellow Pages industry, I have to mention Rodrigo Teles da Silva and Mário Domingos from Directel Group in Portugal as well as José Saldanha from Kenya Postel Directories. All helped me a lot when I first took over Directel Uganda with very little experience in both management and the yellow pages.

YPT:  Do you still believe there is a career path in the yellow pages industry, and if so, what does that look like?

Marques:  The industry has definitely morphed into something that would have been difficult to recognize as Yellow Pages just 3 to 5 years ago but there are always opportunities when you are serving local SMBs. The traits that will guarantee you a successful career are now the ability to serve your client with whatever product or service you have, the willingness to embrace change and positive thinking. You have to listen to your market and adapt or come up with new products that really meet your clients’ needs and not be afraid of cannibalizing some of your existing ones. The fat EBITDA margin periods are gone but as long as there are SMBs, that we invest in our database and sales capacities we should be able to succeed.

YPT:  How do you keep the company current on what is happening in the industry?

Marques:  Directel Macau has been a longtime supporter of ADPAI – the Asian Directories Publishers Association (  ADPAI is the non-profit association that comprises of companies that are involved in the directory business in Asia. It establishes a forum for members to meet on a regular basis to exchange knowledge, experiences, information and ideas, establish standards and practices for the industry in a spirit of mutual interest.

The association is now evolving to be more open to all publishers in the area, as well as online operators and other similar type providers.  We have some members that don’t even have print Yellow Pages.  And if you look at our product line we’ve been doing things like maps and tourist guides for many years now.  We are morphing into media companies, not just Yellow pages publishers.

YPT:  Where do you see the future of your business going?

Marques:  We believe that publishers need to understand how important their database of information is.  We have the best database in Macau. In the past two years we have been building that database going beyond just name, address, and phone number to including company information things such as hours of operation, whether the restaurant is open for lunch, easy to park, is the business is kid friendly, things like that.  We’ve even been using temps to add to that database beyond what our sales people collect when they go visit the advertiser.  That database is the real difference between what we can offer and others.  We will also start adding geocoding information too.  We have found that the Google info often isn’t as accurate as people think it is.  With all of that information, we can syndicate it to others while keeping the relationship with the advertisers.  I think this is a very important thing that publishers need to understand about their business to help shape their future.

View From The Corner Office: An interview with Dave Goddard, Simba Information

Perhaps no one issue is more relevant, current, or strategically important for the Yellow Pages industry right now than  some of the recent environmental challenges it has faced.  Up until recently the industry had managed to fight back most efforts. But a new ordinance passed by the Seattle City Council which would levee new registration fees for publishers, require mandatory opt-out compliance, and impose significant new waster recovery fees per book distributed has now brought the issue to the fore front.

Simba Information, led by Senior Analyst of the Yellow Pages Group, David Goddard, has released a comprehensive new report covering the full spectrum of the topic entitled Going Green:  Environmental Challenges in the Yellow Pages industry 2010. Goddard is a recognized authority on the industry having covered it since 1997.  He oversees the content gathering and presentation of Simba’s Yellow Pages & Directory Report and numerous related research reports. This work is an exceptional piece covering not only the general industry issues, but also provides readers with more detailed views inside most of the major publisher efforts.

We recently sat down with Goddard to further discuss his views on this hot topic. Enjoy.

YPT: How was this study assembled??

GODDARD:   Generally, Simba gathers the information for a report for about a year, which gives some solid trend lines. We then analyze the information and publish it. We have tracked the environmental impact on the industry for the past few years but this year Seattle brought the impact on the industry right to the forefront. While we discovered the industry has become more green over the past few years—primarily since the beginning of the PSI hearings in 2007 — it may be too little and too late. A number of states  and municipalities are already looking closely at the cost of yellow pages recycling just as Seattle did and may decide to recoup the money.   Seattle is going to charge the publishers as much as $600,000 at year to do business in their community. That will probably look very inviting to legislators.

YPT:  Is your overall sense that the industry understands how serious an issue this really is?

GODDARD:   Absolutely, I remember the first few environmental meetings that came up in 2007 & 2008. The publishers were surprised by the environmental issue as it pertained to their industry.  But, now they have educated themselves and a great deal of the credit goes to the YPA and ADP associations.  The publishers now work hard to making recycling of yellow pages directories more convenient and have gotten behind the green movement. However, the challenge is quite large because publishers are dealing with individual states and municipalities.

YPT:  In YP Talk articles we recently suggested that this lawsuit may not be a totally bad thing for this industry.  It could almost be viewed as an inexpensive public relations effort from the industry.  Do you agree??

GODDARD:   It is likely there will be a more united industry. Seattle is already proving itself to be a good example: two of the RBOCs and the YPA have filed the suit against the city ordinance and Yellowbook, which also distributed in the city, has thrown support behind them.   The money that will be owed to Seattle if this ordinance is upheld is really going to pinch. And, it won’t take long for environmental groups in cities like Chicago, which are already in contact with Seattle, to look to do the same.   Publishers may well have to pay to distribute in some of the cities and communities. Hopefully, both sides in Seattle will come up with a compromise that will work for publishers and the city. What that compromise would be, I’m not sure but I suspect they will be looking for one.

YPT:  Publishers have suggested that opt-out rates are only about 1% of the total delivery , and that it is a small fragment doing all the complaining/blogging about the issue while rest of the community isn’t really engaged in the discussion.

GODDARD:   Those statistics sound about right from what I’m hearing but the issue has now moved into the political arena.  If the Seattle model expands, communities across the U.S. are going to ask taxpayers if they want to continue to pay for recycling phone books or send a bill to yellow pages publishers.  I think the taxpayers’ answer is pretty obvious. Communities are going to go for the money. So, even if it’s only 1% of the households that don’t want the book delivered, the political arena is likely to give communities the legal right to send Joe Walsh a bill.  The publishers have to pay the bill, go to court in an attempt to have the ordinance overturned or come up with a compromise.

YPT:  Wouldn’t the process agreed to in the Minneapolis/St. Paul area be the better route for all parties (agreement to set up a single source opt-out program with fees involved.   So, I think me the issues is that if there were no fees involved then say you have to offer the opt-out I don’t think that would bother anyone.

GODDARD:  Minneapolis/St. Paul was a good compromise but communities are always looking for additional revenue.  While cooperation with business is a goal, the Seattle model is an opportunity to offset some expenses. It would be nice for the industry if the Seattle model doesn’t spread but it’s pretty likely that it will.

YPT:  Specific to the Seattle ordinance, it seems that the ordinance champion, Councilman O’Brien, really has his eyes on a bigger loft (State House).

GODDARD:  Yes, you’re right.  Who’s going to be against cleaning up a community?  O’Brien told Simba in a recent interview: “If you produce it, you should pay to get rid of it.”  And, who can successfully argue with that?

YPT:  In which key areas do you think we’re going to similar legislation come up with next?

GODDARD: My understanding is that environmental groups in Chicago are looking to Seattle but don’t want the legal bill, so they are waiting to see what happens.  How long will a court case like this last – 18 months to 3 years?  It’s certainly going to take a while, so I expect we’ll see a lot of communities watching and waiting. If the Seattle ordinance is upheld, communities are likely to follow the model. Two RBOCs and the YPA, which represents a major portion of the business, have recognized the danger of a strong fee-based environmental model and drawn the line in Seattle.

YPT:  But if they lose?

GODDARD:  Those flood gates are going to open if they lose.  It will be costly to the publishers in Seattle and most likely will become expensive in other communities as well. Since the stakes are so large, a settlement really seems likely.

YPT:  You indicated that one of the things that surprised you in your work on this publication was how green the publishers have become.  Tell us more about that.

GODDARD:   Basically, unlike previous years, we’re seeing a lot of progress. In past years we would search the publishers’ web sites and find that opt-out was available but the procedure was difficult. A person who wanted to opt out often had to hunt through the site, follow many steps and sometimes end up placing a phone call to the publisher rather than an online procedure.   But this year it has gotten pretty easy.  And, the YPA and the ADP, which has their own opt-out site, are about to take it national.  So the industry really is going ‘green’ and working toward recycling—that is the big difference from past years.  Back in 2006 before the PSI (Product Stewardship Institute, an environmental advocacy group) meetings, you often couldn’t find yellow pages recycling information anywhere on a publisher’s site. By 2010 a resident can opt out of a book or find the closest recycling center without much difficulty all across the country.

YPT:  Publishers have indicated that the actual opt-out rates are running under 1%, and have slowed to a trickle.  How do you view this result??

GODDARD:   What opt-out does is create a choice and Seattle is a good example because three of the largest yellow pages publishers—Dex, Super Media and Yellow Book—distribute directories in the market. What is likely to happen is two of those publishers will be “opted-out” and a household will receive one book. Environmentalist groups seem to really get fired up when multiple publishers deliver multiple books multiple times a year. Many, many books then arrive at the landfill or recycling center, which is a great photo opportunity. That’s what draws attention and that’s where they see unnecessary costs to the taxpayer.  An average yellow pages user may not even recognize the differences between books delivered to their home, never mind the difference between incumbent and independent.   Given an opt-out choice, I doubt there will be many residents that love the yellow pages so much that they want to receive all three. I just don’t see that happening and with a door-to-door campaign like the one planned by Seattle environmentalists, the opt-out option will definitely come to the surface.

YPT:  If you were leading a print Yellow Pages publishing operation, what steps would you be taking now?

GODDARD:   Basically they have to get into Seattle and file a suit that points out the defects in the ordinance, including the question of why yellow pages publishers need a permit to operate in the city but newspaper publishers don’t.  There are a number of questions raised by the Seattle ordinance that appear to fly in the face of the First Amendment.  While the publishers have to make an expensive stand in Seattle, it can also be an opportunity.  It may well be in the best interest of the industry to find a compromise that becomes a model across the country rather than kill the Seattle ordinance in court and face continuous battles in other communities.

The yellow industry is going greener while the environmental groups are getting stronger, more united and savvy with working with politicians. This entire issue really came to the forefront on the East Coast when Verizon Information Services [now SuperMedia] split its big book in Boston into three regional editions. The issue has now spread across the country to the West Coast and the environmentalists and publishers are in this together. As Sieg Fischer, president of Valley Yellow Pages, said at the PSI dialogue at the Seattle EPA office a couple of years ago, “We all live on this planet; maybe we can work this out together.”  The Seattle ordinance and lawsuit could supply that cooperation.

And lastly, the PSI group has some real credibility and they have influence all over the country.  The institute, which has been involved with multiple industries ranging from batteries to pesticides, seems to know how to work with environmentalists and businesses.  The wisest course of action may be to work more closely with PSI to find a compromise. They may wear green shoes, but the truth of the matter is that they are pretty savvy.

YPT:  How much is the report and how can someone order a copy?

GODDARD:   The report costs $2,995 for an online download and this is the link: