Strong man acts and doorstops used to be the principle uses for local directories. But more and more businesses are turning to this traditionally unglamorous medium, says Alan Mitchell.
Most companies are used to the idea that they have to invest large sums of money seeking out and wooing potential customers. But there's a huge, and growing, number of smaller British businesses which simply sit back and wait for customers to come to them. All they have to do is find a way of placing their shop fronts inside customers' homes and offices - and wait. And when the customer's need arises, the orders flood in.
Over the last decade, consumers' usage of directories to buy goods and services has risen by half. Each month, 54% of the UK population will turn to the Yellow Pages at least once, while each week 15 million consumers turn to its arch rival Thomson Local. Smaller businesses are realising that advertising in a directory is the way to open that shop front in the home.
Result: the unglamorous, little-noticed Cinderella of the marketing world has become the fastest growing advertising medium in the UK, outstripping the ad revenues generated by the much glossier, sexier world of high-profile consumer magazines. 'Nowadays, using the phone for business is just a way of life,' comments Richard Duggleby, head of customer services at Yellow Pages.
Terry Procter, managing director of specialist directory advertising agency Procter and Procter, agrees that advertising in a directory is 'a far cheaper form of generating sales leads than any other medium'.
And, despite the advent of global multi-media communications, most households still do most of their shopping within a five-mile radius of the home.
A 15-mile trip is rare, he points out. For tens of thousands of businesses, being locally available and locally advertised is still what counts.
Garage services, restaurants, plumbers, car accessory merchants and builders' merchants are the five biggest beneficiaries of directory advertising, with electricians, car dealers, taxi firms, DIY stores, insurance brokers, hotels and hairdressers not far behind. Indeed, for many of the 400,000 businesses in Yellow Pages, their ad is effectively the shop front. If the ad didn't exist, nor would their business. 'We have some of our own customers,' says the proprietor for Ryecraft Motors of Peckham ('You bend 'em, we mend 'em'),' but we get a lot of response from Yellow Pages'.
Agrees the switchboard operator for drainage cleaners Drainwise, 'we get nearly all our business from Thomson Local'.
Not surprisingly the battle between advertisers within directories is intense. The bigger the ad the better, with different formats closely scrutinised to test different response rates. One wheeze, of course, is to change your name to get yourself further up the alphabet list. How about Aabacom Services, Aable Electrical, or Aacron Self Storage?
'It's sad,' comments Procter, 'but gimmicks like that work'. Neither operation has yet overcome the directory's big drawback - the fact that would-be customers have no way of knowing whether an ad comes from a cowboy or a genuine professional.
Meanwhile both sides are going all-out to boost consumer usage of directories.
Local maps, useful leisure and amenity numbers and clearer signposting are some of their latest offerings. Thomson Local - the subject of a management buy-out in June 1997 - makes much of the fact that its directories are more 'local' than Yellow Pages. 'We get close to 40% of all usage,' claims Thomson Local CEO Gary List. Yellow Pages, meanwhile, points to the favourable responses to its popular TV advertising campaign.
The message that directories, as the ad puts it, are 'not just for the nasty things in life' is one that business is only now coming round to.
According to List, still less than 20% of all UK businesses use directories as an advertising medium, compared to 40% to 55% in countries such as Italy and the US. But national brands such as DHL, Marks & Spencer Financial, Kwik-Fit, Sun Alliance, Prudential, Saga, Lufthansa and Nationwide ('Obtaining a mortgage over the phone is as easy as ordering a pizza') are piling into directories. Abbey National Direct is now spending millions of pounds on directory ads, which generate over 50% of all its mortgage enquiry calls.
'Fifteen years ago there would have been next to no advertising from these companies,' Procter points out.
'But as the telephone becomes a major channel of business, companies are changing their marketing strategies, and opening the doors to directories,' he claims.
Not surprisingly printing directories is nearly as profitable as printing money. Eighteen months ago, the Monopolies and Mergers Commission, worried at the 'significant entry barriers to the directory market' and the fact that Yellow Pages' 86% share of it generated 'very high rates of return on capital', imposed restrictions on the number of directories it could publish, plus a price cap.
But that's not stopping its expansion plans. If the marketing gurus are to be believed, offerings like Yellow Pages are just low-tech precursors for a coming era when consumers will use emerging media like the Internet and 'intelligent agents' to help choose who supplies them with what, from their homes. Yellow Pages' Internet site 'Yell', which offers a directory of 'good' Internet sites, already receives 500,000 visits a week. Says Duggleby: 'we want to have our finger in as many bits of the future as we can.'.