L. M. Berry and Company - Company Profile, Information, Business Description, History, Background Information on L. M. Berry and Company

3170 Kettering Boulevard

Company Perspectives

At the core of our company is the drive to go beyond your expectation to satisfy every need. It is all about connections: yours with us, ours with your advertisers, the advertisers with their customers. We work to make those connections smart, strong and unbreakable.

History of L. M. Berry and Company

A subsidiary of BellSouth Corporation, L. M. Berry and Company is the largest Yellow Pages advertising sales agency in the United States. Through The Berry Company unit, the Dayton, Ohio-based operation serves more then 100 telephone systems, approximately 1 million advertisers, and more than 100 million telephone customers in over 700 markets, distributing 28 million telephone directories. In addition, Berry Network, Inc., is a business-to-business company that offers Yellow Pages marketing services such as research, media planning, and ad design, plus interactive media services. Berry Sales and Marketing Solutions offers domestic and international clients a wide range of sales and marketing consulting services, including sales strategy, sales force recruitment and readiness, sales manager development, marketing strategies, and product development.

Founder Born: Late 19th Century

The man behind the founding of L. M. Berry and company was Loren M. Berry, born in Wabash, Indiana, in 1888. His father died when he was just four years of age, and he quickly learned the value of hard work as he began to help his mother who struggled to support the family through sewing and work as a maternity nurse. When he was just 8 years old he made and sold horseradish door to door as well as maintaining Saturday Evening Post and laundry routes. He became familiar with newspaper work during his high school years working as a reporter for the Wabash Plain Dealer and writing for his school's monthly paper. He also served as the business manager for both the paper and the school annual. In his business function Berry learned the basics of selling advertising space, which he would put to good use after graduation by starting a business, the Ohio Guide Company, to sell advertising in the timetables published by the electric interurban rail lines serving Midwestern cities. In 1909 he traveled to Marion, Indiana, to sell timetable ads and was asked by the manager of The United Telephone Company in Marion (Berry's uncle, according to the New York Times) if he could sell advertising for his upcoming telephone directory, a task another man had recently abandoned after putting in little effort and achieving no success.

Telephone directories were hardly new. Neither was the selling of advertising in them. The first directory been produced in 1878 in Connecticut by the New Haven District Telephone Company just two years after the telephone was invented. It was a crude one-page listing of 47 subscribers and that at the very least separated business from residential customers, although the names were not listed alphabetically, nor were the phone numbers included. Instead, the 11 residential customers were lumped together haphazardly, followed by three physicians, two dentists, 20 "Store, Factories, etc." four meat and fish markets, a pair of hack and boarding stables, and another eight telephones ascribed to "Miscellaneous" customers, including the police and post office. In the early years telephone companies treated directories as a necessary evil--and expense--and thus were published irregularly. According to lore, in 1883 a telephone directory printer ran out of white paper and substituted yellow rather than wait for a shipment. Thus, the term "Yellow Pages" was born.

In the 1880s the commercial printing firm RR Donnelley formed the Chicago Directory Company to print the Chicago telephone directory, and its founder's son, Reuben H. Donnelley, established the first classified telephone directory advertising and laid the foundation for the Yellow Pages industry. Telephone companies across the country followed Donnelley's lead and began to offset printing costs by selling advertising, but generally they devoted little effort to the task, delegating it to telephone company employees with other jobs or to the employees of their printer. It was not surprising that the ads were sold with little enthusiasm and businessmen eyed them with suspicion, regarding directory ads as just another way the local phone company was trying to bilk them. As a result, there were few ads, few telephone customers referred to the directory for sales help, and the unimportance of the telephone directory became a self-fulfilling prophecy.

Loren Berry, however, was not a man to short shrift any job. Already familiar with Marion businessmen after selling timetable ads to many of them, he went to work on the telephone directory and in little more than a week sold $780 worth of ads, an amount of money that not only covered his commission and the cost of printing a 150-page directory but also earned The United Telephone Company a small profit. It was a successful debut for Berry, who soon traveled to Kokomo and Logansport, Indiana, and used his results at Marion as a calling card with two more telephone companies that were in need of new directories. Again, Berry's efforts paid off for his clients, and he decided to launch a business dedicated to the telephone directory business.

In 1910 22-year-old Berry and his wife moved to Dayton, Ohio, centrally located in the Midwest and a town with a booming economy. They lived in a $12-a-week boarding house while he set up shop at a rented desk in a downtown office building. His first client was the Home Telephone Company, one of two phone companies serving the community. After performing well for the customer, he was then able to sell his services to the parent company, The United States Independent Telephone Company of Columbus, Ohio, which ran 20 telephone companies in the state. Berry was awarded the business of eight directories that had never sold advertising. In order to handle the influx of business, Berry took on a partner, a neighbor in his office building, George Craven, who had been working as a life insurance agent. The expanded operation, called Craven and Berry, was now able to solicit and win business from other Midwestern telephone companies located in larger towns like St. Louis, Indianapolis, and Louisville. New salesmen were employed and given common sense tricks to developing leads, such as read the local newspapers, jot down the names on the side of delivery trucks and wagons, and even visit the silent movie theaters to see what businesses were willing to pay to have their names projected on the screen before the show.

Turning Point: 1921

A turning point in Berry's history came in 1921 when the U.S. government finally decided that local telephone competition caused more problems than it was worth, and legislation was passed to allow for natural monopolies and the consolidation of rival phone companies. Although Berry lost some major customers during the shakeout, in the long run the change was good for the company. No longer did advertisers have to decide if they were going to advertise in more than one directory, and they could be assured that they would reach all telephone customers in a community and not just a fraction.

Craven's health began to falter in the early 1920s, forcing the dissolution of Craven and Berry. Thus, in 1924 the firm took the name L. M Berry and Company. It continued to grow, as did the use of the telephone and the importance of the "Yellow Pages" for both advertisers and telephone customers. By the start of the 1930s Berry's annual directory volume had reached one million copies, a considerable improvement over the 8,000 directories of 1910. The company achieved a major coup in 1931, signing its first Bell System contract, covering the Dayton area for the Ohio Bell Telephone Company. In that same year, the company was forced for the second time since the departure of Craven to relocate its Dayton headquarters to larger accommodations. In addition, Berry maintained offices in a number of other cities, as far away as Philadelphia, Pennsylvania, and Tampa, Florida.

A second generation of the Berry family became involved in the company in the 1940s. Loren Berry's son, John William Berry, had learned the business while growing up, working after school, on weekends, and during his summers. When he was 18, in 1941, the younger Berry got his first taste of sales by heading up the directory sales campaign in Franklin, Ohio, and in the process demonstrated a great deal of potential. In just half the time as the previous year's effort, his team doubled the number of Yellow Page advertisers. John Berry did not join the company until 1946, after earning a business administration degree at Dartmouth University in 1944 and serving a stint in the military at the end of World War II. He quickly assumed greater levels of responsibility at Berry Company, becoming general sales manager in 1948.

It was during the postwar years that the telephone became ubiquitous in the homes of average Americans, and as a consequence the Yellow Pages took on a greater importance and the fortunes of the Berry Company rose accordingly. Between the end of the war and 1950, the Bell System installed 14 million telephones, the same number put in service during the company's first half-century. Moreover, the consumer advertising industry came of age and the Yellow Pages became part of a greater trend impacting consumers and merchants alike. In the generation after the war, Berry expanded across the country. It added Bell customers throughout the south, as well as in New York and Wisconsin, and won the business of nearly 200 non-Bell customers. In addition, Berry became more vertically integrated. Not only did it sell advertising, it would now be able to handle all facets of a sales campaign, plus bill the advertisers, compile the directory, print, and deliver it.

The 1960s brought other changes to berry. John Berry became Managing Director in 1960, then succeeded his 75-year-old father as president in 1963, the same year the business was incorporated. Although Loren Berry would remain involved, serving as chairman of the board, the company was under the guidance of John Berry, who during his tenure would take the business beyond the United States borders. In 1966 he formed a joint venture with International Telephone and Telegraph Corporation (ITT), creating ITT-World Directories to publish directories and sell advertising for telephone companies around the world. By the start of the 1970s the business was publishing in nine languages in 17 countries, some of which never before had a classified telephone directory. Also of note, they were not necessarily the Yellow Pages. In Australia, for example, they became the Pink Pages, and in Europe the Golden Pages.

Stateside, in the meantime, Berry made a number of West Coast acquisitions in the 1960s and as a result opened the first office west of the Rockies. By the early 1970s Berry was responsible for one out of every four telephone directories published in the United States, serving more than 10,000 communities in 42 states. The company also began doing business in Canada, forming L. M. Berry-Canada, Ltd., to produce the Yellow Pages for The New Brunswick Telephone Company.

Loren Berry died in 1980 at the age of 91 and did not witness the major changes that occurred in telecommunications and the Yellow Pages, prompted in large part by the government-mandated breakup of AT&T and the deregulation of the industry. The Yellow Pages had become a significant cash cow for the Bell System, generating about $3.5 billion in advertising revenues in 1982. The profit potential had not been lost on others, of course, and already companies like GTE Corporation and Continental Telecom, Inc., had begun to launch directories to rival the Yellow Pages produced by the local AT&T company. For years other independents had carved out smaller, neighborhood directories that often proved more useful to consumers than the thick, unwieldy AT&T Yellow Pages that covered an entire telephone service area. Of the 6,000 Yellow Pages directories published in the United States in the early 1980s, 1,000 were produced by small independents. Nevertheless, the Bell companies took in 80 percent of all Yellow Pages revenues, retained their status with merchants, and had the added advantage of controlling access to the white pages listings, including new phone numbers, deletions, and changes.

BellSouth Acquires Company: 1986

After the divestiture of AT&T in 1984, the resulting "Baby Bells" began competing with one another, all of them looking to build a lucrative Yellow Pages business. Berry, the second-largest independent advertising sales agent for Yellow Pages directories in the United States, at the time representing 800 directories in 31 states and generating $750 million in annual revenues, was an obvious prize and a natural fit for BellSouth, which in 1986 bought the company from John Berry, who had long since bought out his siblings. He would then use the proceeds to found Berry Investments and also support his philanthropic interests, in particular Dartmouth University.

As a BellSouth subsidiary, The Berry Company lost a number of customers who were in competition with its corporate parent. As a result Berry lost some accounts that it had held for six decades and it took some time to rebuild the customer base. Another factor was increased competition from rival telephone directories in the 1990s. The rise of the Internet, however, also brought a new outlet for the Yellow Pages and new opportunities for Berry. Another industry shift occurred at the end of the century when telecommunications companies began to sell off their directory services, providing Berry with a chance to sell consulting and other services to the restructured operations.

Although BellSouth now owned Berry, the company maintained ties to the Berry family. John Berry, Jr., remained with the company until his retirement in 1994. His brother, Chuck Berry, was the last of the family to be employed. He had joined the business in 1976 and worked in a number of departments over the years. In the final years of his tenure he took a position in Community Affairs, an area that he described as his true passion, affording him a chance to represent the company his grandfather founded in a number of Dayton-area philanthropic programs. He retired in January 2006. It was the passing of an era for the company, and possibly the start of a new one was on the horizon, as BellSouth reached an agreement to be acquired by AT&T, which Berry also served, for $67 billion. The two companies also jointly owned yellowpages.com. As a result, Berry's looked forward to an uncertain, yet promising, future.

Principal Subsidiaries

The Berry Company; Berry Network, Inc.; Berry Sales & Marketing Solutions.

Principal Competitors

TransWestern Publishing Company LLC; Verizon Information Services; Yellow Book USA.


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