Tag Archives: Tandy

1991-1999 TSI: Addressing the Y2K Issue

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The big fix. Continue reading →

In 1999 people were predicting an end to civilization because of the imminent arrival of a new century. Art Bell interviewed a doomsayer almost every night. Key software programs were expected to crash a few seconds into the year 2000.

The calamity did not happen. A few systems probably had difficulties, but no major problems were reported at all. In the late nineties employees and contract workers at companies around the world ad devoted a great deal of time and money fixing or replacing software that would not work as designed in the year 2000. TSI was one of those companies.

The software programs that we had installed at clients and we used in TSI’s office often involved dates. For example, every business that does billing needs to know whether the clients are paying the bills within a reasonable time. This involves a comparison of the date of the invoice and the effective date of the report. The routine that makes the comparison must know the year for both dates. As long as both dates are in the same century, the familiar two-digit version of the year will suffice. However, if the invoice date is in 1999 and the report is run in 2000, the calculation must be adjusted.

This aspect of the problem was relatively simple to solve, but in large systems like the ones that we had installed there were thousands of references to dates. The challenge was to find all the situations that needed to be fixed and to implement the appropriate changes in a manner that minimized the inconvenience to the user.

From our perspective the problem was twofold: the way that dates were stored and the way that dates were collected—from data entry screens or from other files. As we entered the nineties we had three groups of clients: 1) System/23 (Datamaster) users, most of which had extensive custom code; 2) System/36 users, most of which were ad agencies that had a lot of common code, but a mixture of custom and standard programs were stored on separate media for each client; 3) a few AS/400 AdDept users; 4) TSI itself, which used a version of the ad agency system on the System/36.

I decided to inform all the Datamaster users well in advance that TSI did not intend to make their code Y2K-compliant. Most of them were not surprised; IBM no longer supported the hardware. However, the sole user at one customer, Regal Men’s Store, begged us to make their system work in 2000. I replied that it would probably be cheaper for them to buy a new system. As it turned out the company went out of business shortly after year end without purchasing a new system.

Fixing each ad agency system would have been a monstrous job of minimal benefit to anyone. By January 1, 2000, their hardware would have been obsolete for a dozen years. So, I sent a letter to each suggesting an upgrade to a small AS/400. Only a few of them took us up on the offer.

We did create a version of the ad agency software for the AS/400 that was Y2K-compliant. Our employees used it for administrative tasks for about twenty years. We had a great deal of trouble marketing it even to the ad agencies that love their GrandAd systems. Fortunately, by 1994 AdDept sales had really taken off, and we did not really care too much about the difficulties of marketing to ad agencies.

The AdDept system had to work perfectly, and the transition must be smooth. We had already promised a number of users that it would be Y2K-compliant. I intended to spend New Year’s Day 2000 watching bowl games, not dealing with Y2K catastrophes.

Why, you may ask, was there even an issue with data storage? That is, why were the dates stored in a format that caused the difficulties in calculations? The answer lies in Moore’s Law, the preposterous-sounding claim that the number of transistors in a dense integrated circuit (IC) doubles roughly every two years. In point of fact, the astounding 41 percent growth rate applied to many aspects of computing—processor speed random-access memory, and the ability to locate and retrieve large amounts of data very quickly.

For TSI’s first handful of years in business the clients stored all of their data and their programs on diskettes with a capacity of only one megabyte1. Those users crammed years worth of historical data on these thin slices of film. To put this into perspective, consider this photo of an eight-inch diskette:

Storing the simple photographic image shown above requires more than seven megabytes. So, storing a file of the size of this one image—something routinely done in 2021 by cameras, phones, watches, eyeglasses and countless other “smart” devices—would require (using the technology of the eighties) eight diskettes and perhaps an hour of computer time. Much of TSI’s systems were designed in this era in which both disk and memory were precious commodities. Good programmers were always conscious of the the physical limitations of storing and manipulating data. The prospect of a client’s system crashing because it ran out of space for its data was a nightmare to be avoided at all costs. Everything was therefore stored in the most efficient way possible. The idea of using two extra bytes to store the century occurred to almost no one in the early eighties.

I could think of several possible approaches to the storing of data to circumvent the problem of the new century. The four that we considered were:

  1. Replace all of the YYMMDD numbers in every data file with eight-digit YYYYMMDD fields;
  2. Keep the dates the way they were but add a new field to each record with the date in the YYYYMMDD format and use the latter for comparisons, calculations, and sorting;
  3. Add a two-digit century field (filled in for existing data with 19);
  4. Add a one-digit century field (filled in with a 0 for existing data).

Rejecting the first option was an easy call. All of TSI’s systems had hundreds of programs that read fields by their position in the record, not by the field name in the database. If the total width of the fields that preceded the field in question, was, for this example, 50, the program read the six-digit date field beginning at position 51. This was not the recommended method, but it had always worked better for us for reasons that are too wonky to describe here. The drawback was that whenever it was necessary to expand the size of a field, it was also necessary to change or at least check every line of code that read from or wrote to the file. This could be an imposing task for even one field. Since a very large number of files contained at least one date, almost every statement that read, wrote, or rewrote data would need to be checked. If it needed to be fixed—or even if it did not seem to need fixing—it needed to be tested thoroughly with data that contained dates in both centuries. We had no tools for the testing, and every situation was at least somewhat unique.

Large and dangerous.

Attempting this for every date and season field was such a large and dangerous task that the only way that I would consider it was if, at the same time, we abandoned reading and writing by position and replaced it with reading by field name. I thought about it, but I decided that that approach would result in even more work and was only a little bit less dangerous.

I reckoned that the other three methods were roughly equal in difficulty and in the amount of time required for implementation. I eventually decided that the one-digit method would suffice.

There was one additional issue in the AdDept system. The first two digits of the three-digit identified the year. So, it was necessary to add a century field for every file that included the season number as well. The season was a key field2 for many files. Fortunately, it did not seem to be necessary to add the century to the construction of any of those keys.

The other issue concerned data entry. Users of TSI software were accustomed to entering dates as a number in the form MMDDYY, the way that dates are commonly written in the United States. The programs validated what had been entered by converting the number into YYMMDD format and checking that each piece was legal. The check for the year normally involved checking to make sure that it was within ten years of the system date. So, every validation routine needed to be changed because the date entered and the system date could be in different centuries.

All of the work was to be done on the AS/400. The first step was to locate all of the files in both the AdDept database and the agency database, which we called ADB, and to add century fields that defaulted to 0 at the end of the files. At the same time, every program that wrote records to these files was found. A peculiarity of BASIC helped us find these programs. BASIC associates numbers with files in each program, and TSI consistently used the same numbers for files. Thus every instance of updating of the job file contained the phrase “WRITE #22”.

A single callable program was written to calculate the century. Its only input was the two-digit year. It was incredibly simple. It set the century to 1 if the year was less than 80 (the year that TSI moved to Connecticut); otherwise it set it to 0. In BASIC it required only two lines of code:
CENTURY=0
IF YR<80 THEN CENTURY=1

This approach will work flawlessly until the program confronts dates that are in the 2080’s. If anyone is still using code produced by TSI when that happens, someone will need to come up with a rule for setting CENTURY to 2. I don’t lose any sleep over this possibility. Yes, you could say that we just kicked the can down the road, but who is to say that roads and cans will even exist in 2079?

A much more time-consuming problem was correcting all of the programs that produced reports or screens in which data was sorted by one of the date or season fields. I set up an environment for the Y2K project that contained both programs and data. Whereas it seemed important to insert the century field into all the affected files as soon as possible, the reports and screens would work fine for a few years and could be addressed one at a time.

I evaluated this part of the project to involve mostly busy work—repetitive tasks with almost no important decisions and no creativity whatever. We had hired a college student to work with us for the summer. I thought that Harry Burt and I could set up the projects for him. Harry, who had experience as a college-level professor, could supervise him and check his work. This method did not work out at all, as is described here, and it used up some precious time.

I may have overreacted to this setback. I decided to make this a very high priority and to assign it to myself. One of the programmers surely could have done it as well as I did, but I did not want to assign it to any of them because I did not want anyone I was counting on to consider their job as drudgery.

So, for several months I spent every minute of time that I could find fixing and testing programs to handle the century fields correctly. A few cases were trickier than I expected, but the coding was completed, tested, and installed before any of our clients started planning for the spring season of 2000, the first occasion that would requir the code.

I am not certain about when this occurred, but at some point I received a letter from, as I remember it, someone in the legal department of Tandy Corporation. It said that the company had received a letter from someone named Bruce Dickens demanding that Tandy pay him a proportion of its gross income every year to license the software that handled the Y2K problem because it must have used the technique of “windowing”, for which he had been issued a patent by the U.S. patent office.

The letter, of which I cannot find a copy, contained a technical description of the term3 as described in the patent and asked me two questions: 1) Did the software that we installed at Tandy use this technique? 2) Would TSI indemnify Tandy Corporation in a lawsuit over its use?

I answered both questions truthfully: 1) “This does not sound like what we used.” 2) No.

Dickens sent demands for payment to all of the Fortune 500 Corporations. He said that if they did not agree, the percentage of income required for the license would be increased.

I have searched high and low to find out how this situation was resolved. I know that the U.S. Patent Office scheduled a review of the patent, but I could not find a report of the outcome. I also could not locate any information about whether any of the companies that he had extorted ever paid anything to him or the company that he reportedly founded, Dickens2000. I doubt it. I found no evidence that he actually sued any of them either.

If I had been asked directly whether any of our code calculated the century using the year, I would have changed the code listed above to remove the IF statement and simply set CENTURY=1 in all cases and then answered “No”. A few months into 2000 employees of the companies that used the AdDept system no longer entered twentieth-century dates on new items, and the programs only used the code to assign a season when new items had been entered.

We did not charge any of our clients for the Y2K fix. A few people told me later that this was a mistake. Since our customers depended upon AdDept, and there was absolutely no alternative system available, we probably could have gotten away with charging them. The companies may have even set aside funds for this purpose. However, all of the AdDept users had software maintenance contracts, and I considered it our duty to keep their systems operational.

1. A bit is a binary storage unit; it has only two possible values: off or on. A byte contains eight bits, which is enough to store any kind of character—a letter, number or symbol. A megabyte is one million bytes, which is enough to store approximately eighteen Agatha Christie novels. However, it is not close to enough to store even one photograph. Videos require vastly more storage.

2. A key is a set of fields that uniquely identifies a record. A well-known key is the social security number. The VIN number on a car is also a key. A zip code is not a key because neighboring residences have the same zip code.

3. The most readable and yet comprehensive description of the windowing technique that I have seen is posted here. The application for the patent, which was granted to McDonell-Douglas in 1998 (long after everyone had decided on the approach to use), was (deliberately?) designed to appear much more elaborate than the two lines of code that we used.

1986-2005 TSI: Marketing Employees

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TSI’s salesmen. Continue reading →

By the mid-eighties Sue and I really needed help with marketing. We had some good products to sell, and our service was fantastic. However, our salesmanship was poor. I could often persuade people that I could develop a solution to a difficult problem, but I was not very good at persuading them that TSI’s product and approach were better than those of our competitors.

The first person whom we engaged to represent us was Joe Danko, who lived on Cape Cod. At first the relationship was on a commission-only basis. Later we considered hiring him as our salesman, but we decided against it. The details are described here. Joe was never actually an employee, and we never paid him for his services. I don’t know how much effort, if any, he put in on our behalf.

Trust me; Paul was nothing like this guy.

We hired some consultants to help us. They, in turn, hired a graduate student named Paul Schrenker, to sit in Sue’s office in Rockville when she was on the road. We provided a list of presidents of ad agencies and their phone numbers. In only a few cases was it a direct line, but, even so, quite a few people agreed to talk with him. Ad agency executives were all about relationships. Whether Paul was a potential client or a potential vendor did not matter that much; many agency heads were always on the lookout for connections. So, a surprising number of advertising executives accepted a cold call from a graduate student who knew a lot about biology but very little about any aspect of the business world.

The Patriots debacle was not O&P’s finest hour.

One of the ad agencies, O’Neal & Prelle in Hartford, agreed to an appointment, and we eventually closed the sale. Paul did not participate in closing the sale, but he did make the first appointment.

TSI severed its relationship with the consulting firm. We decided instead to hire a full-time salesman, and we approached it in the same way we had recruited programmers and administrative people—by placing an ad in the newspapers. I think that we interviewed a couple of people. One stood out, Michael Symolon. He seemed excited about the job, and he was quite well-spoken. He was a graduate of Central Connecticut. He had worked in marketing for five years at Triad Systems, a company that specialized in software for dentists.

What about TSI?

I think that we hired Michael at some point in 1987. His LinkedIn page, which can be found here, was no help in this determination. Although he included previous and subsequent employers, he left TSI off of his list of experiences. We paid him a pretty good salary as well as commissions.

I remember that when he first began to work at TSI Michael was gung ho about setting up a nationwide sales organization. He advised me to schedule annual trips to exciting destinations exclusively for the most productive reps of our software systems.

Michael.

This attitude shocked me a little, but he eventually revised his expectations when he discovered how complicated the GrandAd product was. Our competitors could undercut us on price on the hardware, and there was not much that we could do about it. The key to selling was almost always our willingness to customize the system for the prospective client. The idea of setting up a network of sales agents seemed unworkable to me. If I could not deal with the people personally, how could I assess what changes were necessary and feasible?

We gave Michael room to be creative in his approaches, but I was not ready to discuss how to celebrate sales generated by imaginary salesmen.

9.5 rounded up.

Terri Provost left the company shortly after Michael was hired. Michael interviewed and hired Linda Fieldhouse to take her place as administrative assistant/bookkeeper. Both of them are described here. Michael assured me that Linda was “at least a nine and a half.”

I am pretty sure that Michael and I went on a couple of ad agency sales calls together. I remember driving up to Vermont with someone—it probably was Michael. When I got out of the car I realized that I was wearing the pants for my pin-stripe suit with my blue blazer. We did not get the sale, but I don’t think that my fashion faux pas was the cause. Vermont is not known for haute couture.

I also remember that Michael accompanied me to Keiler Advertising once. Evidently he had once dated Shelly, who at that time was in charge of bookkeeping there. Michael was very embarrassed by the incident. I did not ask him for historical details.

I don’t remember him closing sales of any new GrandAd clients.

We took Amtrak from Hartford’s Union Station to NYC.

Michael also came to New York City with me for at least one very important presentation to Macy’s in 1988. He was almost a hero, as is described here.

Michael invited Sue and me to supper one evening at his house in Farmington. We got to meet his wife and kids. It was a very nice house, but I don’t remember any details.

I am sorry to report that Michael was at the center of TSI’s first great crisis, which is described here.

I ran into Michael at Bradley International one day in late 1988. He told me that he was working for a company that sold advertising software to magazines. I told him that Macy’s had finally signed the contract, that I had been working my tail off to get all the software written and installed, and that TSI would send him his commission check as soon as we got the final check from Macy’s. There did not seem to be any hard feelings.

For a couple of years TSI muddled along without a salesman and with very little effort at marketing. Those were very difficult years in a number of ways. By the spring of 1991 the AdDept system had two pretty substantial accounts, and we felt that it was time to start marketing it seriously nationwide.

Meanwhile, our ad agency clients seemed perfectly content with their current hardware and showed no interest in converting to the AS/400, the system that IBM had introduced in 1988. It is described here.

We hired a young man named Tom Moran to help with marketing. He was a very nice guy, but he knew next to nothing about computers, advertising, retail, or, for that matter, marketing. He was definitely eager to learn, and he was willing to follow up on leads, which was the most important thing. Plus, both Sue and I liked him.

I remember going on two trips with Tom. The first was for a meeting with Hecht’s in Arlington, VA. Sue, Tom, and I drove down to the Washington area. A Motel 6 on the Maryland side of DC kept the light on for us, and I am happy to report that no murders were committed (or at least none reported) there that night. It was the first and last time that I stayed at a Motel 6.

The three of us met with Barbara Shane Jackson, who was in charge of Hecht’s patchwork PC system and her boss, the advertising director, whose name I don’t remember. Tom did not contribute much, but it was a good meeting on the whole. In the end we got the Hecht’s account.

The RAC was held at the Hilton in downtown Chicago.

Tom and I also attended RAC, the Retail Advertising Conference, in Chicago. It was a huge pain to get everything prepared for our booth there. We had to rent an AS/400 from IBM and to hire union employees to set everything up. Nevertheless, we did manage to get our demo computer system working by the time that the attendees came to visit the vendor area.

Some vendors who were familiar to us were there. Camex, the company from Boston that specialized in programming and selling heavy-duty Sun workstations for the production of ads, had an exhibit that was ten times as large as ours and had a dozen or more people. Tapscan, the broadcast software company. was right across the aisle from our booth. One young lady who worked there must have accidentally left her skirt at home. It appeared that over her black pantyhose and high heels, she was wearing a wash cloth that she purloined from her hotel room.

Most of the conventioneers were drunk or at least tipsy by the time that they reached our area. We made one contact with the ad director of Hess’s, a department store chain with headquarters in Pennsylvania. Tom gave him a copy of our sales materials and got all of his contact information. Unfortunately, almost as soon as we had begun correspondence with him, Hess’s was acquired by another retailer, and his position was eliminated.

The convention would have been a complete fiasco except for two things. The first was that I got to introduce Tom to the indescribable pleasure of Italian beef sandwiches purchased from street vendors in the Windy City.

The other redeeming event was the appointment that I had made to do a demo at the convention for Val Walser, the Director of the Advertising Business Office at The Bon Marché, a department store chain in the northwest. The programs worked without a hitch, and she was very impressed with what the system could do. She even invited us out to Seattle for a presentation to the relevant parties at the IBM office there.

Tom accompanied me on that trip, too. Our plane landed in Seattle very late, well after midnight. We checked into our hotel, but we only managed to get a couple of hours sleep. We went to the IBM office, where I checked that all of the software was working correctly. By this time I had been chain-drinking coffee for several hours, and still I felt very sleepy. This was an important presentation, and I had to be at my best.

The demo seemed to go pretty well. Everyone was attentive. The people from the IT department were asking tough questions, which usually boded well for us. I was so tired that I could barely concentrate. As we were putting away our materials I realized that I had been drinking decaffeinated coffee all day.

Nevertheless, I convinced Val and the other important parties. We put together a hardware and software proposal, and they submitted a requisition to the IT department, which also approved it. However, the powers that be at Federated Department Stores1, the mother ship, vetoed it.

This episode taught me that TSI needed someone who could navigate his way through the bureaucratic structure to find out what the hold-up was. Tom was not ready for this kind of responsibility. In the end, we decided that we could not afford someone who just tagged along for demos. In fact, we were really in the position where we could not afford anything.

Fortunately, we were able to use the Hecht’s installation as an entrée into the May Company, which at the time had about ten divisions. Not long after that I persuaded Foley’s in Houston to install the system, too. I also convinced Neiman Marcus in Dallas to get the system.

A grainy photo of Doug in an airport.

Those sales gave TSI both a solid base of accounts and enough revenue that we again looked for a marketing person in 1993. We found what we were looking for in Doug Pease, who had actually worked in the advertising department at G. Fox, the local May Company chain.

At first I had hoped that Doug could do some of the demos, but I soon gave up on that idea. I knew exactly what the system did, what it could potentially do, and what was beyond us. The programmers were generating a lot of code every week, and so these lists were in a constant state of flux. Besides, I had a great deal of experience at public speaking, and Doug did not. I don’t think that I would ever have trusted anyone with the demos.

Doug was a real bulldog once he had a hot lead. He was extremely good at following up on everything. In his first year we closed extremely profitable sales to Lord & Taylor, Filene’s Basement, and Michaels Stores.

Susan Sikorski

In April of 1994 I received an email from a woman named Susan Sikorski, who worked at Ross Roy Communications, Inc. in Bloomfield Hills, MI. The company at the time had eight hundred employees (!) and seven satellite offices. They wanted a production billing system that would feed their Software 2000 accounting system and some internally developed applications.

A few years earlier I would have considered this opportunity a godsend. We had already written interfaces for Software 2000 accounting systems for two AdDept clients. We loved to do interfaces, and the more complicated they were the better. However, we were so busy with programming for clients that Doug had landed that this was my response:

Unfortunately, as I looked over your package, I realized that our system does not really measure up to your requirements. We would have to make very substantial modifications to meet even the minimal requirements. Since we specialize in custom programming, this would not ordinarily be a great issue to us, but at this time we would not even be able to schedule the work for many months. So, I guess that we will have to mass.

And it was almost certainly a good thing that I was forced to make that decision. In 1995 Ross Roy Communications was purchased by the mega-agency called Omnicom Group. If TSI had been chosen for the project, I strongly suspect that the plug would have been pulled on it before the system became fully operational. Susan found a new job at Volkswagen in 1996.

Meanwhile, in the next few years Doug managed to get TSI’s AdDept system into all of the remaining May Company divisions, as well as Elder-Beerman, the Bon-Ton, Stage Stores, two Tandy divisions, Gottschalks in California, and all but one of the five divisions of Proffitt’s Inc., which later became Saks Inc..

Doug and I took many sales trips together. The most memorable one was in December of 1997 to Honolulu to pitch Liberty House3, the largest retailer on the islands.

Doug using a client’s AS/400 for something.

We had a little free time while we were there. Doug and I used it to climb to the top of Diamond Head together. He was an enthusiastic mountain biker, he had been a soccer player in college, and he was quite a bit younger than I was. I was in pretty good shape from jogging. So, neither of us held up the other.

Sue accompanied us to Honolulu, and after Doug returned home, she and I had a great time on four different islands, as is described here.

The other trip that was the most memorable for me was when we flew to Fresno, CA, to pitch Gottschalks, a chain of department stores in the central valley.

In those days you could save a lot of money by flying on Saturday rather than Sunday—more than enough to pay for a day’s food and lodging and a car rental. Doug and I considered going to Yosemite on our free day, but there was a problem with the roads there. Instead we decided to drive along the coastal highway from north to south to maximize our views of the coastline.

Somebody else’s photo.

I did not have a camera, but Doug did. His was a real camera of some sort. I was not yet into photography, and I had not brought a disposable camera on the trip. Doug took lots of photos. In fact, he ran out of film. When we stopped for lunch he bought some more film.

Doug took a lot more photos on the rest of the journey, or so he thought. When we got to Fresno he discovered that he had no photos at all after lunch. I don’t remember whether he forgot to load the camera after he took out the film. Maybe he did not wind it, or there was a technical problem. That was not the worst of it. He also somehow lost the first roll of film when we stopped for lunch, and it also contained the photos of his newborn child taken before we left.

But, hey, we got the account.

I guess that Doug is unloading new equipment in Enfield.

Doug and I almost never disagreed about what the company should be doing. However, near the end of his tenure he came up with an idea that I just could not sanction. He wanted us to start a new line of business in which we contracted for large chunks of advertising space from newspapers at a discount and then resold it to small businesses at a profit. Maybe he could have sold a lot of space; maybe he couldn’t. In any case such an undertaking would leverage no TSI products or services and none of the skills that the rest of us possessed. In short, he was asking me to backstop a new source of revenue for him. I declined to do so.

Doug and I made a great team. I gathered specs and did the demos. He attended, met the players, and subsequently followed up on everything. When the prospect had signed the contract, he made sure that all the i’s were dotted and the t’s crossed and ordered the hardware if they bought from TSI or a business partner.4 By 1999 we had more work than the programmers and I could handle. I told him to stop selling new software systems until the programming backlog could be reduced to a more manageable level, which would not be for at least a year. He made the imminently reasonable decision to look for another job.

After TSI moved to East Windsor in late 1999, we hired one more AdDept salesman, Jim Lowe. His previous experience was with a company that marketed hard cider. The challenge was to get retailers to give them adequate shelf space. It was retail experience, but not exactly the kind that we had dealt with.

Jim was a smart guy, and he could have been a good salesman for us. We went on a trip together to Wherehouse Music in Torrance, CA. Wherehouse was a large chain of music stores in California. Jim and I stayed in a nearby Holiday Inn the first night. We used MapQuest to find to the Wherehouse headquarters the next morning. At the very first turn MapQuest advised us to turn right. This seemed wrong to me, and I turned left instead. We reached the building in less than ten minutes. I don’t know when we would have arrived if I had turned right.

It was a very strange meeting. Rusty Hansen, whom I knew from Robinsons-May, had told them about us. We never got to meet with him or anyone else who seemed to know what they wanted. We did get to meet the president of the company, who was wearing jeans and a tee shirt. I never did figure out what this whole episode was about. The company went out of business within a couple of years.

Jim only worked for us for a few months. He took an offer that was very similar to his old job. Before he left he helped me with a mailing that produced some good leads. I sold the last few AdDept systems to some of those retailers by myself.

Jim’s advice to me when he left was that TSI should concentrate on AxN, which is described here. I don’t think that he ever really understood that the horse must precede the cart. We needed retailers to be sending us insertion orders in order to be able to send them to newspapers.

Bob in Denise’s office.

Bob Wroblewski was, as I recall, a relative of Denise’s husband. In November of 2003 Denise came up with the idea of paying Bob to get the newspapers signed up.

I got to know Bob on a trip taken by the two of us to California to persuade Rob-May and Gottschalks to use AxN. We both misjudged how well the two demos went. The people at Gottschalks seemed excited; Rob-May was somewhat cool. However, Rob-May soon came around, and I never did persuade Stephanie at Gottschalks to use AxN.

Here is how the marketing process worked. After a retailer’s advertising department that scheduled its newspaper ads in AdDept agreed to use AxN for insertion orders, it provided us with a list of its newspapers with contact information. I wrote a letter to each paper asking them to subscribe to the service. The letter was printed on the retailer’s letterhead and was signed by the advertising director or ROP manager at the newspaper. However, it was sent by us along with a contract that I had signed. The monthly rate was approximately what the newspaper charged for one column inch in one issue. This was a negligible fraction of what the advertiser spent. Then Bob called each one and persuaded them to sign up.

I don’t know (and I don’t want to know) what Bob said to the papers, but he had a very high success rate. He also earned quite a bit for himself in commissions. At one time we had over four hundred newspapers that subscribed for the service!

Bob’s wife died while he was still working with us. I drove to Providence, which is where he lived, for the wake.

1. Federated Department Stores owned many large chains that were all very promising potential AdDept clients. The rejection of The Bon Marché’s request may have been a blessing in disguise. In January of 1990, shortly after this meeting, Federated filed for Chapter 11 bankruptcy protection. It could have been really ugly.

2. Susan Sikorski is apparently working as a consultant for Avaya in 2021. She is featured as a graduate of Wayne State on this webpage.

3. We learned later that the advertising department at Liberty House had approved the purchase of the AdDept system, but the order was never placed because in March of 1998 Liberty House filed for Chapter 11, and the funds for new systems were frozen.

4. TSI was throughout its existence a certified member of IBM’s Business Partner program. However, because of the size of the company we were bit allowed to sell IBM hardware directly. Instead, we needed to pair up with a “managing Business Partner” who actually could place orders. We dealt extensively with several of these companies—Rich Baran, BPS, Savoir, and Avnet. There may have been others.

1988-2014 TSI: The Nature of Retail Advertising

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A different world. Continue reading →

For retailers that sell a wide array of products and also have stores in a fairly large number of markets, advertising has long been both extremely valuable and very complicated. In the two and a half decades that TSI concentrated its work on the advertising departments of these retailers advertising was expensive. Newspapers in major markets charged over $100 per column-inch for ads, and the department stores and big-box retailers bought their ads1 by the page (126-132 column inches), not the column inch. Therefore, the advertising departments were charged by the management of these retailers with 1) negotiating the best rates possible, 2) using the mix of media that provided the most bang for the buck, and 3) designing and producing the ads that produced the most sales.

Most large retail advertising departments were divided into roughly the same areas with which we had become familiar at advertising agencies: media, production, and finance. The years that we had spent working with advertising agencies helped us understand some of their issues. However, the differences were many and complicated:

  • A primary difference was that retail advertising was event-based rather than campaign-based. Most retail events were the same from one one year to the next: Presidents Day, Easter, Mother’s Day, Father’s Day, etc. The dates might change a little, but the approaches were usually similar.
  • Another fundamental difference was the calendar. Most retailers organized their finances and advertising using a 4-5-4 retail calendar2. The first month of the year was usually February. Most retailers divided the year into two “seasons”, spring and fall. Fall began in August.
  • The large organizations had a separate manager for each major media: newspapers, direct mail, and broadcast. A few also had a magazine manager. Inserts (the pull-out flyers in newspapers) were usually treated like direct mail in the production area, but were ordered by the newspaper area.
  • Newspapers were much more important for retailers than for other types of businesses, especially in the nineties when potential customers still started their day by reading the local newspaper.
    • Each retailer negotiated an annual contract with each paper. The contracts often provided significant discounts for the quantity (column-inches) or nature of the advertising. For example, one retailer got some of its full-page ads in one of its major papers free if it met established criteria for other ads! On the other hand, if a retailer ran too little advertising for the contract period, the penalties could be staggering.
    • Not all newspapers were the same dimensions. There were two basic sizes, tabloid and broadsheet, but the actual dimensions varied somewhat. Sometimes ads were just photo-reduced to fit, sometimes different versions were necessary.
    • Inserts were included in the contract, but the rules as to how they were counted varied.
    • Some ads (called “spreads”) covered two full pages and the marginal area in the middle (“the gutter”).
  • Merchandise suppliers often paid for part of the cost of ads that featured their products. This was called “co-op”.
  • Most large retailers needed to know the net (of co-op) cost of ads for each merchandise area. The bonuses for the merchandise managers depended upon their sales markups less net advertising expenses.
  • Many retailers with a large number of stores needed to know the net (of co-op) cost of ads for each store. This was tricky for markets that included multiple stores.
  • Many chains had more than one logo (name on the front of the store). They required different versions for production purposes.
  • A few chains had more than one financial entity. This was challenging.
  • The financial books absolutely had to be closed within a few days of the end of the month. In some cases, especially in the May Company divisions, a set of corporate reports in specified formats were required every month.
  • No agency that TSI had dealt with had a photo studio, but many of the retailers did.
  • The production area of most of these retailers borrowed merchandise from the selling departments. The merchandise was sent to a photo studio, either in the department or outside. After the shoot the merchandise needed to be returned or at least accounted for. A special area called the “loan room” or “merch room” managed this activity.
  • Most retailers did a high percentage of their business in the second half of November and December. Many of them froze their computer systems (no purchases, no upgrades, no testing) during this period, which might extend in either direction.
  • No law specified that every retailer must follow every tenet listed above. Every AdDept installation required some custom code.

The sales pitch: After only two or three installations I had felt comfortable talking with ad agency executives. They generally knew nothing about computers. For the most part they cared little about efficiency; we could almost never point to a position that could be eliminated. It was therefore difficult to persuade them that the computer would save them money. I generally focused on three things: 1) how careful record-keeping could help them locate which clients were unprofitable; 2) how the GrandAd media system would allow improved cash flow; and 3) how a computer system could help if they got a chance to win a big client. I called the last one of these the “reaching for the brass ring” argument.

These arguments did not translate well when we tried to persuade retail advertisers. Usually the retailer had already decided whether or not to get a system for reasons that we could not control. Something had happened that made the current method of handling the work no longer feasible. Macy’s acquisition of the Gimbles stores overwhelmed the system that the advertising department had been using. Hecht’s was in a similar situation after it acquired John Wanamaker. Belk desperately needed help when they consolidated five divisions into one in Charlotte.

Although this phrase is now popular, I had never heard it before I started using it in the ’90s.

Often I would not be acquainted with the circumstances that motivated the important players. I always emphasized the value of having one central set of data to which everyone could contribute and from which everyone could draw. I called this approach “one version of the truth” by which “everyone could benefit from the work done by others.” Everyone could appreciate these notions, but placing a dollar value on the idea of shared data was difficult. Fairly often I would find something in my talks with employees that was horrendously inefficient or even dangerous or illegal, but I could not count on it.

An equally difficult problem was trying to figure out which individual(s) needed to be convinced. In some cases the IT department might not even participate in the software search, but they may have veto power over the final decision. Finding out where the sale stood often required someone from TSI who was willing and able to spend a great deal of time communicating by mail and phone. This was something that I was definitely loathe to do. Fortunately, I found someone, Doug Pease, who was quite good at it. Much more about him is posted here.

One thing that we did not need to worry about was competition. No other software company was crazy enough to attempt to address this market. A few retailers tried to develop something in-house. They all ended up spending millions of dollars or giving up or both.

Difficulties after the installation: I disliked two things about dealing with advertising agencies as clients: 1) It was sometimes difficult to get them to pay their bills; 2) they tended to go out of business or merge with competitors without warning.

We had no problems with retailers paying their bills except when they declared bankruptcy. The first time that this happened I was totally unprepared. A few smaller clients later closed down entirely, but none of these events was catastrophic to TSI.

An equally vexing problem was when one chain of stores acquired another. If the other chain had no system, this usually worked in our favor. If they both used AdDept (TSI’s administrative system for large retail advertising departments described here), we lost one client, but the remaining one usually became more dependent on our support and services. They often also asked us to help with the transition as well.

In the end, however, most of our biggest clients were acquired by Macy’s. The advertising was all managed by one department in New York. That process spelled doom for AdDept because by the time that it happened, Macy’s no longer used AdDept.

One other trend usually produced a little work on the AdDept side, the outsourcing of newspaper buying. We were usually asked to design and implement interfaces with the company that bought the ads. Unfortunately, this same process had a dire effect on AxN, TSI’s method of delivering and managing insertion orders online. When Dick’s Sporting Goods announced in 2014 that it was outsourcing its buying of newspaper space, we decided to shut down TSI.

Decision-making: The ways that decisions were made in retail advertising departments differed fundamentally differed from the way that entrepreneurs like advertising agency executives did. If I could talk to one of the principals at the agency, I could explain why the GrandAd system could produce positive results that could affect 1) the agency’s bottom line, and 2) the agency’s reputation. The situation was totally different in the advertising departments of large retailers.

The department either had a budget for a system or it did not. These were two entirely different cases. If the department had a budget, it was probably because of some huge external factor involving a merger or a takeover. In that case, the eventual purchase was almost a foregone conclusion. The challenge was to fashion a proposal that was within the budget, but not by much.

If the department was not in that position, the process was completely different. The first step was to find a person who had enough authority to requisition funds. This was usually the advertising director. However, advertising directors seldom requested information from us. Our contacts were generally much lower on the totem pole, usually the manager of the business office in the advertising department. So, we would first need to convince our contact and then convince the advertising director either directly, if possible, or indirectly.

We then depended upon the advertising director to requisition the funds. We might not have any idea who would evaluate the request. Sometimes it was someone in corporate finance, sometimes it was someone in the IT department, and in the large organizations approval might be necessary by a holding company such as the May Company, Federated, or Tandy.

At this point it was important for us to recognize which was the case. I was poor at this part of the job, but Doug Pease was much better. If he could connect me with the right person, I could usually frame the arguments for him or her. If no money was available, of course, we probably would not get the sale anyway. During some periods retailers were all tightening their belts. In tough times nobody in retail considered any capital purchase that did not generate sales.

If the final decision needed approval from the holding company, it was extremely difficult for us to influence them directly. In some cases like the May Company and Tandy, it worked out amazingly well for us. TSI’s problems with Federated are documented in detail here.

I began to appreciate the complexity of the situation when one customer told me that “Christmas only comes once.” He meant that the department had a budget at that point, but it had to spend the entire amount in that fiscal year. After that they would be strapped for cash. In general, that was how things worked.

However, some advertising departments had figured out a way around this. They charged the merchandise managers more than the ads cost. I do not know how they accounted for the difference, but they were sometimes had accumulated enough money in this fashion to circumvent the decision-makers in finance and IT. I know for a fact that the AdDept system was financed this way in a couple of cases.

The finance people generally were not upset when they found out about the unauthorized purchase. It was usually easy to determine that AdDept reducee administrative costs fairly rapidly. The IT department, however, might be more upset, especially if the AS/400 was not on their list of approved hardware systems.

Ancillary expenses: For entrepreneurs like ad agencies all expenses came out of the same checking account. The retail advertising departments had a different perspective. Sales tax and travel expenses probably did not hit the advertising department’s line on the income statement. No one ever complained about either type of billing, and they were always paid promptly.

However, the company may have had some rules about travel expenses. I was once grilled about flying first class for a training session. I had to provide proof that I purchased an economy fare and was upgraded by the airline. Some retailers insisted that I stay at a hotel at which they had a special rate. This was usually folly on their part. I liked to stay at Hampton Inns because of the free breakfast and the Hilton Honors points. Hampton’s rates were almost always lower than the “special rate” of the designated hotel.

1. Display ads in newspapers are always called ROP. It is not an acronym; the three letters, which stand for “run of press”, are always pronounced individually.

2. Every week starts with a Sunday. Every month has four or five weeks (twenty-eight or thirty-five days). The purpose of this arrangement and many examples are provided here.

Me and the Shack

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My experiences with the Tandy Corporation. Continue reading →

In 1996 TSI’s salesperson, Doug Pease, and I had negotiated a contract to provide the Tandy Corporation with three licenses for our AdDept software system. AdDept was designed to handle all administrative functions for an advertising department of a large retailer. Tandy only planned to use it for its newspaper and magazine advertising for reasons that were never really explained to us. At the time Tandy had three sizable retail chains, RadioShack (which, at least at the time that we dealt with them was officially one word), Computer City, which sold personal computers and peripherals, and Incredible Universe, which sold all kinds of electronic gear in a Disney-like setting. The three operated somewhat independently, and so there were three different systems. Unfortunately, by the time that the contract was finalized, Tandy had decided to shut down IU altogether, and so we only sold two licenses.

Tandy’s headquarters was in downtown Fort Worth (or, as I later came to think of it, Fort Worthless) adjacent to a mall. There was no parking nearby. All Tandy associates and customers of the mall parked in a lot that was .7 miles from the building. A small train, which they called a “subway,” ran back and forth.

We sold the systems to Tandy, but all of the negotiations were with the VP of Newspaper Advertising at RS. The other divisions had no input. We learned that RS had two systems (the other divisions had none) for newspaper advertising – one for ordering and one for paying bills. RS had four newspaper buyers for four geographical areas, and each had an assistant and a few clerks. Each of these employees had two terminals on their desks because the two systems were totally independent. They had to enter every single ad into both systems, and at the time RS ran ads or inserts in over two thousand newspapers every week as well as a few additional ads.

While I was installing the AdDept systems on one of their dozens of large systems, a security specialist in the IT area was assigned to oversee what I did. She sat next to me and did nothing for the better part of a day. She had no clue about anything that I was doing, and she expressed no interest in learning. Now, I had once been accused of sabotaging word processing documents when I installed a system, and so I actually appreciated that someone else might be able to testify about what I was doing. On the other hand, she was totally incapable of actually monitoring what I was doing, and if I were malicious, she could not have prevented me from deleting or modifying their files or programs. What I did not understand was why Tandy would pay her to keep the seat warm. I had to wonder what she did on the days when a vendor was not installing a system.

For a short period of time the RS employees in the newspaper area had to deal with three systems. When AdDept was fully installed, they were able to remove one of the terminals from everyone’s desk. However, as far as I know, they never adjusted the staffing levels to reflect the fact that they were now doing much less than half as much as before. In fact, I would estimate that AdDept eliminated three-quarters of the work previously performed. I kept expecting to see empty desks on each subsequent visit, but I never did.

RS insisted that I train each of the buyers separately. Despite the fact that their job descriptions were nearly identical, they interacted almost not at all. This was fine with us. We charged them $1,000 per day for training.

The buyers were considered experts concerning all of their papers. I noticed that they were running inserts in The Garden Island, a newspaper only available on Kauai. The buyer told me that inserts were cheaper in that paper than display ads (called ROP in the business). I wondered why they advertised in that paper at all. My recollection was that it was not a serious paper and that free copies were available at any restaurant. It was more like a shopper, and on Kauai most of the shoppers are tourists. I doubted that many of the locals subscribed to it.

One day when I was at the RS office for training I mentioned that I lived in Enfield. One of the ladies told me that they were opening a new RS store there. I was surprised at this, and I asked where it would be located. She gave me an address on Elm Street. I knew that the only part of Elm Street that had any retail establishments was the Enfield Mall, which already contained an RS store, and the strip mall across the street from it. Sure enough the new store was located across the street from the existing one. It was open for two or three years, and then they closed it down. I wonder if anyone at headquarters knew how close these stores were.

My best stories from my many trips to Fort Worthless came from the installation at Computer City. One day I noticed the Advertising Director at the copy machine. I had never seen anyone of that level at any other company performing such a mundane task. He was not there for just five minutes. He had a huge stack of papers with him, and it took him several hours to finish.

You might think from this incident that the department was understaffed. Oh, no, there were dozens of employees, so many that it was impossible for me to figure out what most of them could be doing. One thing that nearly all of them did was eat. Every day one of them brought in a large tray of snacks, and they all took a break and chowed down shortly after the work day began.

They also talked a lot. One day the subject was cats. One lady mentioned in passing that she had fifty-three cats. I asked her whether they were indoor or outdoor cats. She said that she had to keep them indoors because one of her neighbors shot her cats with a rifle whenever one ventured near his property. I mentioned that this would be considered bad form in Connecticut. No one commented, and no one laughed.

CC was sold to CompUSA in 1998 just as the employees were getting used to using AdDept.

Retailers are known for running lean operations. Of all the major ones that I had dealings with, Tandy, which shortly after discarding CC became known as just RadioShack, appeared to be by far the least impressive in regards to the efficiency of its administration and management. I am not a bit surprised that the company is about to give up the ghost.