425: Darrell Lester—The Eight Letter F Word

Former vice president of marketing at Publishers Clearing House, Darrell Lester, tells the inside story of how PCH started as a mom & pop shop, meteorically rose to one of the most beloved companies in America, and then was nearly destroyed by bad press and lawsuits because of greed. Darrell witnessed it all and chronicled it in his book, Downfall of an Icon: The True Story of Publishers Clearing House https://www.amazon.com/DOWNFALL-ICON-Inside-Publishers-Clearing/dp/B0D5RND35J/ref=sr_1_1?crid=G15TQ164GHUN&dib=eyJ2IjoiMSJ9.7x0BQFqvhcoaCnmDhtIHEpJ_6jnOXFlVrFWjevVsr-K_U2yFIWeBHbbQ9h_r7onvPURMdli6MrxJq7j3JKoNysNuhcb4EYpSx7fnuBE6Qcea8Um_cXrBfaO15rJx_ltt6DwKuDmwEIYbBMx2DWU6E6MAXqwVPjG_hESrY3KzLjsGfK0bo2e5a6OcgCN0mKEFTGh1dnyJZH61j6sTYhoF8CzZR21mYshzJCL2QsCInpI. UInw0ixK3oaDcwy4iDUo003ij68-Kl9ASSanSMqSFQQ&dib_tag=se&keywords=Downfall+of+an+icon&qid=1739239795&sprefix=downfall+of+an+icon%2Caps%2C157&sr=8-1.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:03Mike Rowe?

  Hey guys, this is The Way I Heard It. You know me, and you probably know Chuck. And if you don't, boy, are you in for a treat, because Chuck and I are both here today, along with another, I don't want to overstate it, old friend, but another guest that I'm gonna go ahead and call great.

• 0:17Speaker 01

  Yeah, he's absolutely great. He's a guy who has seen a lot about a topic that everyone is slightly familiar with, knows but doesn't know a lot about, and he knows a lot about it.

• 0:29Mike Rowe?

  Spoiler alert, it's the Publishers Clearinghouse.

• 0:31Speaker 01

  Yes.

• 0:32Mike Rowe?

  The people who have been sending you magazines, or your friends' magazines. I don't think you can be alive today, and certainly be over like 20, and not know Publishers Clearinghouse.

• 0:43Speaker 01

  Did you ever fill the stuff out and unpeel the things and enter the contest?

• 0:48Mike Rowe?

  The stamp page?

• 0:49Speaker 01

  Yes.

• 0:49Mike Rowe?

  I did.

• 0:50Speaker 01

  Oh, yeah, me too.

• 0:50Mike Rowe?

  I did.

• 0:51Speaker 01

  Me too, I loved it.

• 0:51Mike Rowe?

  I took a deep dive in it. I found it both complicated and annoying, but I thought the whole time...

• 0:57Speaker 01

  But promising, right?

• 0:58Mike Rowe?

  Promising, you know, and I'm like, I'm getting a great bargain on some magazines, and I have a chance to win a great deal of money.

• 1:03Speaker 01

  Yes.

• 1:04Mike Rowe?

  And so I did it, like, with millions and millions of other people, but, oh my God, this guy, Daryl Lester, has written a book called Downfall of an Icon. And Daryl, in 1973, got hired right out of college. He was a math major, and this little man-paw company needed him to make some arithmetic sense out of their mailings. He stayed for 30 years, he became a senior vice president, and he had a front-row seat to what happened that A) made this a multi-billion-dollar company, and B) the most beloved brand in the country for a time.

• 1:45Speaker 01

  And then?

• 1:46Mike Rowe?

  Not so much.

• 1:47Speaker 01

  Yeah, and then the most hated.

• 1:49Mike Rowe?

  Oh my God. It's just one of those stories that's kind of been right in front of you for years, but you probably don't know it. He's been out of the company for a decade or two, and he's just decided the story is too good not to tell. And he's right. He's a really fun guest. He's written this book that, you know, on a personal level, as I was reading it, man, I was just, I was so sucked in, not to the specific narrative he was telling, but by all of the little adjacencies in my life.

• 2:20Speaker 01

  Hmm. Oh, yeah, for sure.

• 2:23Mike Rowe?

  Because I'm, you know, I sold out friends long before I had anything to bargain with. You know, my first job on TV was QVC. And before that, it was water purifiers out of the trunk and it was magazines over the telephone.

• 2:37Speaker 01

  Computers.

• 2:38Mike Rowe?

  Sure.

• 2:39Speaker 01

  Yeah.

• 2:39Mike Rowe?

  Sure. So I, there's a Willy Loman in all of us, in my view. And I think we're all salesmen to some degree. And this guy certainly would agree with that. We're calling the episode, what are we calling it? The eight-letter F-word?

• 2:55Speaker 01

  The eight-letter F-word, yes.

• 2:57Mike Rowe?

  Because aside from the F-word you're thinking of right now, this one.

• 3:01Speaker 01

  Has eight letters.

• 3:03Mike Rowe?

  It has eight letters and it probably had a more shocking impact than the other F-word.

• 3:10Speaker 01

  Kind of the beginning of the end.

• 3:12Mike Rowe?

  Yeah.

• 3:12Speaker 01

  This F-word cost, yes.

• 3:14Mike Rowe?

  It's a fun book. He's a delightful guest and I look forward to introducing you to.

• 3:21Speaker 01

  Daryl Lester.

• 3:22Mike Rowe?

  Thanks, Chuck. Right after this.

• 3:29Mike Rowe?

  Here's a crazy idea. What if there was an academy out there that paid students to learn instead of the other way around? Specifically, men and women who want to work in the skilled trades. And what if this academy not only paid for your training, but also covered all the expenses associated with your training? Like travel and food and lodging? And finally, what if this academy guaranteed you a job at the end of the training period? Well, that's exactly what's happening at America's Workforce Academy by Meta. This is a five-week, highly immersive, pre-apprenticeship program that gets you all the necessary certifications you'll need to start a career in the skilled trades immediately. I'm talking about AI-proof, six-figure jobs.

• 4:14Mike Rowe?

  Helping to build out the new infrastructure that our economy is depending on. Electricians, plumbers, HVAC techs, welders, fiber optic technicians, these jobs, they are all in demand like never before. And again, every graduate of America's Workforce Academy is guaranteed a job on a Meta website. I first announced this program a few months ago, and I have been watching the response ever since. It's extraordinary. This is a nationwide, unprecedented fast track to a long-term career in a skilled trade. If you, or your spouse, or your kid, or your grandkid are looking for a straight path into a career with no cost at all, check

• 4:57Mike Rowe?

  out the opportunities for yourself at meta.com/america'sworkforceacademy. That's meta.com/america'sworkforceacademy.

• 5:11Mike Rowe?

  Daryl Lester, 30 years, same company?

• 5:15Speaker 02

  30 years, one company, right out of college.

• 5:18Mike Rowe?

  I'm halfway through, full disclosure. I'm loving everything, but the first thing I loved was the picture that you put up of you when you applied, and then your, what was it, I guess, your corporate portrait or something?

• 5:33Speaker 02

  That is correct. When I made Vice President, they took pictures of us. So, yes, that was 20 years later.

• 5:39Mike Rowe?

  How many Vice Presidents were there?

• 5:42Speaker 02

  Generally had about seven, not a lot. And Vice President at Publishers Clearinghouse was a big deal.

• 5:49Mike Rowe?

  Yeah. Okay, so it's called Downfall of an Icon, and I never do this, but there's so much about the book, in the way you wrote it, that kind of rhymes with the company and the way they sold their product. It's very good. It makes me want to turn the page.

• 6:10Speaker 02

  I learned marketing from them, and they were the best.

• 6:14Mike Rowe?

  Listen to this, this is on the back cover. "The epic rise and shocking collapse of Publishers Clearinghouse is the ultimate treatise on American capitalism." You start with a big claim. I love it. "Brilliant innovation to fill a market need, leading to extraordinary profits, popularity, and philanthropy before eventually giving way to runaway greed." Not just greed, runaway greed, and ruin.

• 6:42Mike Rowe?

  Holy crap dude. So you're setting the hook on the back of this thing. And then, just indulge me for a second, because I think this will really help the, uh, the listener. Former PCH senior executive Daryl Lester was there for every step of this classic morality tale. From impressive benevolence and integrity to unconscionable profiteering with comedy and carnage aplenty. No one says aplenty.

• 7:09Speaker 02

  Not, not very much.

• 7:10Mike Rowe?

  Very solid. In the end, one of the most beloved companies in America, a dream maker at a time when people still believed in them, was overwhelmed by scandal and disgrace. How did it happen? Go behind the scenes with the only man alive, who knows the whole story as he defies legal threats from former employers to take us on this gripping journey of fortune, fame, scandal and collapse? As an added bonus, you'll be treated to prize patrol adventures, winner tales, and laugh out loud antics of an impish, yet brazen management team from a time gone by.

• 7:54Speaker 02

  That's it in a nutshell.

• 7:56Mike Rowe?

  That's a terrific piece of writing. And the last thing in the book is the first thing I read.

• 8:04Mike Rowe?

  And you got me, man. You got me right out of the gate.

• 8:06Speaker 02

  Okay, well, if you only read half of it at this point, the best is the second half.

• 8:11Mike Rowe?

  You're still doing it, man. You're still do- you're teasing me with everything you do and say. Everything is an invitation to turn the page.

• 8:19Speaker 02

  I'm just telling the truth.

• 8:21Mike Rowe?

  All right, so downfall of an icon. Why'd you write it?

• 8:26Speaker 02

  Why did I write it? Couple of reasons. There's so much misinformation about published clearinghouse from the press. Almost everything you've heard from the press about PCH is incorrect. So I wrote it to set the record straight. Secondly, it's a fascinating tale. It's a small mom and pop company that became one of the most profitable private companies in America and quote, I say this in my book, "The most beloved company in America at one time."

• 9:01Mike Rowe?

  Only to become one of the most hated.

• 9:03Speaker 02

  That's correct, and there's proof in my book of that claim. So that's the start. The third reason I wrote it was there's so much great comedy. If it weren't for the comedy, the executives were very eccentric and very mischievous. And there were stories about them that you couldn't do today in the business world.

• 9:27Mike Rowe?

  These guys are giving talks, inspirational talks to the company in their underwear.

• 9:31Speaker 02

  That's correct. The whole company in his underwear. That was our treasurer, Dan Doyle. I saw him about a week ago, actually.

• 9:39Mike Rowe?

  He's still around. But now, was Katz still in the game when you started, or he, was he already out? Mertz, sorry, Mertz.

• 9:47Speaker 02

  Mertz. Harold Mertz started the company in 1953. I started in 1973. He left three or four years before I started. He went on a six-month vacation to Australia. He gave the reins to his daughter, Joyce, and to one other gentleman, Lou Kisselick, an executive at the time. And he never stepped foot in the company again. He still owned it, and he still got all of the profits from it, but he never came back to the company.

• 10:19Mike Rowe?

  All right. Where do you want to start? What was the idea in its infancy? How did this thing start?

• 10:27Speaker 02

  Okay, so how it started. Harold Mertz was 49 years old when he started, so he was an older gentleman. He was working at Look magazine. And one of his responsibilities was in charge of all the college students.

• 10:40Mike Rowe?

  Just so people know, Look was a very big deal once upon a time.

• 10:45Speaker 02

  A long time ago, and that is correct. Yes. So Harold Mertz, one of his jobs was in charge of the college students going door to door to sell one single subscription to Look magazine.

• 10:59Mike Rowe?

  Yeah.

• 10:59Speaker 02

  And Harold Mertz decided it would be easier if he combined magazines together to give the consumer a choice. And he decided not to use the college students. He used mail order. And his first mailing was 10,000 pieces. It had 20 magazines inside. No sweet steaks yet, no fanfare, no anything, just 20 magazines and a blurb about them. And he got a 1% response, and that was the start of the company.

• 11:27Mike Rowe?

  So people understand, 1% in virtually every other metric is a failure. You got 1%. What are you gonna do with 1%? In your line of work, it's rather encouraging.

• 11:40Speaker 02

  Correct. Partially because there's very little cost of goods being sold. When you sell a magazine subscription, the publisher pays for the fulfilling the subscription.

• 11:50Mike Rowe?

  So Look magazine, in this case, wants more people reading their magazines. They engage with these outside entities, and those entities, it falls to them to find a more enticing way to present the underlying product?

• 12:07Speaker 02

  That's correct.

• 12:08Mike Rowe?

  So you go from one magazine to a couple dozen?

• 12:12Speaker 02

  Starting with 20, yes.

• 12:14Mike Rowe?

  And you get 1%. So Mertz goes, okay, we're on to something. What happens next?

• 12:20Speaker 02

  Next was the company grew for almost 50 years. Year after year, double-digit growth every single year for almost 50 years.

• 12:33Mike Rowe?

  Who else does that? Where else does that happen in the wide world of marketing?

• 12:37Speaker 02

  In terms of double-digit sales?

• 12:39Mike Rowe?

  Yeah.

• 12:40Speaker 02

  I don't know any other company that has survived 50 years of double-digit sales. I couldn't name another company. So in those fifty years, there was actually only one downturn in one year. And that was when a competitor came to play.

• 12:55Mike Rowe?

  Was that McMahon?

• 12:57Speaker 02

  That was American Family Publishers with Ed McMahon, who never worked for Publishers Clearinghouse. He worked for our competitor.

• 13:04Mike Rowe?

  Isn't that funny, how the two are so conflated?

• 13:08Speaker 02

  Even the news got it wrong virtually every single time.

• 13:12Mike Rowe?

  Okay.

• 13:13Speaker 02

  And we didn't like it, but that's the way it was. That company started, actually, American Family Publishers specifically, because PCH Management pissed off a couple of magazine publishers, Time Inc. specifically.

• 13:28Mike Rowe?

  Well, that's a bad guy to pick a fight with.

• 13:30Speaker 02

  Yes. And they got so mad that they started American Family Publishers with two other entities. One is a family known as the Pritzker family, a family in Chicago.

• 13:42Mike Rowe?

  Like Chicago Pritzkers?

• 13:43Speaker 02

  The Chicago Pritzkers, the owners of the Hyatt Hotel and the Caribbean Cruise Lines and the whole bu- yeah.

• 13:50Mike Rowe?

  Aren't they in like pharmaceuticals today?

• 13:52Speaker 02

  Time Inc., the Pritzker family, and Meredith started American Family Publishers. Meredith backed out at the very last minute. The Pritzkers owned McCall's magazine. That's the connection to the subscription world.

• 14:09Mike Rowe?

  Yeah.

• 14:10Speaker 02

  But we're going a little fast forward.

• 14:12Mike Rowe?

  Yeah, we are. Okay, so I want to get back before the sweepstakes became a thing, because that obviously was a transformational moment. But I want to talk to you a little bit about, full disclosure, I wanted you here because I'm, I've been in or adjacent to your world most of my life. I mean, I'm in the entertainment business now and, you know, it's a pretty crooked path for me. My first real job, like the thing that gave me, when all my actor friends were waiting tables, I was selling magazines over the telephone for a company called Dial America Marketing.

• 14:46Speaker 02

  Okay.

• 14:47Mike Rowe?

  You remember Dial America?

• 14:48Speaker 02

  Absolutely, yes, yes.

• 14:50Mike Rowe?

  And I felt, Daryl, like I had wandered into some...

• 14:55Mike Rowe?

  I mean, it's a world that's very clearly exists, this whole boiler room world. And I'm sure you know it, but most people don't. Like, everyone listening right now has picked up the phone and had someone try to sell them something before.

• 15:11Speaker 02

  Yeah.

• 15:11Mike Rowe?

  But very few people listening have picked up the phone to try and sell something. And it is such a world, it's such an experience. And so, honestly, I wanted you here because I still have a little post-traumatic stress disorder, I think, from, from selling magazines over the phone.

• 15:30Speaker 02

  I could imagine.

• 15:31Mike Rowe?

  And I would just like to hear some things from you about what that's really, I mean, this guy, Mertz, he went door to door, which is a very different deal.

• 15:41Speaker 02

  Well, I mean, the door to door, I mean, is, I guess, harder than selling over the phone because you gotta confront the person directly.

• 15:50Mike Rowe?

  Well, the question is, would you rather have the phone slammed down in your ear or the door flung shut in your face?

• 15:56Speaker 02

  Neither, so.

• 15:58Speaker 01

  Yeah, I mean, wouldn't it be a little bit easier to say yes? It's a little harder to say no to someone face to face than it is to just hang up on them.

• 16:05Mike Rowe?

  True, but when you're sitting there, Chuck, with a headset and just dialing, you're hitting numbers like you, you know, I mean, the first one is more Willy Loman, you know, you're out there with a, with a suitcase and a smile.

• 16:20Speaker 02

  They're all strangers, yeah.

• 16:22Mike Rowe?

  Right, you got a briefcase filled with magazines and you're literally knocking on a door saying, "What do you think?"

• 16:27Speaker 02

  Yeah.

• 16:27Mike Rowe?

  Did you ever do that?

• 16:28Speaker 02

  Uh, no, absolutely not, no. My first job was at Publishers Clearing House in 1973, right out of college.

• 16:35Mike Rowe?

  Why did you go there then? What was it about?

• 16:38Speaker 02

  I was taking a day off from looking in, I live in New York. I was taking a day off from looking for a job in Manhattan. And I happened to see an ad for Publishers Clearing House. Now, when I started in 1973, they were a very small mom and pop company. Let me give you an example.

• 16:59Speaker 02

  At ten AM in the morning, the coffee cart would roll around. I didn't have an office. I was on a desk on an outside area. And the coffee cart would come around at ten AM in the morning, and it would go into an office. And five of us would go in every morning to have coffee. It would be me and Jeannie Clark, the two marketing people in the company.

• 17:21Mike Rowe?

  Mm-hmm.

• 17:22Speaker 02

  Two. That's it.

• 17:24Mike Rowe?

  Mm-hmm.

• 17:25Speaker 02

  In the entire company. Our boss wasn't even in marketing. He was a finance person. Two people in marketing. The three other people were the entire computer department. Jeannie Norman and, uh, Jack. So, five people in nineteen seventy-three were the entire marketing department and the entire computer department. And that's actually why I was able to get to know each and every one of these crazy vice presidents. Because all of my work, I was a marketing analyst, so I was analyzing how the mailings were doing and the tests.

• 17:59Mike Rowe?

  Mm-hmm.

• 18:00Speaker 02

  And my reports, there was no middle management. There were only maybe a hundred employees. So, my work went straight to all of the seven vice presidents.

• 18:09Mike Rowe?

  Right out of college.

• 18:10Speaker 02

  Right out of college.

• 18:11Mike Rowe?

  What was your first day like?

• 18:13Speaker 02

  Okay, I think you read the first, uh-

• 18:15Mike Rowe?

  I did.

• 18:16Speaker 02

  ...couple of chapters of my book. I did the stupidest thing anybody could do on the very first day. I can laugh about it now. I knew nothing about the business world at all.

• 18:27Mike Rowe?

  Which major in?

• 18:29Speaker 02

  I majored in math. There weren't many math jobs back then. I didn't want to be a teacher.

• 18:34Mike Rowe?

  Mm-hmm.

• 18:35Speaker 02

  But I was hired fairly quickly by VP of Finance, Alan Rabinowitz, who was the most mischievous of the vice presidents. And after my first day, I walked into his office, and I said, "Thank you, Mr. Rabinowitz." He said, "Call me Alan." And I said, "Thank you for hiring me." And I started to walk out, and I turned around, and I said, "By the way, I think I deserve a raise."

• 19:00Mike Rowe?

  Day one.

• 19:01Speaker 02

  Day one. I swear to God.

• 19:05Mike Rowe?

  Bold. What's Alan do?

• 19:07Speaker 02

  Stupid. Alan is-

• 19:12Speaker 02

  Alan became a very close friend and mentor. Uh, he passed away early in life, so I knew him for about 20 years. He was always known to talk and for an argument. Devil's advocate was a phrase that Alan would use all the time. That's who he was. At that moment, it was the only time I ever saw him speechless. He said to me, um, let me think about it. I'll let you know tomorrow. I'm just glad he didn't fire me on the spot. I mean, looking back at it, it's just, anybody out there, don't do that.

• 19:49Mike Rowe?

  And yet, I mean, here you sit, all these years later, you rose through the ranks, and I just wonder if part of it is because this Alan guy understood that on some level, the company was being equally audacious with its customers. You know, an unsolicited knock on the door, a phone call, an offer you can't refuse. I mean, surely, what is it, ABC, always be closing. All right?

• 20:17Speaker 01

  He probably liked that moxie.

• 20:19Speaker 02

  One, one of my regrets, one of my only regrets is that he passed away too early for me to ask him that question. Why did you not fire me on the spot?

• 20:29Mike Rowe?

  Yeah.

• 20:30Speaker 02

  I mean, and the raise, I was making $7,300 a year, okay? And he gave me a $200 raise. That was six cents an hour, I think, or something like that, if you do the math. And I was thrilled.

• 20:44Mike Rowe?

  Sure.

• 20:45Speaker 02

  And my reasoning simply was that I have a twin brother, an identical twin brother, who started a job about a month before I did in Manhattan, and he was making $500 more than me, and I couldn't bear that.

• 20:57Mike Rowe?

  That's gotta be a torture.

• 20:58Speaker 02

  And so that's how, yeah, uh, yeah.

• 21:05Mike Rowe?

  Do you think glazed hams glaze themselves? Or do you suppose there's a specific job for that specific task? This was the topic of a recent dinner conversation with some friends the other night. And while those assembled failed to resolve the question, we did agree that if such a job actually existed, then ZipRecruiter would be the only logical place to find a qualified glazer of hams. Why? Because nobody's better at helping you find qualified people who are excited to do whatever it is they do than ZipRecruiter. And right now, you can try them for free at ziprecruiter.com/row. Also, ZipRecruiter has a new feature that shows you the most interested, qualified candidates first. That's a game changer.

• 21:49Mike Rowe?

  So you meet the right people faster. And then your candidates can tell you in their own words, also important, why they're excited about your job. For instance, when Chuck first said to me, "Mike, I've always wanted to work with a glazed ham." I had no choice but to hire him. And that was over 10 years ago. And look, he's still here impersonating a podcast producer. Let ZipRecruiter find the right people for your roles. Try them for free today at ziprecruiter.com/row. That's ziprecruiter.com/row. Meet your match at ZipRecruiter. Build your team. Build it sooner. Meet your match at ZipRecruiter.

• 22:32Mike Rowe?

  Try it free. All right, so it's 1973. You're a math major. You're making 7,500 bucks a year, more or less. And we still don't have a sweepstakes component into this company yet.

• 22:49Speaker 02

  We do.

• 22:50Mike Rowe?

  We do, okay.

• 22:51Speaker 02

  The sweepstakes started in 1967. The first test of a sweepstakes by PCH was 1967. And this will be interesting. That it wasn't actually PCH's idea. It came from Reader's Digest. Harold Merz, this is 1967, about two years before he walked away. So Harold was still running the business. And he saw Reader's Digest doing the sweepstakes. And he saw them repeat it. So he said to his management team, the seven vice presidents. He said, let's try a sweepstakes. So we tested it. It did extremely well. He called his management team together, all seven vice presidents, all of which I worked with.

• 23:36Speaker 02

  And he said to them, whoever wants to destroy my business and continue with the sweepstakes, raise your hand. Harold was not a person, he would listen to both sides of an argument. And then he would make up his mind on what he would do. So that's exactly what he said to his management team. There was only one person in the room who was brave enough to raise his hand. It was the youngest person in the room. It was a creative copywriter, basically. His name is John Minnick. He became president many, many years later for a short time. He raised his hand. He gave Harold Murch the argument as, no, it's going to generate a lot more sales. Harold was concerned that he had a cash cow on his hand.

• 24:20Speaker 02

  It was making a lot of money, a lot of sales, extremely high margin, because the cost of goods was close to zero. Right. Because we weren't manufacturing anything. You're selling somebody else's product. That's correct. He didn't want to jeopardize his cash cow with poor customers. And John Minnick made the argument. And Harold said, okay, I'll agree. Let's continue it. But, he said, but, everything we do has to be above board with honesty and integrity to the consumer. I'll tell you one other thing, which is totally amazing. And I had double and triple checked this when I heard this, when I started at the company. The first sweepstakes mailing, the top prize, $10.

• 25:05Speaker 02

  Now, this was 1967. Sure. The odds of winning... A prize, the lowest prize was 25 cents. The odds of winning a prize was one in 10. But the top prize was $10. When I started in 73, I believe the top prize was around $100,000 at that point. And then over the years it went up and up and up and up.

• 25:30Mike Rowe?

  But still, $100,000 in 1973. What's that in current money? That's a couple of million bucks.

• 25:37Speaker 02

  That was good money, yes.

• 25:38Mike Rowe?

  That's real money. I didn't realize that. So in the early days, your odds of winning something were actually very decent.

• 25:46Speaker 02

  That's correct.

• 25:47Mike Rowe?

  Not much. Like the idea of a, what is it like? It's like a slot machine. Pays off enough to keep you standing.

• 25:56Speaker 02

  To keep you interested, yeah.

• 25:57Mike Rowe?

  Right.

• 25:57Speaker 02

  That's correct.

• 25:58Mike Rowe?

  Right. You're not going to walk out with giant bags of money, but you're going to be rewarded enough to stay in the game.

• 26:04Speaker 02

  Yeah.

• 26:05Mike Rowe?

  So did that model, why did that model go from, or I guess maybe the better question is, what did the odds become ultimately?

• 26:16Speaker 02

  Ultimately. Good news and bad news.

• 26:19Mike Rowe?

  Yeah.

• 26:20Speaker 02

  In my day, when we started to promote a million dollar prize and up to a $10 million prize, the odds of winning were, I don't have the exact number. It was in the millions to one.

• 26:33Mike Rowe?

  Right.

• 26:33Speaker 02

  To win the big prize.

• 26:36Mike Rowe?

  And was the big prize a million? Or was it 10 million?

• 26:38Speaker 02

  It reached 10 million during my era.

• 26:40Mike Rowe?

  And stayed at 10?

• 26:41Speaker 02

  Stayed at 10.

• 26:42Mike Rowe?

  Okay.

• 26:43Speaker 02

  Until today, which I'll get to at some point. Today, however, I've been out of PCH for 20 years. I retired early. And I check their website all the time to see what's going on there. And the odds of winning today are much worse. The odds of winning are, I think it's 8.2 billion to one.

• 27:07Speaker 02

  That's to save their money.

• 27:09Mike Rowe?

  Wait a minute, so the odds of winning something in 1973 were one in 10. And the odds of winning today are one.

• 27:18Speaker 02

  Well, let me restate it, the the odds of winning the big prize today is 8.2 billion to one.

• 27:25Mike Rowe?

  And how many prizes are there today?

• 27:26Speaker 02

  Oh, there are dozens of other prizes, the odds are better for those. But the sales come from the big prize, the more money you promote. It's like the lottery, when the lottery goes really high, people stand in line to buy lottery tickets. The same thing with the sweepstakes entries, the higher the prize, the more people are interested. The little secret about sweepstakes, that started probably from day one of sweepstakes, is people think that you have to buy something to win. You do not, but many people you cannot convince that it doesn't kind of increase your odds.

• 27:59Mike Rowe?

  Yeah.

• 28:00Speaker 02

  And we're okay if people want to think that, I guess.

• 28:03Mike Rowe?

  I think you're counting on it, aren't you, right? I think what he's saying Chuck is this this idea that as a as a participant, a player, you can put your thumb on the scale and maybe increase your odds by, you know, when you send your stuff in, maybe include a little handwritten thank you note or maybe a little token of your appreciation or or something.

• 28:26Speaker 02

  Or say, you know, you're close to winning, don't miss your chance at entering.

• 28:31Mike Rowe?

  Yeah.

• 28:31Speaker 02

  The copy can make a big difference. And you got to be careful not to go over the line and do something that's unethical or illegal.

• 28:39Mike Rowe?

  Well, I want to talk about that, but I'm also talking about the people who are entering would send you guys handwritten notes along with the entry to try and increase their.

• 28:49Speaker 02

  Oh, we would get poems and and we'd get, people would send in cakes and stuff to hopefully increase their chances of winning. And we appreciated the food and and the notes, but no, that didn't.

• 29:02Mike Rowe?

  You weren't a little a little worried about what might be in those cakes or anything?

• 29:06Speaker 02

  At that time, no, this is the 80s, 70s, 80s, no, we wouldn't open the stuff today. But back then, we shared.

• 29:14Mike Rowe?

  So when then did you realize you guys really had a tiger by the tail? Like, when did it tip for you when you realized, good god, we're selling a product that we don't even make through the lens of a sweepstakes, which is really adjacent to a lottery? Like, you have no manufacturing costs.

• 29:35Speaker 02

  Correct. That is correct.

• 29:36Mike Rowe?

  Every single thing this billion-dollar company is creating is an intangible.

• 29:42Speaker 02

  Correct. Correct.

• 29:43Mike Rowe?

  Dreams and hopes.

• 29:44Speaker 02

  The way that the economics worked for us, for example, if we sold a magazine subscription for $10, in my day, we kept $8 and we'd give the publisher $2. Now, they'd have to spend $20 to fulfill the subscription. But the $2 was, they liked getting that, but they more liked getting the circulation. Publishers Clearhouse got so powerful that by the end of my era there, my term there, we negotiated publishers down to 10% and some were 0%. That's the problem we had with Time Inc. They were getting a remit, we called it, of 20% of the sale. And they wanted more. And we said, no, we're gonna give you less.

• 30:29Speaker 02

  And it pissed them off. And they started American Family Publishers and after a year or two, engaged Ed McMahon and other celebrities.

• 30:38Mike Rowe?

  I just think it's useful for people to understand, like, the basics of this. That it's kind of like a customer acquisition cost. If you're a publisher, what you really need is somebody who's going to not just order your magazine, but order it for years, week after week after week. I mean, that's the essence of the subscription. So these guys would go underwater. They would overpay to get that person. And then their whole model is what? Just to make sure the magazine is good enough to keep that person reading forever and ever.

• 31:08Speaker 02

  Correct. I mean, most companies have to pay to get new customers. We gave them a new customer and a dollar or two with it. It was like, found money to them and it increased their circulation. They make, the publishers make most of their money on the circulation. So if we give them more subscribers, they can charge more for their ad rates.

• 31:30Mike Rowe?

  Right.

• 31:31Speaker 02

  So the more subscribers we gave them, the more they wanted. In our heyday, we only offered about a hundred magazines per mailing. And there were three hundred and fifty magazines wanting into the mailing. So they would fight to get in the mailings. And there was a time when they started to offer free premiums, calculators and cameras and stuff like that, all on their dime, just to get them into our mailing, because they had to get in past the other ones. It was genius for the time.

• 32:02Mike Rowe?

  Well, it's genius, and there's so many little things that are counterintuitive, like the complexity of a PCH mailing, right? I got one once, and I was like, you've got to be kidding me. Page after page, different fonts, different prints. Like, everything I had been taught was, this should be way simpler. But I have to admit, fifteen minutes later, I'm still with the materials.

• 32:30Speaker 02

  Yeah, I talk about that a little in the book. We would, so our mailings generally had seven or eight components in each mailing. It had the magazine flyers, it had the stamp sheet with the stamps. It had a whole bunch, it had seven or eight different components in every mailing. And we said to ourselves, you know what? If we could make it simpler, it would cost us less money in paper and printing. So we tested simpler several times. Never worked. And the theory from one of our vice presidents, Tom Owens, a very, again, very mischievous character. His theory was that the more time a person spent with your package

• 33:15Speaker 02

  was like the more time the person spent in your store, the more chance that he would buy something. So that's the theory. Whether that's true or not, I don't know, but that's the way it worked for us.

• 33:25Mike Rowe?

  Well, there's something too about the complexity of a thing translating into the legitimacy of a thing, right? Like, nothing illegitimate could be this complicated. I mean, why would you do that? You know, so you give people multiple hoops to jump through. And, which I guess begs the question, as a math guy, you're probably just looking at the numbers, you're testing everything, but...

• 33:50Mike Rowe?

  Psychologically, there was so much going on in this whole relationship. You know, were you testing the math or were you testing the underlying psychology of the material?

• 34:02Speaker 02

  You know, we, most of the testing was in the language, in the creative.

• 34:07Mike Rowe?

  Yeah.

• 34:07Speaker 02

  And it's interesting because we would, we tested a lot. We would have meetings once a month for the senior vectors. And even in my early days, I was part of that because I was in charge of marketing. So I was in charge of, you know, marketing for the company, even when I wasn't a vice president. I was in on those meetings and we would have a dozen packages that our creative team had produced. And we would look at them, decide which one we actually wanted to test. And we would try to predict which ones we thought would work. We could never predict which the winners would be. If it tested and it worked, we did it. But it's hard to tell beforehand.

• 34:52Mike Rowe?

  Yeah. All right. So again, back to, I'm looking for the moment when you said to yourself, holy crap. This thing really is a monster. This thing is a.

• 35:04Speaker 02

  You know, there was a progression.

• 35:09Speaker 02

  When we first tested television support, I think it was in 1974, 75, a year or two after I started. I was in charge of reporting that test result. And the test result was huge. So that's when PCH in 1975 or so started television advertising. That's when I and others thought, you know what? This cash cow is going to be many cash cows. But at that time, we were still a small mom and pop company.

• 35:41Speaker 02

  We were growing, but it was still small. So that was the first progression. The second was probably when we went to the one million and ten million dollar prize, ten years or so later. That was a big plus.

• 35:58Mike Rowe?

  But you guys weren't highlighting the winners yet, were you?

• 36:03Speaker 02

  You know, we didn't really start highlighting the winners until the prize. Okay, that's good, that reminds me. The big hit was the prize patrol. That was probably the single most important test and thing that we rolled out ever, except for the sweepstakes in general. The prize patrol lifted us to another level. And when I and we realized, I don't remember the exact moment, but I say in my book, we became the most loved company in America. And I give examples of all the free publicity that we had. It was daily.

• 36:44Mike Rowe?

  Everywhere.

• 36:45Speaker 02

  It was Oprah several times, it was Letterman, it was everywhere. It was mentions in sitcoms. Sears, Seinfeld, Cheers. It was on a daily basis, Publishers Clearinghouse was discussed by the news, and that's all free publicity. So that was the third time. There was a fourth time that I'll get into later, that was a fourth time, but it was a, it was not a good move by PCH. Perhaps we'll get into that later.

• 37:14Mike Rowe?

  Okay. Before we do that, though, so there's a time when you're not highlighting your winners. Didn't somebody, didn't this all happen because somebody who won wanted to come and say thanks to the company? And wasn't the company like resistant?

• 37:30Speaker 02

  Yes. The story goes that a winner called and, this was probably in the early seventies, right around when I started. Maybe a little before, a little after, don't know exactly when. A winner called and said they wanted to come and thank us for the prize. And we were like, oh, really? Well, I guess it'll be on your dime, but, but who's gonna show him around? So there was a kind of battle on the vice presidents on who would show the guy around. And it was decided that it was Henry Cowan, an original vice president, and Lou Kissel, I think, who was president at the time, agreed, okay, we'll take the person around. And we took him around the building and shut him around, or they did. And...

• 38:16Speaker 02

  Henry Cowan and Luke Hislick, the president at the time, loved meeting him and his thanks. And the employees clapped when he walked them around and showed us.

• 38:26Mike Rowe?

  It was amazing.

• 38:26Speaker 02

  It was still a small company at the time, maybe 200 employees at that time. So that's when we realized that flying the winners out, and that's really when the publicity started, still 10 years before the prize patrol, however.

• 38:40Mike Rowe?

  Yeah.

• 38:41Speaker 02

  The prize patrol just took it to another level where, you know, we'd show a winner in a flyer, or say the winner's name, but nothing better than showing a live winner on TV.

• 38:55Mike Rowe?

  No, and it seems so obvious today, but it had never been done before.

• 39:00Speaker 02

  Yeah.

• 39:01Mike Rowe?

  Right? And the point that I want to kind of drill down on is that you test everything. All your materials are tested, retested, and you're generally wrong about what you think is going to work.

• 39:13Speaker 02

  That's correct, absolutely.

• 39:14Mike Rowe?

  So it's the idea, it's the idea that you actually trusted the customer more than your own gut. And I think that's important from a, I don't know, there's some sort of abject lesson in there, maybe a humility, maybe just a born of experience, you know? But the idea that it never occurred to you to put your customers front and center until somebody reached out and said, "I'd like to come and thank you," just a basic expression of manners, and even that was met with a certain level of skepticism, but you made them pay it.

• 39:49Speaker 02

  The first time, yeah.

• 39:51Mike Rowe?

  They had to pay for the privilege of saying, "Thanks."

• 39:54Speaker 02

  That's correct.

• 39:55Mike Rowe?

  And then what happens, like, the vice president's, like, the guy leaves, and they're like, "You know what? That didn't suck. That was kind of fun."

• 40:01Speaker 02

  Yeah, so after that, we paid for the winners. We flew them in, and we wine and dine them, and that started our Winners Weekend, is what we called them. We'd have a party in our cafeteria for them, introduce them to all the employees. You know, the contest was still relatively new then. We're talking about, I started in 73, so it was right around, we didn't start TV advertising until 74 or 75.

• 40:24Mike Rowe?

  Right.

• 40:25Speaker 02

  So that's when we started showcasing the winners.

• 40:32Mike Rowe?

  Can't believe it's been 15 years since that headline first appeared in Slate Magazine, the one that said "The Greatest Hoodie Ever Made." That's the headline that put American Giant on the map. And that's the same year their CEO sent me one of these hoodies unsolicited in the mail. I didn't know Byrd Winthrop back then, but he was a fan of Dirty Jobs. He and his kids watched it, and he wanted me to have one of his sweatshirts, so I beat the hell out of it. I mean, I wore it, I don't know, on dozens of different Dirty Jobs. I just saw an old episode last week of me castrating lambs wearing this hoodie. No garment in the history of the world, in my opinion, has ever been bespectacled with

• 41:15Mike Rowe?

  a more curious array of unholy fluids than my American Giant sweatshirt, and it's still standing. Honestly, at this point, I'm less concerned about replacing it than I am deciding who gets it when I'm gone. But what made American Giant famous, of course, was not just a sweatshirt that refused to die, it was making that sweatshirt right here in America with skilled people doing good work. That's something I'm happy to support, especially when I can support it while wearing something comfortable. If you're looking for a gift that might outlast your relationship with the recipient, consider the hoodie that started it all. Go to American-Giant.com/mike. You'll save 20% when you drop my name at American-Giant.com/mike.

• 41:59Mike Rowe?

  American Giant, American-made. American Giant, American-made. I love this so much because it's scary. If you're gonna showcase the winners, and if you're gonna be ethical about following the rules of sweepstakes, then you can't control who the winner is. Which means you're liable to put on all of your mailings and on TV, Cletus from Nebraska with not a tooth in his head. Okay, who suddenly becomes the face of victory for your company. You have no idea who is going to show up. And so like that would make a lot of companies panic.

• 42:43Mike Rowe?

  But it was also so real.

• 42:47Speaker 02

  If we had a winner that didn't look well on TV or we didn't want to promote, we didn't promote them. I can recall one and it was in the, it was around 1975. We had a winner of a hundred thousand dollars. He was an oil rig worker and he quickly spent money on a speedboat, a new car, drugs and hookers. He ended up in jail and apparently he took a shotgun to the judge's house and he ended up in jail. We did not promote that person.

• 43:22Mike Rowe?

  Yeah, yeah, I guess not. But I just mean the care. Like all of the testing you would do for your materials, you can't really do for your winners. And so you wind up by and large, week after week, putting very normal, average looking Americans. Could be you, could be your neighbor. It just seems to me that that made a lot of people go, well, why not me? I mean, if that guy, who knows, could be me.

• 43:52Speaker 02

  Yeah, we had a lot of fun with the winners. We really did. And there's a lot of good stories in the book, inside stories that people don't really know.

• 44:03Mike Rowe?

  What was the culture like in the company at this point? Did it get crazier as they became more profitable or was it always a little nutty?

• 44:13Speaker 02

  Yes and yes. It got crazier and crazier. The workload was getting really, really bad. So imagine.

• 44:25Speaker 02

  There was one year, we'll get into this a little later, one year where sales went up by a hundred percent in one year. We didn't have a staff to handle that kind of sales. So we went from when I started around a hundred employees to, we had around 500 employees in the early 90s. And then in the early 90s, sales went from 500 million a year. The next year it went to 1 billion. We never believed we'd even reached the half of the 500 million that we reached. We were celebrating that. And the next year we hit a billion. The workload was crazy.

• 45:09Speaker 02

  When I started, we had one mailing a month, and that was it. In 10 years, we went to 12 mailings a month. We didn't have the staff to do that many mailings. So the workload was crazy. The fun was crazy.

• 45:27Mike Rowe?

  So like direct marketing conventions all over the country, that kind of thing?

• 45:30Speaker 02

  Oh, yeah. Oh, yeah. Yes, yes. The parties at PCH, I mean, retirement parties, or when people left to go to another company, or it got way, way out of hand.

• 45:42Mike Rowe?

  How generous was the company with its employees?

• 45:45Speaker 02

  The employees felt like family members. So you know a lot of companies, right, Mike?

• 45:52Mike Rowe?

  Mm-hmm.

• 45:53Speaker 02

  Do you know any other company that gave every single employee fresh cut flowers on their desk every Monday morning?

• 46:00Mike Rowe?

  Well, I do that here at MicroWorks, obviously, but aside from that.

• 46:04Speaker 02

  Okay, how many you got?

• 46:05Mike Rowe?

  Mine are gone already.

• 46:06Speaker 02

  So that started in, when Harold Murch left, he started that. And even when we rose to 1,000 employees, every Monday morning, every week, fresh cut flowers on every employee's desk. The owners and the management team treated people like family. They were very mischievous, as I said, very eccentric. We all had a lot of fun together. The camaraderie was unbelievable.

• 46:35Mike Rowe?

  Give me an example of the stuff that management was doing that would either get them canceled today or just simply, just couldn't happen in 2024?

• 46:46Speaker 02

  Okay, well.

• 46:48Speaker 02

  There are a lot to choose from. I have two. I'll give you one now. You mentioned early about somebody doing a speech to the company in his underwear.

• 46:59Mike Rowe?

  Yeah.

• 47:00Speaker 02

  Okay, let's tackle that. His name was Dan Doyle. I saw him a week or two ago. He was doing a book talk at the Paul Washington Library where PCH was and Dan Doyle came.

• 47:11Mike Rowe?

  Was he clothed?

• 47:12Speaker 02

  I thanked him for having his clothes on. He was in the back of the room.

• 47:17Mike Rowe?

  Good.

• 47:17Speaker 02

  Sue Cook was an HR manager. She was single, attractive, and young. I think she was maybe around 30. And she was leaving to go head the HR department at a company in Vermont. And so we threw her a party. She was an HR manager and everybody knew her and everybody loved her. So we had this party with virtually all the employees. And of course, there were speeches. And Dan Doyle walks on. And he introduces himself as Amos Woodcock. He's wearing... There are pictures of this in the book because you can't make this shit up. I can't believe I have pictures of this stuff.

• 48:02Speaker 02

  He walks on. He introduces himself as Amos Woodcock. He's wearing a coonskin hat, a woolly vest that's open, that's showing his hairy chest. He's not wearing a shirt. He has black boots on and black socks and bikini underwear. No pants. And he wants to show Sue Cook, who's sitting in the front row, the kind of young men she's gonna meet up in Vermont. Oh, by the way, he also walked in. He's carrying a chainsaw.

• 48:39Mike Rowe?

  Oh, there you go.

• 48:40Speaker 02

  Okay. The picture doesn't include the chainsaw, but he had a chainsaw he put down when he started making the speech. So he's making the speech. And at the end of the speech, he walks up to Sue. And everybody could see this, but couldn't really make it out. But we got closer to Sue. He gave her a little going away present. And he had hand carved her a necklace.

• 49:08Speaker 02

  I'm a little embarrassed to say it, of a man's genitals.

• 49:11Mike Rowe?

  I see.

• 49:13Speaker 02

  A large necklace.

• 49:14Mike Rowe?

  Hmm.

• 49:15Speaker 02

  That he had around his neck, of course.

• 49:16Mike Rowe?

  Yeah.

• 49:18Speaker 02

  And he walked to the front row, to Sue Cook, and he put it around her neck as a present.

• 49:23Mike Rowe?

  Like a lei, like a Hawaiian greeting.

• 49:25Speaker 02

  Correct. She turned as red as I've ever seen anybody else in their entire life. Now, before I go on, I want to show you something.

• 49:37Mike Rowe?

  All right.

• 49:39Speaker 02

  I'm a little embarrassed to do this.

• 49:41Mike Rowe?

  I can tell, you're all twisted up.

• 49:46Mike Rowe?

  God, please be a Woodcock.

• 49:47Speaker 02

  My Pierre guy said I should do it.

• 49:53Speaker 02

  The picture does not do it justice.

• 49:55Mike Rowe?

  Mm-hmm, never does.

• 49:57Speaker 01

  Oh, it sounds like wood.

• 50:00Speaker 02

  He hand carved this, and this is what he handed Sue Cook. She loaned it to me.

• 50:09Mike Rowe?

  That's fantastic.

• 50:12Speaker 02

  Okay.

• 50:13Mike Rowe?

  Amos Woodcock.

• 50:14Speaker 02

  Could you do that today?

• 50:17Speaker 01

  Well, you just did.

• 50:17Mike Rowe?

  You did.

• 50:18Speaker 02

  Oh, jeez.

• 50:22Mike Rowe?

  Wow. I mean.

• 50:25Speaker 01

  I'm, well, I, no comment.

• 50:27Speaker 02

  Am I right? The picture doesn't do it, the picture's in the book, but it doesn't do it justice.

• 50:30Mike Rowe?

  No, no, it doesn't. What became of Sue? Where is she these days?

• 50:34Speaker 02

  She's somewhere up in the mid, up in Chicago, actually. She sent that to me.

• 50:39Mike Rowe?

  She's removing splinters.

• 50:40Speaker 02

  I do need to send it back to her, so.

• 50:44Speaker 01

  It's only on loan.

• 50:48Speaker 01

  Yeah, okay.

• 50:49Speaker 02

  That's just one example. There were many.

• 50:55Speaker 01

  Can we have one more?

• 50:56Speaker 02

  You want one more?

• 50:56Speaker 01

  Yes, please.

• 50:57Speaker 02

  Oh, jeez.

• 50:58Mike Rowe?

  I mean, he kind of kicked the door open with a Woodcock. I am curious to see where he goes now.

• 51:02Speaker 02

  You brought it up.

• 51:03Speaker 01

  You come out of the gate with that, yeah, where do you go?

• 51:05Speaker 02

  The other one, and this is probably my second favorite one. Is, uh, you want me to put it back in here?

• 51:12Mike Rowe?

  No, no, no, let's keep it out here, just in case people are scrubbing forward, you know, I'd hate for them to miss it. Apropos of, I mean, since we're on the topic, wasn't there like a cyclops?

• 51:22Speaker 02

  Oh, yes.

• 51:23Mike Rowe?

  What was the statue that greeted people at PCH?

• 51:25Speaker 02

  When you, there's a picture of this in the book, when you went into the front of the building, the first thing you saw was a nine-foot statue of a fully naked, one-eyed cyclops with his hands out, holding a fish.

• 51:39Mike Rowe?

  Look, by definition, cyclopses are typically one-eyed, right?

• 51:42Speaker 02

  Yes.

• 51:43Mike Rowe?

  All right.

• 51:44Speaker 01

  So that part was not unusual.

• 51:46Mike Rowe?

  So it was unusual. But it's, but which eye are we talking about?

• 51:51Speaker 02

  I think the one in the middle.

• 51:52Mike Rowe?

  The one eye? Or the one eye?

• 51:53Speaker 01

  He was anatomically correct, except for the one eye.

• 51:56Speaker 02

  That's correct.

• 51:56Speaker 01

  Usually people have two.

• 51:57Speaker 02

  And that's the first thing you saw when you walked in. And I actually had a chance to ask Lou Kissel, former president, uh, several years ago, why Harold Mertz put that in there.

• 52:11Mike Rowe?

  It's a good question, man.

• 52:12Speaker 02

  And Lou Kissel told me it was the mischievous little leprechaun in Harold Mertz. The story I like to tell about the cyclops.

• 52:21Mike Rowe?

  Look at this thing, man.

• 52:22Speaker 02

  Oh, yeah.

• 52:23Mike Rowe?

  You got a cyclops holding a giant fish.

• 52:25Speaker 02

  That's what I said. And one eye.

• 52:29Speaker 02

  The other story I like to tell about the cyclops.

• 52:32Mike Rowe?

  No, wait, wait, wait. I don't understand, you, I mean, just mind, I'm living my life, I'm minding my business, I walk in the lobby of PCH and I'm greeted by just a full-on set of male genitalia, a statue with one eye holding a fish, and I'm supposed to somehow make some kind of correlation into, what, the corporate culture, my odds of winning, the joy of magazines? What does it mean, man? What does it mean?

• 52:57Speaker 02

  Lou Kissel didn't give it to me, he just said it's the mischievous little leprechaun in Harold Mertz. I don't know.

• 53:03Mike Rowe?

  That's not a leprechaun, dude, that's a phallus, man. That's a, I mean, this is, this is next level mischievous.

• 53:11Speaker 02

  That's maybe where all the mischievous started, I don't, I don't know.

• 53:15Mike Rowe?

  All right.

• 53:15Speaker 02

  That came from Harold Mertz. I will say that the new management team and the new company does not have the statue anymore.

• 53:23Mike Rowe?

  Where is it?

• 53:24Speaker 02

  We don't know.

• 53:25Mike Rowe?

  Unclear.

• 53:26Speaker 02

  I asked at this book talk a couple of weeks ago in Port Washington. There were about 75 people. Many former PCHs were there, some original PCHs were there, hired by Harold Mertz himself. I asked them and nobody knows where the statue is.

• 53:46Mike Rowe?

  All right, yeah, I don't want to gloss over the, I mean, it's not ju-- maybe it is just childish, frat behavior or something, but the importance of a sense of humor, however sophisticated or not, you know, it seems to be missing today from so many companies, and I'm not suggesting that, you know, Amos Woodcock needs to make an appearance in the halls of Google necessarily. But, life was more interesting, right? When you had characters like Dan, what's his name, just--

• 54:18Speaker 02

  Dan Doyle, absolutely. Yeah, I think the camaraderie and the friendship is not the same today as it was back then. I still meet once a month with five old time PCHs,

• 54:33Speaker 02

  two of which were hired by Harold Mertz in the 60s. I have lunch with them every month, together, just five of us.

• 54:40Mike Rowe?

  Where do you go?

• 54:41Speaker 02

  Local place, just a local place.

• 54:42Mike Rowe?

  New York, Long Island?

• 54:43Speaker 02

  Uh, some local place in Long Island.

• 54:46Mike Rowe?

  Yeah.

• 54:47Speaker 02

  When we get together, it's funny because people around us will like, we just gab and gab and gab about the old days. It was so much fun. And people look at us and, and once somebody got up and walked over and said, "What are you guys talking about? You look like you're having so much fun."

• 55:05Mike Rowe?

  But it's, it's another one of those things that's hard to articulate, that's unique. Like, I saw it on Dirty Jobs all of the time in a different way, a kind of band of brothers mentality that you'll find in the sewer or on bridge work, you know?

• 55:19Speaker 02

  Okay.

• 55:20Mike Rowe?

  But marketing's no different. And I've been thinking a lot about, I don't know if I'm the right guy to do it, but somebody needs to write a tell-all like you did about Dial America Marketing and the wide world of telemarketing. And somebody should probably do it for the home shopping industry, too. I spent three years on QVC in the middle of the night, selling whatever they brought me. And I bring it up because now when I cross paths with people who were doing that thirty five years ago, same time I was, we we now kind of realize we were pioneers.

• 55:54Speaker 02

  Right.

• 55:54Mike Rowe?

  We had a front row seat to a whole new level of communication and sales that hadn't existed before. And it it's interesting to be able to look back with people who were there. And I just think it's great that you're doing that at this point in your life. How old are you now, if you don't mind me asking?

• 56:14Speaker 02

  Seventy-three.

• 56:14Mike Rowe?

  Seventy-three years old. Interesting. Didn't you start in seventy-three?

• 56:18Speaker 02

  I did, actually.

• 56:19Mike Rowe?

  That's a big number in your life, Joe.

• 56:21Speaker 02

  And I retired twenty years ago. I was fifty-one, retired young.

• 56:24Mike Rowe?

  Is it this thing seventy-three centimeters?

• 56:26Speaker 02

  I'm not, I don't know.

• 56:28Speaker 01

  I can tell you it's not.

• 56:31Mike Rowe?

  You don't even know what six inches is, do you? Yeah, I'm told it's about.

• 56:36Speaker 01

  Yeah, like that.

• 56:37Mike Rowe?

  Anyway, so here you are in the midst of this evolving behemoth. It's politically incorrect. It's fun. The management seems super generous with its employees, but they were also, I mean, there was a lot of philanthropy within the company, too.

• 56:57Speaker 02

  Yes. So the owners were very philanthropic. I actually, I calculated this myself. Many times they did stuff anonymously. They didn't do it to make a name for themselves, although their name is on many buildings at this point and stuff like that. But I calculated when I wrote the book that over their lifetime through today, the Mertz family has given away almost a billion, one billion dollars to charity, the arts, and social causes.

• 57:26Mike Rowe?

  Wow.

• 57:27Speaker 02

  And they were very active in the arts as well.

• 57:30Mike Rowe?

  Was it tied in to the, like, the transactional?

• 57:35Mike Rowe?

  What am I going to say? Cause related. Did you guys use cause related marketing?

• 57:40Speaker 02

  No, we never did that. We thought about it once. We had a competitor. After AFP started, there were several other competitors that started multi-magazine business.

• 57:52Mike Rowe?

  Yeah.

• 57:52Speaker 02

  One of them was called Great American Magazines, owned by Avon, actually. And their promotion was they would give $1 to a worthy cause for every subscription you bought. And I remember saying to the management team, why don't we tout what the merchers do? And the answer was, no, they don't do it to get their name out. They don't want to do that. I will say this in terms of their giving. When Harold Mertz left the company in the late 60s, around 1969, he never stepped foot in the company again. He mandated that 40% of company profits

• 58:36Speaker 02

  go to charity. That was in 1969.

• 58:40Mike Rowe?

  Forty percent?

• 58:41Speaker 02

  Forty percent. And that was just for his share. His wife owned the other, I don't know, half or what, but owned a large piece as well. He guaranteed that 40% of company profits had to go to charity. And they gave away almost a billion dollars.

• 59:04Mike Rowe?

  Ho, ho, ho. It is that time of year, my friends. Medicare's annual enrollment period is here. And if you forgot to decorate, don't worry, I didn't either. But it is time to look at your coverage in all seriousness, because renewing your Medicare plan without checking what's changed is like buying work boots without trying them on. Could be fine, could make you walk funny. Plans do change, doctors change, your prescriptions change, and reading the fine print almost never improves. With age, which is why I'm proud to work with Chapter. Their independent advisors compare and contrast every Medicare plan nationwide.

• 59:47Mike Rowe?

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• 1:00:30Mike Rowe?

  I think it's important to acknowledge, and I'm glad you did it, but the same mind that was that philanthropic was the guy that put a Cyclops in the lobby that's partially erect to greet all of the customers and friends. These things live in the same brain and the same company.

• 1:00:50Speaker 02

  You know what? There is one gentleman. His name is Bert Rowley that I'm going to see in a week or two. He's part of my group of lunch people that I have. He worked for Harold Burtz. He was at that meeting in 1967 about sweepstakes.

• 1:01:07Mike Rowe?

  Yeah.

• 1:01:07Speaker 02

  I'm going to ask him that question.

• 1:01:09Mike Rowe?

  Yeah.

• 1:01:10Speaker 02

  What's the relationship between the Cyclops and the giving? And I'll be curious to see what he says. I'll ask him.

• 1:01:18Mike Rowe?

  It's got to be something to do with the fish. It's the fish, man. I mean, maybe it's a teach a man, feed a man a fish, or teach him to fish. Maybe there's something there. But then again, there's just this partial erection that's just constantly right in the midst of the whole thing. It's just, I just don't know how to square it with fishing in general. So, let's go to the prize patrol.

• 1:01:42Speaker 02

  Yes.

• 1:01:42Mike Rowe?

  Whose idea? Can you walk it back to one person's brain?

• 1:01:46Speaker 02

  Absolutely, one person. Name is Todd Sloan. The prize patrol almost didn't happen. Todd Sloan was a junior level employee. I'm guessing he was probably 25. He had started a year or two before he had the idea. He came to my office. He worked in one of my departments, not directly to me. He worked for a manager who worked for another manager who reported to me. He came to see me. He was working in the marketing department. At that point, the marketing department was 40 or 50 people compared to two when I started. And he said to me, he loves advertising. He wants to shift to the advertising department. We had one person in the advertising department at that point.

• 1:02:30Mike Rowe?

  Isn't the whole company an advertising department?

• 1:02:32Speaker 02

  Well, yes, but we had one person whose title was advertising manager. His name was Dave Sayer. And he would be in charge of awarding the prizes, not via the prize patrol yet. So I tried to talk Todd out of going to the advertising department. Because marketing was, that's who we were. And Todd disagreed and he went to the ad department. And the first idea he had was the prize patrol.

• 1:03:01Mike Rowe?

  How did he pitch it? Like, what was the?

• 1:03:03Speaker 02

  He went to Dave Sayer, his boss. And he said, we're about to surprise a winner. I think the family's name was Yancy. That's the last name. We're about to go to, not surprise, we're about to go to a winner to give them the money for the prize. We've already told them, but next time, why don't we surprise them, not tell them in advance?

• 1:03:31Mike Rowe?

  And film it?

• 1:03:32Speaker 02

  Yes. And Dave said, "That's a crazy idea, but let's try it." So Dave and Todd, on the next prize visit, went to surprise the winner. Dave had a large check. Todd had his own video camera. This is in the mid 80s, I think.

• 1:03:55Mike Rowe?

  Right.

• 1:03:55Speaker 02

  Like 85.

• 1:03:56Mike Rowe?

  It's so gorilla. And in the background is Amos Woodcock, standing by.

• 1:04:01Speaker 02

  That's correct. And when he showed the film when we got home, it was like, we knew it was gold. We absolutely knew it was gold. Now, at that point, it wasn't live.

• 1:04:13Mike Rowe?

  Right.

• 1:04:14Speaker 02

  It was edited. It was not till several years later when Todd had another great idea. This has been going so great. Let's do it live on the Super Bowl.

• 1:04:24Mike Rowe?

  Oh, my God.

• 1:04:25Speaker 02

  And we were like, "Oh, no, no. What could go wrong? Somebody could jump out with a..."

• 1:04:29Mike Rowe?

  Yeah, yeah.

• 1:04:31Speaker 02

  Yeah. And, but we agreed. And that's when we started the live Super Bowl commercials.

• 1:04:37Mike Rowe?

  So that went live on the Super Bowl?

• 1:04:40Speaker 02

  Yeah, we did it on the halftime show.

• 1:04:43Mike Rowe?

  Wow.

• 1:04:43Speaker 02

  No, no, no. It wasn't halftime. It was at the end of the game. We didn't want to pay the money for the halftime. We did it post-game, actually.

• 1:04:51Mike Rowe?

  Mid 80s?

• 1:04:51Speaker 02

  Late, mid to late 80s. I'm guessing late 80s.

• 1:04:55Mike Rowe?

  Yeah.

• 1:04:55Speaker 02

  Because the prize start around mid 80s.

• 1:04:58Mike Rowe?

  Mm-hmm.

• 1:04:59Speaker 02

  That's what I'm guessing.

• 1:05:00Mike Rowe?

  So what was the impact of that post-game spot?

• 1:05:04Speaker 02

  Huge. Everything we did was tested, and it was huge. That's why the double-digit sales every year. Every year, double-digit. And not just 10%, 20%, 30%, 40%. Every year, year over year.

• 1:05:22Mike Rowe?

  What the hell went wrong?

• 1:05:24Speaker 02

  What went wrong? Oh, jeez. It was the late 1990s. And our competitor, American Family Publishers, decided to do something that was what we'd call over the line in their copy.

• 1:05:43Mike Rowe?

  Is this the eight-letter word?

• 1:05:46Speaker 02

  No.

• 1:05:46Mike Rowe?

  Okay.

• 1:05:47Speaker 02

  You want me to go back to the eight-letter word?

• 1:05:48Mike Rowe?

  I do.

• 1:05:49Speaker 02

  It's earlier? Okay.

• 1:05:50Mike Rowe?

  I do, I do.

• 1:05:51Speaker 02

  I will.

• 1:05:51Mike Rowe?

  It's important.

• 1:05:52Speaker 02

  In terms of the chronology, there are two things that went wrong.

• 1:05:59Speaker 02

  The first thing that went wrong had to do with how ethical the company was. So it was the early 90s when this happened. What I say in my book is the company started to go from integrity driven to pure greed. It started with a single event and an eight letter word.

• 1:06:22Mike Rowe?

  Okay, yeah, yeah.

• 1:06:23Speaker 02

  And we had a single word that gave us a 100% increase in sales. Most tests would give you a 5 or 10 or 15% increase. No test had ever given us 100%. Maybe the sweepstakes did back in the 60s. I don't really remember. But it was huge. We didn't believe it. So we tested it again.

• 1:06:45Mike Rowe?

  Is this the F word?

• 1:06:46Speaker 02

  We gave it again, no. We tested it again and it gave us 100% lift. So the word was finalist.

• 1:06:55Mike Rowe?

  That's the F word. What'd you think I was talking about?

• 1:06:58Speaker 02

  Well, it wasn't the fourth word, a F word.

• 1:06:59Mike Rowe?

  No. No, he said A. No, he said eight letters.

• 1:07:03Speaker 02

  Correct.

• 1:07:03Mike Rowe?

  Finalist.

• 1:07:03Speaker 02

  It was finalist.

• 1:07:04Mike Rowe?

  Yeah.

• 1:07:05Speaker 02

  So.

• 1:07:05Mike Rowe?

  Ingenious, diabolical.

• 1:07:08Speaker 02

  Mike Rowe, you're a finalist in the Publishers Clearinghouse Sweepstakes for $10 million. That word finalist gave us 100% increase. Now, the question was, should we do it? Should we use it in our mailing?

• 1:07:25Speaker 02

  It just so happened at the time.

• 1:07:27Mike Rowe?

  Who's in the room? The question's posed. Who's in the room?

• 1:07:30Speaker 02

  Seven vice presidents.

• 1:07:31Mike Rowe?

  Okay.

• 1:07:32Speaker 02

  Including me. I was VP of Marketing at the time. It was my job at the time and for the past 15 years. Any major mailing, I would recommend the theme

• 1:07:44Speaker 02

  and the headlines. Not the copy, just the theme, basically.

• 1:07:47Mike Rowe?

  Gotcha.

• 1:07:48Speaker 02

  It was my job to recommend to the six other vice presidents what we should do in the major mailings. So we had a meeting on this, what we should do. It was the bloodiest battle. We had a lot of arguments. The management team loved to curse, but all in good fun, except for this one time. This was a bloody battle.

• 1:08:10Mike Rowe?

  Whose idea was the finalist? Where did that originate?

• 1:08:14Speaker 02

  One of the writers, and I don't know which writer. One of the writers came up with it, but we tested everything. So we tested it. We didn't really think about it. We just, we tested hundreds of things a year. So it was a test. I didn't even know it was tested until we saw the result and oh, and we found out, you know, how good it was and it was due to this one single word. So I'm in the room. I have a written recommendation that I wrote out to them that I lost a lot of sleep over the night before deciding what to recommend. It's in writing. Wish I had the report, I don't.

• 1:08:51Mike Rowe?

  Mm-hmm.

• 1:08:53Speaker 02

  I knew we wouldn't walk away from it completely. It's too much money. On the other hand, Harold Murch would roll over in his grave if we did it.

• 1:09:02Mike Rowe?

  Because, I mean, just so people, not to put too fine a point on it, but of course you're a finalist, along with millions and millions of other people.

• 1:09:08Speaker 02

  Correct.

• 1:09:09Mike Rowe?

  We're all finalists.

• 1:09:10Speaker 02

  That's correct.

• 1:09:11Mike Rowe?

  Okay.

• 1:09:11Speaker 02

  That's correct. So my recommendation was to, let's use it sparingly. Let's do it twice a year in the big mailings. Let's use added disclosure. Let's say you're a finalist, Mike Rowe, along with all other timely entrants. Or some creative words, I didn't want to write the copy.

• 1:09:35Mike Rowe?

  In the smallest imaginable print.

• 1:09:38Speaker 02

  We certainly wouldn't say along with, you know, a hundred million other consumers. We wouldn't say that.

• 1:09:42Mike Rowe?

  Or anyone who's currently fogging a mirror.

• 1:09:44Speaker 02

  And that was a compromise and there was a bloody battle. The president of the company at the time, Bruce, I'll use his first name only, he's president of the company, and he is vehemently opposed, as is most people in the room, that we're already at record profits.

• 1:10:03Mike Rowe?

  Mm-hmm.

• 1:10:04Speaker 02

  We're already at record profits. Why do we want to go over the line and do something that is so clearly deceiving?

• 1:10:14Mike Rowe?

  Well, that'd be greed, wouldn't it?

• 1:10:16Speaker 02

  Well, the decision after the bloody meeting was that we would go along with Daryl Less's recommendation. Great. There were one or two people that fought to use it, by the way.

• 1:10:30Mike Rowe?

  Mm-hmm.

• 1:10:32Speaker 02

  I won't use their names.

• 1:10:36Speaker 02

  The chairman, Robin Smith, at the time, decided, okay, we're gonna go with Daryl, Daryl's recommendation. Two days later, never seen my boss, Bruce, who was a good friend and mentor. I never saw him angry. He barged into my office and he was red-faced and he was like beyond himself. It was decided that we're gonna use this word finalist in every single mailing. Now, at the time, we were having three mailings a week. Three mailings a week. So we weren't gonna use it twice a year. We were gonna use it three mailings a week.

• 1:11:21Mike Rowe?

  150.

• 1:11:22Speaker 02

  Behind our backs.

• 1:11:23Mike Rowe?

  Times a year.

• 1:11:24Speaker 02

  And we also, at Publishers Club, we never made major decisions behind people's back. We fought in front of people and then we made up our mind. And the boss would make up his mind. Somebody went to Robin and convinced her to use it in every single mailing. And that's what we did. That's the moment in time when we shifted from integrity-driven to pure greed. It didn't happen overnight because the old management team was partially still there.

• 1:11:54Mike Rowe?

  Yeah.

• 1:11:55Speaker 02

  But a few years later, when they were all gone, and today, it's not the same integrity-driven company it was back then. Now, I will say this. It added a lot of money to the bottom line.

• 1:12:09Mike Rowe?

  I imagine it did.

• 1:12:13Speaker 02

  It's the primary reason we went to a billion, over a billion dollars in sales. We stayed at that level. Let me say this, by the way. We only used it for two or three months because we got several lawsuits from attorney generals.

• 1:12:32Speaker 02

  And we decided immediately to stop using it. So we only used that word for two or three months in our mailings. But even so, it got us to over a billion dollars in sales and we stayed at that level for several years.

• 1:12:47Mike Rowe?

  Yeah.

• 1:12:48Speaker 02

  We were fined by the attorney generals. We were fined $490,000.

• 1:12:54Mike Rowe?

  Chump change.

• 1:12:56Speaker 02

  It added over $100 million to profit. Not the sales, to profit.

• 1:13:04Mike Rowe?

  Wow.

• 1:13:06Speaker 02

  So the bonuses that year were fairly generous, you could say. Although many of us weren't happy with, I mean, we didn't turn back the bonuses.

• 1:13:20Mike Rowe?

  But you cashed the checks.

• 1:13:21Speaker 02

  Yes. I'm asked that a lot. Did you cash the check? Yes, I did.

• 1:13:25Mike Rowe?

  Right.

• 1:13:26Speaker 02

  But we weren't happy. The way I describe it in the book, it's like a wealthy relative passing away and inheriting a lot of money from them. You feel really bad for the person, especially if you're close with them.

• 1:13:39Mike Rowe?

  Yeah.

• 1:13:40Speaker 02

  But.

• 1:13:41Mike Rowe?

  But would you like that in 20s or 50s?

• 1:13:42Speaker 02

  Exactly. Describes how I felt about that whole situation.

• 1:13:45Mike Rowe?

  So that's why you say on the back cover at some point you reference a morality tale.

• 1:13:50Speaker 02

  Yes.

• 1:13:51Mike Rowe?

  Isn't it interesting, though, how these things, like you said it didn't happen overnight. It never does. It's a frog in a boiling water and it all comes down to a word. And it comes down to a meeting, not unlike the many meetings you've had. And, you know, this gets a little heated, but in the end, and then it just tips. Do you feel like you knew in that moment that, oh crap, you know, we're not going to get the poop back in the goose here? Or was it salvageable?

• 1:14:19Speaker 02

  No, I thought it was salvageable. It wasn't until the president left several years later.

• 1:14:31Speaker 02

  That's when it started to change.

• 1:14:33Mike Rowe?

  All right, well, that's going to be my next question, but I just a quick sidebar because I'm really stuck on this. And the way history remembers moments like this. You know, the story of Avis? How they got to be number two?

• 1:14:46Speaker 02

  No.

• 1:14:48Mike Rowe?

  It was an ad guy. Similar to the guy you described, not at the top of an agency, just a guy. And the rental car space was very, very noisy and competitive and there was Hertz. And there was everybody else, you know, and this company came along and they were like, well, how are we going to cut through? And rather than say they were the best, they said. We're the second best. We're number two. We try harder. We have to. We're number two.

• 1:15:20Speaker 02

  Wow, that's a really good.

• 1:15:22Mike Rowe?

  Except they were actually like number 27.

• 1:15:25Speaker 02

  All right, well.

• 1:15:26Mike Rowe?

  So they go out into the world, right? And they make, on the one hand, a claim that is wildly inflated. But on the other hand. It's inherently modest. We're not saying we're number one. We're the bridesmaid. We're number two. We try harder. We have to. We're number two. Within a year, they were number two. Because they said they were. Right? And so you could look back on that. And say that was deceptive, that was fundamentally dishonest when you said it. Or. You can say, look, we're in a capitalist society. Caveat, um, tour. Right? I mean, be skeptical, be reasonable as a consumer. Don't take everything you hear, right? So.

• 1:16:10Mike Rowe?

  How do you think about it? How do you make the argument? And I'm guessing the answer is what comes next?

• 1:16:15Speaker 02

  The challenge I had and some of the executives had were we were taught from day one to be integrity driven. That Harold Merz was, he wouldn't do anything that would deceive a consumer. That was totally against his philosophy. That he ingrained in the vice presidents, but those vice presidents were virtually all gone at that point. And that's why it kind of shifted. So, and it's. Stayed at the high watermark for several years. So I thought, okay, we'll ride the gravy train until the real collapse happened.

• 1:16:48Mike Rowe?

  All right. Well, let's go to the real collapse then, because this sounds like the iceberg that the Titanic.

• 1:16:53Speaker 02

  Yes.

• 1:16:53Mike Rowe?

  But the real collapse happens in the failure of, well, where are the lifeboats? And what do we do in the wake of all this?

• 1:16:59Speaker 02

  And this happened literally overnight, not over days, overnight.

• 1:17:05Speaker 03

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• 1:17:33Speaker 02

  It was late 1990s. So once again, we had seven years, seven or eight years of over a billion dollars in sales. I will say we weren't growing at double digits then. We were just happy we were at a billion dollars in sales.

• 1:17:49Speaker 02

  I mean, we were.

• 1:17:50Mike Rowe?

  Turkeys for everyone. Yeah, Thanksgiving.

• 1:17:52Speaker 02

  In the early 90s, we had 500 employees. We finally managed to add to the staff where we went from 500 employees to 1,000 employees. It took several years. It was the late 1990s.

• 1:18:08Mike Rowe?

  And may I can't just say you have a thousand employees in a company that doesn't make anything.

• 1:18:15Speaker 02

  Correct.

• 1:18:17Mike Rowe?

  Just saying.

• 1:18:18Speaker 02

  Okay.

• 1:18:18Mike Rowe?

  How many people does it take to facilitate a dream transaction? You're selling hope.

• 1:18:26Speaker 02

  Yes.

• 1:18:26Mike Rowe?

  You're not even selling magazines. You're not even selling paper. You're just selling an idea.

• 1:18:31Speaker 02

  Yeah.

• 1:18:31Mike Rowe?

  Unbelievable.

• 1:18:33Speaker 02

  So it's the late 1990s, we're at 1,000 employees. We're cruising along, and I'm senior vice president at this point. The workload is finally starting to get a little manageable because we staffed up, and the bottom dropped out. Overnight, we went to Red Ink, virtually overnight. And the story is that a gentleman, his name is Richard Lusk, I think he was in his early 90s, flew from California to Tampa, Florida to collect his prize from American Family Publishers. That was our competitor with Ed McMahon, who never worked for Publishers Clearinghouse, by the way.

• 1:19:17Speaker 02

  He flew to Tampa. He had gotten a promotion piece that said, quote, "You're in a two-person race. Richard Lusk won the person to win the $10 million prize." That was the headline. Clearly deceptive. There were apparently, in that timeframe, there were 25 consumers that flew to Tampa. But Richard Lusk was the first. He probably wasn't the first. He was the first that was televised. His family was worried. He flew by himself. They called the press.

• 1:19:55Mike Rowe?

  Just so I'm clear, is this a PCH ad, or is this an American Family?

• 1:19:58Speaker 02

  This is an American Family Publishers creative package.

• 1:20:02Mike Rowe?

  Uh huh.

• 1:20:03Speaker 02

  So it wasn't ours.

• 1:20:04Mike Rowe?

  You didn't even do this.

• 1:20:05Speaker 02

  We didn't do this, okay? This incident caused the avalanche of hatred and lawsuits. Since we were the leader in the industry, the press came after us. They knew who Ed McMahon was, but they thought he worked for PCH. So the press attacked PCH and Ed McMahon. They didn't really attack American Family Publishers. So we were attacked.

• 1:20:30Mike Rowe?

  So it's a mistaken identity story.

• 1:20:32Speaker 02

  The whole sweepstakes industry was attacked, especially us. We were sued by every single state attorney general.

• 1:20:41Speaker 02

  Some individually, some multiple times banded together. We couldn't get them to agree on a resolution.

• 1:20:49Mike Rowe?

  So is this a class action or 50 individual suits?

• 1:20:52Speaker 02

  Yes and yes. There were also class action lawsuits against us. In addition to the Attorney General lawsuits. So what I say in my book, we were at one time the most loved and one time the most hated. We had more negative press about us than any other company in history. And here's my proof. I'll give you two examples, and I give these in the book. There were two events in the past that come to mind that were bad incidents. It was the Valdez oil spill.

• 1:21:24Mike Rowe?

  That was a bad one.

• 1:21:25Speaker 02

  That was a bad one.

• 1:21:25Mike Rowe?

  Yeah.

• 1:21:26Speaker 02

  Okay. BP sales went down by, I think about 25%.

• 1:21:33Speaker 02

  The other one was Toyota, sticking gas pedals.

• 1:21:36Mike Rowe?

  Oh, right.

• 1:21:37Speaker 02

  Killed some people.

• 1:21:38Mike Rowe?

  Yep.

• 1:21:39Speaker 02

  Sales went down 10%. Our sales went down 50% overnight. And

• 1:21:47Speaker 02

  their negative publicity lasted two or three months. Ours lasted almost three years. We couldn't get the Attorney Generals to agree with themselves. We'd get them to group together and agree, and then the other group wouldn't agree. So we couldn't get them to agree. At one point in time, we thought we had it solved. We had a national class action lawsuit settled by a federal judge. It was settled. I was actually in charge of the operational part of the settlement. We had to mail to all of our customers. We had to mail to 43 million customers and offer them refunds.

• 1:22:29Mike Rowe?

  Sidebar, what's the culture like now? What's the environment like during this time at PCH in the hallways? In the cubicles, in the meeting rooms?

• 1:22:41Speaker 02

  Three words. Chaos, chaos, and chaos.

• 1:22:46Speaker 02

  Yeah, no, it was bad. And we had just staffed up.

• 1:22:51Mike Rowe?

  Thousand people.

• 1:22:52Speaker 02

  Yeah. So the first thing we did is we had our first round of layoffs and then a second round, and a third round, fourth round, the fifth round. Two and a half years of this hell. We thought the class action lawsuit, which was right around the time of the Senate hearings on sweepstakes. We thought it would resolve the whole situation. You know what it did? It made the Attorney Generals even madder. Because they didn't get any money from the class action settlement.

• 1:23:22Mike Rowe?

  They didn't want their pound of flesh.

• 1:23:23Speaker 02

  So they came after us even more. And the Senate hearings, they ripped us apart. I will say this. Give Publisher's Clearinghouse some credit. We did have a solution to the problem.

• 1:23:41Speaker 02

  By the way, the Richard Lusk situation, at the time, it was, there was a discovery of, quote, "older consumers addicted to sweepstakes." That's a thing now. There's an addiction to sweepstakes. And it's generally older consumers. And so we were in the press every day about this stuff, all showing old people with tons of magazines and merchandise we were selling at the time in their houses. So it got really bad. So we had a solution. We called it the High Activity Suppression Program. We had started it about a year before the Senate hearings.

• 1:24:26Speaker 02

  And any consumers that were ordering too much, we eliminated. I was, in fact, put in charge of that program. I was in charge of most of the important programs, because anything important, they usually gave to me. So I was in charge of the High Activity Program. A year before Senate hearings, we're eliminating these seniors.

• 1:24:48Mike Rowe?

  You're trying to get ahead of it.

• 1:24:49Speaker 02

  We were trying to get ahead of it. This was before the Richard Lusk incident, by the way. We presented it to the, at the hearings. Debbie Holland, who was a VP of Creative at the time, presented it. We already did this. The Senate had shown. Ten or so witnesses, older consumers, or their kids, were presenting their cases to the senate. And Debbie Holland went, got grilled by the senators. And one of the things that she showed him was the high activity. And said, you know, this guy that just came on, we eliminated him a year ago from our program. If we and every other sweet stakes marketer does this, it's solved.

• 1:25:33Mike Rowe?

  Has.

• 1:25:34Speaker 02

  Senators didn't care.

• 1:25:35Mike Rowe?

  High-activity suppression program.

• 1:25:37Speaker 02

  Correct.

• 1:25:38Mike Rowe?

  An internal mechanism designed to take those customers who appear to have some sort of addictive.

• 1:25:43Speaker 02

  Correct.

• 1:25:44Mike Rowe?

  Personality.

• 1:25:45Speaker 02

  Take them off your list. Don't mail them anymore. Senators didn't, didn't care. They just didn't care.

• 1:25:53Mike Rowe?

  Well, you weren't a sympathetic entity at that point. You got Lusk, ninety years old, gets on a plane, goes to Tampa. Got his ticket in his hand. It's me and one other guy. I'm just here to get my, my ten million.

• 1:26:08Speaker 02

  Absolutely.

• 1:26:09Mike Rowe?

  And that's it, man.

• 1:26:10Speaker 02

  Yeah, yeah. So we had like five rounds of layoffs over two and a half years.

• 1:26:16Mike Rowe?

  What's your standing like at this point? I mean, is there a little bit of I told you so going on in the mind of Daryl Lester, right? You're walking around, he's like, I told you, I told you guys, this finalist thing.

• 1:26:28Speaker 02

  No.

• 1:26:29Mike Rowe?

  Ex-nay on the idolist day.

• 1:26:30Speaker 02

  No, and the reason why? Because finalist was seven years earlier. If it were a year later, maybe I would have felt.

• 1:26:38Mike Rowe?

  Come on, man. There's no statute of limitation on I told you so.

• 1:26:40Speaker 02

  I never actually felt that way. I didn't.

• 1:26:43Mike Rowe?

  Not even a little vindicated? Not even like with your buddies at lunch next week, you're gonna be sitting around going, hey, you know what? You remember that time I called this thing seven years ahead?

• 1:26:52Speaker 02

  The one thing I do say, and I don't know if this is true, is I say, because I've wondered, why did AFP, our competitor, do that package?

• 1:27:03Speaker 02

  It was so deceptive. And my only conclusion is they saw us do finalist. Yeah. Now, once again, this is Maybe.

• 1:27:11Mike Rowe?

  That's it.

• 1:27:12Speaker 02

  Now, this was seven years earlier, by the way. So it's a long span of time. Took a while, yeah. And they finally said, well, they got away with it. So maybe we can get away with it. I don't know whether it's true or not.

• 1:27:22Mike Rowe?

  Yeah, you do. Of course it's true. Of course it's true. I just sat here the other day and talked to the guy who wrote a book about The Christmas Story. You know, that movie? And there's that scene at the flagpole where they dare. And then they double dare. And then they triple dog dare. And then, you know, one hops over the protocol and suddenly... Well, this is how everything always from the history of people with pointy sticks went at each other. That's how it escalates.

• 1:27:48Speaker 02

  Okay, so maybe we were the cause, but I, yeah.

• 1:27:51Mike Rowe?

  Well, you could go back before that, though. I mean, I could probably go all the way back. Somewhere, there's a statue in somebody else's lobby that makes that cyclops with a partial erection and a fish look positively G-rated. Like, because somebody saw that and were like, you know what? If they can do that in their lobby, we're gonna have a human sacrifice in ours.

• 1:28:09Speaker 02

  Yeah, okay.

• 1:28:10Mike Rowe?

  All right? I mean, this is how people work. They can't help it.

• 1:28:12Speaker 02

  Yeah.

• 1:28:13Mike Rowe?

  It wasn't enough to give people a 1 in 10 chance of winning something. It wasn't enough to have it $100 or $100,000. A million wasn't enough. 10 million wasn't enough. It wasn't enough to give people tours who come to your facility. We gotta go out with cameras. And it wasn't enough to do that. We gotta surprise them. And that's it. We gotta put in a halftime show. But I was just struck by something, too. I don't know if the rhyme of this occurred to you, but how interesting that a guy picks up the phone years ago and says, "I want to come see you to say thanks."

• 1:28:52Mike Rowe?

  Juxtaposed with an old man named Lusk, who gets on a plane to essentially go to your competitor to get his prize. In the end, it's a tale of two customers. One, years ago, who wanted, probably as a result of being well-raised and well-mannered, to simply say thanks. And the next

• 1:29:16Mike Rowe?

  coming to get his

• 1:29:17Speaker 02

  Fine.

• 1:29:17Mike Rowe?

  Coming to get his booty.

• 1:29:20Speaker 01

  I mean, come on, man.

• 1:29:22Mike Rowe?

  That is operatic.

• 1:29:23Speaker 02

  Yeah. That was the downfall, and it lasted two and a half years. When I left the company, we had finally made it to around break even. When I left, I was proud of that fact that we had made it to break even.

• 1:29:37Mike Rowe?

  Now, how many were working there at the time? Six?

• 1:29:39Speaker 02

  No, when I left, we were down to around maybe 500.

• 1:29:44Mike Rowe?

  Yeah, back where you kind of started before the great, before the great finalists.

• 1:29:48Speaker 02

  That is correct, yes, yes.

• 1:29:50Mike Rowe?

  Amazing.

• 1:29:50Speaker 02

  Yeah.

• 1:29:51Mike Rowe?

  Amazing. One little word.

• 1:29:54Speaker 02

  Yeah.

• 1:29:56Mike Rowe?

  Wow. Okay, so why'd you write this book? I'm gonna end with the question I started with. You got 30 years in, you got some distance from the company now. I assume you've got good lawyers. Your publicist here probably hoping, God, we better sell some books. We're gonna have to put together some sort of legal defense fund.

• 1:30:20Speaker 02

  Well, the book is a first step. My ultimate goal is a blockbuster movie. Maybe a TV docu-series.

• 1:30:30Mike Rowe?

  Sure.

• 1:30:30Speaker 02

  The story is fascinating with the highs, the lows, the comedy, the winners, the prize patrol. It's an amazing mom and pop story. How great they became and how bad it became. And my ultimate goal is a movie.

• 1:30:46Mike Rowe?

  Let's get it done. Let's get it done. I'll do whatever I can to get the word out. I mean, people will watch this, but I mean, you should put your foot on the gas. This is an unbelievable story. My only request is a chance. I don't even want a part. I just want a chance to audition for Amos Woodcock.

• 1:31:04Speaker 02

  Amos Woodcock, uh-huh, okay.

• 1:31:06Mike Rowe?

  I just want the opportunity to strap this thing on, as it were.

• 1:31:10Speaker 02

  You got it. I had promised my identical twin brother that he could play me as long as he loses 10 pounds.

• 1:31:19Mike Rowe?

  Terrific. Wow. I mean, I could talk to you for hours because I have this notion in the back of my head, too, that, you know, I told you about Dial America, but, boy, the home shopping industry is sitting right there. What a story. And we went through the same things, Daryl. Like, we, I mean, at least I did, and I think my bosses were doing a similar calculus when they realized, like, the number of sweet little old ladies who were so completely addicted to the television, right, and enamored of the hosts. This, too, was live, like your spot in the Super Bowl. It was real, you know?

• 1:31:56Speaker 02

  Yeah, yeah.

• 1:31:57Mike Rowe?

  And you live in the middle of nowhere, and you're lonesome, and you're flipping around, and there's a nice person looking into the lens of the camera, telling you that this cup, I mean, sure, it just looks like a cup, but look a little closer and imagine the joy it could bring you if you fill it with just the right beverage and enjoy it with just the right company. And suddenly, you're in a relationship.

• 1:32:18Speaker 02

  You could sell anything.

• 1:32:19Speaker 01

  Mike has no experience in sales.

• 1:32:20Mike Rowe?

  I'll tell you, man, final thought, really, is that the other reason I wanted to, just to have you here, is because I'm, all of that's behind me, except not totally. In the end, all businesses are in the business of persuasion, and all business cards, if there were any truth in them, would say salesman underneath the person's name. That's what we do, whether I'm running a nonprofit foundation, trying to get people to think a little differently about the definition of a good job, trying to close the skills gap, or just trying to sell a collectible doll, or a piece of Capitamonte, or a magazine subscription.

• 1:33:00Speaker 02

  Trying to get by.

• 1:33:02Mike Rowe?

  Right. It is, as the back of your book says, capitalism is a, there are a lot of sharp elbows. And what a story, man. Billions to, where are they now? Where is PCH as we speak?

• 1:33:20Speaker 02

  They're in trouble. Financially, I'm guessing. About three months ago, three or four months ago, they, uh, announced in the press massive layoffs. This is a couple of months ago. They laid off a third of the staff.

• 1:33:40Speaker 02

  I hope they survive. I don't know if they will. I really do hope they survive.

• 1:33:45Mike Rowe?

  Why?

• 1:33:46Speaker 02

  I love Publishers Clearinghouse. It made me who I am today. It was a fascinating life because of them, the thirty years I was there. Twenty-five years up, that roller coaster ride up was twenty-five years of fun. It was, you know, five years of hell, but you know, you go through the hell when you go through the ride up. It's worthwhile. So I hope they make it. I did see one sign recently that makes me even more worried. It appears to me they no longer promoting a ten million dollar prize. They're only promoting a one million dollar prize. I can't imagine why they would be doing that. I noticed this

• 1:34:26Speaker 02

  about a week or two ago. Maybe it's not true. It appears to me they are only promoting a one million dollar prize now. Now, the only reason they would do that, in my opinion, would be if they can't afford to

• 1:34:38Mike Rowe?

  Yeah.

• 1:34:39Speaker 02

  fund the ten million dollar prize. That's speculation on my part. I have no idea. I hope they survive.

• 1:34:45Mike Rowe?

  I hope the movie gets made. I really do. It's a terrific book. It's called Downfall of an Icon: The True Inside Story of Publishers Clearinghouse. It really is operatic, man.

• 1:34:59Speaker 02

  Well, thank you for having me. This has been, I love talking about my second home, is what I call it.

• 1:35:06Mike Rowe?

  Yeah. Well, you had a front row seat to something that might turn out to actually be important. And, you know, I don't think the story's over. I mean, as long as people are hoping and dreaming, right?

• 1:35:19Speaker 02

  Agreed.

• 1:35:21Mike Rowe?

  Well, here's to hopes and dreams. This wasn't a gift, was it?

• 1:35:25Speaker 02

  No, I need to get that back to Sue Cook. She's, she said I could keep it for a couple of weeks.

• 1:35:29Speaker 01

  Somebody's depending on getting that back, so.

• 1:35:31Mike Rowe?

  But I have just the tip.

• 1:35:34Speaker 02

  No, no. I'll, I'll yes Sue, if you can have it.

• 1:35:38Mike Rowe?

  It's okay. No, no, look, I, I would not want to take that off Sue's hands. Thanks for listening, folks. Back at you next week.

• 1:35:44Speaker 02

  Thank you, Mike.

• 1:35:46Mike Rowe?

  If you dig the podcast that we do, won't you leave a quick five-star review? I really hate to ask much more of you, but please subscribe. Oh, please subscribe. Oh, please subscribe. All we need are five little lousy stars. Tell us what you like and who you are. Then share us with your friends down at the bar. And then subscribe. And then subscribe. And then subscribe. And then subscribe. And then subscribe. And then subscribe. And then subscribe. And then subscribe. And then subscribe. And then subscribe. And then subscribe.

• 1:36:30Mike Rowe?

  And then subscribe. And then subscribe. And then subscribe. And then subscribe.

• 1:36:42Speaker 03

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• 1:37:11Speaker 04

  What's that?

• 1:37:12Speaker 05

  My fresh detector.

• 1:37:13Speaker 04

  Uh, your what?

• 1:37:15Speaker 05

  There it is.

• 1:37:16Speaker 04

  What is it detecting?

• 1:37:17Speaker 05

  Fresh produce, fresh meat.

• 1:37:20Speaker 04

  Okay, what happens if it detects something really fresh?

• 1:37:25Speaker 05

  Apparently, we celebrate.

• 1:37:28Speaker 06

  At Food Lion, you can count on fresh food at fresher prices. When your fresh detector is going off, head to your local Food Lion or shop at foodlion.com.