Reader's Digest: The Longest Goodbye

By Tom Steinert-Threlkeld  |  Posted 2005-07-08 Email Print this article Print
 
 
 
 
 
 
 

Decades before the idea took hold in the dot-com era, Reader's Digest kept a "360-degree view" of each of its customers—tracking every contact it ever had with a subscriber to its magazine or a purchaser of any of its condensed books or o

"This is our last control tree for a weekend release. In it, we have XNB, we have the nonpromote extract, we have the sampling of the PSLO and the UMD Score files to help MSR. We have the XNB scoring tree, we have the XNB July direct mail, we have the extract for eUMD, the extract of telephone do-not-promotes, we have our typical universe counts and we have the list rental monthly. And I believe that's it. Everything else is going or has gone into MSR. So with that, I'm going to forward on to the data center in New Jersey and whenever the resources allow, it'll start. And that'll be our last P-File."

With that, applause broke out in the small, unassuming conference room along Pegasus Alley at Reader's Digest headquarters in Pleasantville, N.Y.

Tapping a few keystrokes on his laptop computer, database boss Joe Devanny had instructed the company's outsourcing service in Leonia, N.J., to perform "the last big gang run"—the selection of millions of names for a series of marketing campaigns designed to generate new business for the company, particularly at Christmas this year.

This was the curtain call for what most likely had been the world's first large, comprehensive system for tracking and managing every aspect of how a company dealt with—and marketed to—its customers.

Today, the practice is called "database marketing,'' or, in some circumstances, "customer relationship management." Whichever name it would be called by, "it may have been the largest'' such system at the time, according to Frederick Newell, marketing consultant and author of Loyalty.com.

At Reader's Digest, it was called, simply, the Unified File System.

The first system to unify tens of millions of names and addresses from different businesses into one file—and then, add a record of every marketing contact made with each customer. And then, add a record of every product sent to the customer. And then, a record of every payment, as well. Decades before the idea took hold that there was such a thing, The Reader's Digest Association was compiling a "360-degree view" of each of its customers—and allowing its direct marketing operation to figure out how much profit a campaign might produce, before the first envelope was sent out. In a time when years of information had to be crammed into the space of two letters, in a computer.

With Devanny's keystrokes on May 12, the UFS was finally being phased out, in front of a small gathering of marketing, quantitative analysis and technology staff nestled into the Pegasus C room. Corks on champagne bottles popped.

It had taken 17 years to unwind this system and replace it with one based on contemporary technology that present-day programmers could work on and enhance.

In the year the system was born—1969—a mainframe computer could juggle only 64,000 bytes of information in its brain. Customer records had to be kept in the obscurity of the mathematics of "base 16" to make the most use of limited memory. That made it possible to squeeze the date a person became a customer, the products offered to that person, and what he ordered, paid and returned into fields that might store just one or two characters of information.

That the Digest's system had lasted 35 years was partly due to the foresight of its original 30-person programming team, which left key rules, prices and data in the marketing engine open to change by computer users—a radical thought in the early days of "big iron.''

But it was also a testament to the constrictions of a complex, homegrown ball of code that only its Reader's Digest in-house devotees could understand, read and interpret, as the system evolved, struggled and ultimately became what Jeanne Plekoh, an associate director of customer technologies, would call a "cranky, brittle, elegant old lady.''

This, then, is the story of that cranky old lady, who labored in anonymity, cheated death for decades and helped turn Reader's Digest into one of the world's most famous publishers. It's the story of a digital dowager who, in her earliest days, pioneered the concepts of tracking customer behavior, customer response, cross-selling, and the basic marketing principle adapted generations later in the online world by Amazon.com entrepreneur Jeff Bezos: "If you like that, you probably will like this."

But it is also the story of the ladies of Pleasantville itself, who were trucked in by the busload to enter new orders for magazines, books and music, as the company built a system that would keep records on 50 million or more households in a single file—in a time when the entire country had fewer than 60 million. It is the story of the women and men in the quiet halls with the art-festooned walls and in the data center in the basement of Reader's Digest's ivy-covered headquarters, who made history, but no history books, when they gave birth to an invisible lady in the year man first landed on the moon. And kept her alive—perhaps as the world's oldest living system—until that afternoon of May 12, when Devanny told his coterie of cohorts in Pegasus C, "This is it."



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Editor-in-Chief
tst@ziffdavisenterprise.com
Tom was editor-in-chief of Interactive Week, from 1995 to 2000, leading a team that created the Internet industry's first newspaper and won numerous awards for the publication. He also has been an award-winning technology journalist for the Dallas Morning News and Fort Worth Star-Telegram. He is a graduate of the Harvard Business School and the University of Missouri School of Journalism.
 
 
 
 
 
 

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