By Tom Steinert-Threlkeld  |  Posted 2005-07-08 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


A decade after the arrival of the Unified File System, the Digest reached 100 million readers around the world. Founder DeWitt Wallace and wife, Lila, ran the business almost as if defying profit to show up, which it did anyway.

Besides the housewives who were brought in by bus from Pleasantville to work on the database, commuters from as far away as Connecticut and New Jersey could ride to work on company buses. The workday ended at 4 p.m. Each May, Fridays became holidays, so workers could tend to their gardens. Each worker famously got a 20-pound turkey at Thanksgiving, as a token of appreciation.

Monet, Renoir and Matisse paintings hung on office and hallway walls. The quarter-mile headquarters building, built in Georgian Renaissance style, overlooked its own exit off the Saw Mill River Parkway in Westchester County, N.Y. Even though it actually sat in Chappaqua, the founders got the post office to agree that its headquarters would be—for mailing and address purposes—in the bucolic-sounding Pleasantville, one town over.

The company's postal bill in the late '70s probably exceeded $100 million, since mail was its only method of promotion. Because of the vast nature of its filing system, Reader's Digest was called on twice to help improve the nation's postal system, in the establishment of ZIP codes in 1963 and the national change-of-address system in 1986. After all, if you wanted to get a sense of where people lived, who better to check with than Reader's Digest?

At its peak, Reader's Digest was sent to 18 million subscribers in the U.S. each month. Twenty million volumes of condensed books, now known as Select Editions, were sold, along with 12 million other books. It became one of the world's largest marketers of music, moving an estimated $150 million worth of records and cassettes in the mid-'80s. Once, it sold 8-track tapes.

By September 1986, the marketers had used a singular view of their customers and resolute devotion to statistical analysis to create a $1.5 billion-a-year business, worldwide, off Wallace's notion that the best stories in the best magazines could be converted into a print portal of their own.

Every day, the company's 1,228 data processors in Chappaqua, a.k.a. Pleasantville, handled 116,000 orders, deposited $2 million of customer payments, processed 490,000 responses, and sent out 2.32 million letters, postcards and labels. Three quarters of a million magnetic tapes stored information on customers.

But even then, a team of systems architects and marketers had decided to explore the creation of a new Customer Information Management System. The new system would "handle all marketing, fulfillment and customer service data processing needs well into the 21st Century," the company's in-house newsletter, Pegasus, reported. The new system would be easier and cheaper to maintain, make it easier to read customer records, and perform at least as well in selecting households that would respond to mailers.

The time had come to pull the plug on hexadecimal code, the long customer records and the expensive, brittle Unified Filing System.

By 1988, Pegasus was ready to put an exact date on when CIMS would replace the increasingly cranky old lady, UFS: December 1990.

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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