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


In 1990, there was no vendor of customer relationship management software like Siebel Systems. The company would have to write the replacement for the Unified File System from scratch.

It would have to serve the operations of both marketing, which tried to create orders, and fulfillment, which had to satisfy them. But each was a separate, complex business of its own.

The original aim of CIMS was to replace UFS in one fell swoop. Turn off the old, turn on the new.

"That's not feasible. You couldn't do it all at once,'' says Rob Hilliard, the current vice president of customer technologies. "It's like building a house in a day. A carpenter has to lay the foundation before the electrician comes in."

Nineteen-ninety came and went. By 1992, the company was re-examining the entire idea of a "big bang" conversion. By 1994, Andersen Consulting had come in, to try and assess what could be done to save the project.

The effort was redubbed "Chrysalis,'' as if the initiative had been a cocoon for giving birth to moths. Instead of a complete cutover to a new system, the CIMS project would turn into a series of individual tools, to run on top of the Unified File System. The old lady would keep singing.

One of the new tools would be a Selection Tree, introduced by Kari Regan, at the time the director of quantitative analysis. The tree was designed to make it easy to choose terms for mail campaigns, and then run all customers' profiles through it.

The tree was set up as a series of questions— from whether the customer is currently paying for a product, to whether the customer has received a subscription as a gift in the past, to whether he or she should be excluded for bouncing checks or having filed for bankruptcy.

The tree would act as the coding equivalent of a pinball machine. Any customer profile run through the tree would wind up in a final bucket on one of its branches—even if it took 180 or 200 questions to get there.

That took brute-force computing. Which is one of the reasons, according to Otten, that the elegant lady got as old as she did. Her files on customers were complete. The programs that would analyze their behavior worked effectively. And computers kept getting cheaper. It was always more economical to buy more horsepower for crunching code than to rewrite the code.

That would hold true even if every one of the company's 56 million records on customers would have to be run through the entire tree, every time, to get a final selection of names for every single marketing campaign. Even if you were doing just a 1-million-name campaign.

Several selections is exactly what Devanny was about to launch on the "last big gang run" on May 12.

The "XNB scoring tree,'' for instance, would determine which names were most likely to generate new business at Christmastime this year. Different materials for different types of offers would be sent to a letter shop to produce and mail out in July. The differences between materials might be as simple as coloring; or as involved as what kind of free gifts or incentives might make a difference.

But first, the file system would be asked which customers are most likely to respond well to 2-for-1 offers and settle those people into different buckets.

Some might get to renew their subscriptions at $19.95; others, at $21.95. Counterintuitively, the longer you've been a subscriber, the higher the price you will be offered. The more years you've been around, the more you've shown you value the product. So why cut the price down?

But after this last pass at the Unified File System, all future selections would be run through a new combination of software from Oracle (database), Unica (customer selection) and SAS (quantitative analysis), running on faster servers (Sun) using a low-cost operating system (Unix).

After 17 years of trying in earnest to ease out the elegant lady, a new system for managing tens of millions of customers was finally moving in. What had been a 33,000-square-foot data center in its heyday, would be 1,500 feet square in its new incarnation. And most of the computing wouldn't take place under the long greensward of the Digest's headquarters campus.

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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