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

Reader's Digest Base Case">

Reader's Digest Base Case

Headquarters: Reader's Digest Rd., Pleasantville, NY 10570

Phone: (914) 238-1000

Business: Marketer of magazines, books, music

Chief Information Officer: Jeffrey S. Spar

Financials In 2004: Net income of $49.5 million, or 2.1% of its $2.4 billion in revenue. Profit down 62.5% since 2001.

Challenge: Update the heart of its business, its numerically based methods for marketing its products to customers, from a system put in place in November 1969.

Baseline Goals:

  • Increase cash generated by business to more than $175 million a year, from $162.1 million in 2003.

  • Realize "low double-digit profit growth" in each of three operating segments. In 2004:

  • Reader's Digest International operating profit gained 16.3% to $57 million, from $49 million.

  • Reader's Digest North America gained 16.3% to $71 million, from $61 million.

  • Consumer Business Services, which include books and home entertainment services, fell 29.7%, to $64 million.

  • Keep monthly circulation of its Digest, at 10 million or more.

  • Grow annual revenue, past $2.5 billion.

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    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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