dolution

CASE STUDY

Reader ’ s Digest4

Within the RM spirit, the Reader ’ s Digest Association says that ‘ Our business is more than publishing or direct marketing – it ’ s about building lasting customer relationships in everything we do ’. Although the modern terminology was not invented, the Reader ’ s Digest Association has done RM/CRM since its inception in 1922. The magazine Reader ’ s Digest established advanced relationships with its subscribers by building a customer database and using it for direct mail.
It was early in deploying new techniques in its large-scale international operation for individualized direct mail. When the company broadened to books and music, its address list – the customer base – became its most valuable asset.
The new products were sold to existing magazine subscribers through personally addressed letters. The mailing lists were divided into segments: subscriber, subscriber and buyer of one (two … ) books, subscriber and buyer of one (two … ) music albums, and other combinations. It turned out that the more products a consumer had bought, the higher the probability that he or she would buy yet another product. The long-term relationship between Reader ’ s Digest and the consumer determined future sales.
It was clearly established in sophisticated statistical tests that socio-demographic variables for segmentation, such as age, gender and income – which are routinely recommended in marketing textbooks – added no value whatsoever. In 2007, the Reader ’ s Digest monthly magazine was printed in 21 languages reaching 85 million readers. Apart from the original magazine, the Reader ’ s Digest Association publishes 25 other magazines and sells 50 million books a year. It is primarily targeted to the specific markets and affinities of food and cooking, health, home, gardening and language learning