Introduction

Abstract

As IT systems have evolved the amount of information organizations hold about people and the speed at which they can process information has increased dramatically. One consequence of this development is a paradigm shift in the way organizations manage their relationships with individuals. At one time, when dealing with large populations, standard practice was to segment people into relatively few groups, and then apply identical relationship management strategies to everyone in each group. Take the case of an insurer that was about to embark on a marketing campaign to boost the number of new insurance policies taken out. The marketing department may have decided, somewhat arbitrarily, that its target audience was white collar families with children. Its promotional strategy would be to send identical mail shots to all households in middle class suburbs, where it was believed that the target audience resided. Some mailings would be received by the intended audience, but many would be wasted because they would be sent to singles, the unemployed or those on low incomes who just happened to live in middle class suburbs. Similarly, white collar families living in inner cities or rural communities represented a missed opportunity because they lived outside the target areas.