Corner or mom-and-pop stores of old knew their customers, could predict their creditworthiness and interests, reminded them if they forgot something they usually ordered, never suggested products that made no sense, and generally interacted with their customers as though they knew them well because they did, in fact, know them well. They knew a lot about their customers' shopping habits, had a small enough number of customers to keep this information in their heads, dealt with customers as individuals whether they came in person or called on the phone, and were deeply aware of the need to repay a customer's investment in coming to their store with better service.
Modern businesses often don't have these options. They simply have too many customers. There's no way to make sure a customer talks to the same CSR each time or to keep the number of customers small enough for the representative to remember them. However, as Richard Hackathorn pointed out,[1] it's possible to use data, decision-making technologies, and an EDM approach to re-create this feeling, even for a large customer base.
As John Hagel, a well-known business consultant, said in his blog,[2] "Too many companies have concentrated their IT investment on initiatives to automate processes — removing people wherever possible — rather than exploring how IT might be better used to amplify the talent of the people left." Although EDM can remove people from a process, it can also "amplify" your employees' value by letting them treat customers as though they know them personally. This approach has an additional benefit: Good customer service comes not from one person but from the company as a whole.
[1] Richard Hackathorn, "Forward to the Past," DM Review, November 2002.