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B2B companies are also finding that their customers viewpersonalization as a value-added service. For example, PSS WorldMedical, a $1.8 billion distributor of medical products and diagnosticimaging equipment, is expanding its business by personalizing itsonline catalog according to its physician-customers' type of practiceand what their colleagues are buying. Although only 6 percent of PSS'scustomers currently use the Web on a monthly basis to place orders,the company has increased its incremental sales by $200,000 a monthsince the launch of its online system.

All three companies have based their personalization efforts on onefundamental principle. They put strategy first and technology second.They had to figure out if personalization was right for their businessand how they could make it work before installing a single piece ofcode. Company executives also realized they had to fully integratetheir information systems so that they could access and share customerinformation in disparate databases.

Tellingly, none of these companies rely exclusively on off-the-shelfsoftware. Instead, they use entirely homegrown applications or somecombination of packaged and custom-built software. (Off-the-shelfpackages often don't include the functionality that many companiesneed to access and integrate legacy customer information.)

Finally, at least two of these companies are using theirpersonalization systems to reach the Holy Grail: getting customers tospend more money with them through cross-marketing. If a Reflect.comcustomer orders another bottle of customized shampoo online, she isimmediately greeted with a pop-up ad that offers her a special deal onthe conditioner that goes with that shampoo. And when a dermatologistshops on PSS's personalized website, the site automatically shows himother products that are most popular among his owncolleagues.

If the pundits are correct, every company will have to individualizeits products, services and interactions with customers in order tostay competitive. Only then will the promise of CRMincreased customerrevenuesbe fulfilled.