Because Reflect wanted to go beyond customizing products to personalize its every interaction with every customer, Grayson had to overcome the biggest challenge companies face when trying to do personalization effectively. He had to create an infrastructure in which disparate data sources?from Reflect’s e-commerce transaction system to its CRM, manufacturing and fulfillment systems?could all be accessed as one. And he did that in two ways: by basing all of the systems on Oracle databases and by making them feed into an Epiphany data mart. For example, the transaction server, the Web server and the homegrown system that formulates each customized product access the same database. The data mart also pulls information from those servers and systems. So if a buyer who once customized eye cream replaces it, Reflect.com will automatically cross-market other eye products to her in a pop-up ad.

Whether a customer rejects or accepts the offer, Grayson says, her response is fed back into the Epiphany system. This way, she won’t be bombarded with offers for products in which she’s not interested, and Reflect.com can alter the segments of customers to which certain offers are targeted based on the type of women who have responded to them.

To date, Reflect.com has created about 3.5 million unique products, according to Grayson, who says that the cost of customizing is slightly higher than mass-producing similar high-end beauty products. Since it first launched, Reflect has received $85 million in funding from Procter & Gamble and Redpoint Ventures. Grayson says the company is on target toward profitability, but he declined to release specific financial numbers. According to Jupiter Media Metrix, Reflect is the largest beauty products site on the Web.

Companies that don’t customize their own products but want to personalize their marketing and sales campaigns can use the same approach. Access to information in different systems is key when it comes to tailoring interactions with customers, says Grayson. With it, companies get a more detailed understanding of their customers’ preferences, which "allows you to tailor messages that don’t look cursory or thrown together," he adds.

A Doctor on Board

Personalization is not just for B2C companies. PSS World Medical, an up-and-coming distributor of medical supplies and diagnostic imaging equipment, is finding that the power of personalization works as well in the B2B space.

Today, the Jacksonville, Fla.-based company controls 15 percent of the physician supply business and competes directly with 10 other distributors, including divisions of such big name companies as McKessonHBOC and Cardinal Health. To differentiate itself from its competitors and crack bigger accounts, PSS launched two portals, MyPSS.com in December 2000 and MyDIOnline eight months later. It customizes these portals according to each customer’s practice type and brands the pages with the customer’s name or logo.