Does personalization really work?

After my post on personalization yesterday on personalization, someone asked me, “Does personalization really work?” I don’t think he meant that kind of thing that I proposed yesterday (to make sure that the list of everything a customer buys from you online and offline is available to them on your Web site for reorders). I think he meant personalization with a capital “p”—the sexy high-tech stuff that fills those trendy marketing articles.

I understand the skepticism.
While people understand how personalizing offers to potential customers should have a higher hit rate than the broadside blasts we’ve come to call advertising, we’ve all heard about those runaway technology-fests where oodles of cash was blown on something that provide marginal, if any, results.
And we’ve all experienced personalization on Amazon, where it works very frequently, but we’ve all seen weird results like this one:

Now, it could be that my previous interest in a cyan toner cartridge naturally translates into a need for the White Album by the Beatles, but I am missing the connection, personally. Unfortunately, when we see crazy results like this one, we tend to lose faith in all of the recommendations. After all, if Amazon spent millions on this, what will happen when we do something cheap?
So, it’s no wonder that many marketers view the whole idea of personalization with suspicion–something that claims to be more than it is and costs more than it should. Sometimes, they are right.
But other times, personalization is just an extension of good old customers service. If you treat all your customers anonymously offline, then you won’t have much use for it online. But if you know who your customers are, and you typically ask them to identify themselves when they deal with you offline, why wouldn’t you do the same online? If good service requires them to give you their account number or their phone number or the address offline, why wouldn’t you give them an ID and a password online so that you can provide similar service?
Anything you do that shows people they are being treated individually is personalization. Most businesses personalize everything they do offline, but treat their Web site as a big brochure where one size fits all. If you can get past your worries about that big scary “personalization” concept, you might see that real-life customer service starts by knowing who you are dealing with–online and off.