Personalisation is only as good as the data it's based on: The more you have, and the better it is, the more relevant the personalised interaction. The problem is, privacy concerns have customers increasingly shy about sharing. This, coupled with regulatory handcuffs such as the Telephone Preference Service, means businesses have to figure out ways to maximise each interaction with a customer and then securely develop the relationship.

"Companies have to avoid the 'marketing gone wild' mentality, as every interaction is a reflection on brand," says analyst Elana Anderson at Forrester Research. She recommends that they focus on building customer relationships based on proactive service, using personalisation technologies on their incoming channels to maximise the interaction when a customer makes contact. "It's the reason marketing should own the contact centre - if messages are done right, they're service-oriented instead of the hard sell," she says.

At Sharp Electronics, privacy policies dictate that the company doesn't share customer data and that it never sends unsolicited email to existing customers, according to Fred Krazeise, vice president of marketing and planning decisions. As part of its acquisition strategy, however, Sharp does send emails asking recipients for permission to establish relationships.

For its part, Schwan Food makes it a policy not to collect data it won't use, both to streamline operations and because the company doesn't want to intimidate customers.

"Have a purpose for collecting personal data, and always honour opt-out requests," says Glenn Bader, Schwan's director of e-commerce and emerging channels.

According to Gartner analyst Adam Sarner, privacy legislation can actually be a boon to personalisation initiatives - at least in the case of explicit personalisation, in which a company collects data with the customer's permission, with the promise that it will use the data to only make relevant contact.

"Every company should have user profiles that allow customers to set preferences: when they want to be contacted, how often and about what. That's explicit personalisation, and it can be extremely powerful," says Sarner. While the sit-down nature of the Web offers the best interface for creating user profiles, the data should be populated across the databases behind all other relevant contact points, such as email, the call centre or the point of sale. "The trick is not just leave it on the Web, but make it part of the complete user profile," Sarner says.