The version that fails is inserting a first name into a template. Everybody does it, recipients discount it entirely, and it goes wrong visibly when the field is empty or somebody entered their name in lower case. It also creates a false impression of familiarity that the rest of the message does not support, which reads worse than a straightforwardly general message.
What works at your scale is remembering things and referring to them. Mentioning the specific job you did, the problem they had last time, or the thing they said they were planning. That is not automation, it is a customer record and the discipline of reading it before writing. For a business with a few hundred customers this is entirely feasible and it is what larger competitors cannot do at all.
Where automation genuinely helps is in segmenting by behaviour rather than by attribute. Sending different material to people who bought a particular service, or who enquired and did not proceed, or who have not been in touch for a year, is achievable with basic tools and produces messages that are relevant rather than merely addressed. Relevance is what personalisation is actually for, and behaviour predicts it far better than demographics.
Be careful about demonstrating knowledge somebody did not expect you to have. Referring to pages they browsed, or to behaviour they did not realise was recorded, produces discomfort rather than delight, and the line moved as people became more aware of tracking. Referring to something they told you is welcome. Referring to something you observed is frequently not.
The practical starting point is one segment and one relevant message rather than a system. Take the group who bought a particular thing, send them something genuinely useful about it, and see what happens. That produces more than any amount of infrastructure built before you know what distinctions actually matter in your customer base.
Make sure the underlying record is correct before relying on it, because personalisation amplifies bad data rather than concealing it. A message referring to the wrong service, the wrong name, or a purchase somebody did not make is considerably worse than a general message, since it demonstrates both carelessness and that you were attempting to appear attentive. Accuracy is the prerequisite rather than a refinement.