New Twilio Study Points to Lack of Customer Data as Major Obstacle to Reaping AI Rewards
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Understanding consumer behavior is pivotal for companies aiming to enhance their customer engagement strategies. The report highlights a significant consumer trend: the willingness to increase spending on brands that offer personalized experiences. This data underscores the potential revenue growth for businesses that invest in personalization technologies. However, the gap between consumer expectations and brand capabilities, as only 16% of brands report having the necessary customer data, suggests a market opportunity for data management and analytics solutions providers. Companies that can bridge this gap may gain a competitive edge, potentially impacting their market share and stock performance positively.
Transparency in data usage, particularly for AI-driven customer interactions, is becoming increasingly important to consumers. The report indicates that nearly half of the consumers would trust brands more if they disclosed how their data is used in AI-powered interactions. This consumer sentiment can influence brand reputation and customer loyalty, factors that are critical to long-term business success. Brands that proactively address these concerns by implementing clear data usage policies and communicating them effectively may mitigate the risk of consumer backlash and regulatory scrutiny, both of which can affect a company's valuation and investor confidence.
The integration of AI in customer engagement is proving to be a fruitful investment for businesses, with the report suggesting a direct correlation between AI application and ROI. However, the challenges around the acquisition and handling of customer data for AI purposes are non-trivial. The technological landscape for AI in customer engagement is evolving, with a demand for solutions that can not only personalize experiences but also handle data ethically and transparently. This evolution is likely to drive innovation and investment in the sector, potentially affecting the stock prices of companies that provide these AI solutions or that successfully implement them to enhance customer engagement.
Twilio’s fifth annual State of Customer Engagement Report shows consumers spend an average
The report reveals the growing importance of brands disclosing how they use customer data to deliver AI-powered experiences. It also issues a clear warning about the risks of underestimating consumers’ demand for transparency: While
“Customers today expect personalized experiences and want to understand how businesses use their data to shape those experiences,” said Kathryn Murphy, SVP Product at Twilio. “It’s imperative for brands to be clear about how they use AI, ensuring that they balance how they deploy it with equally robust measures to protect customer privacy. Transparency is not optional — it's a critical component of building and maintaining customer trust and loyalty.”
Protecting consumer data is the most effective way to maintain trust
As businesses embrace AI to drive personalized customer engagement, they gather every customer's click, share, follow, like, and purchase to understand their preferences and needs. More than ever, businesses must keep their customers’ data safe to maintain their trust. This year’s report found that six in 10 consumers say protecting their data is the top way for brands to earn their trust. Almost half (
Consumers aren’t the only ones worried about data privacy. Forty percent of businesses surveyed report that finding a balance between security and customer experience is one of their most pressing challenges this year. One particular area of focus for brands is reducing friction during the account signup process, while keeping customer data safe. In 2024,
AI bridges the disconnect between brands and customers, but activating data remains a challenge
The report uncovered a wide customer experience gap:
The report found AI is helping businesses close this gap and improve their customer engagement. For example, seven in 10 companies already leverage AI to personalize content and marketing. As a result, these forward-thinking brands are realizing a number of benefits, including higher customer satisfaction scores (
Although more businesses are embracing AI, the majority struggle to activate customer data. Only
AI-driven personalization boosts the bottom line
When companies embrace AI-powered personalization, consumers reward them by spending an average of
Consumers expect brands to deliver highly individualized experiences and have little patience for those that don’t:
That is especially true among younger generations: Almost seven in 10 Gen Zers and Millennials would stop using a brand that doesn’t deliver personalized experiences on their preferred channels. Additionally, more than one-third of them will abandon a brand that doesn’t engage with them directly in real-time.
The full 2024 State of Customer Engagement Report is available here.
Report Methodology
Twilio’s State of Customer Engagement Report is based on a survey of more than 4,750 B2C executives in key sectors and a parallel survey of over 6,300 consumers in 18 different countries. It also incorporates data from Twilio’s Customer Engagement Platform.
About Twilio
Today's leading companies trust Twilio's Customer Engagement Platform (CEP) to build direct, personalized relationships with their customers everywhere in the world. Twilio enables companies to use communications and data to add intelligence and security to every step of the customer journey, from sales to marketing to growth, customer service and many more engagement use cases in a flexible, programmatic way. Across 180 countries, millions of developers and hundreds of thousands of businesses use Twilio to create magical experiences for their customers. For more information about Twilio (NYSE: TWLO), visit: www.twilio.com.
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Source: Twilio
