Eight Out of 10 Companies That Invested in Customer Engagement Met Their Financial Goals Despite Turbulent Macroeconomic Environment, Twilio Research Shows
Research from Twilio (NYSE: TWLO), the customer engagement platform that drives real-time, personalised experiences for today’s leading brands, shows that investment in customer engagement is a key driver of revenue growth.
Twilio’s fourth annual State of Customer Engagement Report reveals that, amid constrained resources and economic uncertainty, eight out of 10 (81%) companies that invested in customer engagement met their financial goals. In the UK, 94% of companies that invested in digital customer engagement saw revenues grow, with an average increase of 107%.
The data shows that effective customer engagement strengthens a brand’s ability to adapt to shifting market conditions and evolving consumer preferences. Customer engagement leaders report increased customer retention, conversion and long-term loyalty, while six in ten (58%) UK businesses report that investment in digital customer engagement has improved their ability to meet changing customer needs.
Twilio’s State of Customer Engagement Report is based on a survey of more than 4,700 B2C leaders in key sectors across the world, plus a parallel survey of over 6,000 global consumers. It also incorporates data from Twilio’s own customer engagement platform, including Twilio Segment, the leading customer data platform (CDP) for 2021 market share according to IDC.*
Meeting consumer expectations
The findings highlight an urgent need for brands to leverage zero- and first-party data (meaning data collected directly from interactions with customers rather than a third party) in order to improve customer experience and increase customer lifetime value.
The stakes of using that data effectively are high, with UK consumers reporting they will spend 15% more with brands that personalise engagements. Companies believe the impact is even bigger, reporting that consumers spend 41% more when engagement is personalised.
However, brands continue to overestimate how well they are meeting consumer expectations for communication preferences, protecting customer data privacy, and transparency around customer data usage. Additional UK consumer insights include:
· Customer tolerance for impersonal experiences has never been lower. Nearly half (48%) of consumers report being frustrated with their interactions over the past year, rising from 44% the year before. More concerningly, 51% of consumers say they will stop using a brand if it doesn’t personalise their customer experience by taking into account their needs, expectations and preferences.
· Consumers want a faster transition to a cookieless future. Nearly one third (32%) of UK consumers always or often reject cookies on websites, while nearly two thirds (64%) would prefer brands use only first-party data to personalise their experiences. Half (50%) of UK consumers have left a site in the past 12 months rather than accepting cookies. Meanwhile, 81% of global brands are still reliant on third-party data.
· Real-time personalisation boosts customer lifetime value. Nearly three quarters (71%) say that personalised experiences increase their loyalty to brands. However, UK respondents did emerge as the least loyal, suggesting that brands will have to work even harder to engage consumers in this market.
· Consumers trust brands less than brands realise. UK consumers want more control over their customer data, placing top priority on “identity data” such as name, account login and location. Over a quarter (28%) consumers say they have stopped doing business with a brand after their expectations for data privacy and transparency weren’t met.
“When every penny is being scrutinised, businesses need to know they are putting their marketing spend in the right places,” said Sam Richardson, Customer Engagement Consultant at Twilio. “This research reinforces that when brands use first-party data to personalise engagement with customers, they will experience higher revenues, greater loyalty, and better ROI. Companies aren’t the only ones grappling with smaller resources, so are consumers. The brands that pay close attention to changing customer needs and ensuring they give them the experiences they crave, will be the ones that win this climate.”
Twilio’s State of Consumer Engagement Report 2023 can be found at www.twilio.com/state-of-customer-engagement.
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