Published on the 19/04/2023 | Written by Heather Wright

Make it personal. And safe, and cookie-free…

Businesses harnessing highly tailored personalisation are reaping the benefits with consumers investing more in their brands – but those same consumers are also quickly turning their backs on businesses that fail to meet expectations for trust or privacy.

The fourth annual State of Customer Engagement report from customer engagement platform provider Twilio highlights the delicate balance companies face in ensuring data privacy, transparency and security while addressing ever-changing customer expectations.

“How brands approach personalisation can make the difference between success and failure.”

Those expectations include a new level of personalisation, with perfectly timed recommendations and offers, seamless interactions picked up where the last one left off and (with full cake/eat sentiment) all done cookie-free (half of consumers exited a website in the last 12 months rather than accepting cookies).

Based on the views of 4,700 B2C leaders globally (including Australia), along with more than 6,000 consumers and data from Twilio’s own customer engagement platform, the research suggests brands are doing more with less through use of real-time personalisation and first-party and zero-party – the data customers intentionally and proactively share with organisations such as from surveys, requests for updates and account creation – data.

Personalisation via data-driven engagement tools, is the name of the game, as consumers struggle with information and choice overload. Sixty-six percent of consumers globally and 51 percent in Australia say they will stop using a brand if their experience is not personalised. And that, Twilio says, means a shift away from a promotional mindset to one that puts service first, utilising zero- and first-party data to create highly tailored, genuinely useful experiences.

For businesses, the payoff can be big. Globally, 60 percent of brands say investing in digital customer engagement has improved their ability to meet changing customer needs.

It’s also leading to the cash registers ringing more. In Australia, consumers are spending on average 19 percent more on brands that personalise the customer experience – slightly less than the global average of 21 percent more.

Globally, Twilio says its data shows that investment in digital customer engagement increased revenue by 90 percent on average, up from 70 percent last year. Brands identified as ‘customer engagement leaders’ – ie, those with the highest level of maturity in their implementation of personalisation initiatives, use of first-party data and the execution of omni-channel customer engagement, saw increases in revenue of 123 percent on average. Even those deemed ‘beginners’ saw a 67 percent increase, Twilio says.

In return, businesses say they’re planning to almost double their investment in real-time personalisation over the next three years.

But while companies might be spending up big in an effort to offer personalisation, consumers are less enamoured with the results so far, with just 15 percent of consumers saying brands are doing an excellent job of personalisation, despite 46 percent of brands saying they believed they were doing so. Frustration is also growing with inconsistent digital experiences.

“There is strong evidence that personalisation has a huge impact on consumer spend. However, how brands approach personalisation can make the difference between success and failure. Those that do it well, using first-party and zero-party data in real time and putting users first, will win in 2023,” the report says.

“This requires a solid data activation strategy, in which brands leverage insights from customer data and develop rich profiles that enable better experiences and ultimately grow loyalty and customer lifetime value.”

The report also notes looming storm clouds for businesses, with increasing wariness from consumers about consumer privacy, security and personal data tracking.

Globally 98 percent want businesses to do more to guarantee the privacy of their data and be transparent in how data is used. Failure of a brand to meet data privacy and transparency requirements has seen four out of 10 consumers stop buying from a brand.

Australian brands in particular may be under urgent pressure, with the report finding that 30 percent of Australian consumers had had data exposed or stolen as a result of a cyber attack on a brand in the last year – the largest percentage of all countries covered. In addition, 52 percent of Australian brands reported experiencing contact centre fraud last year, putting the country in the top five.

For businesses, that’s leading to the biggest challenges of 2023: Finding the balance between security and customer experience (cited by 42 percent of the B2C global respondents) and protecting customer data (40 percent).

And the business response? Implementing first-party/zero-party data strategies to protect consumer privacy, something 89 percent of brands globally and a massive 98 percent of Australian brands, say they plan to do.

“Brands know that protecting customers is more important than ever, but building healthy revenue will always be at the forefront of their minds. Ultimately, businesses need to build a user experience that prioritises both,” the report notes.