57% say they’ll spend more on personalized experiences
While more than half of consumers suggest brands that treat them as individuals will enjoy a greater share of their wallets, few of them rate the current approaches to personalization very highly, according to recent research from Twillio.
The San Francisco-based firm, which provides application programming interfaces (APIs) to enhance communication, surveyed 6,000 people around the world as well as 4,700 business-to-consumer (B2C) professionals to produce its 2023 State of Customer Engagement Report.
Based on the data, there’s a disconnect between how well brands feel they’re doing in terms of personalizing experiences and what their customers perceive. For example, 91 per cent of brands said they often or always personalize engagement, compared with 56% of consumers.
A scant 17 per cent of consumers, meanwhile, said brands provide “excellent” personalized experiences. The proportion of brands that said the same thing was much higher, at 44 per cent of B2C leaders surveyed.
The value of getting personalization right was clear, however, with 86 per cent of consumers saying it drives their long-term loyalty. From a purely financial perspective, an average of 21 per cent more is spent on brands that personalize experiences, the research found.
“At its core, this is about how brands move beyond personalization itself and truly individualize customer engagement experiences — not just personalized product offers, but an end-to-end experience that is tailored to the individual,” the report’s authors wrote.
“Customer expectations around personalization are changing rapidly. What they considered ‘good’ before 2020 no longer suffices. As consumer brands transition to a world where they are now direct-to-consumer (D2C) companies, bypassing retailers and other middlemen, a deep understanding of customers is essential.”
360 Magazine Insight
Twillio’s report not only reveals the money brands are leaving on the table when they fail to personalize customer experiences. It also shows the risk of increased churn. For instance, 66 per cent of consumers said they would quit a brand if their experience wasn’t personalized.
The problem, of course could be the lack of an agreed-upon definition of what constitutes a truly personalizated experience. The brands who think they’re doing a good job might be using a customer’s first name on an e-mail blast, for example. Twillio argues that brands should also be offering instant replies to questions via social media and chatbots where customer histories inform the assistance they provide.
Beyond the data from its surveys, Twillio’s report also includes sidebars with stories featuring its customers. One of these referenced the idea of personalized product recommendations as another tactic brands should be using.
Other chapters in the report acknowledge that personalization isn’t possible if consumers aren’t comfortable with sharing their data, or trusting brands to treat it with the proper levels of security.
Twillio’s research is well worth the read. You can dive into specific trends without having to fill out a form and use drop-down menus to look at results based on your specific region, and compare the results of those who are leaders in personalized engagement versus “framers” and “beginners.”
