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Investment in digital customer engagement ‘increases revenue by 90%’

Investment in customer engagement continues to drive revenue growth and help companies meet their financial goals in the face of economic headwinds.

Twilio’s fourth annual State of Customer Engagement Report reveals that amid constrained resources and economic uncertainty, investment in digital customer engagement increased brands’ revenue by 90% on average, up from 70% last year.

The data also show that effective customer engagement strengthens brands’ 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 out of 10 companies report that investment in digital customer engagement 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.

Twilio’s 2023 research explores essential consumer trends around personalization, data privacy and trust. The findings highlight the 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 data effectively are high, with 66% of consumers claiming they will stop using a brand if their experience is not personalized. Meanwhile, 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 consumer insights include:

  • Consumers want a faster transition to a cookieless future. Nearly one third of consumers always or often reject cookies on websites, while nearly two thirds (65%) of consumers would prefer brands use only first-party data to personalize their experiences. Meanwhile, eighty-one percent of brands are still reliant on third-party data.
  • Consumer frustration with inconsistent digital experiences is growing. 51% of consumers report being frustrated with their interactions over the past year, rising from 46% the year before.
  • Real-time personalization boosts customer lifetime value. 86% of consumers say that personalized experiences increase their loyalty to brands, and consumers spend on average 21% more on brands that personalize.
  • Consumers trust brands less than brands realize. 95% of consumers want more control over their customer data, placing top priority on “identity data.” Four in 10 consumers say they have stopped doing business with a brand after their expectations for trust and privacy weren’t met.

As part of the research, Twilio divided B2C companies into three categories based on their customer engagement maturity: customer engagement leaders, framers, and beginners. Customer engagement leaders—companies that have the most mature use of personalization, first-party data, and highest level of digital engagement—reported enormous benefits and increased revenue growth compared to those who have less advanced customer engagement strategies. Specifically,

  • 82% of customer engagement leaders met or exceeded their company’s financial goals for 2022, compared to 62% of customer engagement beginners
  • 40% of engagement leaders reported much higher customer retention rates than previous years, compared to 12% of beginners
  • 41% of engagement leaders reported much higher customer conversion rates than previous years, versus 15% of beginners.

“In this macroeconomic climate, every business is looking to do more with less budget,” said Joyce Kim, chief marketing officer at Twilio. “This research reflects what we’re hearing across our customer base, which is that when brands use first-hand data to personalize engagement with customers, it saves companies meaningful marketing spend and increases lifetime value. For brands facing growing headwinds, this means ROI today.”

Twilio’s State of Consumer Engagement Report 2023 is available as a web report with data available from 18 countries worldwide, and as a comprehensive, downloadable white paper. Both can be found at

Customers expect personalisation ‘during every brand interaction’

Customers expect personalisation during every brand interaction — but they don’t trust brands to keep their personal data secure and to use it responsibly.

That’s the dilemma companies everywhere are currently facing, according to new data from Twilio in its third annual State of Personalization Report 2022, which found that 62% of consumers expect personalisation.

Meanwhile, 49% will become repeat buyers if personalisation is offered. Yet only 40% of consumers say they trust brands to use their data responsibly and keep it safe.

Twilio’s report shows lack of trust is increasingly affecting consumer buying decisions: 60% of consumers say trustworthiness and transparency are the most important traits of a brand, up from 55% in 2021.

The personalisation vs. privacy paradox

Delivering personalised experiences requires personal data, so changing consumer attitudes towards sharing data online creates a paradox for businesses.

First-party data, or data collected directly from customers with their consent, is optimal for privacy. According to the Twilio report, 63% of consumers say they are fine with personalisation, as long as brands are using their own data and not data purchased or rented from third parties.

Consumer privacy a generational challenge — and an opportunity

Companies have long “rented” customer relationships from advertisers and social networks. These companies collect behaviour and demographic data and then resell it as targetable audiences. But sweeping privacy regulations — at both the government and corporate levels — are forcing companies to shift from renting to owning their customer relationships.

This pivot is not a simple one. Half of the companies Twilio surveyed said recent changes to data privacy regulations have made personalisation more difficult. But with Google set to join Firefox and Safari in banning third-party cookies by the end of 2023, the shift to first-party data is no longer optional.

Many companies are already responding to these changes in consumer preferences, regulations, and technology, with 43% of business leaders embracing first-party data because it provides better privacy for customers.

Data and technology hurdles to personalisation at scale

Technology remains a hurdle for many companies. Tech giants have fleets of data scientists and massive budgets to achieve personalisation at scale, but Twilio’s report shows the majority of businesses are still struggling to achieve omnichannel personalisation, despite 6 out of 10 respondents reporting increased investment in personalisation in 2022. The most common barriers include lack of technology, unclear ROI, lack of accurate data, and organisational impediments.

Technologies such as customer data platforms give businesses the tools they need to achieve compliance while managing first-party data for personalisation. Customer data platforms collect first-party data at every customer touchpoint to create a single, unified view of the customer. Business leaders are embracing such technologies, with 53% investing in better technology to manage customer data. These companies are equipped to build deeper customer relationships.

“This research points to how recent changes in data privacy regulations has made the personalisation imperative increasingly important and challenging, as customers are skeptical of how brands are handling their data”, said Samantha Richardson, Principal Visioneering Consultant, Twilio.

“With the end of third-party cookies coming to fruition next year, brands need to put a strategy in place to rebuild trust with consumers and move away from legacy advertising approaches towards a more authentic kind of engagement. Using consensually offered first party data and applying that to learn who your customer is and what they really want is a critical first step here. It’s no longer about retargeting someone who has just bought a product with several other, similar items. Customer data platforms can uncover meaningful insights that will help build genuine customer-first relationships  – and moving in this direction now is about when, not if.”

Twilio’s State of Personalisation Report is based on two surveys conducted by Method Communications between April and May 2022. A consumer survey targeted adults who purchased something online in the past six months. A business survey targeted B2B and B2C business managers and above who are familiar with their company’s customer experience, marketingtech, or customer data strategies. There were a total of 3,450 respondents from Australia, Brazil, Colombia, France, Germany, Italy, Japan, Mexico, Singapore, Spain, United Kingdom and United States, with a minimum of 250 respondents from each country.

The full report can be downloaded here.