Eight out of 10 companies that invested in customer engagement in the UK met their financial goals despite the turbulent macroeconomic environment, Twilio research shows.
The latest research of the customer engagement platform Twilio shows that investment in customer engagement is a crucial driver of revenue growth.
Amid an environment of constrained resources and economic uncertainty, the platform’s fourth annual State of Customer Engagement Report highlights how 81 per cent of companies that invested in customer engagement ultimately achieved their financial goals.
The report focuses on a survey that gathered information from more than 4,700 B2C leaders in crucial sectors worldwide. The survey also included data from a parallel survey of over 6,000 global consumers and insights from Twilio’s customer engagement platform, including Twilio Segment.
Meeting consumer expectations
Experts have acknowledged the ability of investment-backed customer engagement to enhance a brand’s adaptability within changing market conditions and evolving consumer preferences for a long time.
So according to the findings, 58 per cent of UK businesses that had invested in digital customer engagement had improved their ability to meet changing customer needs.
Likewise, 94 per cent of these companies that invested in digital customer engagement saw revenues grow, with an average increase of 107 per cent.
The findings lay clear the essential need for companies to efficiently leverage data collected directly from interactions with customers, known as zero and first-party data; ditching third-party data to ultimately improve customer experience and increase customer lifetime value.
The stakes for effective data application have never been higher, since according to the report, UK consumers plan to spend 15 per cent more with brands that personalise engagements.
However, companies themselves consider the impact to be even more significant, as they report that personalised engagement leads to consumers spending 41 per cent more.
Are consumer expectations really being met?
For all the benefits brought to light by the report in regard to delivering on consumer expectations, it also delves into the reality of this achievement, finding that a considerable proportion of business respondents are overestimating their ability in this department.
It specifically demands that companies make significant improvements in communication preferences, safeguarding customer data privacy and increasing transparency around the usage of customer data.
Above all, customer tolerance for impersonal experiences is at its limit, with 48 per cent of consumers reporting frustration with their interactions over the past year, rising from 44 per cent the year previous.
More concerningly, 51 per cent confirm they will stop using a brand if it doesn’t personalise their customer experience by taking into account their needs, expectations and preferences.
Furthermore, consumers want a faster transition to a cookieless future. Nearly one-third of consumers in the UK regularly or often reject cookies on websites, with 64 per cent preferring brands to use only first-party data to personalise their experiences.
Half have abandoned a site in the past 12 months rather than accepting cookies. Meanwhile, 81 per cent of global brands are still reliant on third-party data.
In addition, real-time personalisation boosts customer lifetime value, with 71 per cent reporting 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.
So ultimately, consumers trust brands less than brands realise. UK consumers want more control over their customer data, prioritising ‘identity data’ such as name, account login and location.
Twenty-eight per cent have stopped doing business with a brand after their data privacy and transparency expectations weren’t met.
Putting money where the data is
“When every penny is being scrutinised, businesses need to know they are putting their marketing spend in the right places,” comments Sam Richardson, customer engagement consultant at Twilio, reflecting on the report.
“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,” she continues.
“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,” concludes Richardson.