Businesses across the world are turning to artificial intelligence (AI) to offer personalised customer experiences, however, a report by Twilio highlights that customers remain sceptical.
The fourth annual State of Personalisation Report showcases how companies are experimenting with AI to differentiate and drive business growth. It also provides guidance on how to build customer trust in the technology.
To achieve more sophisticated real-time customer experiences, businesses have turned to AI to help harness the high volumes of real-time data needed to power personalisation efforts. According to the Twilio report, 92 per cent of global businesses are now using AI-driven personalisation to drive business growth.
Furthermore, 81 per cent of these companies believe recent AI technology has the potential to positively impact customer experiences.
Despite this, there is a disparity between business enthusiasm and consumer comfort levels when it comes to AI. Only 36 per cent of European consumers are comfortable with companies using AI to personalise their experiences, and less than half (49 per cent) trust brands to keep their personal data secure and use it responsibly.
To address this issue, businesses need to prioritise building trust and transparency with their customers, according to Sam Richardson, a customer engagement consultant at Twilio. “Real-time, first-party data will be key here for brands to maximise the potential of AI thoughtfully and responsibly,” said Richardson.
Getting personalisation right
The report reveals that the quality of an AI-driven personalisation strategy is only as good as its underlying dataset. Customer experiences are likely to miss the mark for consumers without accurate and robust data. With half (50 per cent) of global companies reporting difficulties in getting accurate data for personalisation, and poor quality data cited as a major obstacle in leveraging AI by 31 per cent of businesses, there is a real challenge to overcome.
To maximise the potential of AI thoughtfully and responsibly, businesses need to invest in data quality, leveraging effective, real-time data management tools and increasing their use of first-party data. The report shows that almost all the companies surveyed (97 per cent) are taking steps to address consumer privacy concerns, demonstrating a commitment to responsible data use.
AI and Gen Z
As digital natives, Gen Z are more influenced by personalisation and more willing to embrace AI. For example, nearly three-quarters (72 per cent) of Gen Z consumers say that personalised experiences have influenced them to make a purchase. While only 15 per cent of Gen Z consumers are uncomfortable with AI being used to help brands personalise their experiences, 34 per cent of gen X and 43 per cent of boomers are not comfortable with it.
Twilio’s report underscores the value of an AI-driven personalisation strategy for brands looking to both retain existing customers and acquire new ones. Sixty-two per cent of business leaders cite customer retention as a top benefit of personalisation, while nearly 60 per cent say personalisation is an effective strategy for acquiring new customers. Over half (51 per cent) of European respondents also say they will become repeat buyers after a personalised experience.
The report concludes by highlighting the opportunity for brands to build customer loyalty and lifetime value by engaging consumers with tailored experiences. Companies that provide a clear understanding of how customer data is being used will be best equipped to establish a strong foundation for successful personalisation efforts.
Methodology
The Twilio State of Personalisation Report is based on two surveys conducted by Method Communications in March 2023. A consumer survey targeted 3,001 adults who purchased something online in the past six months, and a business survey targeted 500 business managers and decision-makers at consumer-facing companies that provide goods and/or services online.
Survey respondents were from Australia, Brazil, Colombia, France, Germany, Italy, Japan, Mexico, Singapore, Spain, US and the UK.
