Dive Brief:
- Three-quarters of business leaders say personalized customer engagement is a high or critical priority in 2024, according to a Twilio survey of more than 4,700 executives and 6,300 consumers in 18 countries released Tuesday.
- Even though 81% brands believe they have a deep understanding of their customers, only 46% of consumers agree.
- Better personalization requires a deep understanding of consumers. Companies often fail to see eye-to-eye with customers when it comes to when and how their experiences are personalized, according to Jessica Liu, a principal analyst at Forrester.
Dive Insight:
Many companies focus on personalizing experiences pre-purchase or during the purchase itself to drive sales, according to Liu. However, this is at odds with consumers’ preference for personalization long term.
Customers expect companies to use the data and context gathered from their purchase history, loyalty status and customer service inquiries to improve communications throughout their relationship, Liu said. Personalization at every touch point, instead of just the leadup to a purchase, builds loyalty.
“Companies should stop focusing on short-term goals like optimizing sales and conversions,” Liu told CX Dive in an email. “Instead, companies should focus on long-term goals, like using personalized tactics when customers expect them more in post-purchase.”
Different demographics also have different expectations for when and how personalization is used to improve their experiences.
The Twilio study found that among millennials and Gen Z, almost 7 in 10 will stop using a brand if it fails to meet their expectations for personalization. Such expectations include communicating with them in their preferred channel and being able to seamlessly resume interactions with a brand no matter where they left off.
Brands also need to take care in how they power their efforts. AI is a powerful tool, and 7 in 10 leaders say they already use it for personalization. However, only half of consumers say companies are transparent about their AI data use.
The key to using AI for personalization is developing trust through transparency, according to Kassi Socha, director analyst of marketing at Gartner. Customers are providing companies with their personal information and want to know how brands are using it for their benefit.
