State of Customer Engagement Report 2022: What Does it Mean for Product & Engineering Leaders?

Customer engagement with brands has changed significantly since 2020. The events of the past two years saw a massive shift in the way customers interact with companies. Businesses that took the plunge and invested in innovative digital engagement tools saw an impressive payoff.

Yet the pace of digital transformation over the past two years presented challenges for product and engineering leaders. To meet customer demand, these leaders rapidly integrated and onboarded new technologies, which left many wondering if they had adequate security in place as they scaled up.  

Leading customer engagement with a digital-first strategy requires product and engineering leaders stay flexible enough to roll with shifting regulations and investor expectations, but brave enough to move into uncharted territory.  

Delayed innovation can put even a strong strategy at risk of becoming obsolete. That’s why it’s important to look at customer trends and prepare for the anticipated roadblocks that might hinder future efforts.

In Twilio’s 2022 State of Customer Engagement Report, we conducted a worldwide survey of over 3,400 B2C companies and 4,500 consumers to gauge exactly how a digital-first strategy benefited businesses and where future trends are pointing.

The results came back with some promising indications, including an average revenue growth of 70% for companies that embraced digital customer engagement strategies. However, if companies want to continue growing their bottom line using digital engagement, they must take notice of emerging pain points and what they mean for strategies going forward.

In our first post in this blog series, we examined our report findings as they related to these other areas:

• Customer experience and service
• Marketing
• Retail

Next, we’ll examine the state of customer engagement as it concerns product and engineering leaders, and explore the opportunities to further enhance digital engagement strategies.

Digital engagement is on the rise — but it has a limit

The pandemic spurred a rapid acceleration in the use of digital tools. On average, B2C companies reported that the abrupt shift sped up their digital transformation by almost seven years.  Seventeen percent also reported jumping into the future by as much as 10 to 14 years.

Product and engineering professionals continually innovate consumer-first features for convenience and speed, but the upward trajectory of digital engagement suggests this work is far from done.

Already, about 53% of B2C organizations’ customer engagement is happening on a digital platform, and they expect that to increase by 21% in the coming three years.

However, our report found many consumers suffer from digital fatigue — a sense of exhaustion that comes from experiencing too many frustrating experiences. Thirty-six percent of global consumers reported feeling digital fatigue within the previous 30 days. In fact, younger generations experience higher fatigue rates than their older counterparts.

As it turns out, more isn’t always better. Suppose product and engineering leaders plan to continue working from a digital-first standpoint. In that case, they must create complete end-to-end experiences where all touchpoints are uniquely crafted and deployed, so they’re not overwhelming customers with pointless or frustrating interactions.

Customer experiences can be better

By far, one of the greatest tools in a product and engineering leader’s toolbox is personalization. Customers don’t always know what they need in a solution, which is why they love products that feel tailor-made for their needs.

Results show that a combined total of 98% of companies believe personalized experiences build customer loyalty, and 83% of consumers agreed.  

Personalization comes from truly understanding a customer's needs and preferences, and acting on that information to create exceptional experiences like loyalty programs and spot-on product recommendations.

While companies and consumers agree on the importance of personalization in building loyalty, they have different views on how well the efforts are landing. Although 34% of B2C companies claimed to always personalize engagement with customers, only 11% of consumers agreed.

Going forward, product and engineering leaders will have to find more opportunities to create personalized touchpoints that speak to the individual’s needs, unique preferences, and buying habits.

The unavoidable shift to first-party data

One of the approaching trends in customer engagement for product and engineering leaders is the inescapable one: The changeover to using first-party data.

With Safari and Firefox already blocking access to third-party cookies and Google Chrome set to make the move in 2023, companies have no choice but to stop relying on third-party cookies for their customer data.

Our report found that the shift isn’t going to be comfortable for everyone. Over half of B2C companies aren’t fully prepared for the big shift, despite its fast approach:

• 45% of companies stated being fully prepared to move away from third-party cookies.
• 51% of companies said they are somewhat prepared for a cookieless world.
• 4% reported being not at all prepared to go cookieless.

To craft the hyper-personalized experiences that customers want, product and engineering leaders must embrace the move to first-party data as soon as possible. Innovating in uncharted territory is risky, but it’s a risk everyone will be taking together.

Just as the pandemic inspired a digital leap into the future, the shift to first-party data collection has the potential to inspire another incredible spring forward to creating customer experiences that instill an even deeper sense of brand loyalty and trust.

Amy is a data-obsessed, award-winning, strategic content marketing leader with over a decade of experience managing high-performing content marketing, community, influencer, and social teams. She loves creating strategic approaches that attract, engage, inspire, and help educate audiences throughout their complete buying journey. When she’s not online, she enjoys crafting jewelry, hiking the tallest mountain, or diving the deep blue sea. Connect with her on Twitter and LinkedIn.