Trend 2

Protecting consumer data is key to maintaining trust

Background

As businesses seek to better understand and personalize the customer experience, they've begun to meticulously gather and analyze every customer click, share, follow, like, and purchase to understand their preferences, wants, and needs. 

But data privacy is a growing concern for consumers who want to know how businesses are using this information, how long they’re storing it, and whether it's secure. Brands must use robust security measures and transparent data protection policies to ease consumer concerns and win their trust.

6 in 10 consumers say protecting their data is the top way to build their trust.

Building customer trust by protecting data

Every generation is concerned about data privacy

The top way to earn customers’ trust? Keep their data safe.

While every generation agrees, older age groups are particularly sensitive to data privacy. In fact, 67% of baby boomers and 64% of Gen Xers express that businesses safeguarding their data significantly influences their trust. 

This trend could be attributed to older consumers being less familiar with technology and having grown up in an era when privacy was highly valued. Younger generations may have a better grasp of the reciprocal relationship with brands, as they’re more willing to share personal information in exchange for free services, discounts, and more personalized experiences compared to their older counterparts.

Percentage of consumers who say protecting data is the top way to build trust

Consumers on whether or not brands are transparent about AI data use

Consumer data privacy and AI

When it comes to AI, consumers want to know exactly how businesses leverage their data. Almost half (49%) of respondents say they would trust brands more if they openly disclose the use of customer data in AI-powered interactions. Unfortunately, brands overestimate how transparent they are with consumers about AI. While 91% of brands say they’re transparent with customers around how AI uses their data, only 48% of customers agree.

Businesses are paying attention

Consumers aren’t the only ones worried about data privacy. In fact, 40% of businesses say finding a balance between security and customer experience will be one of their most pressing challenges in 2024. This figure has remained relatively unchanged from last year’s 42%. 

One particular area of focus for brands is reducing friction during the account signup process while keeping customer data safe. In 2024, 40% of brands say they’re prioritizing simplifying the signup and login process to improve customer engagement. This can establish a successful relationship between legitimate users and businesses while also keeping out bad actors.

Brands’ top customer engagement challenges over the next 12 months

Global findings

Globally, Hong Kong is the only region where brands are meeting consumer transparency around AI.

In other parts of the world, data privacy is a more pressing issue. Brands in Brazil, Indonesia, Mexico, Singapore, and Spain are more likely to say finding a balance between security and CX will be a top challenge in 2024. Still, it’s promising to see so many businesses make data privacy and AI transparency a priority this year.

Percent of brands/consumers who say brands are transparent about AI data usage

Actionable insights

A crucial part of building omnichannel experiences is ensuring these channels are safe for your customers. When a company actively safeguards its channels, whether through user authentication or two-factor authentication, it fosters mutual trust. In 2023, we saw billions of verifications through Twilio's platform. In 2023, we saw a 21% increase in verifications on Twilio's network. This shows that more brands are taking steps to protect their consumers right off the bat.

To the right are a few ways to build trusted communications that maintain consumer trust.

These measures make it easier for consumers to know when they’re interacting with your brand on verified channels and allow your business to move legitimate users further down the sales funnel. The result? A secure and trustworthy omnichannel environment that benefits both consumers and businesses alike.

Improving data transparency can also improve consumer trust.

Check out Twilio’s AI Nutrition Facts and create your own responsible AI label for your business.

Explore the data

Brands’ most pressing customer engagement challenges for 2024

Brands/consumers on whether disclosing AI data use boosts customer trust

The top four actions consumers say brands can take to build their trust

The top four actions brands believe build customer trust

Brand spotlight

 

“By focusing our marketing efforts exclusively on people who have demonstrated a purchase intent, while simultaneously filtering out inactive or disengaged customers, we have been able to optimize our advertising spend.”

 

Alice Luzzi

Digital Marketing Specialist, Arduino

 

Arduino builds privacy-first, personalized customer experiences

Arduino, which offers accessible electronics and digital technologies to customers, wanted to categorize website visitors into ‘casual browsers’ and ‘ready-to-buy’ consumers. With Twilio Predictions, it could set up this categorization then trigger an advertising campaign based on these predicted actions. 

Twilio’s CustomerAI technology also allows Arduino to predict customers’ shopping intentions while managing sensitive global data and adhering to GDPR compliance.

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