2024 State of Customer Engagement Report | Twilio

Background

Companies believe they understand their customers, but there’s a significant disconnect between customer expectations and what brands deliver. In fact, 81% of brands say they have a deep understanding of their customers; less than half (46%) of global customers agree.

Brands also overestimate the frequency and level of personalization they provide. In order to win and keep customer loyalty, businesses must narrow the gap between customer expectations and reality.

While 81% of brands say they’re ‘good’ or ‘excellent’ at providing positive customer engagement, only 62% of consumers agree.

No personalization? Big problem.

Businesses need to solve this customer experience gap. Otherwise, consumers will take their business elsewhere. In fact, 64% of consumers say they would quit a brand if their experience isn’t personalized.

Plus, four out of 10 customers admit to searching for alternative products or services when brands fail to personalize their experience in real time, while 31% say it’s pushed them to purchase from a different brand entirely.

Actions consumers took when brands didn't personalize in real time

Consumers on the top benefits of personalized engagement

Wonder why consumers are fixated on personalization? It mostly boils down to convenience and relevance.

The majority of consumers say personalized engagement makes it easier to find what they want online, get relevant recommendations, and get tailored promotions. With so many brands competing for consumer attention, personalizing communications on preferred channels ensures messages cut through the noise and reach the intended audience.

Obstacles to understanding

When it comes to truly understanding customers and their expectations, businesses struggle to connect and securely activate customer data. Only 16% of brands strongly agree that they have the data they need to understand their customers, and just 19% of businesses strongly agree they have a comprehensive profile of their customers.

Top challenges faced by brands in comprehending customer needs

Brands' top priorities for improving customer engagement in 2024

Closing the customer expectation gap

In the upcoming year, numerous businesses are placing a high priority on eliminating friction points and proactively addressing customer concerns. These focus areas, combined with assistance from AI, will help businesses bridge the gap and deliver exceptional customer experiences in 2024 and beyond.

Global findings

The customer expectation gap is even more pronounced in certain countries. France, the UK, and Spain have the largest gaps between brands’ reported understanding of customers and how well consumers think brands understand them.

Rapidly changing customer needs are proving a major challenge for many regions, including Brazil, Hong Kong, India, Indonesia and Mexico. This underscores many businesses' need for technology that can empower them to anticipate customer behaviors and activate data to deliver personalized experiences, all in real time.

Brands/consumers who agree that brands deeply understand customers

Actionable insights

In order to understand where your own customer experience gaps exist, your business can:

By conducting a customer journey audit, your brand can identify customer pain points and areas of friction that could be impeding conversion. Ask your internal teams what’s missing, where customers are getting stuck, and what can be improved. These answers can help you build a holistic customer journey map that will ensure your brand is putting its best foot forward for customers.

Data activation is the missing piece in many technology stacks. While most businesses have a wealth of information in their data lake or warehouse, few have the means to seamlessly send this data to downstream activation tools.

Solutions like Twilio Segment’s Linked Profiles can help businesses bring together CDP data with business records stored in data warehouses, promoting a deeper understanding of each customer and their interactions with your brand. By activating this data in real time, marketing teams can then deliver one-to-one hyper-personalized customer experiences.

Customer support agents are usually the first to interact with customers and affect their experience with a business directly. By integrating AI tools into their technology stack, contact centers can collect data in real time and mindfully decide which fields to expose to virtual and live agents alike when dealing with customers. That way, they don’t get overwhelmed by unnecessary information while still providing ideal personalized experiences for customers.

AI can also help businesses resolve customer issues faster and more effectively. Customer service agents can access AI-generated summaries of previous customer service interactions, allowing them to promptly understand and resolve a user’s issue while saving the customer from repeating themselves.

Just last year, Twilio helped process over 927 million contact center tasks, up 35% from 2022. Clearly, more businesses are investing in contact center technology that gives customer service agents more visibility into past customer interactions.

By putting yourself in your customers’ shoes and listening to their feedback, your brand can keep a pulse on where your experiences are meeting or exceeding expectations and where you have room for improvement. Of course, consumer expectations are always changing, so be sure to conduct these exercises regularly to refine your strategy and continue delivering the hyper-personalized experiences consumers love.

Explore the data

Percent of users who say they’ll quit a brand that lacks personalization

Brands/consumers who say brands provide positive customer engagement

Brands/consumers that ‘strongly/moderately’ agree AI will enhance engagement

Percent of brands that say they have access to comprehensive user profiles

Brand spotlight

Jack Henry is pioneering personalized financial experiences

As a financial services technology provider, Jack Henry needed to deliver innovation, scalability, and optionality so banks and credit unions could enhance their fin tech and build relationships while growing their businesses.

By optimizing customer communications with Twilio Voice, SMS, and SendGrid email API, Jack Henry is able to drive efficient, timely and personalized accountholder interactions across channels. Integrating multi-factor authentication with Twilio Verify or SMS alerts also ensures critical security infrastructure while enriching account holder interactions and enhancing customer engagement.

Read the full story

Looking forward

2023 was a breakout year for artificial intelligence. Companies like OpenAI and Google took generative AI to new heights, garnering the attention of brands across the world and leaving them asking: What can we do with AI? As 2024 progresses, we expect to see even more businesses invest in AI to automate tasks, personalize content, improve marketing campaigns, provide better product recommendations, resolve customer issues, and more.

At the same time, we expect to see more brands invest in better methods of data collection—giving up third-party cookies once and for all and going directly to the source (the customer) to get the data that will fuel their engagement. Brands that do this well and provide individualized experiences for every customer should see greater loyalty and higher revenue.

Overall, our findings from this year indicate that investments in digital engagement are continuing to grow. Last year, Twilio processed 2.1 trillion digital interactions via voice calls, SMS and WhatsApp, email, user verification requests, and contact center tasks, for a year-over-year increase of 19%. Brands that continue to invest, as modeled by our Engagement Leaders, have the opportunity to improve conversion rates, retain customers, earn trust, and exceed revenue goals.

If you’re ready to take your customer engagement to the next level, contact our sales team or read why Twilio was named a Leader in the 2024 Gartner® Magic Quadrant™ for CPaaS.

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