Investment in customer engagement drives revenue: Twilio
New research from Twilio, the customer engagement platform that drives real-time, personalised experiences for brands, shows that investment in customer engagement continues to drive revenue growth and help companies meet their financial goals in the face of economic headwinds.
Twilio’s fourth annual state of customer engagement report reveals that amid constrained resources and economic uncertainty, investment in digital customer engagement increased brands' revenue by 90% on average, up from 70% last year. The data also shows that protecting data is a top challenge for Australian brands as consumers report personal impact from a cyberattack on a brand.
Twilio’s report is based on a survey of more than 4,700 B2C leaders in key sectors worldwide, plus a parallel survey of over 6,000 global consumers. It also incorporates data from Twilio's customer engagement platform, including Twilio Segment, the leading customer data platform (CDP) for 2021 market share, according to IDC.
Importantly, Twilio’s 2023 research explores essential consumer trends around personalisation, data privacy and trust.
The Australian findings highlight the urgent need for brands to address increasing consumer privacy, security and personal data tracking concerns. Over half (52%) of brands experienced contact centre fraud last year, and nearly 1 in 3 (30%) consumers in Australia had their data exposed or stolen due to a cyberattack on a brand.
Australian brands are responding accordingly, with 98% saying they will implement zero and/or first-party data to protect consumer privacy, improve customer experience and increase customer lifetime value. However, the stakes of using that data effectively are high, with 51% of Australian consumers claiming they will stop using a brand if their experience is not personalised.
Meanwhile, brands continue to overestimate how well they are meeting consumer expectations for communication preferences, protecting customer data privacy, and transparency around customer data usage.
Several additional insights mentioned in the report include growing consumer frustration with inconsistent digital experiences. For example, 47% of Australian consumers report being frustrated with their interactions over the past year, rising from 42% the year before.
Twilio also found that real-time personalisation boosts customer lifetime value. For example, 79% of Australian consumers say personalised experiences increase brand loyalty. On average, Aussie consumers spend 19% more on brands that personalise, a jump from last year's increase in spending of 12% more.
Also, 95% of consumers want more control over their customer data, placing top priority on “identity data.” 29% of Australian consumers say they have stopped doing business with a brand after their expectations for trust and privacy weren’t met.
As part of the research, Twilio divided B2C companies into three categories based on their customer engagement maturity: customer engagement leaders, framers, and laggards.
Customer engagement leaders - companies with the most mature use of personalisation, first-party data, and the highest level of digital engagement - reported enormous benefits and increased revenue growth compared to those with less advanced customer engagement strategies.
Specifically, at a global level, 82% of customer engagement leaders met or exceeded their company's financial goals for 2022, compared to 62% of customer engagement laggards. Meanwhile, 40% of engagement leaders reported much higher customer retention rates than in previous years, compared to 12% of laggards. Whereas, 41% of engagement leaders reported much higher customer conversion rates than in previous years, versus 15% of laggards.
“In this macroeconomic climate, every business is looking to do more with less budget," says Joyce Kim, chief marketing officer at Twilio. "This research reflects what we’re hearing across our customer base, which is that when brands use first-hand data to personalise engagement with customers, it saves companies meaningful marketing spend and increases lifetime value. For brands facing growing headwinds, this means ROI today.”
”While the ongoing charge of security breaches is not unique to Australia, the widespread impact felt by consumers was unprecedented. The fallout from the high-profile data incidents have necessitated the urgency today to ensure security is embedded in the customer experience. The research serves as a call to action for brands operating in this environment to start building trust with customers through meaningful and personalised interactions while securely authenticating consumers during sensitive transactions,” adds David Coghill, head of solutions engineering, Asia Pacific and Japan (APJ), Twilio.