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AI-driven Content Personalization for Growth
Businesses worldwide are eagerly embracing the potential for artificial intelligence (AI) to provide personalized customer experiences, but customers remain cynical, according to the fourth annual report from Twilio, the customer engagement platform that drives real-time, personalized experiences for today’s leading brands. This year’s report underscores the value of an AI-driven personalization strategy for brands looking to both retain existing customers and acquire new ones, especially in today’s competitive market.
The Benefits of Personalization
Sixty-two percent of business leaders cite customer retention as a top benefit of personalization, while nearly 60% say personalization is an effective strategy for acquiring new customers. Consumers also increasingly confirm the value of personalization, with 56% saying they will become repeat buyers after a personalized experience, a 7% lift from last year’s report. These findings clearly point to a growing opportunity to build customer loyalty and lifetime value by engaging consumers with tailored experiences. During this time of uncertainty in the macroeconomic climate, businesses shouldn’t let potential ROI like this pass them by.
The Power of AI in Personalization
The report also shines a light on how a staggering amount of businesses are experimenting with AI to differentiate and drive business growth, but it also provides guidance on how to get this right, starting with the critical need to raise consumer confidence in the technology. To power even more sophisticated real-time customer experiences, the vast majority of businesses are turning to AI to harness high volumes of real-time data and power their personalization efforts. According to the report, 92% of businesses are now using AI-driven personalization to drive business growth. However, a disconnect exists between this enthusiasm and the comfort level of consumers: only 41% of consumers are comfortable with companies using AI to personalize their experiences, and only half (51%) of consumers trust brands to keep their personal data secure and use it responsibly. To effectively leverage intelligent technology in a way that strikes a balance with the current comfort level of consumers, businesses must first establish a baseline of trust about the data used to deliver that personalization.
The Importance of Data Quality
AI-driven personalization is only as good as its underlying dataset, and without robust data, customer experiences will likely miss the mark for consumers. It’s a real challenge: half of companies report that getting accurate data for personalization is a struggle, an increase of ten percentage points compared to 2022, and 31% of businesses cite poor quality data as a major obstacle in leveraging AI. Meanwhile, accuracy (47%), speed of real-time data (44%), and customer retention or repeat purchases (44%) were the top metrics of successful AI-driven personalization. To improve AI results and personalization overall, companies need to invest in data quality, leveraging effective, real-time data management tools, and continuing to increase their use of first-party data.
Preserving Trust and Implementing AI
The report also highlights how businesses such as Farmers Insurance Group recognize the importance of preserving trust while continuing to improve personalization. Almost all of the companies surveyed (97%) are taking steps to address consumer privacy concerns, demonstrating a commitment to responsible data use. The most popular step is investing in better technology, such as Customer Data Platforms, to manage customer data.
Engaging Gen Z Consumers
One tremendous opportunity for AI-driven personalization is in engaging Gen Z consumers. Growing up with smartphones and tablets at their fingertips, this demographic of digital natives expect unparalleled digital experiences. Gen Z is an especially welcoming demographic for brands, as they are both more influenced by personalization and more willing to embrace AI. In fact, a third (34%) of Gen Z consumers already expect AI to be used in their experiences with brands. For example, Gen Z consumers are much more likely to say that personalized experiences have influenced them to make a purchase than other generations.
The Role of Personalization today
Consumers today want to feel valued and understood, and personalization is a key tactic to achieve that. Businesses are clearly excited by the potential of AI to accelerate their ability to tailor experiences to the unique preferences and behaviors of each customer, but for this to be successful, brands will also need to get consumers on board. With consumer comfort levels lifted by AI that is thoughtfully and responsibly implemented, and informed by high-quality data, brands will be able to create a deeper connection that translates into increased spending and brand loyalty.
The full State of Personalization Report can be downloaded from logiclabsai.com. Join us on May 10, 2023, for Twilio Segment’s virtual half-day summit, CDP Live, where we will bring leaders from Meta, Nextdoor, Snyk, and more to the virtual stage. These experts will share insights on retaining customers, driving sustainable growth, and the future of AI-powered personalization. Discover actionable strategies that will help you navigate 2023 and beyond to win in a competitive market.
Twilio’s State of Personalization Report is based on two surveys conducted by Method Communications in March 2023. A consumer survey targeted 3,001 adults who purchased something online in the past six months. A business survey targeted 500 business managers and decision-makers at consumer-facing companies that provide goods and/or services online. Survey respondents were from Australia, Brazil, Colombia, France, Germany, Italy, Japan, Mexico, Singapore, Spain, United States, and the United Kingdom.
Twilio Segment’s Customer Data Platform (CDP) provides companies with the data foundation that they need to put their customers at the heart of every decision. Per IDC, it’s the world’s #1 CDP for 2021 market share. Using Twilio Segment, companies can collect, unify and route their customer data into any system where it’s needed to better understand their customers and create seamless, compelling experiences in real-time. Tens of thousands of companies, including FOX, IBM, Intuit, and Levi’s use Twilio Segment to make real-time decisions, accelerate growth, and deliver world-class customer experiences.
For more information about Twilio (NYSE: TWLO), visit Twilio’s official website.
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