Only 71% of Consumers Trust B2C Companies They Engage With: Report
The past two years have spurred an unprecedented acceleration of digital transformation for business-to-consumer companies in Asia Pacific & Japan (APJ), advancing their digital strategies by an average of 7 years and boosting total revenues by more than 60 per cent for APJ companies that invested in digital customer engagement.
That’s according to research released today by Twilio, the leading customer engagement platform. The company’s third annual global State of Customer Engagement Report, which also reflects the findings from the APJ region, found that investment in digital customer engagement and personalisation technologies has significant, measurable, positive impact on customer retention and trust — and on revenues.
The cookie clock is ticking
Third-party cookies, which are now blocked by Firefox and Safari, will also be blocked by Google Chrome by the end of 2023. Companies need to prepare quickly for these upcoming changes. When asked what kind of customer data their marketing strategy currently relies on, a total of 78 per cent of APJ companies said that they are reliant on third party cookies. Meanwhile, 83 per cent of APJ consumers want brands to make use of only first-party data when delivering the kind of personalised experiences they now expect.
The deprecation of cookies will cause even more difficulty for brands who rely on such cookies to identify and track visitors to their websites. More than half (55%) of APJ companies say they are not fully prepared for a cookieless world, and 42 per cent of companies predict that the impending changes will lead to lower return on investment on their marketing spend.
This means that when a key pillar of the advertising – and social media-driven internet disappears, collecting and relying on first-party data won’t just be a competitive advantage anymore – it will be table stakes for survival. APJ business leaders recognise this – 96 per cent say fully owning and utilising customer data will be their biggest growth lever over the next three years.
Personalisation: expectations vs. reality
Personalisation has emerged as one of the most important aspects of delivering a competitive brand experience that will attract customers and create brand loyalty. In fact, the consequences of not providing personalised experiences to customers can be severe, with nearly two-thirds (65%) of APJ consumers saying they’ll stop using a brand if it doesn’t personalise their experience.
However, while both brands and consumers agree that personalisation is important, the report uncovered some startling gaps between the two groups.
Five fundamentals to ensure digital survival and success
“The research clearly shows that companies that prioritise digital customer engagement reap the biggest rewards,” said Glenn Weinstein, chief customer officer at Twilio. “Personalisation is actually getting harder to deliver, with high customer expectations, changing technologies, and the diminishing value of third-party cookies. We’ve seen five fundamentals to overcoming these challenges: embrace digital, personalise every interaction, shift to first-party data, close the trust gap, and avoid engagement fatigue by increasing the quality of your interactions.”
“Engagement, trust and loyalty are becoming crucial for any business strategy, alongside price and product. Rapidly changing consumer expectations and loyalties in the past two years have shown that businesses must accelerate their digital transformation efforts to deliver meaningful interactions. With India’s growing digital-first narrative, brands and companies have to be consistent in engaging with digital customer engagement strategies such as personalisation to keep their customers loyal to the brand,” said Ved Antani, Vice President, Engineering and Managing Director, Twilio India. “While Indian businesses are investing in digital engagement, we are still a long way from realising the full potential of effective customer engagement. The Twilio 2022 State Of Customer Engagement report reaffirms that personalised engagement must become a part of the robust digital growth strategies businesses leverage to deliver flexible, seamless, and personalised experiences and stay ahead of the competition.”
Key APJ findings from the Twilio report include:
● 68 per cent of APJ companies increased their investment in digital customer engagement in 2021 and approximately 60 per cent is the average top-line revenue increase among companies that invested in digital customer engagement over the past two years
● B2C companies say that the past two years accelerated their digital transformation strategies by an average of 7 years in the APJ region. Among the respondents, 22 per cent of companies say they’ve leaped forward 10 to 14 years.
● 96 per cent APJ companies say personalisation increases brand loyalty and 84 per cent of consumers agree
● Almost two-thirds (65%) of APJ consumers say they’ll stop using a brand if their experience isn’t personalised and 90 per cent of APJ consumers say that they will stop doing business with a company after frustrating customer experiences
● Globally 75 per cent of companies think they’re providing good or excellent personalised experiences, but that trend is much lower in APJ (66%). Yet, more than half of consumers (57%) disagree
● While 50 per cent of APJ brands say their customers want greater data privacy, 69 per cent of consumers want greater data privacy from brands. Consumers are demanding greater data privacy and transparency than brands realise.
● 90 per cent of B2C companies believe consumers trust their ability to protect data, but only 71 per cent of consumers actually do trust these companies
● 83 per cent of APJ consumers want companies to only use first-party data for personalisation and 96 per cent of companies agree that fully owning and utilising customer data will be their biggest growth lever over the next three years
● More than half of APJ consumers are frustrated by inconsistent digital interactions with brands
● While globally, over 1 in 3 consumers have experienced digital fatigue in the past 30 days, Gen Zs and Millennials are more than twice as likely as Baby Boomers to experience digital fatigue
The report is based on two surveys conducted by Lawless Research in December 2021 and January 2022. The B2C company survey collected responses from 3,450 business leaders, while the consumer survey collected responses for 4,500 consumers. Both surveys included respondents from Australia, Brazil, Colombia, France, Germany, Italy, Japan, Mexico, Singapore, Spain, United Kingdom and United States with two hundred to 1,000 responses from each country. In addition, the report includes analysis of anonymised, aggregate data from over 1.6 trillion interactions that have occurred on Twilio’s platform, including Twilio Segment, over the past several years.
