Interviews, insight & analysis on digital media & marketing

Report: Lack of customer data holding back use of AI for brands

UK businesses are making progress on the implementation of artificial intelligence (AI) for customer experience, but are facing significant challenges due to a lack of quality data, according to research from customer engagement platform Twilio.

The fifth annual State of Engagement Report, which surveyed more than 4,750 B2C executives and 6,300 consumers across 18 countries, found that just 27% of UK businesses believe they provide ‘good’ or ‘excellent’ customer engagement, with only 7% of consumers agreeing.

AI is helping brands to improve how they serve customers – with almost seven in 10 companies using the technology to personalise customer experiences – but inaccurate data and/or a lack of first-party data is a barrier when it comes to understanding consumers for 69% of these businesses. Worryingly for brands, just 19% of them around the world feel they have a comprehensive profile of their customers.

Convincing consumers that their data is secure is a big driving force behind the issue, as 64% of UK consumers state that protection of their data is the top way for brands to earn their trust. And, globally, 49% of consumers would trust a brand more if it disclosed how customer data is used in AI-powered interactions. In turn, this is causing 40% of businesses to see finding the balance between security and customer experience as the one of their most pressing challenges.

Nonetheless, it’s a challenge that it’s vital they overcome for the sake of business success, with 47% of UK consumers being likely to spend more money with a brand that is personalising engagement. Furthermore, 45% have made a repeat purchase from a company based on the level of personalisation they received, while 78% have given up on a brand entirely if their experiences aren’t personalised.

“Customers today expect personalised experiences and want to understand how businesses use their data to shape those experiences,” said Kathryn Murphy, SVP Product at Twilio. “It’s imperative for brands to be clear about how they use AI, ensuring that they balance how they deploy it with equally robust measures to protect customer privacy. Transparency is not optional — it’s a critical component of building and maintaining customer trust and loyalty.”


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