The past two years have spurred the greatest acceleration of digital transformation for Aussie business-to-consumer companies, advancing their digital strategies by an average of 8 years, ahead of the global average of 6.5 years. As a result of the investment in digital customer engagement, companies have boosted total revenues by an average of 64%.
That’s according to research released by Twilio, the leading customer engagement platform.
What conclusions can you draft from Twilio’s report?
The company’s third annual State of Customer Engagement Report, which reflects the findings from a survey of 3,450 business leaders and 4,500 consumers across 12 countries, 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 85% of companies said that at least half or more of their data was third-party.
Meanwhile, 86% of Australian 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. While 98%of Australian companies say they are somewhat fully prepared for a cookieless world, 45% 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, relying on first-party data won’t just be a competitive advantage anymore.
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.
The consequences of not providing personalised experiences to customers can be severe, with nearly half of 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.
For instance, most companies (88%) surveyed believe that personalisation is important to their customer engagement strategy. Yet while 81% of Australian companies claim to provide good or excellent personalised experiences to customers, the report showed that more than half of consumers (56%) disagree, reporting bad, poor or average personalisation.
Australian consumers are also the most likely to underestimate how much personalisation influences them. While companies say consumers spend 43% more when engagement is personalised, consumers believe they spend just 12% more.
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 getting harder to deliver, with high client expectations, changing tech, 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.”
Kristen Pimpini, Regional Vice President, Australia and New Zealand, Twilio added, “Many Australian companies accelerated their digital customer engagement over the last two years, creating entirely new and innovative ways of connecting with and servicing customers.
“While those efforts have translated to strong wins, it shows us that they are still some way off in meeting consumer expectations. Companies need to close the experience gap, respond to consumers’ expectations of flexibility and choice in how they interact with brands.”
What were the key insights from the Twilio report?
Key Australian findings from the Twilio report include:
- 64% is the average top-line revenue increase among companies that invested in digital customer engagement over the past two years. For 15% of responding companies in Australia, revenues doubled after investing in digital customer engagement.
- B2C companies say that the past two years accelerated their digital transformation strategies by an average of 8 years, ahead of the global average of 6.5 years. 27% of Australian companies say they’ve leaped forward 10 to 14 years.
- Australia leads the way in Asia Pacific Japan with the highest level of digital customer engagement (50%). Companies here predict that by 2025, over half (59%) of their customer engagement will be digital.
- 98% of B2C companies believe consumers trust their ability to protect data, but only 67% of consumers actually do trust these companies.
- 63% of Australian companies are more likely to invest in Customer Data Platform (CDP) to collect, analyse, connect or unify their first-party data.
- Gen Zs (46%) and Millennials (40%) are more than twice as likely as Baby Boomers to have experienced digital fatigue in the past 30 days.
- 37% of Australians surveyed would rather lose the internet for a day, go through airport security during a holiday or shave their head than reach out to a customer contact center.
- The report provides insights and examples of top digital customer engagement from five different global firms – Allianz Direct, Intuit, Nubank, The Trevor Project and Electrolux.
The report is based on two surveys conducted by Lawless Research in December 2021 and January 2022. The company survey collected responses from 3,450 business leaders (250 in Australia), while the survey collected responses for 4,500 consumers (300 in Australia).
Both surveys included respondents from Australia, Brazil, Colombia, France, Germany, Italy, Japan, Mexico, Singapore, Spain, U.K and U.S, with two hundred to 1,000 responses from each country. The report includes analysis of anonymised, aggregate data from over 1.6 trillion interactions that have occurred on Twilio’s platform, including Twilio Segment.