Home Tech Updates Consumers want personalization, but brands don’t trust their data

Consumers want personalization, but brands don’t trust their data

by Helen J. Wolf
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Customers expect personalization during every brand interaction but don’t rely on brands to keep their personal information safe and use it responsibly.

According to new data from the customer engagement platform Twilio, companies worldwide are currently facing that dilemma.

The third annual State of Personalization Report 2022 shows that 62% of consumers expect personalization, saying a brand will lose loyalty if their experience is not personalized, and 49% will become repeat buyers if personalization is offered. Yet only 40% of consumers trust brands to use their data responsibly and securely.

Twilio’s report shows that lack of trust increasingly affects consumers’ purchasing decisions: 60% of consumers say that trustworthiness and transparency are the most important attributes of a brand, up from 55% in 2021.

Consumers want personalization

The personalization versus privacy paradox

Delivering personalized experiences requires personal data, so changing consumer attitudes to sharing data online creates a paradox for businesses.

First-hand data, or data collected directly from customers with their consent, is optimal for privacy. According to the Twilio report, 63% of consumers say they have no problem with personalization if brands use their data, not data bought or rented from third parties.

Consumer privacy is a challenge and an opportunity for generations

Companies have long been renting customer relationships from advertisers and social networks. These companies collect behavioral and demographic data and then resell it to audiences. But sweeping privacy regulations at both government and corporate levels are forcing companies to shift from renting to owning their customer relationships.

This game is not easy. Half of the companies Twilio surveyed said recent changes in data privacy regulations have made personalization more difficult. But now that Google, Firefox, and Safari will ban third-party cookies by the end of 2023, the shift to first-party data is no longer optional.

Many companies are already responding to these changes in consumer preferences, regulations, and technology, with 43% of business leaders embracing first-party data as it provides better customer privacy.

Data and technology barriers to personalization at scale

Technology remains an obstacle for many companies. The most common barriers include lack of technology, unclear ROI, lack of accurate data, and organizational barriers. Tech giants have large numbers of data scientists and huge budgets to achieve personalization at scale. However, Twilio’s report shows that most companies are still struggling to attain omnichannel personalization, even though 6 out of 10 respondents reported more investment in personalization by 2022.

Technologies such as customer data platforms give companies the tools they need to achieve compliance while managing first-party data for personalization. Customer data platforms collect first-party data at every customer touchpoint to create a unified view of the customer. Business leaders embrace such technologies, with 53% investing in better technology to manage customer data. These companies are equipped to build deeper customer relationships.

“A customer data platform is the brains behind a company’s customer engagement strategy,” said Kathryn Murphy, GM of Twilio Engage.

“The ability to act on first-party data in real-time allows companies to go beyond the superficial level to deliver hyper-personalization at scale.”

Twilio’s State of Personalization Report is based on two studies conducted by Method Communications between April and May 2022. A consumer survey focused on adults who bought something online in the past six months. A business survey targeted B2B and B2C business executives and above who are familiar with their company’s customer experience, marketing technology, or customer data strategies. There were 3,450 respondents from Australia, Brazil, Colombia, France, Germany, Italy, Japan, Mexico, Singapore, Spain, the United Kingdom, and the United States, with a minimum of 250 respondents from each country.

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