That’s how the cookie crumbles: consumers demand personalisation from brands without reliance on cookies

Brands generally enjoyed positive ROI in 2022 when investing in customer engagement, but research suggests many are still failing to meet consumers’ changing personalisation expectations.

Investing in customer engagement and personalisation drives revenue growth for businesses across all industries, new research from customer engagement platform Twilio has found.

According to Twilio’s latest State of Customer Engagement report, customer tolerance for impersonal experiences has never been lower, with almost half (48%) reporting frustrations with their interactions with brands in 2022.

Half of consumers said they would abandon brands that don’t sufficiently meet their personalisation expectations and nearly two thirds (64%) would prefer brands solely use first-party data when personalising experiences, with half reporting leaving a website last year rather than accepting cookies.

Changing consumer expectations

Twilio’s findings indicate a potentially urgent need for brands to better leverage first-party data to improve customer experiences and increase overall lifetime value. UK consumers reported they intend to spend 15% more with brands that personalise engagements but many companies believed this figure will actually be far higher, at 41%.

But Twilio concluded that brands are overestimating how well they’re meeting consumer expectations. Many businesses are supposedly failing to meet consumers’ communication personalisation preferences and adequately protect their data privacy while also being transparent about data usage.

Customer engagement drives ROI

Eight in 10 (81%) of companies that invested in customer engagement met their financial goals in 2022, the research found.

Digital customer engagement was found to be even more effective in driving return on investment, compared to non-digital, with 94% of UK firms that invested in digital enjoying revenue growth, with an average increase of 107%.

This general growth comes despite turbulent economic conditions and restricted budgets, highlighting that constrained resources can still be used effectively when the right opportunity arises.

Over half (58%) of UK businesses reported that investment in digital customer engagement improved their ability to meet evolving customer needs.

Privacy and transparency

It appears that consumers trust brands less than businesses realise. Last year, 28% stopped doing business with a brand after their expectations for data privacy and transparency weren’t met, despite 71% saying that personalised experiences increase their brand loyalty.

Sam Richardson, Customer Engagement Consultant at Twilio, said: “This research reinforces that when brands use first-party data to personalise engagement with customers, they will experience higher revenues, greater loyalty, and better ROI.

“Companies aren’t the only ones grappling with smaller resources; so are consumers. The brands that pay close attention to changing customer needs and ensuring they give them the experiences they crave, will be the ones that win this climate.”