Consumer patience with poor digital experience is waning – 73% of consumers in Asia Pacific & Japan (APJ)  report they will stop using brands that don’t personalise their experiences

Investment in customer engagement continues to drive revenue growth and help companies meet their financial goals in the face of economic headwinds. This is according to Twilio’s fourth annual State of Customer Engagement Report which reveals that amid constrained resources and economic uncertainty, investment in digital customer engagement increased brands’ revenue by 90% on average, up from 70% last year, globally.

The data also illustrates how customer engagement contributes to business resilience – globally, six out of 10 companies report that investment in digital customer engagement improved their ability to meet changing customer needs, and helped increase customer retention, conversion, and long-term loyalty.

Twilio’s State of Customer Engagement Report is based on a survey of more than 4,700 B2C leaders in key sectors across the world, plus a parallel survey of over 6,000 global consumers. It also incorporates data from Twilio’s own customer engagement platform, including Twilio Segment, the leading customer data platform (CDP) for 2021 market share according to IDC. The report includes findings from Hong Kong, India, Indonesia, Malaysia, the Philippines, and Singapore.

Twilio’s 2023 research explores essential consumer trends around personalisation, data privacy, and trust, which highlight opportunities for brands to directly increase customer lifetime value. For example, the research found that consumer patience in APJ is low — 73% will stop using brands if their experience is not personalised — and brands continue to overestimate how well they are meeting those expectations, with a personalisation experience gap of 27 percentage points between B2C and consumer perceptions.

Key consumer insights in Asia Pacific & Japan (APJ) include:

    • Consumer frustration with inconsistent digital experiences is growing. 53% of consumers in APJ report being frustrated with their interactions over the past year, up from 51% the year before.
    • Precise, real-time personalisation improves customer lifetime value. 91% of consumers in the region say that personalised experiences increase their loyalty to brands. Consumers in APJ also spend 24% more on brands that personalise – higher than the global average of 21%.
    • Consumer trust is lower than brands realise. Consumers in APJ want more control over their customer data, with “identity data” being the top priority. Meanwhile, 44% of consumers in APJ have stopped purchasing from a brand after their expectations for data privacy and transparency weren’t met, exceeding the global average of 41%.

As part of the research, Twilio divided B2C companies into three categories based on their customer engagement maturity: customer engagement leaders, framers, and laggards. The customer engagement leaders — companies that have the most mature use of personalisation, first-party data, and highest level of digital engagement — reported enormous benefits compared to those who have less advanced customer engagement strategies. These include substantially increased revenue growth, customer retention, and customer conversion rates, along with a greater likelihood of meeting the company’s financial goals. Globally:

    • 82% of customer engagement leaders met or exceeded their company’s financial goals for 2022, compared to 62% of customer engagement laggards.
    • 40% of engagement leaders reported much higher customer retention rates than previous years, compared to 12% of laggards.
    • 41% of engagement leaders also reported much higher customer conversion rates than previous years, versus 15% of laggards.

“In this macroeconomic climate, every business is looking to do more with less budget,” said Joyce Kim, chief marketing officer at Twilio. “This research reflects what we’re hearing across our customer base, which is that when brands use first-hand data to personalise engagement with customers, it saves companies meaningful marketing spend and increases lifetime value. For brands facing growing headwinds, this means ROI today.”