Is Data Inadequacy an Obstacle to AI?

Findings from Twilio, a customer engagement platform, indicate that businesses are advancing well in integrating artificial intelligence (AI) to enhance customer interactions. However, they encounter notable hurdles due to insufficient customer data and a lack of transparency in its utilization.

Twilio's latest State of Customer Engagement Report underscores the increasing significance of brands openly communicating their utilization of customer data to facilitate AI-driven interactions. However, it also highlights a disparity between brands and their customers regarding this transparency. Although 93% of UK brands claim transparency in disclosing how AI utilizes customer data, only 40% of customers concur.

Derived from a worldwide survey spanning 18 countries and involving over 4,750 B2C executives and 6,300 consumers, the report delves into the ways brands are integrating AI to foster stronger connections with their customer base. It examines where AI is generating the highest returns for brands, as well as which engagement trends hold the utmost significance for consumers. Further insights specific to UK consumers are also provided.

- The most effective approach to preserving trust involves striking a balance between security measures and enhancing customer experience. According to this year's findings, 64% of UK consumers consider safeguarding their data as the primary method for brands to earn their trust. Additionally, nearly half (49%) of global consumers express that they would trust a brand more if it openly communicated how customer data is utilized in AI-driven interactions. Conversely, 40% of businesses perceive achieving this equilibrium between security and customer experience as one of their foremost challenges this year.

- Artificial intelligence (AI) is playing a pivotal role in narrowing the gap in customer experience, yet many businesses still grapple with data adequacy. While 27% of UK businesses assert they deliver 'good' or 'excellent' customer engagement, merely 9% of UK consumers share this sentiment. AI adoption is aiding this effort, with nearly seven in ten UK companies already leveraging it to tailor customer experiences. However, 69% of UK brands identify inaccurate data or a deficiency in first-party data as significant hurdles hindering their understanding of customers. Globally, only 19% of businesses strongly affirm having a comprehensive understanding of their customers.

- When customers receive personalized experiences, they tend to increase their spending, whereas they are inclined to seek alternatives if a brand fails to provide this customization. In the UK, 47% of consumers are inclined to spend more money with brands that personalize their engagement, compared to those that do not. Additionally, 45% indicate they have made repeat purchases from companies based on the degree of personalization they've experienced. Furthermore, a significant 78% of consumers abandon a brand altogether if their experiences lack personalization.

Kathryn Murphy, Senior Vice President of Product at Twilio, commented, "Today's customers anticipate personalized experiences and seek transparency regarding how businesses utilize their data to tailor those experiences."

"Brands must prioritize clarity regarding their AI utilization, ensuring a careful balance between deployment strategies and robust safeguards for customer privacy. Transparency isn't just a choice; it's an essential element in fostering and sustaining customer trust and loyalty."

Twilio's State of Customer Engagement Report draws from a survey encompassing over 4,750 B2C executives across various industries and a simultaneous survey involving more than 6,300 consumers across 18 diverse countries. Additionally, it integrates insights from Twilio's Customer Engagement Platform.