The State
of Customer Engagement Report
2023
Brands are doing more with less — and meeting soaring consumer expectations — by using real-time personalization and zero-party and first-party data
Executive summary
The past year has mandated a new approach to business. Facing economic uncertainties and a contraction of marketing budgets, brands know they need to do more with less.
To create Twilio’s annual State of Customer Engagement Report, we incorporated insights from 4,700 B2C leaders in key sectors across the world as well as more than 6,000 global consumers, plus data from our own customer engagement platform, including Twilio Segment, a CDP.
We found that, in 2023, the most successful brands use digital customer engagement to drive growth and increase resilience in a rapidly changing landscape. Sixty percent of brands say that investing in digital customer engagement has improved their ability to meet changing customer needs.
Three macro-influences are driving this change:
- The direct-to-consumer revolution
- The urgent need to protect consumer privacy
- The continued digital transformation of all business
These trends span industries, countries, and organization types — and they demand a response. Engagement strategies need to empower companies to address their customers’ needs in real time. Indeed, first-party data — and zero-party data — are critical to keep customers engaged in this new environment.
It’s also critical to move beyond data collection and into data activation. In a data-saturated world, companies need the ability to not just collect and organize, but to actually make use of customer data in real time.
The future is bright for businesses that have a sharp, forward-looking plan to make the most of a highly personalized landscape without compromising on data safety and privacy.
Maturity model
Our respondents were divided into three groups: leaders, framers, and beginners.
Customer engagement leaders, while working hard to develop and execute omnichannel customer engagement, are seeing the biggest results from their investments in digital customer engagement. In a macroeconomic environment where more organizations are doing more with less, with the intention of retaining customers and lowering the cost of conversion, customer engagement leaders are more likely to be resilient.
Engagement leaders were more likely than low-maturity brands to report their customer retention rate was ‘much higher’ than the previous year (40% vs. 12% of low-maturity brands)
Engagement leaders were more likely than low-maturity brands to report their customer conversion rate was ‘much higher’ than the previous year (41% vs. 15% of low-maturity brands)
Five key takeaways emerge from the data in this report. These core principles are crucial for brands that want to improve customer engagement in 2023.
Investment in digital customer engagement increased revenue by 90% on average.
- Consumers' patience for impersonal experiences hits a low66% of consumers say they will quit a brand if their experience isn’t personalized.
- Real-time personalization improves customer lifetime value86% of consumers say that personalized experiences increase their loyalty to specific brands.
- Consumers want a faster transition to a cookieless future95% of consumers want more control over their customer data, placing top priority on “identity data.”
- Consumers trust brands less than brands realize98% of consumers want brands to do more to guarantee the privacy of their data, as well as be more transparent about how their data is used.
- Balancing security and customer experience is vital42% of brands say that their top customer engagement challenge in 2023 is finding a balance between security and customer experience.
Explore the trends
Explore the future of customer engagement
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Methodology
When putting together the State of Customer Engagement Report 2023, Twilio focused on three key sources:
- Insights of more than 4,700 B2C leaders in key sectors across the world
- Views of over 6,000 global consumers
- Data from our own customer engagement platform, including Twilio Segment, a CDP
In this interactive presentation, you can explore the data, comparing results for different countries and industries.
For a complete, 28-page presentation and discussion of the survey results, download the free PDF.
2023 State of Customer Engagement Report
Download the report to gain insight to the full findings from over 4,700 business leaders and 6,000 consumers across the globe.