Businesses have access to more customer data today than ever before. However, this abundance of information comes with increased customer scrutiny—customers are increasingly, and justifiably, opinionated about how their data is used, especially with the growing adoption of AI. According to Twilio’s latest State of Customer Engagement Report, 70% of companies are already using AI to personalize content and marketing, making it more important than ever to prioritize using robust, accurate, and consented data to successfully leverage AI. The companies that are getting it right have cracked open a massive opportunity to boost the bottom line – the report shows that they’re seeing higher customer satisfaction scores, better data-driven decision-making, and improved market segmentation and targeting. Yet, challenges like incomplete customer profiles and privacy concerns hinder many from achieving their full AI potential.
Ditch data gossip for first-party and zero-party data
Instead of relying on third-party cookies or “data gossip”—data that businesses trade behind consumers’ backs—companies aiming to build long-term customer relationships should focus on first-party data: customer data that is unique to the business, such as user behavior on its own websites and apps. Even better, brands can start to build their collection of zero-party data, which customers intentionally and proactively share. With the aid of AI, businesses can now tailor brand experiences more effectively, treating each customer as a unique individual based on their past preferences and interactions, at scale. Brands can now deliver a curated, unique experience to the right audience at the right time, so that every interaction is more efficient and targeted. AI can also predict a customers’ next moves and what is likely to garner a response, improving customer retention and loyalty. For example, electronics company Arduino uses AI to trigger advertising campaigns tailored to specific types of website visitors—casual browsers and those ready to purchase. By activating their first-party data with AI, Arduino is able to predict customers’ shopping intentions while still protecting sensitive data and ensuring GDPR compliance.
Consumers understand the differences between data they willingly provide and the third-party data that brands “rent” from social networks, search engines, and ad networks. They increasingly expect brands to be transparent about what personal data they collect, and to manage that data responsibly. Transparency about data collection and usage is not optional—it’s essential. Nearly half of consumers would trust brands more if they disclosed AI data usage, and 60% prioritize data protection. This era demands that brands not only collect data responsibly but also use it to genuinely benefit the consumer.
Real-time personalization with zero privacy compromises
Personalization is no longer just a nice-to-have; it’s a must. Our research shows that 55% of consumers will spend more with a brand that personalizes their experiences, while 48% have made repeat purchases based on the level of personalization they received. That’s a powerful increase in customer value.
Fortunately, consumers understand that their data is crucial to delivering these personalized experiences. It’s a tradeoff they’re willing to make, as long as the personalization payoff is worth it.
Effective personalization should occur in real-time and use accurate, rich, and consented data about the customer, like their recent purchases and behavior on the brand’s websites and apps. Merely using a customer’s first name in an email is not enough, and retargeting them with ads for a product they bought earlier that day is off-putting. Real-time personalization, enriched by AI, is key to making data collection worth it to the customer. Consider CraftJack, which connects homeowners to contractors for maintenance and home improvement projects. Before investing in a robust customer data infrastructure, CraftJack was stuck sending generic communications that failed to inspire customers’ trust when inviting service providers into their homes. In unifying and activating its customer data, CraftJack is now able to deliver personalized, specific and real-time communications about each and every service interaction, fostering a more seamless, trusted customer experience.
Prioritizing trust and transparency
In the competitive market, trust is the cornerstone of customer loyalty and a strong bottom line. Coupled with the rise of AI, brands need to collect, manage, and use customer data in a way that prioritizes transparency and delivers real value to consumers through real-time personalization.
