Presented by Twilio

With the current surge of generative AI advancements, consumers expect all of their interactions with brands to be personalized. These expectations around personalization have pushed many companies to implement AI in order to deliver more unique, engaging and satisfying experiences for their customers.

In fact, Twilio’s 2024 State of Customer Engagement Report, which features insight from 4,750 business leaders and 6,300 consumers worldwide, found that 76% of businesses said delivering personalized customer engagements is a “high” or “critical” priority for them this year -- and they see deploying AI as the key to achieving that goal.

However, only 16% of companies surveyed believe they have the data they need to understand their customers’ wants and needs.

For companies that want to fully capitalize on AI to build better customer interactions, the takeaway is clear: don’t waste your effort implementing AI without first building a robust customer data foundation.

Here’s how companies can do just that, and unlock the potential of their customer relationships. It starts with building direct relationships in order to know your customers; creating comprehensive customer profiles; and activating “stuck” customer data.

Know your customers

Many companies believe they understand their customers, though this year’s research revealed a stark disconnect between customer expectations and what companies actually deliver. Fully 81% of companies said they have a deep understanding of their customers, but less than half (46%) of customers agreed.

To win and keep customer loyalty, businesses need to build direct, digital relationships with their customers that are not mediated by a third party advertiser or vendor. This is key to closing the gap between customer expectations and reality.

Our research identifies a set of “Engagement Leaders,” or brands that effectively model how businesses can build relationships with customers. This group of brands does better across the board at understanding their customers, and showing it. They deliver omnichannel engagement, personalize customer experiences and use first-party data rather than third-party cookies to inform their interactions. These brands use AI to end the age-old method of one-to-many personalization and deliver unique experiences for individual customers.

What’s most compelling is that these brands’ strategic investments pay off, with an average revenue increase of 123%, and higher customer retention rates than other brands. And they make clear what other companies that invest in understanding their customers stand to gain: improved conversion rates, better customer retention and higher ROI from their investments in AI and personalization.

Replace siloed customer data with a unified view of your customer

Twilio’s 2024 State of Customer Engagement Report also found that 64% of companies are using AI to build a unified view of every customer by combining data from multiple sources, standardizing data formats, filling in missing values, reconciling inconsistent data and deduplicating information.

Building one unified customer profile delivers outsized benefits and enables businesses to have critical context about each of their customers in real time.  A unified profile summarizes all of the customer’s engagements with the company and helps outline the customer’s intent and interests. It can even predict future user behaviors, like a high propensity to purchase or churn. This 360-degree view of the customer allows companies to adapt to changing customer needs, and deliver the right message to the right person at the right time.

For example, Universidad Uk, which offers 100% online education across Latin America, uses Twilio's Unified Profiles and Agent Copilot solutions, which bring gen AI technology and real-time customer data into the Twilio Flex platform to deliver personalized customer experiences.

“In just two months, we've seen significant improvements in our support operations and student interaction,” said Iván Cantú, COO of Universidad Uk. “We've reduced the average handling time for academic inquiries by 30% and, by deploying an AI bot informed by Unified Profiles in real-time to handle a majority of student queries, deflected 70% of our support cases. Combining real-time data from various sources into Flex has enabled us to streamline our communication processes and proactively support students in Latin America and Spanish speakers in the U.S.”

Activate your customer data

Siloed data is a headache for many businesses and the culprit behind disjointed and generic customer experiences. But siloed data in a generative AI era is a recipe for disaster. Silos prevent companies from accessing real-time data to fuel AI-powered engagement with a customer, that in turn generate more refined information about your customers’ preferences, and so create a continuous loop of improvement. Siloed data equals static customer relationships that are unable to evolve and adapt to customers' changing needs and behaviors. Moreover, relying on inaccurate or poor-quality data can impair AI models and generate misleading outputs or 'hallucinations.' These inaccuracies skew the understanding of customer preferences, which leads to bad experiences that erode customer trust and loyalty.

Fortunately, locating and using data “stuck” in your stack -- e.g. customer data spreadsheets, a storage system like a data warehouse or in the software it originated in -- does not require an IT infrastructure overhaul. Many companies have implemented tools and technologies like customer data platforms (CDPs) and customer engagement platforms (CEPs). The next step is using AI to create integration and interoperability between them. Our research found that 47% of brands plan to do just that by adding AI capabilities to their CDPs or CEPs by 2025.

An example of a company getting this right is CraftJack, which helps homeowners find skilled, reliable contractors in their areas. By connecting CraftJack's existing customer engagement channels with Twilio Segment’s CDP, CraftJack fuels campaigns with reliable, up-to-date customer data and delivers personalized communications.

Additionally, businesses can leverage tools like Twilio’s Agent Copilot and Unified Profiles, which leverage generative AI and real-time customer data to help businesses deliver consistent customer experiences.

How a business activates its customer data is the foundation for cohesive, customized experiences and foundational to unlocking rewards from any AI investment.

Personalized interactions have long been a priority for companies. Recent advances in generative AI offer more than just a step-change in personalization, but a true transformative and generational change in how businesses engage customers. Now is the time for businesses to build a strong customer data foundation to seize the moment and exceed their customers’ expectations. 

To learn more about how businesses are unlocking their data and leveraging AI for better engagement, check out Twilio’s most recent research here.   

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