The role of marketers has shifted dramatically in the past few years. Legacy marketing strategies may have been data-driven, but that data was often overwhelming in volume, siloed between different applications and difficult to act on.
How much things have changed. Today’s marketers have far more customer data available to them, and the priority now is on data that drives ROI. New data technologies allow marketers to break down the old siloes, enabling them to more easily leverage that data to improve customer retention, conversion and long-term loyalty.
When done right, these efforts can save precious marketing dollars in the short-term and make a massive difference to their company’s financial goals and long-term resilience.
Customer data drives business impact
New research from Twilio, based on a survey of more than 4,700 business leaders and 6,000 consumers across the globe, shows that investment in digital customer engagement increased brands’ revenue by 90% on average in 2022, up from 70% the previous year.
Companies that have made the biggest commitments to digital customer engagement—by investing in real-time personalization, first-party data and digital channels for customer interaction—have reaped the biggest rewards.
Among these customer engagement leaders, 82% met or exceeded their company’s financial goals for 2022, compared to 62% of customer engagement beginners. Meanwhile, 40% of engagement leaders reported much higher customer retention rates than previous years, compared to 12% of beginners. They saw higher conversion rates too, with 41% of engagement leaders reporting much higher customer conversion rates than previous years, vs. 15% of beginners.
In other words, for marketers who effectively embraced customer engagement, 2022—for all its turbulence and uncertainty in the macro view—was a year of growth.
Part of the power of customer data is that it can drive results beyond just generating and converting leads. Brands that embrace data across the entire customer journey—from prospect to sale to customer support—are reaping measurable financial rewards.
When marketers take the lead in understanding customer journeys, the data puts them on top of the wave, instead of being pummeled by it. This allows them to generate results that extend much further than the traditional marketing funnel.
Let’s look at three strategies that marketing leaders are using to turn customer data into business impact.
Embrace real-time personalization
Global consumer expectations are higher than ever when it comes to personalization, and two-thirds of consumers will stop using a brand if their experience is not personalized.
But personalization expectations have evolved. It’s no longer enough to put the person’s first name in an email subject line; the email needs to be more deeply tailored to the customer’s specific interests. It’s also not enough to direct retargeting ads at potential customers who have visited a website; in fact, brands need to ensure that those ads get turned off as soon as the customer has actually made a purchase.
Unfortunately, most companies aren’t doing as well as they think they are with personalization. Twilio’s research shows that 46% of brands believe they’re doing a pretty good job at personalization, but only 15% of consumers agree.
To convert, retain and build loyalty with customers, brands need to up the ante with real-time personalization that leverages data from the entire gamut of customer interactions. To do this effectively, businesses need to merge the complete history of each customer into a single, unified, “golden” profile, then use that to deliver tailored content like product recommendations or loyalty program invitations.
Ultimately, this empowers businesses to drive down acquisition costs and to increase customer lifetime value, by delivering hyper-personalized engagement, campaigns and communications.
For example, fitness brand CrossFit reports that by using Twilio tools like Segment Unify, it’s able to bring together data from every customer interaction and source, create sophisticated customer profiles, and then reach athletes, coaches and affiliate owners with better, more tailored communications. In fact, tactics like personalized local gym recommendations and virtual contests have proven to boost customer satisfaction.
As the CrossFit team has built up their digital presence in recent years, this data-driven approach to personalization has truly allowed them to better engage and expand their tight-knit fitness community.
Bet on first-party data
Consumers dislike third-party cookies, and they’re increasingly opting to reject them altogether. Almost one-third of consumers polled by Twilio said they always or often reject website cookies when given the option. With browsers like Safari and Firefox already blocking third-party cookies and Google Chrome planning to block them next year, brands need to shift to a new strategy now to survive.
Although it seems the cookie deprecation deadline has been kicked down the road over and over, the most successful marketers are actually making the move to collect and activate not just first-party data, but zero-party data, which is data that consumers explicitly choose to give them. For instance, by filling out a new-customer form or answering a questionnaire.
To make the shift, companies need to clearly articulate a first- and zero-party data approach. Collecting, activating and using this data should be at the core of any successful marketing strategy in 2023.
Close the trust gap
To get the right data from customers, brands need to win their trust. However, Twilio’s research found that the trust gap between consumers and brands is widening.
For example, 98% 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. This lack of trust can have serious consequences: Four out of 10 consumers said they stopped doing business with a brand after their privacy and transparency requirements were not met.
To succeed in winning customers’ trust, companies need to implement effective data security protocols, treating customer data as precious information. More than that, though, they also need to communicate how they are using (and protecting) their customers’ data.
While balancing security and user convenience always requires a careful touch, consumers may be more forgiving than brands expect. Of those consumers surveyed by Twilio, 83% said they trust brands more when their account identity is verified and authenticated. Therefore, the process of building trust and transparency begins with the login screen.
Customer engagement delivers
Consumers demand personalization. They’re savvy enough to know the difference between fill-in-the-blank personalization and true personalization, which offers perfectly timed recommendations and offers, as well as interactions with a brand that feel like the continuation of an ongoing conversation.
Marketers that can offer these kinds of experiences while leveraging first-party data in a secure and transparent way that will win customers—and loyalty—for their brands.
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Kathryn Murphy has over 20 years of experience in product management, design and engineering with a deep domain in retail, commerce, payments, customer data platforms and multichannel marketing. As product and UX leader for the Twilio data and apps organization, she led the growth of next generation marketing tools built on the customer engagement platform.
