2023 state of customer engagement: Solving disconnects between brands and consumers on CX and AI

by | Feb 28, 2023 | Public Relations

Newly released research from conversational AI firm LivePerson provides a detailed look at how both enterprises and their customers view digital experiences, conversational commerce, and chatbots and AI—revealing a significant disconnect between what brands deliver and what consumers actually want.

The firm’s 2023 State of Customer Engagement report finds large gaps between how brands think about and execute customer engagement strategies, and what their customers want from these exchanges—and reveals how brands can close these gaps by creating more personalized experiences, using conversational tools instead of cookies, and leveraging AI to create better engagement.

2023 state of customer engagement: Solving disconnects between brands and consumers on CX and AI

Key learnings from the report include:

Brands think they’ll get a break when times are tough, but their customers are actually getting more critical

With brands currently operating in an environment where they’re having trouble hiring and are looking for ways to cut costs—typically causes of degraded customer engagement—62 percent of consumers say they’re actually more critical of how brands engage them now than they were a year ago.

For example, 57 percent of consumers say long wait times matter more to them now than they did a year ago—but troublingly, 77 percent of brands believe the opposite.

On top of that, 40 percent of consumers say they’d switch to a competitor if a brand took more than 30 minutes to reply—even if it was their favorite brand.

Consumers—especially Gen Z—will spend more when they get personalized experiences, but brands’ traditional personalization methods turn them off

About three-quarters (76 percent) of consumers—which increases to 81 percent for ages 18-24—said they are more likely to make a purchase if they feel a personal connection with a brand. However, they don’t want to feel like they’re being tracked.

More than half (58 percent) don’t want brands to use cookies to track their activity for better personalization, but 81 percent of brands say it’s highly important that they do. Worse, 50 percent of brands think consumers prefer cookies over being asked for information directly in a conversation, when in reality, 69 percent of consumers feel comfortable doing so.

“There’s a number of sharp disconnects between brands and consumers when it comes to customer engagement. While brands give themselves high marks, their customers are actually getting more impatient,” said Rob LoCascio, founder and CEO of LivePerson, in a news release. “Luckily for brands, consumers report they’re looking for personalization, conversation, and automation—all of which are achievable through smart use of AI.”

2023 state of customer engagement: Solving disconnects between brands and consumers on CX and AI

Consumer sentiment toward messaging and AI is highly positive, but brands have yet to fully capitalize on the opportunity.

Consumers, especially Gen Z, continue to embrace automation and messaging with brands. When it comes to preferred channels, 75 percent—and 83 percent for ages 18-24—are more likely to purchase if they can message with a brand rather than call.

On top of that, all age groups say experiences driven by automation and AI increase their loyalty. An all-time high number of consumers (62 percent) feel positive about engaging with chatbots, and 68 percent say that communicating with automations to resolve issues faster increases their loyalty to a brand. Strikingly, 60 percent of 18-24 year olds would rather interact with a chatbot than a human to find a product.

Brands appear to understand this, and are working toward improving these experiences. When asked if they are currently evaluating or planning to implement AI or automated solutions for customer engagement within the next six months, 89 percent of brands said, “yes” and 85 percent said that AI is extremely or very important to their customer engagement strategies.

However, brands appear to be giving themselves better marks than their consumers do

When asked how mature their company’s use of AI is today, 78 percent rated themselves excellent or good. Yet only 43 percent of consumers say that brand chatbots are currently “easy to use.”

“With positive sentiment toward AI at a record high, and Generative AI in particular creating a groundswell of excitement, it should trouble brands that less than half of their customers currently find chatbots easy to use,” said Ruth Zive, CMO at LivePerson, in the release. “When it comes to using AI to drive better business outcomes, It’s clear that there’s significant room for improvement. Brands should be mindful of the fast-evolving AI landscape and learn about emerging capabilities that can help them continuously draw insights and elevate customer experiences.”

2023 state of customer engagement: Solving disconnects between brands and consumers on CX and AI

Access the full report here.

In November 2022, LivePerson commissioned an online survey of 2,517 consumers aged 18 and older, as well as 1,022 executives at B2C brands with more than 500 employees. Respondents were based across the USA, UK, and Australia.

Richard Carufel
Richard Carufel is editor of Bulldog Reporter and the Daily ’Dog, one of the web’s leading sources of PR and marketing communications news and opinions. He has been reporting on the PR and communications industry for over 17 years, and has interviewed hundreds of journalists and PR industry leaders. Reach him at richard.carufel@bulldogreporter.com; @BulldogReporter