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Personalization gets an upgrade: With the ethical use of AI, leaders shift focus to predictive, emotionally intelligent and customized engagements

by | Jun 27, 2024 | Public Relations

New research from customer engagement platform Twilio points to a new age of personalization as evolving consumer demands drive business leaders to focus on delivering predictive, emotionally intelligent, and highly personalized customer experiences. AI is central to this shift, with businesses utilizing more dynamic models and metrics, enhancing interoperability between tools such as customer data platforms (CDPs) and data warehouses, and prioritizing data privacy and the ethical use of AI.

The firm’s annual State of Personalization report is based on an online survey prepared by Method Research and distributed by RepData. The study, now in its fifth year, highlights perspectives and predictions from business leaders across twelve countries and a diverse range of industries, revealing that 89 percent of respondents believe the ethical use of AI can be a competitive business advantage, and over half (54 percent) of business leaders said they are addressing consumer concerns around data privacy and ethical considerations in AI by implementing robust privacy controls

personalization strategy

Twilio’s recent State of Customer Engagement Report found that almost half (49 percent) of respondents said they would trust brands more if they openly disclose the use of customer data and AI-powered interactions. With a careful balance of innovation, transparency, data privacy, and ethical best practices, organizations can maintain consumer trust as they leverage AI to deliver better customer experiences.

“Personalization is table stakes in the world of marketing. Today’s consumer not only expects brands to understand them, but they want brands to anticipate their needs, and AI is making that a reality,” said Robin Grochol, VP of product management at Twilio, in a news release. “In our latest State of Personalization Report, we found the majority of business leaders are making the shift from reactive to predictive personalization to help them deliver on increasingly sophisticated and dynamic consumer demands.”

personalization strategy

Gen Z’s preference for more personalization has fundamentally changed brands’ marketing approach

The report also found Gen Z are setting the trends that will shape the future of engagement. A generation of digital natives that grew up immersed in tech, Gen Z hold massive buying power and are breaking the traditional marketing funnel with their unique preferences, including higher expectations for authenticity, transparency, and engagement on their terms. It’s clear that businesses are receiving the message, as 85 percent of companies currently plan to adjust or optimize their marketing strategy to accommodate the unique needs and preferences of Gen Z consumers.

Predictive personalization, emotional intelligence, and other key trends are transforming personalization

In alignment with the demands of the Gen Z consumer, 86 percent of business leaders expect a significant shift from reactive to predictive personalization across the industry. Brands are pivoting to anticipate what’s next from consumers, using AI/ML to craft experiences tailored to individual needs and preferences. This proactive approach allows brands to actively engage customers with the right messages at the right time.

AI equips businesses with the ability to process massive amounts of data in real-time, providing the needed insights to craft dynamic engagement with customers. This is fundamentally changing the way brands can and will interact with customers. As part of this shift, 82 percent of leaders emphasize the importance of embedding emotional intelligence, or the ability to respond to human emotions, into AI systems. Additionally, 80 percent of marketers plan to adopt more sophisticated metrics (customer lifetime value, emotional engagement, and brand affinity) to measure the effectiveness of personalization beyond traditional engagement and conversion rates.

From marketing to customer service, the report found AI will become the silent partner helping companies address consumer expectations and harness data-driven insights to deliver targeted personalization. 

personalization strategy

Additional findings include:

  • 73 percent of business leaders agree that AI will change personalization and marketing strategies.
  • 58 percent of business leaders believe that AI chatbots will be the most impactful AI-driven personalization technology over the next 5 years.
  • By 2025, 59 percent of businesses surveyed expect their teams to be using AI daily.
  • 72 percent of companies are using a customer data platform (CDP) for personalization while 48 percent are using a data warehouse. A CDP’s strength in handling real-time, customer data meshes seamlessly with the robust, scalable environment of a data warehouse providing a dynamic approach to personalization.

Download the full report here.

Twilio Segment conducted this research from April 8 to May 5, 2024. The survey targeted 521 adults (age 18+) who are employed full time as B2B and B2C company directors or above in title. All respondents are from companies with more than 500 employees and are familiar with a company’s customer experience, marketing tech, or customer data strategies. The sample was split between 12 countries: US, UK, Australia, Brazil, Colombia, France, Germany, Italy, Japan, Mexico, Singapore and Spain.

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

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