Privacy Puzzle: Consumers Want Personalization, But Don't Trust Brands With Their Data

Consumers are becoming more selective.

Sixty-two percent say a brand will lose their loyalty by delivering an un-personalized experience — up from 45% in 2021. But only 40% trust firms with their personal data, according to The State of Personalization 2022, a study released Tuesday by Twilio Segment, based on surveys of businesses and consumers.  

That paradox is contributing to the use of privacy-sensitive first-party data. 

On the consumer side, 60% say trustworthiness and transparency are the most important brand traits -- up from 55% in 2021. Still, 65% worry that data is being collected without their permission.

But here’s the deal: 63% are comfortable if brands are using their own data, and not purchasing data.

Personalization works: 49% will likely become a repeat buyer after a personalized shopping experience -- and 38% will return even if there are cheaper or more convenient alternatives. 

Moreover, 80% will spend more — up to 34% — when the experience is personalized, 

Are companies delivering? Of those surveyed, 47% personalize based on real-time customer behavior, and 41% have a customer data platform.   

Yet only 35% feel they are successfully achieving omnichannel personalization, although that percentage has risen from 24% in 2021.  

Still, 40% say that obtaining accurate customer data for personalization is a challenge. And 37% are now using privacy-sensitive first-party data exclusively, versus 31% in 2021. 

Why focus on first-party data? They say: 

  • The data is higher quality — 54% 
  • It provides better privacy for consumers — 43% 
  • It’s easier to manage because they own it — 39% 

But data privacy regulations have made personalization more difficult, according to 50% of companies surveyed. That may be why 53% are investing in better technology to manage customer data in response to these changes.

“A customer data platform is the brain behind a company’s customer engagement strategy,” says Kathryn Murphy, general manager of Twilio Engage. “The ability to act on first-party data in real-time empowers businesses to go beyond the surface level to deliver hyper-personalization at scale.”

Working with Method Communications, Segment surveyed 3,002 consumers and 400 businesses in Australia, Brazil, Colombia, France, Germany, Italy, Japan, Mexico, Singapore, Spain, United Kingdom and the United States.

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