Twilio has published its annual State of Customer Engagement Report, revealing a significant perception gap in Australia, between brand’s understanding of their customers and customers’ actual views.

The report delves into how brands are leveraging AI to enhance customer relationships and identifies key engagement trends, with findings derived from a comprehensive global study involving over 4,750 B2C executives and 6,300 consumers.

According to the report, there is a 45% gap in Australia between a brand’s perceived understanding of its customers and what consumers actually think. While 86% of Australian businesses believe they provide good or excellent customer engagement, only 54% of consumers agree.

The study also found that consumers globally spend 54% more on brands that personalise experiences. However, only 16% of brands have the necessary customer data to do so. In Australia, 85% of brands believe AI will improve customer engagement, but only 22% of consumers agree.

“Customers today expect personalised experiences, but Australian consumers are notoriously sceptical. Here we are seeing a lot of brands pouring resources into creating these experiences and deploying AI initiatives, but they are still not properly collecting and unifying the data they need to execute them properly, and consumers can tell,” said Area Vice President of APAC Sales for Twilio Segment, Liz Adeniji. “Brands need to invest in more foundational work around their use of data and consider other measures like improved data security to instil greater trust and ensure their AI and personalisation attempts aren’t missing the mark.”

The report also highlights the importance of transparency in AI-powered interactions. Approximately 49% of consumers globally would trust a brand more if it disclosed how customer data is used in AI interactions. For 60% of consumers, protecting their data is the top way for brands to earn their trust, though 64% of consumers would quit a brand if their experiences aren’t personalised. This tension was felt by businesses, with 40% reporting that finding a balance between security and customer experience is one of their most pressing challenges.

“It’s imperative for brands to be clear about how they use AI, ensuring that they balance how they deploy it with equally robust measures to protect customer privacy. Transparency is not optional – it’s a critical component of building and maintaining customer trust and loyalty,” Adeniji said.