Research has revealed a trust gap between UK brands and consumers – while 74% of companies state they do personalisation well, less than half of consumers (42%) agree.

Despite this, both parties agree that personalisation is key to increasing brand loyalty, with UK customers spending 43% more on their products when engagement is personalised. And while 70% of them believe that personalisation increases brand loyalty, 83% of consumers hold this view globally.

That’s according to to Twilio’s third annual State of Customer Engagement Report, which reflects findings from a survey of 3,450 business leaders and 4,500 consumers across 12 countries, including the UK.

With tech giants like Amazon and Netflix setting the benchmark for personalisation, customers now expect brands to deliver accurate, tailored customer services and experiences.

According to the survey, 70% of UK consumers believe that having personalised interactions with brands increases their chances of going back to that brand for a product or service, building positive relationships and increasing brand loyalty. This is even higher on a global level, with 83% of consumers agreeing that personalisation improves customer relationships with a brand.

Companies are in agreement on the importance of personalisation in their customer engagement strategy, as this translates into increased spend. Brands report that UK consumers spend 43% more on their products when interactions are personalised. For companies in the retail and eCommerce industry, personalisation is even more critical, with 91% of these companies rating personalisation as ‘extremely’ important for their customer engagement strategies.

Although consumers and brands agree on the importance of personalisation, consumers have a distrust of the way that brands are using their personal data. The survey reveals a trust gap: while 97% of UK businesses believe that their customers trust them to protect their data privacy, only two in five UK consumers (39%) have faith that these businesses will do so.

The results reveal that lack of transparency is the main reason customers have trouble trusting brands with their data. Findings suggest that 39% of UK consumers believe companies aren’t clear about how organisations use their data, and 40% don’t believe that businesses use only first-party consented data in their personalisation. Building strong relationships with customers, using personalisation, therefore requires businesses to address trust issues around data handling to add reassurance.

Other key findings from the report include:

• Brands need to become less reliant on third-party data. Significantly, 82% of UK companies have complete or substantial dependence on third-party data and would therefore be negatively impacted by losing access to it. With brands facing a cookieless future, first-party data will become more important to help them to understand and accommodate their customers with engagement strategies that meet expectations and needs.
• Businesses already recognise the importance of first party data. In fact, 96% of UK companies agreed that first party customer data insights lead to a better customer experience, with nearly half (47%) strongly agreeing.
• Companies also understand the potential value of compliantly using customer data well. Data shows that nearly all UK businesses (97%) agree that fully owning and using customer data will be their biggest growth lever over the next three years.

You can read the full report here.