• Consumers became more critical of customer engagement over the past year, and disagree with the high marks brands give themselves for personalization and automation
  

• Positive sentiment toward AI experiences rises to an all-time high, with Gen Z shoppers most excited about getting help and making purchases through automation

LivePerson, a global leader in Conversational AI, revealed the results of its 2023 State of Customer Engagement report, providing a detailed look at how both enterprises and their customers view digital experiences, conversational commerce, and chatbots and AI.

The report, based on survey results from over 2500 consumers and more than 1000 brand executives, finds that there are large gaps between how brands think about and execute customer engagement strategies, and what their customers actually want. The survey also reveals how brands can close these gaps: creating more personalized experiences, using conversational tools instead of cookies, and leveraging AI to create better engagement.

Key learnings from the 2023 State of Customer Engagement 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% of consumers say they’re actually more critical of how brands engage them now than they were a year ago.

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

On top of that, 40% 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.

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Consumers (especially Gen Z) will spend more when they get personalized experiences, but brands’ traditional personalization methods turn them off.
76% of consumers (81% 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%) don’t want brands to use cookies to track their activity for better personalization, but 81% of brands say it’s highly important that they do. Worse, 50% of brands think consumers prefer cookies over being asked for information directly in a conversation, when in reality, 69% 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. “Luckily for brands, consumers report they’re looking for personalization, conversation, and automation — all of which are achievable through smart use of 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% (83% 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%) feel positive about engaging with chatbots, and 68% say that communicating with automations to resolve issues faster increases their loyalty to a brand. Strikingly, 60% 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% of brands said, “yes” and 85% 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% rated themselves excellent or good. Yet only 43% 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. “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.”

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