LivePerson's 2023 State of Customer Engagement report reveals sharp disconnects between brands and consumers on CX and AI

Rhea-AI Summary

LivePerson (NASDAQ: LPSN) has released its 2023 State of Customer Engagement report, based on surveys of over 2,500 consumers and 1,000 brand executives. The findings highlight a disconnect between brand perceptions of customer engagement and consumer expectations. Key insights reveal that consumer expectations are rising, with 62% becoming more critical of engagement quality. Notably, 76% of consumers are likely to purchase when feeling a personal connection, yet many reject tracking methods like cookies. Despite 89% of brands planning AI improvements, only 43% of consumers find brand chatbots easy to use.

Positive

• 62% of consumers are more critical about brand engagement now than last year.
• 76% of consumers likely to purchase from brands providing personalized experiences.
• 89% of brands plan to implement AI solutions for customer engagement.
• Positive sentiment towards messaging and AI is at an all-time high.

Negative

• 77% of brands believe consumer engagement is improving while 62% of consumers feel otherwise.
• Only 43% of consumers find brand chatbots easy to use.
• 58% of consumers prefer not to be tracked by cookies, contrary to 81% of brands who emphasize their importance.

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

NEW YORK, Feb. 15, 2023 /PRNewswire/ -- LivePerson (Nasdaq: LPSN), a global leader in Conversational AI, today 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.

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."

To read the full 2023 State of Customer Engagement report, visit LivePerson's website.

About the survey
In November 2022, LivePerson commissioned an online survey of 2,517 consumers aged 18 and older, as well as 1,022 executives at B2C brands with more than 500 employees. Respondents were based across the USA, UK, and Australia.

About LivePerson, Inc.
LivePerson (NASDAQ: LPSN) is a global leader in Conversational AI. Hundreds of the world's leading brands — including HSBC, Virgin Media, and GM Financial — use our Conversational Cloud platform to engage with millions of consumers as personally as they would with one. We power nearly a billion conversational interactions every month, providing a uniquely rich data set to build connections that reduce costs, increase revenue, and are anything but artificial. Fast Company named us the #1 Most Innovative AI Company in the world. To talk with us or our Conversational AI, please visit www.liveperson.com.

Contact:
Mike Tague 
mtague@liveperson.com

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SOURCE LivePerson, Inc.

FAQ

What does the 2023 State of Customer Engagement report by LivePerson reveal?

The report reveals significant gaps between how brands view customer engagement and what consumers actually desire, highlighting increased consumer criticality.

How do consumers feel about AI and chatbot interactions according to LivePerson's report?

Consumers, particularly Gen Z, report positive sentiments towards AI and chatbots, with 62% feeling positive about engaging with chatbots.

What percentage of consumers are likely to switch brands due to poor engagement?

40% of consumers would switch to a competitor if a brand took more than 30 minutes to respond.

How important is personalization to consumers based on the report findings?

76% of consumers are more likely to purchase when feeling a personal connection with a brand.

What challenge do brands face according to the 2023 State of Customer Engagement report?

Brands rate their AI usage as mature, but only 43% of consumers find brand chatbots easy to use, indicating a disconnect.