Twilio report shows why AI alone won’t drive loyalty

Twilio report shows why AI alone won't drive loyalty

For all the buzz around AI, it turns out customers are still human.

Twilio’s 2025 State of Customer Engagement Report makes it clear: brands that obsess over trust and timing, not just technology, are the ones winning hearts and wallets.

This article explores the key findings from Twilio’s sixth annual report, including why consumers are increasingly abandoning irrelevant experiences, and how personalization, transparency, and real-time engagement are the real growth levers in today’s AI-saturated market.

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What Twilio’s latest report reveals about customer engagement

Twilio surveyed more than 7,600 consumers and over 600 business leaders across 18 countries to understand the current state of customer engagement.

Their 2025 report zeroes in on a crucial insight: while AI is improving customer-facing operations and driving revenue, it is not closing the gap between what brands think they know about their customers and what customers actually feel.

Some of the most telling stats:

96% of companies say AI improves customer interactions
75% report increased spend from personalization
Only 45% of consumers feel understood by brands
71% say they will walk away from purchases if experiences lack relevance

The disconnect is glaring. Marketers are betting on tech, but customers want to feel seen, respected, and engaged in real time.

The trust-personalization gap: AI isn’t closing it

Personalization is no longer a nice-to-have. Twilio’s report shows that real-time relevance directly drives conversion and loyalty. When brands deliver on-the-spot engagement, 88% of consumers say they are more likely to buy. But only 44% of brands say they are executing at that level.

Meanwhile, trust remains fragile:

Only 15% of consumers absolutely trust brands with their data
84% want control over personalization settings
54% want to know when they are interacting with AI

Despite 83% of business leaders believing they understand their customers deeply, that confidence is not translating into customer perception. The gap has slightly widened since 2024, highlighting that AI alone is not enough to drive meaningful relationships.

Adding more tech does not automatically fix trust. What matters is transparency. Brands need to be clear about how data is used and when AI is in the mix.

What marketers should know

Marketers can’t afford to treat trust, timing, or relevance as afterthoughts. Twilio’s data signals a shift: customers are rewarding brands that personalize responsibly and communicate transparently. Here’s what to take away:

1. Real-time CX is the new baseline

If 71% of consumers will abandon a purchase due to irrelevant experiences, your martech stack needs to support real-time personalization across channels. Static segmentation will not cut it.

Tip: Invest in real-time CDPs and event-driven engagement tools that update customer profiles dynamically and trigger tailored responses in the moment.

2. Transparency is a trust multiplier

With 61% of consumers skeptical about how brands use their data, vague cookie notices are not enough.

Tip: Make personalization opt-ins clear and give users granular control. Let them know when they are talking to a bot. Brands that lead with transparency will stand out.

3. AI is not the villain, but it is not the hero either

Despite AI fatigue (55% of consumers are tired of hearing about it), smart use of AI is still delivering results when used to support human-centered engagement.

Tip: Use AI to scale insight, not empathy. Train your systems to support personalization efforts, but let real people handle loyalty-building moments.

4. Relevance must scale with compliance

Businesses are feeling pressure from all sides. 53% say their biggest challenge is keeping pace with shifting customer expectations, and 45% cite data privacy as a top concern.

Tip: Focus on zero-party and first-party data strategies. Ensure your data stack is built to flex with global privacy regulations without sacrificing personalization.

Twilio’s latest report is a reality check for marketers still betting that AI alone can drive loyalty. Customers want relevance, yes, but they want it on their terms with transparency, control, and real-time value.

Loyalty is not a product of smarter tech. It is a result of smarter trust-building.

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