Can brands balance personalisation and privacy in 2025?

The promise of personalized experiences has captivated both brands and consumers. Yet, as companies delve deeper into data-driven strategies, a critical question arises: Can businesses deliver tailored experiences without compromising consumer trust? A recent study suggests that while Australian consumers crave personalization, they are wary of the privacy implications.

Growing consumer scepticism towards AI, the emergence of the ‘silent treatment’ responses to both positive and negative brand experiences, a call for brands to get back to basics, and the essential role of trust in the privacy and personalisation debate are just some of the findings in Qualtrics’ fourth annual Consumer Experience Trends report. Australian consumers are torn when it comes to getting a personalised experience. Almost two-thirds (60%) say they prefer to buy from companies that tailor their experience. But 52% are concerned about the privacy of giving up their personal information to get one, and just a quarter (25%) trust companies to use their data responsibly. When consumers do trust companies with their personal information, they are much more comfortable with their data being used to tailor experiences to them. 

The Qualtrics 2025 Consumer Experience Trends report reveals:

• AI scepticism grows: Only 14% of Australian consumers trust organisations to use AI responsibly, signaling a shift from initial excitement to growing scepticism. 
• Consumer pain points: Despite fewer bad experiences, major pain points like poor communication and service delivery issues persist. If not addressed, these issues may lead to decreased consumer spending.
• The ‘Silent Treatment’: Consumers are increasingly staying silent about their experiences, whether good or bad, which makes it difficult for organisations to gauge customer satisfaction.
• Balancing privacy and personalisation: While consumers want tailored experiences, there is discomfort with companies using unsolicited data to personalise interactions.  
• Back to basics for building trust: Trust is closely linked with customer loyalty and the best way for organisations to maintain it is by reliably delivering on their promises. 

AI scepticism grows

Most consumers in Australia (86%) are placing low trust in local organisations to use AI responsibly. As a result, comfort levels with the technology have dropped 9% over the last year – from checking an order through to seeking medical advice. Concerns regarding customer service when using AI have heightened too; specifically having a human agent to connect with (61%), misuse of personal data (56%), and the belief people will lose their jobs (54%). 

“Consumers in Australia are some of the biggest sceptics anywhere in the world when it comes to AI,” said Isabelle Zdatny, Customer Loyalty Specialist, Qualtrics. “Companies are more excited than consumers about using AI, and there’s a lot of work to do to persuade people of the benefits. The best uses of AI right now in customer experience are when it’s focused on solving issues or problems people care about.”

Consumer comfort using AI for specific tasks

Consumer pain points

The leading cause of poor customer experience in Australia is communication problems (46%), followed closely by service delivery issues (44%), and pricing concerns (39%). For brands, the consequences of poor experiences are costly, with 54% of consumers cutting spending after receiving one – a figure that has remained stable over the last year.

Through 2024, consumers have reported a higher volume of poor experiences with brands in must-have industries, such as government, telco, and utilities, while-nice-to have sectors, including streaming services and retailers, provided the least.

“There is no excuse for getting the fundamentals of good customer experience wrong, but too often consumers are saying this is what’s happening with poor communication and service issues. Nice-to-have industries continue to raise the bar on what good customer experience looks like, and with more than half of bad experiences ending in a spending cut, businesses and governments can no longer afford to fall behind,” said Zdatny.

The ‘Silent Treatment’

For businesses, the challenge of meeting expectations is compounded by a growing number of consumers giving brands the silent treatment – when they’re happy and annoyed. Since 2021, consumers in Australia are 6 percentage points less likely to say something about a bad experience. 

When people do say something, the most common response is to tell family or friends. Less than a third of consumers share feedback directly with a company, and they are least likely to post something on social media. 

“Customers are giving brands the silent treatment, and if organisations don’t find a way to fix this issue, we could see more disgruntled consumers in Australia,” said Zdatny. “Customers are expecting a better experience, but simultaneously they’re not willing to share the insights brands need to deliver one. Overcoming this gap requires brands to rethink how they engage with customers and go beyond the traditional feedback survey.”

Consumer response after a very good experience

Consumer response after a very bad experience

Consumer comfort with companies using information for personalised experiences

Back to basics for building trust

What consumers care about most is that they can trust what a business tells them. Setting accurate expectations is more valuable to consumers than speed or convenience, and new products and services must not come at a cost to the customer trust organisations have already earned. 

“It’s dangerous to assume existing customers will stay loyal without intentional effort to keep them. To deliver a great customer experience, following through on the most basic commitments and delivering what’s been promised is what’s most important to consumers,” said Zdatny.

Consumer priorities when interacting with organisations

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 A recent survey reveals a privacy paradox: Australians desire personalized experiences but are hesitant to share data. News, Brand Dynamic Business