What every CMO should know about consumer behavior

A look at what’s changed with consumers in the last 12 months

For the second year running, Dotdigital has commissioned independent consumer research to surface the trends, behaviors and expectations that most marketing teams simply don’t have the time, budget or resources to find themselves.

Last year’s report, The loyalty divide, drew on responses from 3,000 consumers and explored what was driving a growing divide between what consumers expected from brands and what marketers thought they wanted. This year, we went bigger and surveyed 4,000 consumers across the UK, USA, Australia and Singapore to create the Customer trend index, which looks at the full customer journey, from brand discovery to advocacy. This broader view reveals that trust is now the deciding factor at every stage of the customer journey. 

The report identifies what’s changed in the last 12 months and the impact those changes could have on the success of your marketing strategy and tactics.

1. Consumers expect more from personalization

One of the most striking findings from this year’s research is the sharp decline in consumer satisfaction with personalization. The proportion of consumers who feel brand communications are “just right” in terms of personalization has dropped from 78% to 61% in a single year. Similarly, perceived relevance of marketing has fallen even further, from 23% to 15%.

The tempting interpretation is that brands need better data. But the more accurate reading is that the bar has moved. Consumers have experienced enough genuine personalization (the kind that feels considered) to know the difference between a brand that actually understands them and one that’s just using their first name in a subject line.

Brands are sending more, but they’re landing less, so it’s not a volume problem; it’s a relevance problem. And relevance, as Byron Sharp and the Ehrenberg-Bass Institute have long argued, is about salience: being meaningfully noticed by the right person at the right time. When communications stop feeling relevant, they stop registering entirely.

2. AI is changing how people research, not how they decide

Few topics have consumed marketing conversations quite like AI. This year, we were committed to discovering if the reality matches the noise and if consumer behavior has genuinely changed as a result of AI. 

70% of consumers have experimented with AI in some form, but only 16% are using it to discover new brands. In-store browsing and personal recommendations remain the dominant discovery channels, just as they have been for years. What AI appears to be doing is compressing the research phase and helping consumers move faster through information gathering, without replacing the trust signals that drive actual discovery or purchase decisions.

Brands investing heavily in AI-driven discovery aren’t wrong to do so, but the timing matters. Consumers are using AI later in the journey, when they already know what they want and are actively researching their options. That’s the moment to be present: in the comparative content that AI surfaces when someone is ready to buy. The “best of” articles, the product roundups, the side-by-side breakdowns that sit between a consumer and a purchase decision. For many consumers, this is where the research phase now ends and the decision phase begins.

3. Human recommendations have reasserted themselves

AI plays its strongest role at the consideration stage, when consumers know what they want and are comparing their options. But when it comes to building trust from scratch, something decidedly human is doing the work. Word-of-mouth recommendations from friends and family have climbed from sixth to third place in the loyalty drivers ranking, representing a 45% increase in influence in a single year. 

The influencer channel is telling a similar story. 44% of consumers report discovering new brands through the creators they follow on social media. This points to the same principle: credibility carries more weight when it comes from outside the brand. Consumers are making decisions based on signals that emerge in spaces a brand does not control, shaped by voices they already trust.

The strategic implication is significant for marketers. Brand-controlled channels still matter. Email remains the preferred way for 45% of consumers to interact with their favorite brands, with in-store experiences (42%) and brand websites (40%) not far behind. But they are no longer sufficient on their own to build the kind of credibility that moves people. The experience a brand creates has to be worth talking about, worth sharing, worth recommending. Of course, marketers have always known this, but the findings in the Customer trend index give word-of-mouth marketing new commercial urgency.

4. The terms of data exchange have tightened

Last year’s research gave marketers a useful foundation: consumers will share contact data when there’s genuine value on offer. That willingness hasn’t disappeared, but it has become less generous. This year, 30% of consumers are uncomfortable sharing data until the value to them is made explicit. Not implied, not buried in small print, but clearly stated upfront. 

Contact data is the starting point for everything that follows. How brands ask for it shapes the entire relationship from that moment on. At the point of capture, consumers are making a quick judgment about whether a brand is worth trusting with their data. Brands that clearly communicate the value awaiting consumers (through offers, loyalty benefits, or a plain explanation of what will land in their inboxes) are building trust before the relationship has even begun. 

5. Loyalty rewards need to remove friction and add value

Loyalty was a central theme in last year’s Loyalty divide report, covering everything from what drives consumers to stay with a brand through to the types of rewards they actually want. We posed the same loyalty-focused questions this year to compare year-on-year shifts in consumer attitudes. For the most part, they haven’t, and that consistency tells its own story.

Product quality remains the top loyalty driver, and preferences for how loyalty is rewarded have stayed remarkably stable. Loyalty programs themselves are an important driver for over half of consumers surveyed (53%), and what they want from those programs hasn’t changed. Of the 4,000 consumers surveyed this year, 53% want free shipping and returns, with cashback close behind at 52%. Symbolic rewards like VIP events, charitable donations and exclusive experiences continue to underperform.

Two years of consistent data make the consumer position pretty hard to argue with. They want something that immediately reduces the cost or effort of their next purchase. With customer acquisition becoming more expensive and harder to predict, a loyalty program that genuinely reflects what customers want is one of the most reliable growth levers an organization has.

Looking forward

4,000 consumers across four markets told us, in different ways and at different stages of their journey, the same thing: trust is the deciding factor.

The data in the Customer trend index leaves little room for ambiguity. Consumers have shared exactly what they need to trust a brand, and many aren’t getting it. The full report is packed with more insights like these, practical takeaways you can act on straight away and detailed breakdowns by market, generation and employment status. I hope it gives you as much to think about as it gave us, and leaves you with a sharper game plan for the rest of the year.