Home Thinking Aloud Building Behavioral Awareness To Understand Your Customers

Building Behavioral Awareness To Understand Your Customers


by Michael Wade, Jeff Loucks, James Macaulay, and Andy Noronha, authors of “Digital Vortex: How Today’s Market Leaders Can Beat Disruptive Competitors at Their Own Game


Historically, many of the decisions about marketing and selling to customers have been based on demographic and psychographic research, such as customer surveys, focus groups, and ethnographic studies. These sources of information are increasingly ill-suited to today’s reality. A customer survey that takes three to six months to conduct may provide an organization with customer insights that are outdated, leading to product or service development decisions that are out of step with the current wants and needs of customers. Traditional sources of knowledge about consumers, moreover, such as demographic information, are declining in value. Demographic data increasingly represents an incomplete picture of the modern consumer resulting from changing patterns of behavior that no longer fit typical customer segments. Such “post-demographic consumerism” reveals results that can puzzle firms that cling to yesterday’s customer personas.

Digital technologies, in particular mobile phones and sensors, are expanding the horizons of what organizations can sense about how their customers communicate and consume. This new hyperawareness is redefining the underlying nature of what organizations can feasibly know about their customers’ behaviors. Rather than being limited to behaviors observable during “snapshots in time” (e.g., during focus groups), companies now have access to an always-open window into how customers act. This hyperawareness creates unprecedented opportunities to understand the mix of cost value, experience value, and platform value that customers want, and then to deliver it through new and improved offerings.

Today’s smartphones pack a proliferation of sensors, including accelerometers and gyroscopes used to measure movement and orientation; magnetometers and GPS chips for location services; environmental sensors for temperature and light intensity; and increasingly, fitness sensors such as heart rate monitors and pedometers. Companies are even exploring ways to go beyond the sensor data to derive insights based on phone usage. Researchers at Samsung have found that by monitoring certain phone usage patterns, such as typing speed, and how often the “backspace” and “special symbol” buttons are used, they can predict a person’s emotional state with 68 percent accuracy using machine learning algorithms. Several disruptive startups, including Branch.co and inVenture, are reinventing financial lending in developing nations by offering mobile apps that assess consumers’ creditworthiness based on their mobile phone usage. According to research and consulting firm Trend Watching, “People – of all ages and in all markets – are constructing their own identities more freely than ever. As a result, consumption patterns are no longer defined by ‘traditional’ demographic segments such as age, gender, location, income, family status, and more.”

New methods of capturing and analyzing data on mobile phone usage have generated interesting, and sometimes counterintuitive, results. For example, these apps have found that the faster consumers drain the batteries on their mobile phones, the less creditworthy they are. Another finding is that those who take the effort to enter the last names of their contacts on their phones are more creditworthy. These apps are a great example of how hyperaware disruptors use digital technologies and processes to target a value vacancy. Without the capability to gather data from a non-traditional source (a mobile phone), these companies would be unable to address the needs of this sizable yet underserved market. According to the philanthropic investment firm Omidyar Network, such apps could enable 325 million to 580 million people in emerging economies to access consumer loans. Such apps can also help prevent bad lending practices by accurately assessing the creditworthiness of borrowers who use “low-documentation” mortgages to gain approval for loans they cannot repay, a factor that played a role in the 2008 financial crisis. Beyond understanding consumer behavior, such as travel and mobile phone usage patterns, companies are now building hyperawareness capabilities that will enable them to pinpoint their customers’ emotions. Imagine stepping into your car for your morning commute, and your car already knows whether you are cheerful, anxious, or angry. It could then adjust its environment, such as music, interior temperature, or commute route – to optimize your commute experience.

Forward thinking companies are now building the hyperawareness capabilities to allow them to recognize their customers’ emotions – much as a friend, spouse, partner, or family member might. Companies can then use this understanding to create customer experiences tailored to the customer’s unique needs and wants in a given context, and to monetize these insights for sale.


Michael Wade, Jeff Loucks, James Macaulay, and Andy Noronha are authors of “Digital Vortex: How Today’s Market Leaders Can Beat Disruptive Competitors at Their Own Game“.