“Behavioral Surplus” Is Not Evil – It’s Essential to Customer Experience

20 May

“Behavioral Surplus” Is Not Evil – It’s Essential to Customer Experience

Mark Yates
Research Manager
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Andrea Sangalli
Research Director
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As the age of customer experience takes hold, enterprises must do far more than collect and analyze customer data to enable the improvement of their products, services, and engagements. They must also tap the so-called behavioral surplus.

For those unfamiliar with the term, behavioral surplus is data that goes beyond online product and service use. It can include information related to a person’s location, age, profession, lifestyle, habits, and a range of personal and professional preferences. Facebook and Google have been using it for years to make precision predictions that allow their customers not only to target advertising more effectively but also to deploy choice architectures that can influence behavior.

The term has been getting a great deal of media attention in recent months thanks to the publication of the book Surveillance Capitalism. In it, the coiner of the term and author Shoshona Zuboff frets that use of this surplus data is potentially destructive to people at personal, familial, and societal levels. And she has a point. De facto monopolies with overwhelming network effects can manipulate people into making unnecessary purchases or poor decisions that benefit large corporations (or governments).

However, most enterprises IDC has spoken with recognize that such manipulation can backfire. The age of surveillance capitalism, after all, is also the age of user reviews and IT abundance. If a Londoner is unhappy with Uber, they can give the driver a low rating, complain about the company on Yelp, and easily shift to Lyft or a black cab. If a Czech is unhappy with their bank, there are a dozen others they can move to with little strain.

Input and Output

Organizations can use behavioral surpluses to solidify long-term relationships with clients. They can use this data to generate experiences that can lead to meaningful transformations (as posited by Pine and Gilmore in 2011). For example, a banking app can help people spend more wisely by providing alerts and budget planning tools. An instantaneous fuel consumption gauge can help people better understand their petrol usage and thus drive more carefully and economically.

In this respect, a behavioral surplus is both an input and an output. As an input, it provides firms with data about how people act online and in the real world, enabling the provision of improved CX. As an output, it provides firms with data that can be repackaged to prompt people to modify their behavior — not just to spend more, but to improve their lives.

The CX can be great, for example, when an insurance company tracks a driver. The company may use periodic or real-time summaries (objective or gamified) of vehicle data to reward drivers with reduced rates or other goodies for driving safely and efficiently (e.g., braking slowly, cornering gently, and accelerating evenly). For both the driver and the company, this saves money. The insurer will have fewer claims and reduced churn; the driver pays less for insurance and has fewer accidents.

But that is just the start. The collected data also tells the insurer how people drive. Different kinds of drivers will be correlated with different types of services. In aggregate or individually (for people who signed a EULA) the data can support revenue-generating activity. It can be correlated with data from social media, route preferences, home location, LinkedIn profiles, parking selection in large lots, leisure activity (based on location), weather, and so forth, making it even more valuable. Aggregated and anonymized, this information can be sold to planners, law enforcement, housing developers, Disneyland, recruiters, telcos, and other enterprises interested in behavioral patterns.

Achieving Empathy at Scale

Despite Zuboff’s misgivings, most European enterprises will need to tap behavioral surpluses to enhance engagements. And they need to do so in a manner that’s productive and transformative for both sides.

Enterprises should:

  • Openly (and aggressively) showcase their respect for customer privacy. How you treat customer data is how you treat your customers. Organizations need to develop and execute easy-to-understand and clearly displayed consent processes. This is crucial for creating a foundation of trust upon which to engage with clients and deliver services.
  • Learn from customer interactions. The omni-channel expectation makes it mandatory to engage with clients and customers on their terms. Whether via apps and websites or branch offices and call centers, enterprises must listen carefully, not just to what their clients are doing and saying, but how they do and say things. The data collected by organizations should be used to train artificial intelligence (AI) applications to brighten and deepen the tone, mood, and content of conversations and thus provide customers with memorable and transformative experiences.
  • Extend and analyze customer journeys. Many enterprises have mapped their most important customer journeys, but they still struggle with integration of the back end and the creation of cross-functional KPIs and metrics. Customer journeys are getting more complex — and the goal remains to make them truly seamless. Moreover, the “API economy” has extended journeys beyond the four walls of the organization into business ecosystems where touchpoints proliferate. Enterprises must deploy analytics and AI to partner data, government data, ecosystem maps, and other information sources to better understand and serve their customers.

IDC has a new CX Practice in Europe to support technology vendors and end-user organizations. It provides insights from 20 analysts and consultants, each of whom is focused on an industry sector or customer experience technology. If you want to leverage your CX momentum and maintain a growth trajectory or learn more about the new IDC European CX Practice, please contact Mark Yates or Andrea Sangalli. Visit https://idc.com/customerexperience to contact us.

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