Understanding Customer Behavior – for today and tomorrow

Customer behavior is ever changing, but the speed at which it is currently altering has resulted in customer decisions becoming less transparent. Given the current scenario, how does one keep-up with this disruptive trend, re-think the basis of competition, and customize one’s business model to win the battle of growth? What is very evident is that old frameworks and business models are not going to work anymore! It is now time for a new approach that involves a multi-dimensional framework, which can engage the new ‘multi-dimensional customer’. In line with today’s needs, what is it that companies must identify, and work on, so as to understand and respond to today’s demanding customer?

Below are three dimensions, basis which today’s customer makes decisions.

• The Five Mys Framework
  
  • My Motivation – Trust, authenticity and social values are critical though intangible motivators of the choices today’s consumers make.
    This means that our best experiences become expectations, and we no longer compare a company to just its competitors but to whosoever sets the standard for our best experience as consumers. Further, this means that customers value peer reviews as well as social references, and a majority of them today believe in individual influencers than just companies. A fact which can be attested to by the fact that as many as 41 per cent of Indians trust online reviews, according to a report.
    
  • My Attention – The fight for consumer attention has never been more intense. This has been further exacerbated by the unprecedented volume of content at our fingertips, available at various media channels. Understanding how individual customers prioritize, and marshal, their time & attention, is essential for breaking through the chaos, for building deeper, more meaningful relationships.
  • My Connection – Today’s technology connects humans to information, and each other, 24/7; in turn driving shifts in our social interaction and behavior. Understanding the shape and pattern of this wide-ranging digital connection and network is central to understanding how decisions are influenced.
  • My Watch – The companies that understand constraints of time and anticipate how they change across life events, are best placed to engage customers in the moments of greatest impact and meet their expectations head on.
  • My Wallet – Here again, how consumers adjust their share of wallet, across life stages and pivotal life events, is changing and causing a ripple effect of change across not one but all categories to which they allocate their money. How much money we have, how we choose to allocate it, and how our attitude towards it shifts is based on myriad factors, not just our salary or age.
    

• Customer wallets
  When, where, how, and why we spend is becoming increasingly complex. This calls for a new way of thinking about the interrelationship among income, borrowing, savings, and spending. A report states that consumers stress the importance of budgeting, but also show a willingness to forgo value in favor of convenience or self-improvement.
  

• Generational surfing
  For years, companies have used age as a proxy to determine our spending power, likely needs, and relative attractiveness as customers. But things are no longer happening at the same time, or in the same order, as happened with earlier generations.

To conclude, change isn’t looming in the distance, instead it’s the reality being faced by companies, the world over. The team at Actuate Business Consulting, a knowledge-based management consulting firm in India, believes, that no company, regardless of maturity of the sector, is immune to these forces and comparative pressures. Thus, by applying the understandings from the aforementioned Five Mys Framework, Customer Wallets, and Generational Surfing, one can better navigate the complexity of consumer decision making process.