The Customer Experience Revolution: Turning Behavioral Data into Competitive Advantage

September 2, 2025 By Julia Borgini

Consumers have almost too many options when it comes to making a purchase. Multiple companies offer the same item at similar prices, so how does one choose? Often, it comes down to customer experience (CX).

Most people would rather do business with a company that offers an exceptional customer experience, regardless of the price. Excellent CX leads to loyal customers who’ll stick with you, and are worth an average of 2.5X more revenue than new ones.

Businesses can transform their CX by using behavioral data to enable personalized interactions, proactive problem solving, and strategic decision making. Everyone from marketing to sales to product development can use that data to enhance CX.

As more data is shared online between services, apps, and platforms, businesses should be using it more effectively to create better CX for people, as it can make a significant difference to their bottom line. Here’s how you can do that.

Understanding online behavioral data

Online behavioral data refers to the digital footprint people leave behind online, including site visits, app usage, purchase histories, social media engagement, and abandoned shopping carts. These behavioral touchpoints reveal people’s preferences, habits, and pain points. Smart businesses use this information to update CX through personalization, predictive analytics, and updated features or products. Consumers expect this level of personalization today, with nearly 60% of consumers believing businesses should use the data they collect about them to personalize their experiences.

The business case for behavioral data in customer experience

The primary benefit of using behavioral data in CX is to gain a deeper understanding of your customers and audience. You’ll learn their preferences, habits, challenges, and tendencies, all of which can help inform your customer-facing touchpoints more effectively.

Enhance engagement with targeted messaging, as you’ll understand how users interact most frequently with your content. For example, combining EASI demographic data about a geography with internally-gathered data of distribution channels can help you determine which groups are more likely to prefer social media to email or a chatbot to a customer support phone call.

Product management and development teams can utilize behavioral information to introduce new features without needing to directly solicit feedback from users. An EASI ring study can give you information about consumers in a specific area and your customer success questions can guide you in developing new products or features. Delight them with something they didn’t even realize they needed by simply observing their behavior and designing an improvement.

Not only will existing customers enjoy the new features or products, but you’ll probably stay ahead of the competition because of it. People will flock to your brand and products because they’ll hear the positive feedback from those you’ve interacted with.

Positive sentiment fosters loyalty in existing customers and demonstrates to your audience as a whole that you’re worthy of becoming their vendor too. You’ll develop higher lifetime value across customers, reduce the cost of finding new ones, and stay ahead of competition and consumer changes.

Practical applications: transforming CX with behavioral insights

Here are a few ways today’s modern businesses can use behavioral data to enhance CX across their business.

Personalization: Use site visits, social media engagement, site searches, and link clicks to personalize the CX for people. Send personalized messages, create content they’re searching for, and highlight product features that align with their needs to create relevance.
Customer journey mapping: Marketing and sales teams can use navigation paths and exit points to optimize the flow, resulting in improved conversions and engagement. It allows for faster adaptation to consumer behavior, making it appear you’re doing it “just for them.”
Data-driven product development: Use consumer and audience behavioral insights to refine products and feature development. Establish tighter alignment with customer needs, regardless of how rapidly they evolve.

Navigating the challenges of behavioral data implementation

All that said, there are some challenges to using behavioral data in CX for your business, customers, and employees. Businesses must strike a balance between personalization, data collection, and security when collecting and using behavioral data. Customers and audiences want to know why you’re collecting the data and how you’re using it; transparency is critical. Likewise, adherence to data collection and storage practices for global laws and guidelines, such as GDPR, HIPAA, and the “right to be forgotten,” is essential for both employees and your business.

The ethical use of data should be a top priority for businesses using behavioral data for CX. People must trust that you’ll use their data responsibly to maximize your insights without putting the data, your customers, and your business at risk. Many businesses are using AI and LLMs today; however, many don’t realize the risk of using personally identifiable information (PII) or other restricted data in these apps. While many of these AI-based apps don’t keep individual copies of the data they ingest, they do use it to inform their learning models. So, using the data in this manner poses a legal and financial risk if it’s not legally protected or if people have not given consent for it to be used in this way.

The final challenge to using behavioral data in CX is the idea of becoming a data-driven business. While businesses collect and have access to massive amounts of consumer data, many are hesitant to use it due to institutional perceptions and obstacles. Businesses must overcome internal issues to understand how a data-driven strategy can benefit both the business and its consumers before implementing it. It may require changes to workflows, processes, and procedures, thereby upsetting the status quo. People may be resistant to change and hesitate to see how the approach can benefit the business.

The future of CX is in the data

The future of customer experience (CX) for any business lies in leveraging behavioral data to create meaningful, personalized interactions that drive loyalty and revenue growth. Collecting and analyzing data thoughtfully, while maintaining transparency and adhering to ethical practices at all times, can help you transform your CX strategy. Use data to be proactive, not reactive. Companies that adopt data-driven personalization today will foster stronger customer relationships and gain a competitive edge in an increasingly competitive marketplace, no matter the industry you’re in.