3 ways the IoT is changing customer relationships
While not a new phenomenon, the Internet of things continues to build momentum and has huge implications for both the consumers and producers of today’s technology. More people are becoming more comfortable with the idea of tracking personal data, from health factors like their calorific intake or heart rate during exercise to the performance of their vehicle to how their homes are using energy.
There’s an undeniable thirst for information and curiosity about what’s next – driving further innovation. The leading examples of IoT for most people are wearables and connected homes and vehicles, but there will be much more to come. For organizations, analytics is necessary to gain insight from the substantial data that connected devices and systems can provide, which can help them refine how their offerings are personalized for consumers.
Tapping into the potential of analytics when it is applied to unstructured data, specifically data from social media, mobile, IoT, and publicly available information, can reveal considerable insights. Yet, analyzing data from these unstructured channels presents challenges for enterprises and industries not well prepared to take advantage. Industries such as consumer product goods, banking and financial services, insurance, and energy and utilities, among others, are racing to invest in analytics that can help them strategize and position for competitive advantage.
The use of analytics is exploding thanks to better technology – cost-effective big data storage, more powerful analytics services and access to better algorithms. Organizations now have the ability to drive better business outcomes by leveraging multiple analytics techniques. While most companies view prescriptive analytics as the most advanced of all analytics techniques, predictive and diagnostic type of analytics are also powerful in their own right.
Depending on the business model, predictive analytics is used for scenarios like setting prices or evaluating inventory. Companies who are looking to understand the why and how of a business challenge can employ sophisticated analytics, bolstered by new information channels created by the IoT.
Let’s take a closer look at how exactly this connectivity enhances product and process innovation.
Insight to speed innovation
The rise of the IoT means more than simply the communication between physical devices—it means the availability of more consumer information. Connected devices make user data available to manufacturers much faster than previously possible, in essence producing what we’re calling “The Information of Things” – the idea that connected devices deliver massive amounts of information that has the ability to reshape product evolution.
The IoT equips manufacturers with data about product use patterns, which informs and speeds updates and improvements. For example, having details about the most popular applications on a smartphone can help developers improve the user interface in the next generation of the product, better catering to consumers’ preferences. Additionally, knowing what features are most utilized in a luxury car or wearable device can influence the development of the next release, in essence helping manufacturers better meet consumer demand earlier in the product lifecycle.
Insight to maximize revenue
In addition to informing and speeding product updates, the IoT also presents new opportunities for cross-sell and up-sell. Having a better understanding of a customer’s exercise habits, for example, can help a brand recommend additional or complementary items that the shopper might find useful. On the other hand, if an item needs periodic replacing, the manufacturer could send automatic reminders to the consumer. Brands can also share this data with other brands (assuming customers “opt-in”) to better serve consumers and improve sales.
Staying with the exercise scenario, the maker of a personal fitness tracker could work with a consumer’s favorite running shoe provider to send alerts when they’ve reached a certain cumulative mileage and it’s time for new shoes. Taking it a step further (no pun intended), the system could even activate shipping of a new pair of shoes, depending on consumer settings and preferences. With the connection of information in this way, processes are eased for consumers and manufacturers, and brands have greater ability to improve sales and better cater to their buyers’ needs.
Customer intelligence is leading digital transformation
Digital transformation is a movement happening across industries and requires organizations to deliver personalized, relevant content on a 24x7 basis to enhance every customer experience across all touch-points. This means that customer intelligence has to move beyond analytical solutions created from structured data sources to incorporate techniques that can derive insights from unstructured and semi-structured data.
The necessity to derive comprehensive customer insights has accelerated with companies coming up with digital only business models, such as Uber, AirBnB, and others. Thanks to innovations such as open source software, analytics as a service, and cloud-based infrastructures, organizations have tools at their disposal to re-imagine all aspects of customer intelligence.
The IoT will become more significant to businesses and consumers, and we’ve only scratched the surface of the potential that this area holds. The continued growth and interest in the IoT offers incredible value for brands of all types of product segments, and even services. But, before they can take advantage of the IoT’s ability to drive digital transformation, companies must take steps to clearly define their problems, determine what data capture is needed, and how to best leverage and translate those complex data sets into intuitive information.