What marketers can do with IoT (part I)
In previous blog posts, we can read a lot about IoT, the IoT devices and IoT platforms. We are often focussed in these articles around the technology. Recently we see a shift towards an employee, customer or consumer focussed IoT design. These human-centric IoT focussed organizations perform better than those who do not take the customer experience into account implementing new technologies.
In the daily iX consultancy practice, the major focus is marketing amongst sales and services, and we wondered what can marketers do with IoT. With some customers, we discussed the use of their IoT devices as part of their appliances, and this was mainly related to services.
In presentations, we talk about the challenges for marketers on how to reach the consumer in a smarter home environment where IoT devices and robots manage the house (Can digital make or break your company). What at the end are the benefits for consumers, which is critical if we have a customer-centric designed organization? Starting with Human-centric design experiences, IoT can play an essential role in understanding the usages and behaviors of the consumer. IoT provides real-time, contextualized data that can come from many touchpoints over time. All this data can fuel a range of new and exciting marketing and customer experiences. These include selling products and services more effectively, e.g., IBM’s Marketing Transformation where customers experienced uncoordinated communications that lead to ineffective lead quality, with low conversion rates. Cross-sell, and upsell opportunities for interested prospects was limited. All Marketing Units were trained on developing connected journey campaign strategies that met the needs of the prospect along each step of the purchase journey using behavior analysis. Other examples are creating new products and services that generate new sources of revenue. Philips, Oral B, ARA, and Grush etc..connect their toothbrushes through the internet and provide more insights and guidance on how to improve brushing teeth. An opportunity for dentists to build closer relationships with patients via data sharing, naturally when companies obey data protection and privacy.
If the company has access to the end user consumer data, it provides a wealth of information. The information gathered and analyzed gives the company the sources to create exceptional experiences. Moreover, is the consumer experience, not the new currency?
Research has proven that those who implemented a Business Design Office have improved positive potential financial impact for both individual projects and a grander organizational transformation. 2x Faster time-to-market, 75% Reduced design time, 33% Reduced development time.
After implementing the Business Design Thinking practice, combined with an analytical capability that provides insights, and through AI guides what should be changed to deliver that exceptional experience, your business is at the forefront of innovation in the marketing department. In last years CMO study from the IBM Institute for Business Value (IBV), The modern marketing mandate, the research shows “The Reinventors” are the standouts. They report that they outperformed their peers in both revenue growth and profitability, and lead as well in innovation. Their organizations are exceptionally well aligned. Use the link to read the study.
In a study from 2014 in HBR “The value of customer experience” a correlation was shown that proves and quantifies the value of Customer Experience in a transaction and subscription-based business. Annual revenue increase between 1,8x–2,4x if the company scored high on customer experience in a transaction based business. Companies that scored high (>8 points) increased the future years of subscription to 5,5–6,5 years.
Further studies from Forrester 2016, shows those who have invested in customer experience(Cx) they outperform laggards. the CAGR of leaders of Cx shows 17% growth compared to those that did not invest in Customer experience they show a CARG of 3%.
Conclusion
We see that Marketers can do a lot with IoT to contribute to the companies growth. If the IoT technology is well implemented and becomes an integrated part of the end to end experience, it offers them the capability to differentiate themselves. Mandatory for contribution to growth and differentiation is a strong analytical capability in their marketing department. How to build such a capability is where IBM can help with IBM Digital Strategy & iX. A good example is how IBMs own marketing department leverage rich data environments for improved marketing ROI. In our next blog posts, we will discuss some steps to get there, from data platform services to Machine Learning and AI for the marketing department.
References:
Enterprise Design Thinking — Human centric design — customer centric design
Smart Toothbrushes IoTand business models
IBM Institute for Business Value (IBV), The modern marketing mandate
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