The Internet of Things – The Value is the Customer Experience
The IoT makes it possible for companies to better serve their customers in new ways every day.
The internet is currently undergoing its third revolution. The first wave was the fast and easy availability of information through search engines such as Google. The second was connecting people through social platforms such as Facebook and Twitter. This third transformation, which promises to be every bit as much of a game changer as the first two, is the Internet of Things, better known as IoT. The IoT means the things that we have around us become a system of objects embedded with electronics, sensors, software and connectivity to the global network of computers. In the IoT, an object is defined as anything equipped with the ability to collect, analyze and share data, from a pet with an ID chip or person with a heart monitor to a mobile device, vehicle or building. In this revolution the objects around us become smarter and more versatile.
Companies across industry sectors are looking at the IoT as a way to capture opportunities, improve their businesses and increase their revenue streams. However, there is a tendency to approach an IoT strategy from the starting point of the technology instead of the business model. Many companies, anxious to connect their products to the internet, end up investing in technology for technology’s sake. For example, it is possible to connect your home fridge with the internet, but what would be the value in that connectivity? Do you need to check the temperature of your food remotely from your phone? Is that data important for your daily life?
In reality, the technology isn’t the issue; rather, one should start with an innovative model that supports the business case—the “why” of connectivity. What are the “jobs to be done” that your customer has to manage in his or her daily life? How can we use the IoT to provide not just connectivity, but value and meaningful solutions to our customers? To explore how to get to the why of the IoT, let’s start with a look at how the IoT will impact product design.
The impact of the IoT product design
In the coming years, the IoT will continue to dramatically improve the way that products are designed, produced, serviced and used through improved collaboration with customers and partners during development. Historically, customers didn’t have access to products until they hit the market and would have to wait for a second or third version to be released to add new functionality. Now, through the cloud, we can create rules for control of electronics and adjust the behavior of the product and improve functionality even after the product has gone to market. One obvious example of this concept is cell phone technology. Before the apps age, one had to buy the newest version of a phone to access new functionalities. Now, you just need to download a new app that can deliver the latest capabilities.
Before the IoT, manufacturers would devise a “one size fits all” solution to try to create a relevant customer experience, even when the market had diverse mindsets and needs. Now, the connectivity in equipment allows for interaction with the products and their owners to generate customized solutions that can enhance the technology, behavior and user experience throughout the product lifecycle. A customized user experience is becoming a requirement for today’s sophisticated buyer. Each customer’s interaction with a product is unique, and therefore they expect service and support that is tailored to their specific needs. This demand for personalized and meaningful interaction with a brand is causing smart companies to move away from a product-centric focus to a service focus. Moving your organizational spotlight from “things” to the “experience one has with things” can change the mindset of a company and naturally lead to better interactions with customers, faster and more accurate feedback and more meaningful solutions.
It’s not about the technology
It is becoming increasingly clear that the challenge of utilizing the IoT is not technology; there are a lot of technical tools available. The challenge is gaining a deep appreciation of your customer’s needs and figuring out how to use this knowledge to create a relevant business model. Companies generally think that they understand their customer base well enough to have an idea of the main opportunities to create winning business models, but since IoT is changing the relationship between companies and customers, it’s a good idea to re-think those assumptions. Start with a deep dive into your customers’ industries to understand the commercial landscape and uncover the obstacles that your customers encounter. These challenges represent areas where improvements and innovations can immediately impact their businesses. Remember, the IoT can be used to solve problems that we simply didn’t have the technology to address in the past. Take this market research (both internal and external analysis) and map out the opportunities to affect your customers’ businesses on an ongoing daily basis. With this insight, you can answer the questions of “what” and “why” and then turn your attention to technology to figure out “how.”
What’s next for the IoT
It is clear that the trend towards simpler, smaller, faster and more cost efficient will continue with our computers, devices and other smart objects. And while these technological advancements will always be important, the IoT is really about the value this technology can provide customers. The IoT makes it possible for companies to better serve their customers in new ways every day. As connectivity continues to advance, supporting customers will be at the center of the IoT, from the smart company’s perspective. The companies that will most successfully reap the business rewards of the IoT will look at their customers first and technology second, and focus their attention on creating customized solutions, innovative product enhancements and elevating their customer service to new heights. Ultimately the race will be won not by technology, but by using that technology to create the best possible experience for their customers and improve their daily business operations.
See you at the cloud!