IoT might be at the peak of inflated expectations in the Gartner Hype Cycle, but it seems to have already gained wide acceptance as a new tool for marketing and customer relationships.
A survey of 500 IT and marketing professionals in large and mid-size companies, designed to assess their use of big data and IoT in support of digital marketing, reported: “Forty percent are using machine data (Internet of Things) to support digital marketing, but are in the beginning stages of doing this. Nearly 20 percent are being very aggressive this way, and another quarter or so (27 percent) plan to begin an IoT project for digital marketing soon.”
It went on to say: “Top uses for IoT in digital marketing: better understanding of customer preferences (28 percent), to power campaigns and promotions (24 percent), to drive customer-facing web and mobile apps (14 percent). Seventy percent say they’ve been successful in meeting or exceeding their IoT-based digital marketing goals. More than half (53 percent) say it’s likely they’ll expand IoT-based digital marketing programs.
“Forty percent say cost is the biggest consideration when implementing big data and IoT-based digital marketing programs. Twenty one percent say lack of executive support is the biggest challenge (“They don’t yet see the value.”). Twenty percent say technical skills are the chief impediment — they don’t have the skills in-house
Impediments to IoT in marketing
“Forty percent say cost is the biggest consideration when implementing big data and IoT-based digital marketing programs. Twenty one percent say lack of executive support is the biggest challenge (“They don’t yet see the value.”). Twenty percent say technical skills are the chief impediment — they don’t have the skills in-house.”
Unfortunately no further details of the survey, commissioned by 23nd Watch, a company that develops enterprise workload management for the public cloud, appear to be available. (The figures I’ve quoted come from a press release).
However, there’s no shortage of information on how IoT can be exploited by those engaged in customer service, marketing and the delivery of customer experiences in general.
This article How the Internet of Things is helping banks put their customers first by Jane Tweddle is industry principal, financial services at SAP UK, has some interesting views.
IoT, banking and customer service
First off, she warns that the time to act is now “The IoT is … an existing reality that we all need to work within, rather than something we can attain or acquire, or a state of play looming on the horizon; the IoT is having a profound impact on all industries and the time to respond is now.”
For Tweddle, the main use of IoT for customer service in the banking sector seems to be the provision of location information. “The use of IoT-enabled technology to provide a more convenient and rewarding experience for their credit and debit card customers is one of the most-cited examples; this may include, for instance, banks analysing the frequency of ATM usage within a certain area and targeting specific zones for ATM installation where foot traffic is highest,” she says.
However, “Improvements in overall network infrastructure, big data analytics and cloud accessibility must first be completed before the IoT can be implemented on a truly massive scale.”
Tata Consultancy Services’ recently released report Internet of Things: The Complete Reimaginative Force makes an equally, if not more compelling case for IoT in the realms of customer service an marketing.
IoT increases revenue by 60 percent
“In some companies, the IoT is already having a big impact on revenue, product and service customisation, and customer service,” it says. “Companies with IoT programs in place reported an average revenue increase of 16 percent in 2014, in the areas of business where IoT initiatives were deployed. In addition, about nine percent of firms had an average revenue increase of more than 60 percent.”
According to the report, “The biggest product and process improvements reported by companies were more customised offerings and tailored marketing campaigns, faster product improvements, and more effective customer service (in part, by being able to identify product problems before customers knew about them).”
This is all very high-level, big picture stuff. If you want to get down to more practical advice on how IoT can be exploited today for marketing and customer relationships, I can recommend Customer Experience in the Internet of Things: Five Ways Brands Can Use Sensors to Build Better Customer Relationships from Altimeter Group.
Practical applications of IoT for customer relationships
Here is summary are the five examples it gives.
Context based rewards. “Reward enabled by sensors incentivises engagement and purchase by drawing from contextual elements. These elements combine both digital (eg online browsing and purchase histories) and physical (eg location, time, weather, product) realms.”
Improved decision-making. “Through sensors, companies can enable monitoring (read: visibility) into just about anything, such as the number of steps taken per day, the amount of food the dog is eating, and the amount of windshield-wiper fluid remaining. Any connected object can inherently be monitored, and brands can use this insight to provide extra value by delivering more efficiency to customers, whether in the form of energy, time, insight, or money.”
Facilitation. “Facilitation in IoT is fundamentally about enabling consumers to accomplish an action more seamlessly through the use of connected devices. It’s about streamlining transaction, authentication, or any other exchange between brand and consumer.”
Service. “Service in the IoT is about identifying gaps, issues, or opportunities to either react in real time or proactively suggest, service, or resolve before customers realise they have a problem. Service in IoT can be both reactive and proactive.”
Innovation. “IoT provides additional tools for brands understand, improve, and innovate on consumer-facing experiences more effectively [by] … Collecting feedback and innovating products and services… more quickly [and using] … customisation and personalization to … stay relevant and differentiated.”
Altimeter seems to have a strong focus on the nexus between IoT and customer relationships. The above report is only one of a number of publications from the group on the topic. Smart move I reckon. Many disciplines will be disrupted by IoT and if the statistics I quoted earlier are to be believed, that disruption will occur sooner rather than later in the field of customer relationships.