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How IoT unlocks customer value: Five core truths of customer experience

Traditional product manufacturing went like this: We built it, we tested it, you bought it. Job done. Product managers never heard from customers — and frankly, they didn’t want to. If the R&D team wanted to tap into any user data, some heavy lifting was required to really put an organization in the customer’s shoes. Despite very clever research methodologies, data required a great deal of interpretation to show insights.

But now everything is dramatically shifting. With the amount of data doubling every two years, it is instant and substantial. Customer touchpoints are exploding and product manufacturers need to grasp the potential of customer experience (CX) sooner rather than later if they don’t want to miss out on revenue opportunities. There is huge potential for many brands, beyond the applications, in how they use data to craft customer experiences.

So, from a CX perspective, how is IoT going to impact the value in the customer relationship? What are the CX mechanics that will impact this relationship and increase advocacy among users?

No CRM or brand advertising will come close to IoT’s capacity to engage customers emotionally and deepen customer value. For many brands, it will change the principles of customer relationship marketing in much the same way that digital changed the advertising industry. To further hone this point, I’ve gathered five core customer truths to explore the impact of data in engaging customers through IoT:

1. Prediction

You might be wondering how cloud-enabled sensors and actuators can change customer experiences. Put simply, a new customer journey is born. A new model where products predict and manage impacts on performance and delivery. As customers, IoT is removing the burdens of ownership and those points of irritation which can, collectively, send a customer relationship over a cliff edge.

One of the great burdens of electric car ownership is range anxiety. Or in other words, “Am I going to get there?” Of all the great features in Tesla, its capacity to use predictive analytics to optimize journeys and keep customers on the road is critical. Even before the driverless age takes off, data is looking ahead to ensure we’re getting better experiences behind it.

2. Insight

The new insights loop enables us to see products used and consumed through objective and vivid data. Not only is this kryptonite for R&D, it shifts the customer-product experience, enabling brands to share beautiful visualizations of data, ideas for optimizing usage and evolving technology, and comparative consumption patterns across use groups. And for customers, it enables them to explore their own consumption patterns.

In doing so, data becomes the product. The data generated becomes part of the product experience itself and transforms our expectations of functionality. Take Nest, for example. For decades, the home thermostat was a clunky one-way device to control your home climate. Now it’s a living, breathing, connected dashboard enabling customers to optimize energy usage based on real-time behavior. This not only results in money savings for the user, but also engages customers with an effortless brand experience. Knowledge becomes power for both the brand and customer.

3. Personalization

Personalization is arguably one of the biggest pain points when you call customer service. After running through a lengthy automated call screening process, you have to run through all your PINs and passwords again when you finally get through to a customer support specialist. It’s not just the time investment that bothers us, it’s the fact that so much of it is avoidable.

A smart IoT model changes this. Not only can data instantly identify connecting customers, but customer support can access product inventory, observe usage patterns and assure customers they’re in the hands of a CX support agent who genuinely knows who they are. Customer support, therefore, becomes truly personalized. An IoT + CX ecosystem delivers an almost concierge level of support.

4. Community

Sharing data across user groups and communities creates powerful tribes. Speak to any wearable tech advocate, be they a fun runner or cycling road warrior, and you’ll realize the fiercely competitive world of segments and leaderboards. Big data brands like Nokia Health realize the potential of community through competition, not just connection. This living data era is pairing those trusted running shoes with the cloud and generating astounding content to share with those you love (and love to compete with).

5. Humanization

IoT humanizes products like never before. A great deal of brand strategy is invested in humanizing products so we can unlock emotional connections. Any half-decent brand idea will talk in terms of human personality, to the point that customers could describe the brand as a real person in the room.

Brands can bring genuine personality to product experiences. You can finely tune the personality you project. You can intellectualize through data and build emotion through semantics, content and tone of voice. For a humanized product economy, it is simply revolutionary.

The expectation deficit

Ric Merrifield, the IoT CX consultant, cites the point at which acceptance and expectation converge. For the IoT industry to realize its potential, customers need to accept access to their data. This opens an “expectation deficit.” Customers understand how valuable that data is to the product owner, but where’s the payback for the customer in this relationship?

The IoT sectors and applications that are seeing early adoption are those that balance the legacy functionality (a watch to tell the time) with the data functionality (a watch that tracks your activity). Customers share the value of this data and the expectation deficit is balanced.

The greater challenge is posed to traditional industries migrating to the IoT era. The internet of things is really an “internet of customer experiences.” Data will grow organically and rapidly, so brands will need to harvest it for powerful relationships. It is time for clever product engineers to grow into brilliant CX engineers too.

All IoT Agenda network contributors are responsible for the content and accuracy of their posts. Opinions are of the writers and do not necessarily convey the thoughts of IoT Agenda.