How the Internet of Things Helps Deliver the “Right” Customer Experience
B2B marketers are under enormous pressure to get everything right. “Right message, right channel, right time”…sound familiar? With this tattooed on our brains, it’s hard not to see the Internet of Things (IoT) as our golden deliverer. After all, the IoT can improve the reach and timeliness of our marketing messages, leveraging the Internet to broadcast content to a network of connected devices.
But viewing the IoT as just another advertising “channel” is short-sighted. Our years as ad-pushers and lead-generating purists have scattered in the wake of pull marketing. Marketers have been flagged as the owners of customer experience; to fully embrace that challenge, we must concentrate on delivering continual value to buyers – before, during and beyond the purchase.
The IoT plays an important role in this scenario because it allows marketers to remain connected to buyers (through “smart” products). And the data-sharing isn’t just one-way. Through the IoT, connected devices have the ability to talk to us, to applications and to each other. By collecting sensor data, marketers can gain real-time insight into how buyers are using products – powerful information marketers can use to shape an ongoing dialogue with customers.
But we won’t be able to harvest customer insights from the IoT by ourselves. Without question, serving up the “right” customer experience takes a village. Are we, as marketers, investing effort in forming collaborative “communities” within (and even beyond) our organizations so we can to learn more about our customers?
If we aren’t doing it now, we definitely need to start. Nothing less will do when the insight we’re seeking lives within the IoT.
Data for an Ongoing Customer Dialogue
Nearly two years ago, a group of marketing luminaries predicted that the most important marketing metric would change from “share of wallet” or “share of voice” to “share of experience.” As marketers, we want buyers to choose our brands to engage with. The best way to accomplish this is to deliver an experience that is in step with their current needs, yet beyond their greatest expectations.
The IoT presents a unique opportunity to gain dispassionate insight into how well buyers actually like products.
“The IoT serves up the world’s biggest focus group – only better,” says Wayne Sadin, Chief Digital Officer at Affinitas Life. “Often, customers tell vendors one thing and do another. Through the IoT, we get objective data, directly from the ‘thing,’ as to how it’s actually being used.”
Based on data collected from “smart” product sensors, marketers can identify usage patterns, revealing favorite product features, dysfunctional equipment and even unintended uses. It may be surprising to some, but this data is relevant beyond the B2C sector. Contrary to current assumptions, most connected devices aren’t in consumer homes or phones. They’re in factories, businesses and healthcare – making IoT data particularly significant for B2B marketers. Accordingly, McKinsey & Company analysts predict B2B applications will account for nearly 70% of the value estimated to flow from IoT in the next 10 years.
Does this still sound far-fetched? If you’re thinking sensory data crosses too far into product territory to be a key marketing focus, you’re probably not alone.
Still, there’s a huge reason B2B marketers should care about IoT data: It helps us fortify customer relationships beyond the purchase. Product usage patterns can lead to new segmentation and customization methods, which in turn can fuel the creation of special offers, after-sales service packages or segment-specific features. Smart product data can also indicate a poor customer experience (e.g., via pressing the same equipment button multiple times), surfacing an opportunity for customer care to proactively respond.
Essentially, by giving marketers direct access to product voice, the IoT delivers a moment of truth in the customer experience – data that’s typically uncaptured by voice of the customer (VOC) surveys and focus panels.
According to Sadin, Internet-connected sensors provide new ways to improve the B2B customer experience.
“For example, a heavy equipment vendor that gets a pre-failure alert can dispatch a repair crew and the right parts to a customer’s site, turning a possible calamity into an inconvenience by acting ahead of failure,” Sadin says.
But the IoT horizon isn’t all sunbeams and lollipops. As businesses gradually apply it within their own workplaces, employees will catch the unmistakable whiff of creepiness…Something they’re all too familiar with as consumers.
“When businesses adopt IoT in the workplace to gain efficiency and improve the customer experience, employees can feel their every action is being watched by someone back in headquarters – or even more big-brotherish, by an AI,” Sadin says. “For instance, delivery truck routes that once were up to the driver are computer-generated and continually revised as traffic and customer needs change…and the ‘geofencing’ program sets off alarms in headquarters if the truck deviates from time and course parameters.”
Despite employee discomfort about an IoT workplace invasion, there’s no denying the business value it contributes to optimizing operations. We’re all familiar with electronically tagged items along the supply chain, and they’re only the beginning.
For B2B marketers, the biggest competitive gains happen when IoT data shapes decisions.
Connected Data for Customer-Focused Decisions
What does an “IoT-informed” decision look like? Before we explore how this manifests in B2B marketing, let’s consider a more tangible, if not earthier, example. Ever heard of the Connected Cow? It refers to cow wearable technology created by Fujitsu Kyushu Systems, designed to help dairy farmers breed their cows more successfully.
Here’s how it works… For heifers, the breeding window of opportunity doesn’t last long (about six hours). However, when cows become fertile, they tend to walk more. To alert dairy farmers when this happens, Fujitsu created a cow pedometer to track movements. The pedometer then beams hoof-step data back to Fujitsu, which analyzes the data and sends results to the dairy farmer. From there, ranchers can easily identify their furious walkers and flag them for insemination.
Farmers using Connected Cow technology have boosted fertility detection rates from 55% (typical) to 95% and the pregnancy rate from 40% to 67%. So you could say that, on dairy farms, IoT data breeds success. (Pun haters, move on...)
Like dairy farmers, B2B marketers have short windows of opportunity to take decisive action. Because IoT data delivers insight at the moment of product use, it helps determine when customers may be most open to engaging with brands.
To illustrate this point, Sadin describes a scenario in which IoT data from semi-trucks inspires a truck manufacturers’ marketing team to create an opportunistic safety campaign.
“After looking at IoT data from the trucks in the field, these marketers discover that trucks built within the last six months are stopping better than older trucks, and their rate of rear-end collisions is lower. After checking with the product team, they learn that a new brake pad is responsible for the new trucks’ improved stopping performance.
“Based on this information, marketing decides to whip up a safety-focused campaign,” Sadin continues. “They might also to urge product to create a ‘quick-stop retrofit kit’ that can be sold to older-model truck owners.”
We have a lot of miles to travel before this scenario becomes a reality. As Sadin is quick to point out, complications arise when gathering, analyzing and integrating staggering volumes of far-flung IoT data. Add to this the complexities related to the ways devices discover each another and authenticate interactions, and you've got quite conundrum.
Organizations hoping to derive business value from the IoT will need to develop a viable data architecture, an interoperability strategy and governance rules for IoT data. Another important consideration for companies will be added security measures for data protection and the preservation of intellectual property.
Grounding the IoT Vision in Reality
The IoT may promise a mind-boggling (and tantalizing) torrent of customer data, but will B2B marketers have enough discipline to discover, ingest, and organize the data? Today only 8% of businesses are actually using more than 25% of their IoT data.
Part of the challenge lies in bringing data (from/within the IoT and enterprise systems) together. Perhaps the larger hurdle is making sense of all the data available to an enterprise, 80% of which is unstructured.
“We have enough trouble with the Internet of Internets, let alone an Internet of Things,” says Anthony Scriffignano, Ph.D., SVP and Chief Data Scientist at Dun & Bradstreet. “Just because the technology exists to allow smartphones and cars to discover one another and connect, doesn’t mean we can quickly assemble an expansive web of interconnected things, flip a switch and watch the marketing insights start rolling in.”
To responsibly interpret and effectively govern IoT-generated data, organizations will need to develop a flexible, shared data ontology (exposing the who, how, where and why of things talking to each other). According to Scriffignano, these definitions – and the relationships among these terms – are essential to authenticating and validating the devices and data gleaned from IoT interactions. Without this governance, the IoT could easily metamorphose into mayhem’s evil twin.
“Without formal specifications for the IoT, it’s not difficult to imagine a scenario in which something will talk to another thing that shouldn’t respond. To use an extreme and intentionally absurd example, a passenger’s iPad® might send an ‘extend landing gear’ command to a plane that is flying at 30,000 feet,” Scriffignano says.
It doesn’t take much prompting to imagine less fatal, but nonetheless terrifying, automated marketing responses triggered by wild, ungoverned IoT “intelligence.” Take something as basic as a time zone and its role in content distribution. Without a universal definition of time zone among connected things, marketing chaos will likely ensue.
“Will we establish one time scale for everything so that something that happens at ‘midnight’ will be unambiguous, even if the ‘thing’ is moving among time zones?” Scriffignano asks.
In addition, B2B marketers who plan on using the IoT for prediction and optimization will face an analytics challenge. Traditional analytics tools aren’t equipped to extract real-time, usable insights from the huge data streams produced by the IoT.
“This is a real problem for IT,” says Sadin, who specializes in improving IT architecture, alignment, agility and ability to transform businesses. “How do we manage networking, Big Data and analytics? We need to encode data better, cleanse data better and learn how to analyze data faster.”
A Stronger Product & Marketing Bond
Clearly, CMOs will need to work closely with CIOs to optimize the business value derived from the IoT. In addition, Sadin says, the IoT should bring product and marketing teams closer than they typically are today. (According to a statistic shared at the SiriusDecisions Summit in March, 90% of B2B marketing departments are not fully integrated into their company’s product development cycle.)
“By and large, marketers are as uncomfortable strolling over to the product area as they would be wandering around a factory floor,” Sadin says. “But in an IoT world, the product team is a valuable source of customer listening for marketers, not only on the back end of a purchase, but also on the front end of a product’s next iteration.”
Before approaching IT, Sadin urges B2B marketers to think about what they already know about customers and what they’d like to find out…and how data from connected devices might be able to fill in the gaps.
“What would you, as a marketer, want to ‘ask’ the product? Capabilities for gathering this information could be built into the product, but only if the product folks knows what’s needed,” Sadin says.
But gathering all of this data is useless if IT can’t integrate it into the enterprise architecture and analytics teams can’t make sense of it.
“Ideally, IT, marketing and product teams should have a three-way conversation,” Sadin says. “Marketers need to ask product engineers, ‘Can you produce this data?’ If so, then they need to ask IT, ‘Can you capture it here and deliver it there?’ Then, the analytics team can speak to their ability to deliver the type of analyses marketing wants.”
This kind of collaboration won’t happen overnight. As Sadin notes, relationships are the hardest things to change. And this is true many times over in the IoT world, where the relationships in question aren’t only among people. Technologies need to be compatible and disparate data sets need to relate to each other; otherwise, one universal view of the customer will remain elusive for marketers.
As a vision, the IoT is irresistible. Its sparkling outcomes are seductively easy to imagine. We may want the rewards to magically appear, but the truth is that we have a lot of work to do – not the least of which is to recruit IT, product and analytics teams to pursue a complex customer analytics endeavor.
Yet, if helps us to do the right thing for our customers – by creating the right experience – it will be well worth it.