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RAPPORT

Thirty measurable business cases for IoT with connected services

Smart and pervasive technologies

Since the industrial revolution companies have focused on and invested significantly to influence customer behavior during the decisionmaking process. This process refers to the 4 common steps leading up to a purchase: need awareness, information, evaluation, and transaction. The activities that companies use to influence behavior during these steps have been proactive in that a message triggers some response. In most product categories, however, the process of buying is significantly shorter than the final stage of the decision-making process, i.e. the use phase. In the automotive sector, for example, a consumer will spend 1 to 3 months deciding which new car to buy and then drive that car for 3-5 years.

In the home appliance sector, the decision-making process is typically concluded in weeks, whereas the use phase can last a decade or more. Certainly, companies try to reinforce the post-purchase relationship with the customer with communications like standardized cross-sell offers and periodic service reminders, but these communications are seldom truly valuable to the customer, because they are mostly based on generalizations about segments and do not reflect a customer ´s actual product condition or his/her product usage. The only truly valuable post-purchase moment-of-truth for companies is customer feedback. Most companies erroneously celebrate no-complaint as quiet satisfaction and some companies actively solicit feedback, which is seen as an opportunity to engage the customer. Social media exacerbates the post-purchase customer relationship for many companies by giving custom- ers the ability to share product opinions with hundreds or even thousands of followers and friends, thus giving birth to a new industry in social monitoring, and a new class of customers like the ego-poster or the professional product reviewer. But the ability to monitor customer "tonality" in near-time does not change the problematic paradigm, namely, the post-purchase customer process for most companies today is reactive in that the company usually does nothing that is truly individually relevant until a customer requests information or complains. In other words, companies use a stimulus-response model during the buying process to steer the customer, and then the customer uses the stimulus-response model post-purchase to manage the company.

The Internet-of-Things (IoT) is profoundly changing the way companies interact with their customers in that it is enabling a post-purchase relationship that did not previously exist. By connecting devices to the internet, companies can gain insights into product performance and, more importantly, individual customer behavior with products. This is called “Predictive Monitoring” and it puts control of the stimulus-response model back into the hands of the company. The data collected from connected devices is “internal data,” because no competitor has this information. Internal data has very valuable proactive applications, which can create a competitive advantage. To maximize the value of this internal data, it should be used in near-time to create an impact for the business and its customers. This is where we differentiate between the Internet-of-Things and Connected Service Experience (CSX). IoT involves making the data generated by connected products available on the internet for reporting and monitoring.

CSX involves analyzing the data from connected products in near-time, querying an expert system to find the most appropriate “Next Best Action,” and triggering an individual interaction between the company and the customer. For example, a fitness bracelet shows the runner his pulse, heart rate, and pace. The runner has to interpret this information and make a subjective decision. The runner may login to a website or use a mobile app to view dashboards, get advice from other runners, or post comments or questions for the manufacturer. Using CSX, the data from the runner ´s bracelet is analyzed using a variety of methods and a specific tips is generated to help improve his/her performance. Instead of monitoring the runner ´s community or waiting for the customer to request information or complain, CSX uses the data from connected products to stimulate the customer, thus putting the company in-charge of the post- purchase experience.

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