How IoT unlocks customer value — 5 core truths

Let’s be honest. Not too long ago there were well-paid product managers whose very existence depended on not hearing from customers. We built it, we tested it, you bought it. Job done. If it goes wrong, you’ll find us at the end of a very clunky communication trail and even then, you might not get what you want.

If the R&D team wanted to tap into any user data, then some heavy lifting would be needed to immerse an organization in the shoes of the customer. Despite very clever research methodologies, data required a great deal of interpretation to show the insights.

Harnessing digital connections to foster deeper human connections is the highest opportunity of the internet of things (IoT). Altimeter: Customer Experience in the Internet of Things — 2015

But now everything is shifting. Dramatically. Data is going to be instant and substantial. Customer touchpoints are going to explode and product manufacturers will need to grasp the potential of Customer Experience, almost overnight.

There is huge potential for many brands, beyond the applications, in how they use data to craft customer experiences.

So, at a CX level, how is IoT really going to impact the value in the customer relationship and what are the CX mechanics that will actually impact this relationship and increase advocacy amongst customers (users)?

We’ve gathered 5 core Customer Truths to explore the impact of data in engaging customers through IoT.

01 Prediction

Much of the growth in wearable tech or connected health products is driven by its reflective data. Our daily efforts are reported through beautiful visuals to count your daily calories, movement, pulse rate and so on. Yet data has a fantastic ability to predict.

So how do Cloud enabled sensors and actuators 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 Motors, 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.

02 Insight

The new insights loop enables us to see products used and consumed through objective and vivid data. In doing so, data becomes product.

Take Nest, for example. The home thermostat, for decades, 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. The data generated becomes part of the product experience itself and transforms our expectations of functionality.

03 Community

The Instagram explosion some 5 years ago, demonstrated the capacity of socially enabled devices to generate content for consumption across a social community. The potential, however, is not simply passive content sharing.

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 brands like Withings Nokia 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).

04 Personalization

One of the biggest pain points when contacting a company is after running through a lengthy automated call screening process, having 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 we don’t get back that bothers us, it’s the fact that so much of it is avoidable.

A smart IoT model changes a great deal. Not only can data instantly identify connecting customers, 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.

05 Humanization

Anthropomorphism, apart from being the biggest word here, is the attribution of human characteristics to objects. 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 actually describe the brand as a real person in the room.

IoT humanizes products like never before. 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.

Conclusion: 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 up 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 seeing early adoption are those where the balance of legacy functionality (a watch to tell the time) is largely balanced with the data functionality (a watch that tracks your activity). Customers share the value of this data and the ‘Expectation Deficit’ is balanced.

Perhaps the greater challenge is posed to traditional industries migrating to the IoT era. The fire and forget age is over. 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.

 01 The Internet of things changes the customer-company relationship — Harvard Business Review 2015.

02 CITO 2015 — How IoT is shaping the future of Customer Experience and Product Development.

03 Altimeter — Customer Experience in the Internet of things 2015.

04 How IoT Changes Customer Relationships — Ric Merrifield — Harvard Business Review 2016

Originally published at on January 25, 2017.