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How IoT Can Help Marketers Increase ROI

The Internet of Things (IoT) has blurred the lines between the digital and physical realities as everything from watches to freezers join the connected world. And this is just the beginning: research firm IHS Markit projects that the number of connected IoT devices worldwide will jump 12 percent on average annually, from nearly 27 billion in 2017 to 125 billion in 2030.

As the world around us becomes increasingly connected, the business processes that will be impacted first include marketing, sales and customer service. Why? These departments increasingly rely on data coming in from IoT devices to ensure a consistent, personalized customer experience.

Imagine driving past a mall and a notification pops up on your smart watch or mobile phone indicating your favorite store is having a sale, then presents you with a coupon? That’s IoT-enabled marketing at work.

It’s Not About The Purchase, It’s About The Journey

Marketers spend hours analyzing the success of their campaigns via open rates, conversions, etc. and for good reason: Engagement is the first step in a customer’s relationship or journey with a company. However, all too often marketers mistakenly stop tracking a customer’s engagement after they make a purchase, rather than analyzing how that customer subsequently utilizes that product or service over time. That’s a huge missed opportunity, especially when engaging customers is so difficult in the first place.  

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With IoT, marketers increasingly have access to a plethora of data points that help paint a portrait of a customer’s interests, preferences and the best way to reach them. This information provides marketers with valuable insights into customer engagements that go way beyond the initial interaction, which in turn helps enrich and deepen customer relationships over time, leading to increased loyalty and share-of-wallet.

3 Key Considerations for Designing an IoT Marketing Strategy

Before jumping head first into the IoT waters, marketers should remember that more data doesn’t necessarily mean more insights. Here are three important things to keep in mind:

Stay focused on what kind of data will be meaningful. It takes just one contrived, “connected” device for consumers to sour on a brand. So start small and think strategically about the value delivered by making a device IoT-connected. For example, smart home device makers like Ring and Nest each zeroed in on specific services like doorbells and thermostats, respectively. By focusing on a particular customer service, both companies are able to collect the relevant data needed to not only create a better product, but also deliver a more personalized customer experience.

Consider the customer’s view before connecting a device.  It’s no secret that IoT-enabled devices generally include a price premium. For the most part, consumers don’t mind that extra expense because there’s something in it for them. However, while a kitchen appliance manufacturer may love the idea of having an IoT-connected toaster that produces data, if the connectivity doesn’t deliver a benefit for the customer, why would they pay extra for connectivity? As with any other capability, consider how and why integrating IoT into your products or services can help provide tangible value for customers first.

The Furby factor: will an IoT device pass a customer’s ‘creep meter’?Before introducing any IoT device, remember that with great power, comes great responsibility. Or put another way, there is a fine line between personal and creepy. For example, IoT-connected children’s toys. The introduction of Furby gave rise to a series of smart toys that can listen to conversations and watch activity using cameras. Many of these cute companions connect to the internet using Wi-Fi or Bluetooth, which prompted the FBI to issue a warning to parents about the cybersecurity threat these devices pose. Probably not the type of endorsement those toy manufacturers were seeking.

While the data generated by IoT devices can provide marketers with unprecedented customer insights, it needs to be handled with extreme care. Used correctly, it can help marketers deliver sophisticated, personalized and memorable customer experiences, but is can equally create experiences that are memorable for all the wrong reasons

To be successful, marketers should  start small, determine how to best measure success, and stay focused on designing experiences that can drive value for both consumers and businesses simultaneously.

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