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February 2016

Will IoT strengthen customer relationships or undermine it?

I have been reading a lot of interesting developments about IoT(Internet of Things) and some recent trends on the kind of devices that will pop-up soon to influence a customer's life which were showcased in CES 2016. I often wonder how ready are enterprises to transform themselves in a way to anonymize this data yet deliver compelling customer experiences.

I came across this lovely article in HBR on "Customer tracking can work without being creepy". Smart CRM as HBR puts it, talks of some interesting steps that companies need take to balance data being collected & not getting too up-close & personal!

There is a very big difference in companies controlling the data and allowing customers having control over their own data. When customers feel value is being created in their interactions with the company using this data, then there is no issue. The key question here is - "Definition of Value". The irony here is what companies think is value out of this data for them, may not be valuable to customers and value may be different across different customer segments & types. Companies need to understand the concept of "value tiering" when it comes to managing individual customer relationships and using this data out of these devices.

The importance of mapping customer journeys with this data is a critical component companies need to develop quickly.The need to have a "Pilot & learn" mindset is critical. Mapping end-to-end customer walk-thro's and discovering 'data-holes',  is a good way to create previously impossible customer experiences now enabled thro' such IoT devices.   

There is also a huge need to integrate "Brand values" with "Data lakes" that are getting created due to IoT devices. If you were a bank, which  focuses on efficiency more than convenience, then the " data experiences" have to be linked to those brand values. However, if  you are a retailer focusing on "Intelligent Shopping", then how will these devices & data deliver similar values need to be worked on. Amazon's dash button is a great example of this. 

IoT devices have the ability to create 'data overload' and can lead to 'Relationship Tripping' - companies must learn to use it selectively, effectively and intelligently. They need to develop their own IoT vision and have a clear road map of which customer experiences would they like to influence and drive value will be important.