5 Ways IoT Enables Brands to Create Loyal Customers

Author

Mike Kavis, Contributor

March 6, 2015

If you’re not using the Internet of Things to engage your customers, you should be.

Earlier this week Jessica Groopman from Altimeter published a thought provoking white paper that recommends 5 consumer facing use cases for IoT. For each use case she highlights the value proposition for both the brand and the customer, describes a few key methods for engagement, and closes with some real life examples. While you can download it for free (registration is required), here’s my outline of the 5 most compelling uses cases from the report.

Reward

In exchange for opting into brand programs, customers want to be rewarded for their time, money and effort. Numerous loyalty programs and one-to-one marketing campaigns have been in use for years. The problem with these legacy methods is that they usually only capture web activity and point of sale purchases. Both of these data points are used to model shopping behaviors to enable brands to segment shoppers into categories like “loyal,” “brand switcher,” or “never buy.” However, they miss out on many data points that can influence buyers’ behavior including current location, availability of in-store products, and environmental conditions (heavy traffic, weather, a triggering event, etc.). With sensor and mobile technology, brands can proactively engage with customers with the right content at the most relevant time and reward consumers for their participation.

An example of an IoT reward use case mentioned in the report shows how Taco Bell targets users of the Waze mobile navigation application. When the consumer drives by their local Taco Bell they may receive a targeted message that they’ll get free cinnamon twists if they make that late-night purchase.

Information and Decision Making

The goal of this use case is to empower consumers with the ability to access and act on intelligence. This can be accomplished providing information about the product via a mobile device or tablet, using location based technology to help navigate consumers to the product or service. They can also monitor usage or conditions to alert consumers when to purchase or service a product and provide news, updates or public awareness.

A great example discussed in the paper was how one company released a public service announcement to its consumers providing them with valuable information.

“After a recent earthquake in California, wearable fitness tracker company Jawbone released an aggregated report of how the earthquake affected San Francisco Bay area sleep cycles, based on sleepers’ proximity to the quake’s epicenter”

This type of one-on-one dialogue with consumers is invaluable and drives huge brand affinity. Consumers don’t like to get buried by promotions, but will welcome interesting and meaningful insights about the product and its uses. Jawbone was able to mine data across many customers to discover new information that it could convey to its customers extending the value of their purchase far beyond the initial benefits.

Facilitation

Facilitation focuses on making the user experience easier, faster and more convenient. New technologies like mobile wallets are making the payment experience simple and fast. If you have been to Disney World lately you would have seen the new wearable Magic Band that allows customers to traverse the entire park without ever having to reach into their wallet. The wearable not only acts as a form of ID and a payment device, but it also records what attractions the customers visit and makes the appropriate recommendations and offers based on their patterns. The most commonly referenced facilitation use cases surround the idea of mobile-managed connected homes, including remote controlled thermostats, lighting, security systems and other household appliances. However, facilitation can bring value to every aspect of someone’s day.

Service

Numerous IoT technologies are also being used to improve customer support by proactively identifying opportunities. I recently wrote how smart labels could drastically improve logistics, allowing customers and support staff to obtain up to date information about items within a supply chain and take corrective action sooner.

One of the best examples of improved service is how Tesla is changing the way cars are serviced. Here is an excerpt from the report:

“In January of 2014, Tesla was forced to recall 29,222 Model S cars. The wall chargers were at risk of overheating. Given Tesla cars are effectively hardware supporting a software operating system, Tesla was able to deliver a software update that eliminated the problem in all 29,222 cars. Not only did this save drivers a pesky trip to the dealership, but Tesla gave customers full control over when they preferred to receive the 45 minute update.”

 

Innovation

The fifth and final use case focuses on leveraging feedback for rapid R&D, customization, and improvement. This is accomplished by collecting data from products, customers, and environments to learn more about customer feedback, interaction that will allow products and services to be tailored to each customer.

A company that can take customer feedback and quickly act on it has a great chance of improving customer loyalty. Once again Telsa was used as an example of how IoT is enabling this.

“Tesla not only provides software updates to the car’s operating system (OS), but also crowdsources ways to innovate by allowing customers to submit requests for features they would like. (Implementation is, of course, at Tesla’s discretion.) Recently a customer submitted a request for a crawl feature: in effect, extremely slow cruise control to ease the driving experience during heavy stop-and-go traffic. Not only did Tesla implement the crawl feature for that customer, but they rolled it out across the entire fleet via a software update”

Summary

I only scratched the surface of the many nuggets found within this report. There are many other focus areas in this report with great information that are not covered in my summary. The key take away is that IoT will provide brands with new opportunities to engage with consumers like never before. But it is not a one way street. Customers will get benefits as well as the level of service, customization, and efficiencies will greatly improve as these technologies mature.

IOT customer loyalty

This article was written by Mike Kavis from Forbes and was legally licensed through the NewsCred publisher network.

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