Customer Experience in the Internet of Things: Five Ways Brands Can Use Sensors to Build Better Customer Relationships

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GROOPMAN J., Customer Experience in the Internet of Things: Five Ways Brands Can Use Sensors to Build Better Customer Relationships, ALTIMETER, March 2015

Type Book
Abstract The Internet of Things is not some pipe dream, Jetsons-esque future state; it is

an entirely new paradigm for building relationships. Yet determining when, how, and to what extent to apply connected products and other sensor-generated data to the customer experience remains poorly understood by marketers and digital strategists. Our research finds that the unique opportunity in the Internet of Things is that it has the potential to mutually benefit both enterprise and consumer. Enterprises gain visibility; consumers gain empowerment. This report reveals five use cases illustrating how consumer-facing brands can embrace the Internet of Things to create actual value for businesses and consumers alike.

Topics Business Model, Consumer, Technology, Interoperability, Transparency


"The Internet of Things creates the opportunity for any element of the brand experience to have a voice. When we add sensors to the world around us (e.g., beings, places, objects, environments), we grant these things a voice through the data they generate simply by existing. IoT enables multiway communications between brand and consumer, brand and object, consumer and object, and object and object" (p. 4).

" The Internet and social media age brought consumers empowerment in the form of power via access to information. The Internet of Things extends this, but fundamentally facilitates consumer empowerment in the form of doing: controlling, allocating, conserving, monitoring, and accomplishing" (p. 5).

"Content that aids in product and service evaluation. Companies can send the content that they’ve produced for the web directly to connected devices and in response to such triggers as location, weather, and product interaction. Examples might include checklists, comparison guides, and ratings and reviews from other customers" (p. 9). This can be suggests a liberal market-driven solution to the current problem of consumers' lack of awareness about what he can do and not do with the connected chattels he buys: the provider sends to the customer directly on the IoT product or on the mobile app notifications of what the consumer can or can't do with the product, reducing consumer's information costs.

"IoT helps brands make their products and services more useful. Utility in IoT is leveraging sensors in connected objects, environments, or mobile devices to accomplish an action that was historically done manually. In many ways, “utility” is a catch-all category for facilitating action. This could include actions like remotely watering the lawn, turning up the slow cooker, using a wearable or smartphone as a hotel room key, gesture-controlling heating and lighting, or any other way brands can deploy technology to help customers utilize their products and services more effectively. “Brands should really begin by focusing on utility use cases, establishing relevance, and building volume. Everything else will fall into place,” says Matt Silk, head of strategy at Waterfall Mobile. Facilitation is less about replacing existing actions and more about simplifying them. It’s about consolidating steps and reducing friction. The opportunity is one of bettering customer experience and forging emotional connections, while the risk is one of experience or functional breakdown" (p. 12).

"Proactive support is when service converges with automatic resolution. Sometimes this is invisible to the customer. For example, a connected washing machine is not just plugged into the wall outlet; rather it constantly sends performance data to the manufacturer. When something goes wrong, the manufacturer can either deliver a software update over the air or preemptively schedule a technician visit" (p. 13).

"IoT enables customization and personalization to help brands stay relevant and differentiated. IoT presents the opportunity to tailor experiences to customers’ unique preferences, behaviors, and needs" (p. 15).

N.B. (the growing role of software): "As brands apply a software component, an interface that is iterative and constantly updated, to products, which in turn become hardware, rapid innovation and customization become possible" (p. 15).

"Just because we can add sensors to just about anything doesn’t necessarily mean we should" (p. 20).

N.B. (business models): "Many businesses also find that IoT enables entirely new models of generating revenue and/or cost-savings and efficiency. Those leading IoT initiatives will benefit from educating stakeholders (especially leadership) about the potential for new business model creation. Leveraging data for new or enhanced services; incorporating sensors for more crowdsourced or collaborative services in the shared economy; identifying service gaps or opportunities are just a few of the ways companies are capitalizing on new monetization strategies. “We’ve seen many clients realize new monetization strategies, as connected products are an amazing source of data which can illuminate opportunities previously invisible, or impossible,” says Kirsten Billhardt, Internet of Things marketing strategist at Dell" (p. 22).

"Furthermore—a real challenge to realizing connected services—brands must plan activations to be as technologically standardized as possible. Standards across connected devices are inconsistent today, but building out connected products and services to be able to ‘play nicely’ with other hardware, software, APIs, computing and connectivity protocols, etc, is critical for contextual relevance and driving adoption. “If you want your connected service to be reliable, there must be clear standards; no silos by individual manufacturers,” says Kurt Hoppe, former head of Smart Home North America at LG" (p. 24).

N.B. (unstable contractual terms): "“Disabling cookies across browsers, computers, etc. is pretty difficult. By contrast, it’s easy to opt out on a physical object in your house -- you just stop using it,” says Jamie Beckland, head of product at Janrain, a customer identity management platform. Easier opt-out spells risk for brands as deterring customers diminishes ROI on IoT implementations—which aren’t inexpensive" (p. 25).

"[T]he truest role of IoT is to make technology more invisible so that we can reacquaint ourselves with the world around us" (p. 27).

Examples of uses cases illustrated by the article:

  • Whirpool is integrated with Nest: if Nest is set to Away, the washer "switches to slightly longer drying times at a lower temperature

to conserve energy" (p. 10);

  • Chamberlain garage door opener, which provides the ability to remotely open and close the garage door from anywhere (p. 12);
  • "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" (p. 14);

  • "As brands apply a software component, an interface that is iterative and constantly

updated, to products, which in turn become hardware, rapid innovation and customization become possible" (p. 16).