The Internet of Things (IoT) is much talked about and perhaps slightly less understood. The IoT is, in effect, every single smart device in the world, pictured as a single network. By “smart” we mean that a device has embedded in it the ability to communicate with the mothership – the place where it was made and from which it was bought. Smart devices include domestic appliances, watches, wearable electronics and a host of other things.
Consumers like smart devices because the device’s ability to communicate with its manufacturer makes for faster diagnosis and repair of faults and allows updated firmware to be installed as soon as it is produced. Marketers like them for rather different reasons.
You build a product, you offer it for sale and someone buys it and takes it home. That’s how it’s always been and, while the sale was nice, the problem for manufacturers inherent in that business model is that – unless something goes wrong with the product – they don’t know where the consumer is.
Why would they want to know that? Because one of the best established rules of selling is that the easiest person to sell to is someone who’s bought from you in the past. And that remains true even if the product they bought has not been a total success. Someone who bought your refrigerator is a good candidate to buy your newly introduced chest freezer – but that’s no good if you can’t find them to tell them about it.
Marketers would have loved to know where their customers were. And now, thanks to the IoT, they can.
It’s impossible to know exactly how many smart devices make up the Internet of Things. One estimate says 2.9 billion worldwide while another says 5 billion. With numbers like that, the one thing we can be certain of is that, however many smart devices there are, there are a lot. In marketing terms that’s better presented as: A LOT. And the number is going to grow. 13 billion by 2020 is a number frequently heard.
Connectivity means data; data means more relevant marketing campaigns; more relevant marketing campaigns mean greater customer engagement. A marketer’s dream.
What we see marketers using the IoT for is to:
- Analyze customer buying habits
- Collect data about how customers use products. The data highlights specific faults and advantages and provides guidance on which new product directions will produce most sales
- Send targeted information on upgrades and new products to customers who are likely to pursue those products and (just as important) not sending information to people who don’t want it.
The presentation of brands is going to have to change because the relationship between seller and buyer is also going to change. Instead of trying to second guess consumers, we can know what they want and what they don’t want and act accordingly. We can offer better service and we can interact and engage with our customers in a way that has never before been possible.
The next five years may be the most exciting time marketers have ever known.