It’s official: there are now more Internet connected-devices on this planet than there are humans. And this number is expected to more than double to 50 billion in another six years. The Internet of Things (IoT) refers to these uniquely identifiable physical devices that are connected to each other and the Internet, and they can be found everywhere today — in computers, cars, coffee makers, cities and humans.
Businesses have already started using these devices for strategic objectives; for example, auto insurers use driving pattern analyzers to tweak insurance premiums. With the rapid growth in the usage of these devices, clients are increasingly asking Merkle where the opportunities are and what this means for their CRM strategy. Addressability, personalization and analytics are three of the more important themes that make it to the top of the list.
1. Highly Addressable Customers and Media Spend
David Williams, Merkle’s CEO, stresses the importance of addressability at scale as the future of CRM. Devices in the IoT universe will be IP enabled and can become addressable platforms, which will allow marketers to identify customers at the individual level accurately. Additionally, marketers will also be able to know their behaviors and impact those accordingly. A smart refrigerator can tell you when you are running low on eggs and suggest a brand of eggs to replace it, thus increasing the context and the effectiveness of the ad significantly in addition to identifying the customer at the individual level. Today’s, CMOs want to know how much of their media spend is addressable and the IoT will enable a level of addressability that will allow marketers to answer that question.
2. Cross-Channel Personalized Experiences
This is a two-way relationship — in return for providing data across these devices, a customer will demand a personalized experience and connection with a brand. More devices mean more channels through which marketers can interact with customers and each channel will have its own unique features and will require a redesigned customer experience to meet a new customer expectation.
The defining factor in creating this cross-channel experience will be the ability to create a unified customer view from multiple “walled data gardens” that exist across devices and channels in many organizations. Marketers will have new visibility into how customers use products at each stage of the customer lifecycle. When Nike’s Fuel Band tracks that I have completed running 500 miles (approximately the useful life of a running shoe) and uploads that data to the Nike portal, Nike could generate a personalized sales campaign to replace my running shoes. In doing so, it will use data from earlier interactions across different channels to create a customized buying experience. Marketers who leverage this data at all customer touchpoints will have an advantage.
3. "Bigger" Data and Analytics
Big data will get even bigger and analytics will become even more important with the arrival of the IoT. The data generated by these devices will have to be stored, optimized and analyzed in order to ultimately impact a company’s bottom line. Given the real-time nature of this data, decision-making will have to be dynamic and speedy as well. And as the quality of data coming in increases, the quality of the analytics and resultant decision-making will improve. A key difference here from earlier paradigm shifts will be scale – enterprise data centers must be prepared to handle the influx of data coming in. The value of all of this data will only be realized when marketers leverage analytics and data to drive richer insights, stronger targeting and more accurate measurement.
A turning point like this will also bring about its own set of challenges with privacy and security at the top of the list. Disclosure of any customer information coming from these devices to a third party should only be done with a customer’s consent as winning that trust back could prove to be an uphill challenge. New links in the data chain present viable entry points for hackers, and companies must ensure that processes exist to mitigate the effect of potential security breaches.
The opportunity with the Internet of Things is huge. This is a real chance for today’s marketers to use the wealth of information available to accurately identify and present customers with a relevant and targeted set of choices. Marketers who can leverage each channel’s characteristics to make an emotional and mutually beneficial connection with a customer will ultimately be the winners in this new ecosystem. The rest? As more and more consumers embrace newer technology, they will have no choice but to play along or be left behind.