The IoT Equation: Harmonizing Business Goals with Customer Needs
By Kim Burmeister, CEO
In the whirlwind of technological advancement, the Internet of Things (IoT) stands out as a transformative force reshaping how we interact with our devices and data. Initially, the race to launch IoT products focused on feature-rich offerings, emphasizing remote command and control. However, this rush often overlooked a critical component: a sustainable strategy for providing long-term value to customers and businesses. As IoT technology evolves, it’s imperative for businesses to ponder: How can we monetize these innovations? What tangible benefits do they offer users? And how do we navigate the ongoing challenge of aligning business objectives with customer needs?
As the technology evolved, we started to encourage our clients to contemplate the long-term value of their Internet of Things (IoT) solutions. We posed critical questions to guide their strategic planning: How could they effectively monetize these products? What tangible benefits would these offerings provide to their end-users? Moreover, we emphasized the importance of developing a robust, ongoing roadmap. This roadmap would be pivotal in ensuring that the evolving needs of both the business and its end-users are consistently addressed and fulfilled.
Fast forward to the present, and a notable challenge in IoT solutions emerges: the delicate balance of catering to both business and customer needs. While a significant portion of a business’s value lies in data collection and analysis, an overemphasis on this aspect can lead to customer disengagement. Conversely, focusing exclusively on delivering customer value without a strategic approach to data utilization leaves businesses without a compelling return on investment (ROI) narrative. This lack of balance can lead to organizational skepticism about the overall value and effectiveness of their IoT strategies.
To illustrate the aforementioned imbalance, consider these two examples:
- Data-Driven, Customer-Disengaged Smart Home Product: A smart home product is launched with a strong business-centric value proposition, primarily focusing on data collection from product usage. The company utilizes analytics to track usage frequency, identify seldom-used features for potential removal to cut costs, and assess product lifecycle through cycle counts. However, the value delivered to customers is minimal, limited to remote control and status monitoring. Lacking continuous investment in feature development, customers eventually lose interest, leading to reduced usage and account deletions, ultimately resulting in the cessation of data flow.
- Customer-Focused, Data-Neglected Smart Home Product: A smart home product is designed with a multitude of features that significantly benefit the end-user. Customers enjoy the ability to effortlessly complete tasks, monitor progress, troubleshoot issues, and discover methods to enhance task outcomes. Yet, in this scenario, there was a lack of initial consideration for data strategy. This oversight hampers the organization’s ability to leverage analytics for informed business decisions and to uncover new revenue streams, despite the product’s popularity among users.
In the first scenario, the business’s focus on data without engaging customers results in insufficient user interaction to generate meaningful, statistically significant data points. Alternatively, in the second scenario, the emphasis on user features without a data strategy leads to a lack of structured, comprehensive data, rendering analytics ineffective. In both cases, the IoT product risks being perceived as a financial burden, offering minimal return on investment.
It is therefore crucial to devise a system that strikes a balance between these two approaches, optimizing value for both the business and the customer. Achieving this equilibrium enables an organization to sustain investment in new feature development, supported by a revenue stream linked to these enhancements.
In the realm of connected products, generating revenue often demands innovative thinking beyond conventional subscription models. While subscriptions can be viable for some solutions, consumer fatigue with this model is clear. The challenge lies in leveraging data to create alternative revenue streams. These could include predictive maintenance, selling replacement parts, enhancing customer experience to boost market share, or adding value to a dealer network. The key is to integrate data strategically to unlock new, sustainable revenue opportunities.
If your current solution isn’t meeting your expectations, or if you’re considering integrating IoT into your product for the first time, we invite you to consult with our team. Our experts specialize in crafting solutions that harmonize the requirements and expectations of all stakeholders, ensuring a balanced, effective approach to IoT implementation. Let us help you navigate this journey to maximize the potential of your product.