How the Internet of Things will empower marketing

Transforming the role of marketing

The Internet of Things (IoT) has arrived, and it is disrupting numerous industries. While brands are investing significant amounts to connect an ever-increasing number of products with embedded intelligence tied to plants and processes, marketers must ensure their strategies are keeping up to speed with the IoT’s exponential growth. Fifty-one percent of the world’s leading global marketers have predicted that the IoT will be the most influential trend of the next few years.  Marketo simply describes the IoT as “the interconnectivity of our digital devices that provides endless opportunities for brands to listen and respond to the needs of their customers – with the right message, at the right time, on the right device”. This new interconnected world is bound to revolutionize user and customer experiences, as well as the way in which we all will interact with brands.  It will transform the marketing and advertising industry.

The product experience over price point

A predominant need for the marketer is to understand how the IoT changes the product experience in a way that provides a key opportunity for marketing: the IoT-connect product enables the brand to create a greater entangled relationship with its customer.  Customers’ lives will become easier, more productive and their purchases more affordable. Let’s take the example of the refrigerator. The IoT-connected refrigerator, for example, will be able to recognize when a grocery such as milk or butter is running low and update digital shopping lists – the customer does not need to spend time checking on their stock before going to the grocery store. One step further, that same refrigerator could order the grocery product online for delivery, saving the customer the trip to the grocery store and thus even more time and money. The marketer is able to market the product based on new levels of convenience that rise above product price point consideration.

Entangling the product and the customer

The refrigerator’s machine learning will begin to recognize the consumer’s behavior and preferences, with the long-term capability to decipher what meals we are cooking based on the ingredients taken out and in what quantity. During the work-day we may ask the refrigerator what meal we can cook that evening and receive recommendations based on intimate knowledge of what we prefer. What does this mean for marketing? In short, opportunities for greater customer loyalty – we will more likely buy the refrigerator that can instinctively know us individually and our preferences, rather than one based on traditional features such as number of storage compartments and variance of cool-to-cold settings. Our likelihood of switching brand to one that does not possess the data of our preferences – thus needing to ‘learn about us’ again, and unable to save us time – will drop significantly, potentially even if the alternative brand is cheaper. We have been entangled by the product. At Vertic we call this Entangling or Entangled Marketing. 

The personalized interface

This impact of the Internet of Things on the product’s potential to reduce importance of price point is going to be key to many manufacturing companies longevity, in particular those whose products are becoming increasingly seen as commodity items. The running shoe is already an example of this – many manufacturers are already 3D printing their products as a way to compete on price. However, it will be those that add value in services that will ultimately win out. Under Armour’s vision of creating connected clothing that can read biometrics is such an example. Their purchase of Endomondo and MyFitnessPal shows their recognition that the consumer is not as interested in the running shoe as the product but the data that can be leveraged from the shoe’s usage to help make them fitter, stronger and healthier.

Considered a tool for personalization, engagement and new customer experiences, the IoT can help brands forge greater mutually-rewarding relationships with customers. This ranges from monitoring and assessing buying habits across customers’ devices to gaining greater insights into the customer buying journey to better utilizing real-time data—particularly at point of sale. Ads will be more targeted and ultimately more contextualized. The IoT should also be used as a means to create more efficient customer service practices, including resolving issues quickly and offering more seamless experiences.

The increased data generated by the IoT will enable brands to effectively personalize experiences rather than pester customers. Greater insights will simply be wasted if brands do not adopt customer-centric practices and create a rewarding relationship for both brand and consumer. The key to unlocking the power of the IoT is to use data for valuable customer feedback to improve offerings and fuel further innovation. While brands progress to create more connected products, they should note that exceptional interfaces may be more important to consumer adoption than the actual product. A successful interface is the gateway to entanglement: if the refrigerator’s interface is successfully personalizing recommendations over time, its user is more likely to be mutually responding to its recommendations with the product’s usage. This intrinsically linked action and mutual reaction are the basis of the entangled relationship.

IoT and Entangled Marketing

Thought leaders are already racing to apply Entangled Marketing to this technological advancement.  Andrew Morawski, Head of IoT at Vodafone, describes in his blog post how the Internet of Things has the potential to achieve the vision of moving brands beyond engagement to entanglement by transforming the customer experience and essentially how we interact with brands.

In order to leverage the smarter marketing opportunities the IoT presents, brands must make efforts to understand the value it brings.  This means an increase in the sophistication of touchpoints and opportunities for greater interactions through digital. Combined with a wealth of data on customer behavior, marketers will have every opportunity to create more targeted and better tailored customer interactions throughout the customer decision journey. With a prediction of approximately 75 billion smarter devices by 2020, make sure your brand is not left behind in the race to win a greater share of life with customers.