Why should you spend the time, effort, and money to make your appliances “smart”? There are many reasons, but in this post we will focus on how you will benefit from the unprecedented “Connected Customer Relationship” you achieve with IoT. This new relationship enables manufacturers to create new sales channels such as consumable purchases (such as refrigerator water filters, exactly when they are needed), or completely new business models like selling service subscriptions such as “refrigeration as a service” (you don’t “buy” the refrigerator, car, etc, you rent it) and even selling “guaranteed quality of service” sometimes now referred to selling “outcomes”.
I just read a couple of predictions by Paul Saffo, Technology Forecaster, in last month’s print copy of National Geographic where he mentions that “We’re moving away from a purchase economy. We will subscribe to access rather than pay money for possessions such as smartphones. We won’t buy software anymore; we’ll subscribe to it.” Well some of this has already happened, but Saffo also mentions that in 5 to 10 years many of us won’t own cars, and when you need a ride, a self-driving car will show up at your door and you will just pay for that service.
Beyond these examples, imagine the expansion in customer contact that an appliance manufacturer will have with the consumer when they are connected. There are amazing opportunities for marketing, up-sell, support, maintenance, and if done well will build increased loyalty from the consumer.
So, many thought leaders are predicting that IoT Business Transformation is about turning products into services. In my next blog(s) we will talk about other ways manufacturers can get a healthy return on their IoT investments. Additionally, we will cover transformation drivers like customer expectations evolving due to disruptive competition and the need to become more design and user-centric across an entire organizations to win your market.