Five Steps for Capturing the Connected Customer: Make It a No-Brainer

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To gain broad consumer adoption, your connected product needs to be price competitive with its unconnected counterparts.

Although it almost goes without saying, price is extremely important to consumers. How important? In its report The Connected Consumer Challenge the IBM Institute for Business Value reports that consumers rank price as the single most important criteria when making a purchase. 82% of respondents said that price was important in past decisions, and 85% said price would be important in future purchases. Winning the hearts and minds of consumers is first and foremost a matter of being gentle on their wallets.

Which brings us to the current generation of connected products. Take the most popular connected product to date: the Nest Thermostat. With an intuitive interface, attractive housing, and cool features like the ability to learn your behavior and create a customized scheduled that saves you money on utility bills, the Nest sets the bar not just for thermostats but for connected products at large. But with a price tag of $250 — five times the cost of your typical non-connected thermostat — it’s hard to see how Nest can ever break out as more than a niche market. The story is the same for many other current generation connected products. Withings’ connected weight scale, which records your readings and transmits the information to the Cloud, sells for $150, while a highly-rated non-connected scale costs only $25. The starter kit for the Philips Hue costs $200, with additional bulbs topping out at $70 each. Home Depot sells equivalent LED bulbs for $13.

The challenge, then, is to design your connected product in a way so that “connected” is no longer mutually exclusive from “affordable”. The single greatest factor in the cost of connected products is undoubtedly system architecture. The reason we at Arrayent are such strong advocates of keeping devices computationally simple and pushing complexity to the cloud is because this architecture has a proven track record of keeping product costs at a minimum. The current generation of connected products listed above are so expensive precisely because they try to do too much in the physical products themselves. After choosing the correct system architecture the second most pivotal action you can take to minimize the costs of your connected product is to resist the urge of “feature creep” by focusing on your product’s minimum value proposition, as we discussed in the last installment of this “Capturing the Connected Customer” blog series.

Affordable connected products can be done. In fact, they already have. Our customer Chamberlain, the market leader in garage door openers (GDO), is paving the way in useful connected products at reasonable price points. Chamberlain’s Internet-connected garage door openers, which includes their flagship brand LiftMaster, come stock with lifetime access to a free app (available on Android and iOS) which enables customers to remotely control their GDO from anywhere in the world. For anyone who has left their home only to realize 15 minutes later that they left the garage door open, this “peace of mind” app is a life saver, even if they only use it two or three times. Your typical non-connected GDO sells at retail for $199. As for Chamberlain’s connected GDO, with its killer remote control app? $229. Talk about a no-brainer.

End of Part 4 of 5.  Continue to Part 5: “Iterate and Grow”

By Kayce Basques