The Internet of Things (IoT) has been one of the biggest trends in digital technology in the past 5 years. Gartner previously estimated that there will be nearly 26bn devices on the IoT by 2020, but this year Cisco has estimated that 50bn devices or objects will be connected by that time. It appears that connected devices are ringing in a new era for marketing

However, let’s first remove the ambiguity behind what the IoT is…

The Internet of Things revolves around the increase in machine-to-machine communication, by increasing the connection of physical objects to the internet, and thereby to each other and the environment. IoT has the ability to be an aid in helping facilitate a smoother environment where many decisions and actions are automated to make our lives better and easier.

To put it simply, it’s going to make everything in our lives is going to become “smart.”

To enable this to happen, electronics and software are included in an object giving it an ability to network and communicate with other devices built on cloud computing and networks of data-gathering sensors.

What does this have to do with CRM?

The IoT holds the possibility of the connected objects offering enhanced value and service. However, one of the biggest opportunities for marketers today is having effective CRM - including the use of personalisation and loyalty. Some people name their cars but the IoT takes the concept of an object having an identity to a new level. In effect, it can give products identities and that opens up the potential of new relationships with products, extending the concept of CRM to products. Through IoT, the owners of the brand can evaluate information in regards to the product which is connected to personalise them to an individual customer.

This way of thinking opens up new possibilities for brands.

Instead of thinking of a brand’s relationship with the product just at the point in which they are buying and hoping no issues pop up. Brands can begin to understand the life of the product, how it is used and the relationship the customer develops with the product. Throughout the lifecycle of the product messages can be sent, experiences created and products can managed. There will also be more relative opportunities to cross-sell and up-sell based on how the consumer is using the product. Through their continuous relationship with the product, a brand can consider ways to deepen their relationship, and make the relationship continuous with the customer.

Johnnie Walker whiskey IoT CRM

An example of this is Diageo's Johnnie Walker’s ‘Smart Bottle’; the bottle used sensors in the form of tags, which were printed and attached to the bottle aiming to improve the consumer’s journey and experience. The bottle could then tell if the bottle was opened or if it wasn’t, this meant that they could send targeted messages depending on which stage of consumption the consumer is at.

For consumable products, it will be possible to gain understanding in regards to the order cycle of a product. Rather than relying on past purchase data to estimate when a customer is likely to run out of their existing product, brands will be able to understanding exactly when a product is running out.

As a part of the opportunities of CRM comes personalisation, but product based personalisation. Facebook, Amazon and Google are able to dominate the targeted advertising space because of the huge amounts of data they have access to, however the widespread adoption of IoT will open up new opportunities in data. Translating the data into consumer insight will be hugely valuable to brands to deliver the correct message, at the correct time and through the correct medium.

Costa Coffee have created a ‘digital barista’ for areas where a full shop is deemed unsuitable, for example workplaces or universities. It is essentially an intelligent vending machine. By using the AIM suite powered by Intel, it uses real time audience analytics and delivers the information to a central database, where they will be able to see insights such as where certain menu items do better. It will be able to detect people in front of the machine, recognise if they are male or female and then show targeted content based on the data collected previously. Being able to understand the identity of a customer, their buying behaviours and location in real time. This could be considered an advantage due to the fact it will be able to adjust to market conditions, competitor pricing as well as tailoring to the specific individual.

Innovation and rewards

Consumer goods are an example of a category that struggles to generate loyal shoppers, because decisions are easily traded for better deals from brands selling a similar product. However the IoT has the ability to hold people within a brand’s ecosystem. For instance, once a consumer has bought a product, it can generate ongoing value, for example health data, then this could link into other services that all become part of a convenient lifestyle. IoT enables brands to create loyal customers by reward, information and decision making, facilitation, service and innovation.

Forbes gave some examples of these:

Taco Bell gives us a good example of reward, using the Waze navigation app. When the consumer is near to their local restaurant they receive a message encouraging them to make a purchase.

Jawbone Earthquake data CRM

Jawbone used their data to give information after an earthquake in the USA. Jawbone released a report on how the disaster had impacted on people’s sleep cycles, based on their closeness to the epicentre.

Tesla used the IoT back in 2014 when they were forced to recall 29,222 of their cars. There was a risk of overheating in regards to their wall chargers. They were able to simply update the software and eradicate the problem in the cars, this was because it was able to give the flexibility to the customer because they could determine when they wanted the 45 minute update to take place.

A product should no longer be seen as stagnant, the product has essentially gained a ‘voice’.

The technology that IoT has means that physical products can develop a ‘living digital layer’, using data to personalise the customer experience, it is giving brands even more opportunity to develop fully fledged deep and understanding relationships of who their customers are and what they are doing/how they are using products.

Want to know how you can manage your CRM in the IoT era? Talk to us and take a look at our award-winning work.