Marketers must learn hard lessons of mobile to succeed with IoT

The Internet of Things (IoT) is set to unleash a tidal wave of data, with 22 billion connected devices by 2018, supporting the development of more than 200,000 new IoT apps and services. These are staggering numbers, but just a fraction of what’s to come. And it begs the question: Are brands ready for what some have dubbed the Third Wave of the Internet?

Let’s start with a simple question: How can we learn from the lessons of mobile?

The revolution in mobile devices gained speed quickly and left many brands struggling to understand how to engage with customers across these new channels. Think about the speed of change that has created a mobile-first world for many consumers. Smartphone subscriptions reached 2.6 billion in 2015, according to the Ericsson Mobility Report and are expected to grow to 6.1 billion by 2020. Over a third of website visits now start with mobile web browsers.

Looking back, this adoption has been remarkable for both its speed and its scale. And it tells us that marketing teams can’t treat data collection and optimization as an afterthought.

Many brands are still paying for a lack of foresight about how to measure and optimize their mobile channels. (In one telling stat, Forrester Research revealed in 2014 that only 38 percent of marketers said they were using mobile analytics to measure and optimize the mobile app experience.)

It’s critical to think in advance about how to interact with customers across new channels and use the data generated by them.

We are on the brink of another “mobile moment.” IoT poses huge opportunities for business, including expansion into connected products and services, generating new sources of revenue and improved efficiencies. IDC, for example, calls 2016 the “Year of the IoT Developer,” forecasting that 250,000 unique IoT applications will be developed in the next four years.

Are you preparing for what lies ahead?

What is IoT?

Let’s define terms. IoT refers to a network of physical “things” connected by IP addresses to the internet and networked with other objects, devices and systems. Objects become uniquely identifiable. That means we can integrate the physical world into our digital systems, whether it’s a smart refrigerator signaling an order for groceries, a home thermostat measuring energy usage and ultimately paying the bill, or data from a wearables app feeding into a health care dashboard for viewing by your doctor.

Falling costs of sensors, coupled with big leaps in bandwidth and processing power, have opened the door to widespread development of IoT. Consider that Amazon last year launched its Web Services IoT platform for processing and using data from internet-connected devices.

IoT applications range from today’s fitness wearables to uses in agriculture to control seeding and water use on crops. Goldman Sachs identified early adoption verticals to include wearables, cars, homes, cities and industrials “as test cases for what the IoT can achieve.”

What does all this mean to marketers?

It’s important for the enterprise to preserve maximum openness and flexibility in the martech platform as consumers adopt new devices and channels. In the case of IoT, you need the ability to choose from different implementation approaches across an expanding set of use cases, including POS (point of sale) and downloadable software.

That’s the brand’s view, but what are customers expecting? As users interact with more and more channels, they expect relevant, seamless experiences across touch points. A customer ordering an IoT wearable device expects to be able to sync with other devices or buy related products and services seamlessly cross-channel from the brand.

We know from our experience with mobile that brands must think in advance about how to engage users across new channels of interaction, and that includes creating an ecosystem of data that helps you orchestrate content, offers and transactions, regardless of channel. That requires certain foundational elements to be in place:

• Data Collection. As IoT expands, brands will need to make sure they can collect and integrate data about user behaviors and transactions over an extended time horizon. That data must be integrated with other digital and store touch points for a holistic view of users.

• Channel Optimization. The same rules apply to IoT applications and mobile. Measurement and testing will be foundational for optimizing interactions with IoT applications and other use cases. You need to take in data and apply it across the customer journey. The end game, of course, is to create an optimal customer experience across all channels, generate loyalty and promote new product or service purchase or adoption.

A use case study

Delivering a cohesive experience across touch points is the name of the game. Nonetheless, the difficulty is typically in the details.

To test this out (and to get a little more granular on these issues), I recently visited a manufacturer’s retail website to look at a range of connected IoT consumer products. The retailer sells a diverse set of products, including smart scales (which weigh elements like muscle and skeletal mass and report data into a computer dashboard), along with smartwatches and other wearables that deliver multi-sport performance tracking and training.

What did I find in using two of these products? Both strengths and weaknesses that point to issues in creating a cohesive customer experience:

• Integration supported by a single ID was largely seamless among the brand’s circle of IoT products. For activities like running, weight, tracking steps or monitoring heart rate, the integration was strong, including connecting with the smartphone app and website. Nonetheless, there was little upsell or cross-sell marketing among the products, and I believe this was a missed opportunity.

• When IoT app functionality was added from other brands (e.g., sleep trackers, blood pressure monitors), the integration became considerably less seamless. The ability to either export data from the app or leverage data from other products was hit or miss.

• Let’s consider the data I left behind. The brand gains purchase data about what products I own and the categories I have an interest in, signaling interest and intent, valuable information when it comes to promoting other products and services.  In a multi-device ID (as is the case in this example), I am logging in as a consumer on multiple fronts and receiving emails and surveys, with more valuable touch points. Moreover, let’s say I’m also looking at apps that integrate with sleep tracking. I’ve signaled broader interests and the possibility of new purchases or partner sales.

We can draw a couple of conclusions from this example. First, the customer experience requires a seamless approach that makes it easy to get the most value from an expanded wearables IoT ecosystem.

And second, the relationship generates valuable marketing data for the brand to leverage on behalf of the user. Ideally, the brand converts the user into a multi-product, higher-value and happier customer.

These are early days for IoT, but even now, with consumer and industrial uses coming to market, we see immense opportunity. Goldman Sachs calls IoT a “mega-trend,” or the next big thing for the internet, and the hyperbole is well-deserved. It’s time to look at the opportunity and ensure quality customer experiences as new devices and applications are added.