The Internet of Things Changes the Company-Customer Relationship
IoT could change the way businesses interact with consumers according to this Harvard Business Review piece. Historically, companies have sold products as a one-off physical item, perhaps with a warranty, but the primary mode of transaction was at point-of-sale.&nbsp;IoT industry expert, Paul Weichselbaum, argues that the sales paradigm may shift to a service paradigm, one that helps users buy, integrate, install and use their devices.&nbsp;
With the rise of the internet of things, our individual technology envelopes – our personal networks of smart, connected devices — are rapidly becoming more complicated as more and more devices from a growing profusion of vendors do ever more complex jobs. In fact, industry research indicates that the number of devices in these envelopes will triple over the next few years, and, absent a common set of standards, the complexity of these envelopes will only compound.

This dynamic is exacerbated by product companies’ historical service paradigm. It used to be that most of the value we derived from our devices was the result of direct physical interaction: For example, we turned a key in a door look, flipped a light switch, or twisted the dial on a thermostat. Now, however, our interaction with devices is profoundly changing – they are becoming more like interconnected services than products. Soon it will be common to drive up to one’s house – which has adjusted heating or cooling in anticipation of your arrival — and have the garage door automatically open, the security system disarm, the doors unlock and lights come on. This impending future creates a conundrum for “thing makers” as the way that services must be supported is profoundly different from the way that devices are.

The historical service paradigm for thing makers could be called “fire and forget”: I sell you a thing, perhaps a crockpot, and … no offense … I hope I never hear from you again. If you contact me for service I will ask you two questions: 1) “are you in warranty?” and 2) “is your request within the scope of what I have decided I will support?” If the answer to both is “yes,” I will serve you as inexpensively as possible using techniques such as self-help on the web, endless IVR loops (“for billing questions, press 1”) and/or offshore labor. And once I resolve your issue — no offense — I hope I never hear from you again. In a sense I’d like to “forget” that the product exists and move on to my next sale.

This service paradigm is not designed for a world in which intelligent, context-aware, learning devices are interacting with each other, with the cloud and with our smartphones while other devices are constantly being added, removed, or modified (via downloads from the cloud). This environment requires a focus on what the user is trying to do as opposed to merely whether the crockpot they purchased is operating as intended. Service in the IoT world needs to not only address devices that don’t function properly, but also support users as they attempt to buy, install, integrate and use these devices. As such it needs to be a continuous, open ended experience.

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Some firms may look at this situation and see operational headaches and increased service costs. Others — the companies that will be the winners in the IoT — will see opportunity. Rather than continue dodging customers, they’ll transform their service models operationally, technically, and culturally. They’ll embrace the opportunity by applying different KPIs – such as improved customer experience, churn reduction, and increased customer lifetime value — hiring more technically oriented (and nimble) service reps and modifying the service model from one in which the company defines problems it’s willing to address to one in which the customers defines the job to be done, and the company helps them do it – indefinitely.

This transformation will not only be longitudinal (providing continuous service), but also expansive, providing a holistic approach that will earn companies a trusted adviser position. In an age when user experience is surpassing product and price as the number one brand differentiator, focusing on the user, their environment and what they’re trying to do with their technology, as opposed to how any given component in their envelope is functioning, is essential, even when that means supporting other companies’ products.

The companies that see service in an IoT world as a competitive differentiator — a brand and growth opportunity — will thrive; those that continue to view service as an episodic cost obligation will lose out.