Impact of Internet of Things: How to better understand the customer
Customer behavior has long been one of the most analyzed aspects of the business world. As new mobile innovations such as wearables and embedded devices continue to evolve, firms should be looking into ways to improve their customer behavior analytics. To answer this, it’s important to look at the impact of Internet of Things (IoT) on customer behavior. More specifically, how can the IoT improve one of the most important aspects of customer behavior analytics: data sources?
Gathering information about your target audience is a crucial step toward better understanding your customers. Metrics such as age, geographic location and even political leanings can help companies predict product performance in various groups. Correlating these metrics with detailed sales data can help marketing and customer support teams better understand why a product is or isn’t thriving in a given demographic. As such, it’s a priority to ensure that this information is both comprehensive and accurate.
Fortunately, the IoT is here to help. Collecting customer demographic data used to be a tedious process confined to a select few channels, such as point of sale (POS) or marketing campaigns. According to Juniper Research, the number of IoT devices in use is set to reach 38.5 billion in 2020, up from 13.4 billion in 2015. The impact of Internet of Things is clearly visible when looking at how many devices there are. Each one is a new opportunity for sourcing customer data.
From a high-level perspective, the idea is to leverage the multiple points of contact inherent in the IoT, which will help gather more customer behavior information while retaining data integrity and quality. The focus should be placed on developing engaging applications to drive data creation. After all, your customers are already plugging into the IoT, they just need a reason to share their data.
Point of Sale
The all-important POS can be a make-or-break time for a customer’s loyalty. Despite its obvious importance, many executives fail to see the opportunities that come from using it as an integral data source. Combined with the IoT, the POS holds a wealth of information about customer behavior. Instead of just collecting static metrics loosely related to the customer, such as the time of day a transaction occurred or the items purchased, more personalized data can be gathered. With social media integration, customer emotions and expectations can be gathered quickly and efficiently using phrases, keywords and hashtags.
One of the biggest shifts playing out at the POS is the sheer flexibility afforded by the IoT. Customers and enterprises alike are beginning to see the convenience of allowing sales to occur anytime, anywhere. Connecting sales channels to platforms such as smartwatches, or to mobile advertisements, with the help of well-designed applications enables this kind of flexible customer engagement. By taking advantage of the growing number of devices feeding the IoT, new and insightful data about customer behavior can be captured from ever-changing POS systems.
Though this is possibly the most traditional data source, primary research data is a perfect example of how new IoT technology is complimenting traditional business practices. In the past, gathering customer behavior information from conventional research methods was difficult. One of the biggest hurdles was engaging customers in a noninvasive manner to conduct research campaigns. However, the IoT solves this problem. According to ZDNet, upwards of 2.9 zettabytes, or 2.9 trillion gigabytes, of data will be generated by consumers before the end of 2020. That’s an astronomical amount of information just waiting to be collected and analyzed.
Managing such a massive data set becomes more of a reality when you understand that the IoT is simply a connective layer across the many mobile devices in your customers’ lives. In addition, building research campaigns around the idea of IoT presents a growing opportunity to create more engaging research methods that can then help you better understand unique customer behavior.
Ultimately, the important data surrounding your customers and the way they interact with the world has always been there. The tricky part is finding new and innovative ways to collect it. The IoT has positioned itself as a prime solution. When married to a well-integrated mobile platform to support it, this plethora of customer data can be utilized to its maximum potential.