By Barton Goldenberg
As with any new technology, there are plenty of questions that need to be asked by the management of every organization considering implementing the innovative technology. Here are three key questions concerning the Internet of Things and my initial responses to each question.
1) Is there a sustainable driving force behind the Internet of Things?
The demand for Internet of Things technologies is driven by organizations’ need for valuable customer, partner and employee insights. I predict that the next few years will serve as a warm-up period in which people will be experimenting with Internet of Things devices and applications. Some will take root and others will fall by the wayside. While B2C organizations will lead the charge during this period via Connected Home, Connected Wearables and Connect Health devices, B2B organizations will also actively participate in such areas as deliveries, managing stock, inventory control, and customer analysis.
After this experimental period, during which time the bugs will get worked out, I predict that the Internet of Things will take off. This era will be one of the most disruptive periods in modern-day history as the Internet of Things becomes a normal part of how customers manage their day-to-day activities in the home, office, and elsewhere.
2) How to cost-justify investing in the Internet of Things?
As with all technology investments, a well through-out Business Case is the best way to justify investing in the Internet of Things. Cost components in the Business Case include: the cost of the sensors and devices that are included within the refrigerator, medical device, etc. or the cost of adding a sensor or device to an existing item, the cost of creating a service in the Cloud to monitor these sensors and devices, and the cost of analyzing data coming from these sensors and devices. The revenue component of the Business Case results from looking at the lift in sales resulting from customers using these sensors and devices and comparing this to a control group that does not utilize these sensors and devices. While not a perfect science, most of my customers use this approach to justify the return on investment and breakeven point for an innovative technology.
3) How to respond to the growing concerns around data privacy issues?
This is a tough question to which there is not a simple answer. Most organizations currently utilize the opt-in/opt-out approach to data privacy, as well as legal guidelines related to organizations using customer data for their marketing campaigns. For example, if Beacon technology is used in a marketing campaign, consumers are required to download the organization’s campaign app, turn the Bluetooth option on for location-based services and grant permission to use their Beacon-generated data for marketing purposes. Yet because current data privacy approaches and guidelines are evolving, the Internet of Things industry must actively contribute to this ongoing dialog.
Typically, customers are willing to grant access to their confidential information if there are tangible benefits resulting. If organizations can show their customers that there is a value in granting organizations access to their confidential data, along with an explicit promise of not abusing the use of such data, then data privacy issues can often be met with to the mutual satisfaction of both sides. In essence, privacy is an organization-customer trust issue where trust gets built over time.
In our next blog post, we will discuss the Internet of Thing’s resulting Customer Service Challenges and its impact on Big Data analysis and insight.
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Barton Goldenberg, is the founder and president of ISM Inc., customer-centric strategists/implementers serving best-in-class organizations globally. As a CRM leader for 30 years, he was among the first three inductees in the CRM Hall of Fame. Recognized as a leading “customer-focused” author, his latest book, The Definitive Guide to Social CRM, is hailed as the roadmap for Social CRM success. Barton is a popular speaker on “maximizing customer relationships to gain market insights, customers and profits”. He is a long-term columnist for CRM Magazine and speaker for CRMevolution and frequently quoted in the media.