What to Expect From The Internet of Things
The potential for value exchange from data exchange is never clearer than in the growing use of the Internet of Things (IoT).
The constant acquisition of consented data in the background (through consumption / use of a particular product or service to enhance customer experience) is the direction that the value exchange must take if brands are to move beyond the quick-fix, short-term loyalty boost of rewards points, money-off vouchers and exclusive offers.
Econsultancy’s ‘Marketer’s Guide to the Internet of Things’ states that:
“Consumer goods are an example of a category that struggles to generate loyalty from shoppers. Decisions are easily swayed by better deals from brands selling similar products. But the IoT has the ability to hold people within a brand ecosystem. This would be possible, for instance, if, once you have bought into a product, it can generate ongoing value, such as health data.”
But it is a scary concept. For customers who are already protective of their data, the concept of knowingly and freely handing over more information seems abhorrent.
Why? Because not only must they provide more data, they must provide what can be highly personal data. In the realm of the wearable for example, this can include blood pressure, relative fitness levels, weight loss progress – insights people are wary of giving their spouses, let alone a brand.
If marketers are to move beyond this offer-driven, old-school marketing that has constituted ‘loyalty’ over the last 20 years, they need to repackage this data story.
Tackling The ‘Wary Consumer’ In An Internet of Things (IoT) Era
Consumers are wary. But they are also not always aware of the potential value available to them as a result of data sharing.
Marketers must face up to this challenge, but how?
Jonathan Carter, Head of Strategy and Consulting at Acxiom said:
“It all comes down to Relevant Utility, to the practical magic that makes the value exchange or offering so attractive and compelling it transcends consumers’ data concerns.”
This is already happening. Take the Googleverse for example. As consumers, we are past the point of withholding information because of the utility and value the service provides: free email, free social media, free storage, free office tools… the list goes on.
In providing such utility, consumers need to understand that they’re getting this because of their data. To maintain this understanding, brands need to drive acceptance in consumers that they will share data.
As Adam Kornick of Aviva emphasises:
“People’s stated preferences often vary from their actual wants. I will often ask in conferences how many people pay for their email. But before that, I’ll ask how many people would be willing to share information on their vacation plans so that companies can offer ads on the back of that information. A reasonable number of people in the audience will say they wouldn’t do it. And yet they almost all have free email funded by sharing information about themselves.”
However, there needs to be a careful calibration of the balance in the value exchange. Consumers understand the potentially life-changing utility of a free service such as YouTube and it is still, a decade after launch when any number of disruptors have entered the market, by far the dominant free at the point of viewing video streaming service.
Yet as Aviva’s Kornick points out, consumers have a limit of tolerance:
“If YouTube started doing things you didn’t like, even though they’re the dominant brand – and free, you would still switch.”
Keys to Success With IoT
Understanding, transparency and clarity are key to the success of the IoT. Only once both sides (consumer and brand) understand either other and the value to each in sharing data, can seamless data relationships and service provision exist.