The Internet of Things Is Changing How We Manage Customer Relationships


https://hbr.org/2015/06/the-internet-of-things-is-changing-how-we-manage-customer-relationshipsJust as it’s hard to remember what life was like before the iPhone, it can be hard to remember business before there was CRM software — back when you still had to explain that it stood for “customer relationship management.” Today, CRM pervades the way many companies track and measure how they interact with other organizations, across many departments: marketing, sales, customer service, support, and others. CRM made it possible to determine precisely who responded to a specific marketing campaign and then who became a paying customer, which customer called the most for support, and so on. It gave companies some overall measure of revenue compared with marketing spend — something described in this 2007 article in The New York Times.

But now that Big Data and the Internet of Things have come along, we can go beyond the transaction to every little detail of the customer’s actual experience. You can know when customers enter your store, how long they are there, what products they look at, and for how long. When they buy something, you can know how long that item had been on the shelf and whether that shelf is in an area of things that usually sell fast or slowly. And then you can view that data by shoppers’ age, gender, average spend, brand loyalty, and so on. Today, this sort of thing is possible not just for online experiences; it’s possible for physical experiences as well — and not just retail shopping. This vivid view of the end-to-end experiences is rapidly changing the way people think about, measure, and manage their customer relationships.

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Consider Waze, a wildly popular crowdsourced driving application that people use for real-time traffic information, warnings about hidden police, and turn-by-turn guidance about how to get around congestion. It only works because users give up their location information (on their mobile device) in exchange for information that will enhance their own experiences. So each mobile device pushes real time information into the main information hub, which processes all of the data and then pushes personalized messages back to every machine that is connected. It works incredibly well.

Another offering that taps the power of the Internet of Things and Big Data (and in whose development I was directly involved) is Disney’s MyMagic+. Disney customers (aka “guests”) wear a MagicBand bracelet that allows Disney to know where they are at all times. Guests use an application called My Disney Experience to plan all of their bookable and non-bookable activities: dining, rides, attending parades, and so on. Then, Disney can use the tracking information and send them personalized messages via their smartphones about things like where they might find a cold drink if they are ahead of schedule, what they might skip if they are running behind, and, if they are heading toward a congested area, a better route to take.

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In addition, guests can use the band to get into their hotel rooms in their resort as well as the park (by tapping a Mickey Mouse icon instead of going through a turnstile). This has greatly increased the rate at which guests can enter the park.

With every passing day there are more examples of Internet of Things adoption. And with every passing adoption, what people will accept (giving up things like their location information) and what they expect (“If Waze can help me with my driving, why can’t my grocery store tell me the fastest way to get through my grocery list?”) both change. As this intersection of what people will accept and what they expect evolves, the kinds of experiences that can be captured in the form of new big data evolves with it.

Your plan probably won’t be perfect, and you may need to make some new hires, or get some outside help from people who have done these Big Data and Internet of Things projects. But whatever you do, don’t underestimate the impact of acting on something seemingly minute. The right incremental changes can truly transform the way people experience your organization. So even if something seems trivial, try it and see how it goes. You might find that you had underestimated just how powerful a small change can be. Read more…

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