series of mannequin hands wearing "smart" rings
To successfully transform your CX to support IoT capabilities, you'll have to evaluate the impact of IoT data and information on every area in the business PHOTO: NYC Media Lab

Do you have a plan to address the connected future and the increased customer expectations that the internet of things (IoT) will bring?

For most firms, the growth of connected devices via the IoT will highlight the organizational challenge of ensuring that customer experiences aren’t negatively affected. And the stakes are high for doing so: Gartner predicts the IoT market will grow at an astonishing pace in the coming years and every industry will be affected.

Gartner’s forecasts project that 8.4 billion connected things will be in use globally by the end of 2017, accounting for total spending of $2 trillion. What’s more, that number of connected devices represented a 31 percent increase over 2016, with the total projected to reach a staggering 20.4 billion by 2020.

Defaulting to Dissatisfaction?

Meanwhile, what we know about customers is that, after a service interaction, they are four times more likely to become dissatisfied than satisfied with a company according to landmark 2010 research by the Customer Contact Council. With market share, profitability and sustainability at stake, it’s clearly in an organization’s best interests to ensure that service interactions do not create disloyal customers.

The same research concluded that, “When it comes to service, companies create loyal customers primarily by helping them solve their problems quickly and easily.”

Preparing to Meet Post-IoT Customer Expectations

Given these existing customer perceptions about service and extrapolating them to the increased problem-solving and problem-prevention expectations customers will have for IoT devices, it’s critical that companies prepare for the connected future.

But the rapid enablement of IoT capabilities raises two key questions for companies that must be addressed as part of that preparation:

  • What will customers’ expectations be for their experiences when utilizing connected devices?
  • What changes do companies need to make to their staffing, processes and technologies to meet those enhanced customer expectations?

Let’s look at each of these questions with an eye toward developing approaches that can meet customers’ increased expectations and needs going forward:

1. Customer experience expectations and IoT

We’re conditioned to expect automation to simplify our lives, and utilization of IoT capabilities is all about automating activities that previously required manual interaction. 

For example, we adopt Nest thermostats to enable us to change temperatures without having to be physically present to interact with the thermostat. We expect the interaction to be simple, seamless and work 100 percent of the time, even though, realistically, there might be many technical issues beyond Nest’s control.

Whether your business produces a product that has IoT capability or not, you’re likely to be impacted by customer expectations for improved experiences. The Kano model, which maps customer expectation on two axes — achievement and satisfaction — demonstrates how CX capabilities which were once considered revolutionary can devolve from delighting consumers to becoming expected, commonplace ‘table stakes.’

The implication for business is clear: customer expectations will be rising. And while there may be a delay between IoT enablement and increases in customer expectations, it is inevitable that customers will expect more from IoT’s increased ability to deliver fast and easy customer service.

Bottom line: Leaders should not delay in working to prepare for increased customer expectations because the business risks of not doing so are simply too great.

2. CX transformation to support IoT

Digital transformation is a hot topic and has implications across all areas of your business. Most transformation approaches identify changes needed in the areas of people, business processes and information technology.

Looking at the business drivers behind digital transformation, we find CX and IoT are at the core. That’s because many organizations are developing IoT products as a means of differentiating their solutions from others.

In some cases, IoT functionality is designed to address pain points customers have. The Nest thermostat, for example, helps reduce energy costs. In other cases, new functionality delivers gains. For example, Whirlpool’s connected appliances enable remote monitoring, something that will come in very handy if your refrigerator fails while you’re on vacation.

So whether pain reduction or gain improvement, the key point is that IoT can provide differentiation to staid products. However, the dilemma that IoT enablement creates for companies is to ensure that capabilities are in place to meet customers’ enhanced expectations for their new experiences.

That means having employees with the right skills executing business processes as designed, all supported by information technologies that reduce execution friction for all parties.

Assessing the Scope of Business Transformation

IoT functionality uniquely impacts all major organizational processes and as a result, the scope of business transformation can be very large with respect to each of the following:

  • Innovation and product design: IoT devices provide data to help understand customer usage patterns and identify potential issues in product reliability issues.
  • Operations and supply chain: IoT devices can trigger inventory replenishment, track movements of goods and provide data to mitigate supply risks.
  • Production and manufacturing: IoT devices can manage robotics and 3D printing, as well as monitor quality to enable output processes that are agile and responsive to demand.
  • Post-sales service and support: IoT devices provide data to trigger dispatches to perform prevention or repairs. Additionally, having data will help service personnel be prepared with parts, repair instructions and tools needed to perform the needed service.

Taking a Holistic Approach to CX

Successful CX transformation to support IoT capabilities also requires a holistic approach to evaluating how IoT data and information will impact each area of the business. The best method for identifying those impacts is to frame questions from a customer-centric point of view.

For example, “As a customer, I want [this improvement]” or “[This problem] just occurred and as a customer, I need [this response] to happen automatically.” Many firms find themselves behind in their ability to frame and deliver the necessary responses.

Here’s a question that you can ask to check your organization’s readiness for the pending revolution resulting from IoT devices: How can the new products and services on our roadmap for development be improved by access to real-time data?

Addressing IoT’s Raised Expectations

Virtually every firm will find it is (or will be) impacted by connected IoT devices and the ever-increasing expectations they raise. 

Evaluating the data generated by those devices and applying a customer-centric perspective to assessing your core capabilities can help you maximize your customers’ experiences while sidestepping their dissatisfaction.