IoT and Marketing: How IoT is Going to Change Marketing
IoT-Technologies (Internet of the Things) are reaching nowadays more business units and not only as a means to drive machines and production optimisation. “Today marketers are also using IoT-Technologies to increase customer engagement and conversion rates” according to John Munoz, Head of Martech for Digital Loop GmbH in Munich” an agency specialized in digital business solutions with customers ranging from Insurance to hospitality”. Access to comprehensive data is enabling companies to have a better understanding of the needs and wants of prospective customers and align those more closely in the development of products and services”. According to John Munoz, this is for example the case with Food companies looking to capitalize on new eating trends such as milkless products (Oatley) and meatless products (Beyondmeat).
Analyzing customers buying behavior more precise
It is no secret anymore that marketers should know what the needs of their customers are to offer them the products and services that they are actually willing to purchase. Especially if the competition is high. Since everyone now owns a smart electronic device from mobile phones, watches or even smart vehicles with access to the internet, companies receive an immense amount of data about their global customers every day. With the vast amount of data, however, companies are also faced with the challenge of gaining the right insights in order to take the appropriate measures afterwards. IoT-Technologies enables marketers to quickly access and analyze data efficiently in order to drive business decisions.
“The ability of companies to gain useful customer information through IoT provides them with a substantial competitive advantage” according to Vladimir Stashevskiy (Data Analyst at Digital Loop). “Customer data collection in the past was undertaken by means of surveys and or customer complaints. Whilst not wrong, these methods tend to rely on the willingness of the customer to provide. The interconnection of smart devices including as smartphones, laptops, televisions and intelligent voice assistants with cloud solutions on the other side, makes the gathering of and truthfulness of the data more accurate”. Smart devices provide more quantitative information and can therefore help marketers offer customers more attractive products and services in the first place.
The improvement of personalization
In the age of big data most people own more than one smart device. According to statistics from 2020, the average American household has more than 10 smart devices. In Germany, an average household owns almost more than 7 devices with access to the internet. The amount of data produced by connected smart devices is expected to grow to nearly 80 zettabytes (ZBs) by 2025. “The increase in interconnectivity enables marketers to increasingly personalize communication with their customers providing customers with tailored content that appeals to and enables the build-up of loyalty says John Palacios, Head of Digital Loop and Martech Consultant. In other words: Every company offers the same products to all its customers, but adapts the way it addresses each customer to their specific needs. Companies are primarily developing strategies to increase customer loyalty with the data from CRM and CDP tools. CRM systems are centered around customer relations and simplifying the customer journey at every stage, from increasing the engagement to more brand awareness. CDPs (Customer Data Platforms) are platforms primarily used to collect information. Offline data can be accessed and customers can be tracked online outside the corporate website, for example via social media and related websites. CDPs eliminate the amount of redundant customer data by unifying the data across channels. Read all about the differences between a CDP and a DMP in this post.
Both platforms are able to collect data on customers and create permanent customer profiles. With CRM systems, profiles can only be created based on your personal interactions with customers. This information will need to be implemented manually and automatically. However, there are more and more CRM tools that enable personalization of content and provide real time features. CPD solutions automatically collect data from different devices as well as automated creation of 360°-degree customer profiles even with massive amounts of data.
“CDP will also allow companies to use personalisation much better. Personalisation in the martech sense means serving highly-personalised, tailored and user-specific content. It has become common sense now that personalised content, offers and ads drive higher conversion rates.” - Vladimir Stashevskiy, Data Analyst at Digital Loop.
Combining IoT technologies and personalized targeting is the key to every successful marketing strategy.
Developing new innovations with IoT
In today's world all types of devices can be turned into smart objects with the ability to communicate remotely. This gives marketers new and better options to interact with customers. In order to be able to react to the new digital changes, it is also important for companies to implement these new digital marketing innovations. Many companies like to use established tools and solutions that have always worked well for them. However, it is important to adapt to the new innovations in order to stay ahead of the competition.
“The significant amount of information that can be gained through IoT is important for the development of new products” according to Ilgin Yildiz, Head of Project Management at Digital Loop. IoT is based on the connection of 3 essential fields: sensor, connection and process. Sensor technology enables the transfer between the digital world and the analog Reality. Through connections, data can be transferred via various compounds such as 4G, Ethernet, Bluetooth, and RFID. The process compiles the vast amounts of data into actionable information.
As IoT technologies have become more relevant, there are many applications that help marketers optimize their marketing strategies. Many companies are also integrating IoT into their products and services to add more functionality and value, but also to get more information about their customers.
An example for that is one of the most popular home speakers, Amazon Echo. In 2019 more than 100 million smart home devices from amazon were sold.
According to Amazon, more than 70% of households that own a smart TV also use smart speakers. This allows companies to reach their customers in this way as well. For example, Amazon offers marketers the opportunity to run OTT video or audio ads for their connected home target groups. Since more and more people are shopping on home speakers, Intelligent voice assistants like Amazon Echo are also changing the customer behaviour in the future. Voice Shopping with home speakers offers customers a whole new experience, because it is much easier, trouble free and converts leads faster to sales than usual shopping options like physical stores and online shopping.
But this is not the only IoT product from Amazon. In collaboration with Tide, the company developed the Amazon Dash Button. As soon as customers need a new product, they can press the physical button and it will be instantly ordered and delivered. This way, companies can manage their logistics better according to customers' needs, and customers get easier and more convenient access to their products through IoT.
Marketers can use IoT technology to offer their customers a new and unique experience. In return, they get better data and improve understanding of the customer.
As the efforts towards increased digitization grows, so is the demand for more data protection rights. Depending on these developments, companies will also have to deal with the legal challenges posed by the rise of IoT marketing.
This article was originally published on LXAhub.com.