You finally think you have your customer insight nailed? You know their likes, dislikes, spending habits and how they prefer you to communicate with them? Surely life will be a little simpler from now on? Maybe for a little while. At least, until the Things come along…
Gartner predicts that there will be 26.6 billion devices online by 2020. These smart, connected devices have the potential to provide marketers with data sets that aren’t just overwhelming in size, but varied in scope.
While capturing information and analysing it to inform campaigns is nothing new, the depth and breadth of information that it will be possible to gather by the time the Internet of Things (IoT) is fully with us has the potential to present major challenges to CMOs who aren’t prepared for it. But it’s not all bad news, the IoT also has the potential to give a competitive edge to those who get a handle on it early. So what can today’s marketers do to prepare?
Understand the link between transparency and customer data
Understanding the sensitivities surrounding the gathering of customer data is the first challenge. People have proved time and again that they’re willing to trade-off data mining if it proves useful for them and it’s done transparently. Tesco uses data from its loyalty scheme to offer vouchers on frequently-purchased items; Google trawls its customers’ email accounts to target ads based on conversations. But these invasions of privacy are tolerated, because customers know it’s going on and they find the results useful. It’s a fine line – a number of businesses have already pushed things too far and risk turning loyal customers away by exposing, without first being truly transparent, just how much they know about you.
The lesson for marketers is to make sure they understand the ethics involved and their customers’ expectations, and rights to, privacy. Transparency about what data is being collected is essential from the outset to ensure customers realise they have a choice and can therefore buy into the idea. They need to agree that what they’re getting in return is a fair trade-off.
Organising your data
The next challenge is organising the data sets now at your disposal. How do you tie together information on someone’s driving habits, coffee drinking and what time they go to bed? What do you do with it once you have it? How do you understand which part of this customer insight is most valuable to you and then build on this to rapidly identify and act on trends and opportunities?
The marketers of tomorrow will either need to develop, or hire in, an entirely different skill set to those traditionally found in the marketing toolbox, to ensure they are able to make the most of the opportunity presented by the IoT. To get it right, marketers will need to become statistics-spinning data gurus, without losing sight of a marketer’s core competency: exceptional communication with the customer.
Beyond data: navigating new channels
The rise of connected devices also opens up new marketing channels in a major way. It will soon be possible to communicate with customers with targeted ads or messages through just about any connected device in their home. Amazon has already been selling e-readers and tablets at a subsidised price in return for displaying ads on the lock screen and that’s just the start.
Inevitably, this means even greater fragmentation in terms of the channels open to marketers and success will come down to being able to pick and choose which will prove to deliver the greatest return. Key to this will also be getting the balance right between utility and invasiveness. Fridges will be able to show an advert for grocery delivery when it sees you’re out of essentials like juice or butter, but will consumers respond to this in a positive way and find it as helpful as the organisations creating these features imagine? Will the interference into their daily life be worth the trade-off?
Yes, the Things are coming. But marketers that prepare in advance, swot up to ensure they understand the very latest on ethics and privacy and get a clear handle on managing large customer data sets early, really don’t need to be afraid. They could represent the next big opportunity they’ve been looking for.