The connectivity movement is transforming the way business is done and promises great value for product companies willing to join in. With all the hype out there around the Internet of Things (IoT), however, one would be forgiven for being skeptical. In this article we’ll take a look at just what product connectivity can deliver how it can grow product sales and, as a result, improve a business’ bottom line.
The truth is, whether a company has an existing product or something new it’s looking to introduce, adding connectivity – through Bluetooth, Wi-Fi, cellular or alike – opens up many opportunities. Let’s take a closer look at what those opportunities are.
For the initiated, the first thing most think about at the mention of IoT is the amount of data that is generated and the related topics: Scalability, elasticity, data lakes and warehouses, etc. Adding connectivity to a product certainly does open up the proverbial data floodgates. But data’s true worth is in its usefulness and the purposes it can serve. With this in mind, we’ll split this section on data into two categories of purpose: Data for the end user and data for the product company.
It’s no stretch to understand that a connected product produces a lot of data that it’s end users may find beneficial. It can give the customer the ability to see how the product is being used, data about the environment it is in, its own effectiveness and more. For example, with a thermostat that is connected to the internet, the user now has the ability to get the current temperature, the set point, the heating and cooling system’s current state, data related to energy usage and efficiencies gained or lost.
On the product company’s side, however, there is another set of benefits that can come out of the data made available from a product’s connectivity. Not only can they also see the same state information mentioned above – which could be beneficial from a customer support perspective – but it could also be aggregated and stored for in depth analysis. This analysis would then reveal feature usage across all users and could indicate where the true value lies in a product, providing great data for marketing and identifying areas for continued UI improvement. For instance, data could reveal that features you thought were secondary might actually be the most valuable and should be prominent in marketing and customer menus and dashboards.
Adding connectivity to products also open up possibilities for new ways to control its functions. Utilizing a smart phone as a method of control for a connected device may be the most prevalent control method added to consumer products. Adding connectivity technology to a screenless product allows the device to capitalize on the smart phone’s high-resolution screen and touch feedback for controlling its many features, in lieu of complicated or sub-par user experiences which result when competitive pricing preclude more user-friendly interfaces.
Introducing the smartphone as a functional extension of a connected product opens up other features as well. Smartphones have a myriad of sensors and services which could be useful to a product without such resources: Accelerometers, location services, Bluetooth, microphones, cameras, etc. To continue the thermostat example, companies like Nest have capitalized on this by using a smartphone’s location to determine when a user is home and controlling the thermostat set point appropriately, allowing it to conserve energy when the user is away.
If simply controlling a device remotely is step one, then step two might be to make this control process “smart.” Connectivity in the product opens up intriguing possibilities in terms of how a device is controlled. New algorithms and machine learning could be used to control the many features a product might have. This would hopefully result in the system helping customers achieve new goals such as more efficiency, better effectiveness or less intrusion in daily life or business operations. A connected air purifier, for instance, could be configured to use resources more effectively by accessing environmental air conditions available from online data sources or change its operating mode depending on what else is going on in the home.
When a product has connectivity, whether it is to devices within a certain location or to the wider internet, it enables a new category of end-user features that we’ll call integrations. You’ve heard the phrase “the whole is greater than the sum of its parts”, no doubt. This adage can be true for devices with connectivity which are integrated to work together or with other cloud-based services. The value these devices provide to the end user together, as a collection, has the possibility to greatly outweigh the value they bring individually.
Let’s take an example in the connected appliance department. Let’s say I have a refrigerator that has a water and ice dispenser insert and a water filter. The refrigerator is smart enough to know when a new water filter is needed and has a visible indicator to show this. Let’s also say that there is an online retailer that stocks these parts and offers timely delivery. While both devices provide value to the end user, one clean water and an indication when maintenance is required, and another delivering disposable goods, together they can provide even more value. As a consumer, I could utilize an integration between the two and receive a water filter in the mail, within a few days of when I need it, with no effort on my part.
Building a product typically also means building a support structure around it. When designing and optimizing the user experience of your connected product, it is important to consider situations outside of the normal and fully operational. Do your customers need to be educated in proper use? Will they need support when issues arise? What happens when a product fails?
Connected products offer a way to improve the post-purchase support user experience.
Initial provisioning and setup of products can be tricky, especially for highly integrated products. Providing user support in this phase can positively shape those first few experiences with your company’s product. Once initial connectivity is established, remote access capabilities could give a customer service representative the ability to help end users by remotely identifying issues and even resolving them. Imagine a customer calling customer support to get some help setting up confusing settings on a newly installed water softener. The remote support team would then be able to review usage data and water conditions and being able to tweak settings remotely. It could create a much better experience, especially for consumers who have no desire to become “power users” of water softeners.
The same goes for issues that arise further into the product’s useful life. For example, a connected dishwasher could respond to remote requests for data on the last few cleaning cycles, allowing a customer service agent the ability to identify an issue with a particular part while on the phone with a customer. A replacement part could be ordered and shipped to the customer’s home and an appointment with a repair person could be scheduled to coincide. Or to take this one step further, what if an issue could be identified and a customer contacted proactively? This has the potential to add some strength to a brand’s reputation, especially for products whose functionality can be critical, like generators or heating systems.
While the main point of this article is to focus on features, it is important to note the responsibility that a company has to consider the security of its products and privacy of its customers. Unfortunately, companies making devices in the IoT space have established a poor track record in these areas and the general public is taking notice. Stories of IoT devices turned into botnets (e.g., Mirai malware attacks in 2016) and security camera being remotely compromised (e.g., Ring camera hacks in 2019) do not paint a rosy picture. There has been quite a bit of bad PR for connected products. It is critical that product makers take these concerns seriously, evaluate the cyber security risks they face and properly engineer their connected solutions.
Building better products with better features and better experiences are a win for the company because they are win for the customer. In this last section, however, let’s turn our focus every so slightly to look closer at the direct benefits the product company can receive through connected products.
Adding connectivity to existing products allows a company to establish a new product line. A group of connected products also opens up possibilities for common platforms and integrations among the product line. For instance, a company that produces kitchen appliances could build a whole new line of their appliances around the concept of a connected products, allowing it to capture more market share, introduce platforms and product integrations not before possible and build a reputation with tech-conscious consumers.
The customer value created with connected products may be substantial and, in turn, there may be an opportunity to charge a premium for the product. Online services that accompany a connected product could also be a revenue source if, again, the value-add is sufficient enough for a subset of users. Some companies have even taken to the approach of unlocking certain extended features of connected products through additional fees. Tesla is a great example of this last approach. Those who purchase as Tesla car can unlock the autopilot feature at any time for a one-time fee, even if they didn’t initially pay for it when they bought their car.
The last business-related benefit that we’ll point out is that which can be gained from the customer relationship that is established through a connected product. There is typically some sort of registration process that an end user must perform in order to use their product’s features with their smartphone, tablet or home speaker, for example. This registration process allows a company to build a database of its customers in a new, more effective way than was possible in the past. In turn, this database of contact information, combined with the possible exposure through mobile apps, can be used to continually engage users. Building an audience is useful for brand awareness and announcing new products. Providing interesting and relevant content via email or social media allows a brand to do the hard, long work of building a strong reputation which lasts well into the future.
The more value a company is able create and offer to the customer through connectivity, the stronger the value proposition for the actual product. Increased product value equals increased sales and a stronger brand. That’s a solid path to growth, the IoT way. DornerWorks is an IoT solution provider and engineering firm with the right skillsets to help any company realize the value in connectivity. And when your company grows we can help you stay on top of it all, from robust embedded electronics to designing cloud architecture to grows with you.
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