Think Outside the Ad: Smart, Connected Products Transform Customer Engagement

Ideal customer engagement aims for an immersive experience, one that recreates the intimacy of the corner store. However, digital communication has made engagement increasingly dissonant and fractured. Will smart, connected products (SCPs) bring manufacturers and customers closer together? Or will they further splinter things? A lot rides on the ability of marketing and sales to deliver on the possibilities of SCPs.

In the article, How Smart Connected Products are Transforming Companies, co-authors PTC CEO, Jim Heppelmann, and Harvard Business School professor, Michael Porter, describe the powerful insights gained by combining data from SCPs with data from other sources, and the implications on companies operations and organizational structure. This continuous data stream produced by SCPs creates an opportunity for manufacturers and customers to know each other better.  Marketing and sales teams must become extremely data-savvy to realize any benefits. It’s a challenging hurdle. But once it is cleared, SCPs open the door to unique and innovative customer engagement.

  • Product-as-media: When a new engagement channel emerges, the first word out of marketing’s mouth is almost always, “Ads!” SCPs will be no different. New screens are just too seductive.  More ads could swell the tidal wave of irrelevant interruptions people get every day. But what if the offer was personalized and arrived at the point of need instead?  These messages become no longer an interruption, but a helpful convenience. For example, if a smart appliance sensed a user consistently struggling with an operation, it could offer advice or a coupon for a helpful accessory. SCPs offer the opportunity for true concierge-level service.
  • Product-as-a-brand avatar: Marketers think of themselves as brand stewards. Sales believes they own the customer relationship. But the #1 element contributing to loyalty is product behavior. Starbucks is a well-loved brand, but if their coffee didn’t perform as expected – delivering the caffeine kick, the iconic brand would struggle. SCPs can do much more than just perform their basic function. Wearable technology could make social sharing more convenient. Office equipment could use gaming to reward teams who are most efficient. SCPs offer the opportunity to contribute more deeply to the emotional bond that a good brand achieves.
  • Product-as-a-captivator: The more we learn about the way customers really buy, the more antiquated the old sales funnel becomes. A fresher approach is to turn the funnel upside down – build loyalty first, then figure out how to monetize that loyalty.  In the words of marketing guru, Seth Godin, companies should “make strangers into friends and then friends into customers.” Park visitors with Disney World’s Magic Band on their wrists, for example, can not only instantly pay for services, but they can also receive personalized recommendations for attractions based on their patterns of use. SCPs, with their interactive capability, are a powerful tool for captivating customers in the brand’s orbit.

Implications for the marketing organization:

  • Increase integration. To change the engagement game, marketing must break down silos. Everything must be integrated — data, content, and methods of interaction. This integration must occur not only within marketing, but also between functions such as sales, service, logistics, and manufacturing. Companies must pioneer new organizational structures, leadership styles, and reward systems, as well as invest in collaborative technologies.
  • Increase agility. Real-time engagement requires that companies be ready for anything. Marketing and sales should adopt practices from dynamic teams such as community first responders, surgical teams, software development, and gaming. Keys to success include a customer-centric mission, data-driven feedback, and empowered cross-functional teams. Technologies such as cognitive computing and predictive analytics will also take on new importance.

This is the sixth installment in a series of guest posts by leading industry analysts covering topics found in the new Harvard Business Review article, How Smart Connected Products are Transforming Companies, co-authored by PTC CEO, Jim Heppelmann, and Harvard Business School professor, Michael Porter.

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