With the number of connected Internet of Things (IoT) devices expected to jump from 27 million at the end of 2017 to an estimated 125 billion by 2030, according to IHS Markit there will be plenty of data for loyalty marketers to leverage to improve brands’ relationships with customers.
The IoT sensors are becoming embedded in everything from home thermostats to cars to retail kiosks and displays. While some, like kiosk displays, serve simply as motion triggers to start a display video or turn on a light, others collect data about customers, their trends and preferences, enabling marketers to offer more personalized services to enhance the customer experience and loyalty beyond the traditional points of sale. An MIT Sloan Management Review article points out that customer experience and loyalty are closely intertwined.
Starbucks was among the earliest companies to try to capitalize on this connection, integrating voice ordering with Alexa, Amazon’s popular digital assistant. Customers can not only link their accounts, but can also instruct the digital assistant to have the preferred store of the coffee chain to start his or her “usual order.”
By enhancing the customer experience in this way, brands can not only provide enhanced customer satisfaction, but also can collect data on remote ordering, have additional detail on customer buying habits and other preferences.
For example, Coca-Cola used IoT data collected from its vending machines at college campuses, and determined that peak usage times closely correlated with times of popular television shows. The beverage company is using this data to offer cross-promotions as well as customer rewards to boost brand loyalty, according to a CITO Research white paper.
Thanks to IoT, marketers can follow the Coca-Cola example to capture data from a variety of devices to help refine their marketing strategies to better target certain segments of their customer base, including loyalty members and non-members, helping them to better deliver more personalized offers that will better resonate with customers.
However, as CITO Research points out, the availability to collect more data also raises the issue of privacy concerns. So companies need to make sure they offer customers the option of opting out of offers and that that they limit the frequency of offers so as not to lose customers to marketing overload.
For customers that opt-in, a combination of beacons and geo-fencing can deliver offers to customers as they drive near stores, a potentially powerful marketing strategy. As a RedShark blog discusses, you can geofence not only your own stores, but also those of competitors. If doing the latter, you would want to make offers compelling enough to prompt the customer to drive by or leave the competitor’s location.
As the IHS Markit article explains, the IoT evolution is just in its infancy. As the number of devices and data grows, it will provide loyalty marketers with even more information from which they can develop new and compelling strategies.
Phil Britt is a reporter for The Wise Marketer.
