Many global manufacturing companies have plans in place to create a connected product system by connecting products, building applications, and collecting data. IoT is the technology that will enable this.
The initial ROI justification for connecting products has been to improve product quality and provide full-service lifecycle support. This is significant, but not the complete picture. The larger value opportunity is to redefine your business model: to completely evolve the way you sell your product and manage “connected” customer relationships.
The heart of this transition is the shift from just selling physical products to selling products as a service or solution. The result is that, in an IoT world, the product itself is sold as a package made up of the physical product, software solutions, training, consumables, support and service packages, and more. This is happening across all industries, and creating a multitude of opportunities.
But with these great opportunities come great changes and great challenges. And, unfortunately, most companies trying to make this shift haven’t fully assessed the potential challenges of this evolution.
To succeed with IoT, you must have a smart connected product strategy. At the core of this strategy are your end users, and the relationship you have with them. Commerce in an IoT world requires a different user experience. The customer is now in charge, empowered to purchase and self-manage their products and services. Putting the customer first is powerful in terms of improving the customer experience, but it puts tremendous pressure on the systems and teams that support customer relationships.
You can properly prepare to launch smart connected products and subscriptions services by considering the following…
Before shifting to an IoT subscription business model, you need to create a strong business case. Sure, IoT can drive sales, reduce customer churn, and increase revenue, but only if you have buy-in and the systems to support this model. We’re headed for a brand new world dominated by smart connected products and product systems—are you ready?