Connected Marketing: How IoT Is Revolutionizing Customer Engagement

Joerg Koesters

It’s 6 pm, and you’re driving home from work, using a navigation app to make your way through rush-hour traffic. As you pass one of your favorite fast-food restaurants, a 2-for-1 deal pops up on your navigation screen. Seconds later, you’re in the restaurant’s drive-thru, about to enjoy a tasty snack.

This example of real-time customer engagement is not a futuristic scenario. It’s happening right now, thanks to new connected technologies driven by the Internet of Things (IoT). IoT is transforming the way companies and customers interact by revolutionizing customer engagement, leveraging data and insights for real-time action.

How IoT is changing customer engagement

A company’s interaction with its customers used to be limited to the point of sale. Companies had to piece together data from anecdotal feedback, customer surveys, product returns, and customer service complaints to gather any insight into their customer’s needs and behaviors. Consequently, customer engagement was reactive rather than proactive. That’s all changing thanks to data available through the Internet of Things.

IoT has long been the domain of industrial B2B (business-to-business) applications. Now, B2C (business-to-consumer) companies are beginning to understand the power of IoT to revolutionize customer engagement. Consumer brands like Nestle, Philips, and Target are using IoT applications to better predict and respond to consumers’ needs.

Using IoT to exceed consumer expectations: 3 applications for B2C companies

Today’s digital-savvy consumers expect personalized products and services that suit their unique needs and situations. They also expect contextual and meaningful interactions through their choice of channels. IoT technology makes both possible by connecting people, processes, and things. IoT platforms provide immediate, actionable insights so companies can respond to customer needs in real time. The result: Companies do not just meet customer expectations—they exceed them.

Here’s how IoT is transforming customer engagement for B2C companies:

  1. Creating new points of differentiation by shortening the R&D cycle:
    IoT allows companies to interact with customers in unique ways, differentiating these companies from other businesses that have not made IoT engagement a priority. Product developers, for example, can gain valuable insights from customer feedback and immediately apply these insights to deliver higher-performing products and services. By better understanding how customers use their products, developers can update features to better align with customer needs and expectations.
  1. Refining the marketing process with greater personalization:
    IoT offers a tremendous volume of data on consumer habits and behaviors, positioning companies to better understand customers’ needs and wants. Rather than flooding customers with an onslaught of poorly timed advertising, companies can better market their products to customers at the exact moment of need. Personalized, “in-moment” offers – like the one described above – also reduces unnecessary marketing expenditures and delivers a better advertising ROI.
  1. Strengthening customer loyalty: IoT makes it possible for companies to act on real-time data insights by offering rewards and discounts. For example, CITO Research reports that Coca-Cola gathered data from its vending machines and determined that beverage consumption spikes on college campuses at specific times correlated with popular TV shows. Coca-Cola can then use this data to offer targeted rewards through cross-promotions, driving immediate consumer action and boosting brand loyalty.

Learn how to innovate at scale by incorporating individual innovations back to the core business to drive tangible business value: Accelerating Digital Transformation in Retail. Explore how to bring Industry 4.0 insights into your business today: Industry 4.0: What’s Next?


About Joerg Koesters

Joerg Koesters is the Head of Retail Marketing and Communication at SAP. He is a Technology Marketing executive with 20 years of experience in Marketing, Sales and Consulting, Joerg has deep knowledge in retail and consumer products having worked both in the industry and in the technology sector.