Smart, connected products (SCPs) open the door to a new dynamic between manufacturers and their customers. Space and time barriers fall away. Products gain new ears and new voices that invite relationships that are richer, more intimate, and more advantageous to both parties. To activate this value, marketing executives must not only boost 21st century marketing skills, they must rethink their marketing strategy in totally new ways.
The voice of SCPs provides marketers with masses of real-time data describing actual usage. Behavioral analysis based on this data is an exceptional tool for understanding customers and creating meaningful segments. Human behavior is very complex. Marketers used to be stuck with inadequate strategies for segmentation — methods such as gut-feelings, past experience, and traditional rule-based methods like parsing by vertical markets. Without behavioral data, marketers will miss important insights (at best), or will be biased and wrong (at worst).
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. Supplemental sources include operational systems (e.g., CRM, customer service, logistics, and finance) and customer interaction systems (e.g., click streams, search, and geographic data, downloads, or video views). Data can also be also accessed from third parties (e.g., list companies, media, or from databases such as SEC filings).
By integrating data from SCPs with other data, marketers will be able to discover hidden segments with a high propensity to buy, or act in certain useful patterns. They can then use these segments to design more effective pricing strategies, offers, and bundles. For example, a customer who is an active product user might enjoy offers for product extensions. A dormant user would just be irritated by these offers and needs other stimulus to resume use.
Implications for the marketing organization: