Thirteen billion “things” are currently connected by digital sensors and transmitters. That number is projected to grow to 39 billion by 2020. The expected impact on the global economy by 2025: $6.2 trillion. However, the rapid growth of Internet of Things (IoT) devices is neither the full story nor the real opportunity for marketers in the manufacturing space.
More than 40 percent of all connected devices are used for supply chain analytics and robotic machinery, providing important information about daily operations. In fact, most major companies have implemented IoT projects and are realizing returns on their technology investment, with revenue increases averaging 16 percent in 2014.
IoT devices are creating opportunities to not only develop new, more relevant products but also to improve customer service by providing a deeper understanding of buyers’ behavior.
To succeed during this next industrial revolution fueled by the IoT, marketers need to decide how to analyze and interpret all of the data these devices generate. Even more important is how they plan to leverage that data.
Marketers can take the lead by analyzing the collected data to create new or personalized offers and services for their buyers. What’s more, marketers could even craft these offers before customers realize they need them.
That’s why in the coming year, marketers should expect to see many traditional manufacturing companies begin to offer services to store and analyze data from IoT devices. Already, GE has announced it is building a cloud service to handle the vast amounts of data produced from jet engines, locomotives, MRI scanners and power-generation equipment.
Meanwhile, Rolls-Royce is using IoT to revamp how it sells jet engines for airplanes as a connected information service. Sensors embedded in the engines transmit data, which enables technicians to monitor the engines and remotely perform maintenance. IoT also makes it possible to precisely track jet engine usage. Rolls-Royce uses this information to lease the engines on a thrust-per-second basis in the same way that automakers lease cars with a specific number of miles included in the agreement, creating a new product for their buyers.
Just as Rolls-Royce discovered the opportunity for a different service offering, manufacturers far and wide can gain insights into how their products are being used. This IoT data can be leveraged to inform the next versions of existing products or the design and launch of new products.
IoT devices that monitor product usage or performance also provide marketers with insights they can use to trigger automated delivery of emails, newsletters and other content. Information can be tailored to directly speak to how products are performing and where the products are in their life cycle.
The IoT data can also help identify opportunities for after-sale services and support to help companies avoid downtime and automatically restock consumables, as well as conduct predictive maintenance and employee training.
All told, nearly half of all IoT devices are connected to machines. IoT applications on the assembly line, in the distribution center and on products themselves are expected to rapidly multiply. The impact on the ways companies design and make products, and the ways their buyers use their products, is expected to be as massive during the next 20 years as the impact of computers has been for the past two decades.
Now is the time for business-to-business marketers to adopt the IoT not only as a product feature but also, more important, as an essential source of insights about what buyers need.