As we imagine ways to deepen personalized product experiences we will need to manage relationships not just with consumers, but with products.
Billions of smart things quantifying our lives through streams of data – the Internet of Things. Each smart thing enables manufacturers to observe how consumers use their products while delivering immediate feedback and personalized insights that help people do whatever they’re doing, better.
With products active participants, customer relationship management will give way to product relationship management – CRM to PRM.
The IoT is disrupting business with two types of communication and both involve the product, itself.
Product-to-consumer communication
Products provide immediate feedback to consumers, reflecting consumer insights, usage history, unused features, equipment status, etc.
Product-to-manufacturer communication Products provide the manufacturer visibility into usage patterns, product performance, maintenance, upgrade opportunities, etc.
Manufactures and consumers are entering into a new product-centric, communication paradigm. Smart products are providing a layer of information that allows manufacturers and consumers to track usage patterns, infer maintenance requirements from history, and detect failures in real-time.
IoT disruption will lead to improved product innovation and personalized customer service.
Insights from usage history can guide upgrade recommendations
Insights from cumulative usage history can inform product evolution
Monitoring can lead to new revenue streams (products as a service)
Deliver immediate customer support directly through the product
Trigger manufacturer-to-customer engagement points, initiated by the product when equipment is over-used
In this new age, one thing is clear: customer service cannot remain reactionary. The new product-centric paradigm enabled by IoT, will fundamentally change how companies deliver customer service. The days of taking a wait-and-see approach to customer service are over. Extended warranties will be replaced with monitoring services. Time-based maintenance will evolve into just-in-time maintenance, informed by time – but also usage history.
Companies will shift from selling products to selling ongoing, customer relationships.
A new relationship management model will emerge. Products will participate in customer service through their own relationships with the customer. Product-delivered customer service will provide alternative means for customers to receive immediate, low-friction support. Product-centric, customer relationships will force business to adopt a new management model. Customer Relationship Management (CRM) will give way to Product Relationship Management (PRM).
“Early adopters of PRM stand to gain an unfair competitive advantage in their ability to better delight customers, unlock new revenue opportunities and spark new, enhanced relationships between a business and its ecosystem of customers, partners and vendors.”1
IoT brings complexity to relationship management.
Xively’s Complexity of IoT Relationship Management
Not only are there more communication paths – now between the consumer and the product as well as the product and a manufacturer, there are more agents participating in the conversation. This complexity grows exponentially when products become services, platforms, or are nested inside of systems.
“Just as CRM technology was designed to help manage the broader practice of customer relationship management, the IoT is spawning new business practices centered on product relationships, and a new class of technology – a new market – to help companies manage these relationships.”1
Partnerships will be vital for managing the complexity of the IoT. Xively refers to Product Relationship Management as “connective tissue”, explaining that PRM is the “unifying force that will work with your existing CRM, ERP, and other business systems to make your company truly connected.”1
“As more connected products come online, a sense of expectancy is quickly emerging for both the producer and the user of these products. PRM has the potential to become as ubiquitous to companies selling connected products as CRM and ERP systems are in the business world today.”1
Take-aways
Companies that haven’t started thinking about IoT need to get started. The IoT is here. For IoT disruptors, the shift from CRM to PRM is already evident. Companies that don’t rethink their customer relationship strategy will be left behind.
References: 1: Xively Whitepaper: Product Relationship Management(PRM): The Killer App Every Connected Business Will Need 2: Xively Webinar: Product Relationship Management(PRM)|What Every Connected Business Needs
May 2015
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