IoT Intangibles: Increased Customer Loyalty

There are so many direct, quantifiable benefits of the IoT, such as increased quality (that 99.9988% quality rate at Siemens’s Amberg plant!) and precision, that we may forget there are also potential intangible benefits.

Most important of those is customer loyalty, brought about by dramatic shifts both in product designs and how they are marketed.

Much of this results from the IoT lifting the veil of Collective Blindness to which I’ve referred before: in particular, our prior inability to document how products were actually used once they left the loading dock. As I’ve speculated, that probably meant that manufacturers got deceptive information about how customers actually used products and their degree of satisfaction. The difficulty of getting feedback logically meant that those who most liked and most hated a product were over-represented: those who kinda liked it weren’t sufficiently motivated to take the extra steps to be heard.

Now, by contrast, product designers, marketers, and maintenance staffs can share (that critical verb from my Circular Company vision!) real-time data about how a product is actually operating in the field, often from a “digital twin” they can access right at their desks.

Why’s that important?

It can give them easy insights (especially if those different departments do access and discuss the data at the same time, each offering its own unique perspectives, on issues that will build customer loyalty:

  • what new features can we add that will keep them happy?
  • can we offer upgrades such as new operating software (such as the Tesla software that was automatically installed in every single car and avoided a recall) that will provide better customer experiences and keep the product fresh?
  • what possible maintenance problems can we spot in their earliest stages, so we can put “predictive maintenance” services into play at minimal cost and bother to the customer?

I got interested in this issue of product design and customer loyalty while consulting for IBM in the 9o’s, when it introduced the IBM PS 2E (for Energy & Environmental), a CES best-of-show winner in part because of its snap-together modular design. While today’s thin-profile-at-all-costs PC and laptop designs have made user-friendly upgrades a distant memory, one of the things that appealed to me about this design was the realization that if you could keep users satisfied that they were on top of  new developments by incremental substitution of new modules, they’d be more loyal and less likely to explore other providers.

In the same vein, as GE has found, the rapid feedback can dramatically speed upgrades and new features. That’s important for loyalty: if you maintain a continuing interaction with the customer and anticipate their demands for new features, they’ll have less reason to go on the open market and evaluate all of your competitors’ products when they do want to move up.

 

Equally important for customer loyalty is the new marketing options that the continuous flow of real-time operating data offer you. For a growing number of companies, that means they’re no longer selling products, but leasing them, with the price based on actual customer usage: if it ain’t bein’ used, it ain’t costing them anything and it ain’t bringing you any revenue!

Examples include:

  • jet turbines which, because of the real-time data flow, can be marketed on the basis of thrust generated: if it’s sitting on the ground, the leasee doesn’t pay.  The same real-time data flow allows the manufacturer to schedule predictive maintenance at the earliest sign of a problem, reducing both its cost and the impact on the customer.
  • Siemens’s Mobility Services, which add in features such as 3-D manufactured spare parts that speed maintenance and reduced costs, keeping the trains running.
  • Philips’s lighting services, which are billed on the basis of use, not sold.
  • SAP’s prototype smart vending machine, which (if you opt in) may offer you a special discount based on your past purchasing habits.

At its most extreme is Caterpillar’s Reman process, where the company takes back and remanufactures old products, giving them a new life — and creating new revenues — when competitors’ products are in the landfill.

Loyalty can also be a benefit of IoT strategies for manufacturers’ own operations as well. Remember that the technological obstacles to instant sharing of real-time data have been eliminted for the supply chain as well. If you choose to share it, your resupply programs can also be automatically triggered on a M2M basis, giving an inherent advantage to the domestic supplier who can get the needed part there in a few hours, versua the low-cost supplier abroad who may take weeks to reach your loading dock.

It may be harder to quantify than quality improvements or streamlined production through the IoT, but that doesn’t mean that dependable revenue streams from loyal customers aren’t an important potential benefit as well.

Sentri: example of how IoT is re-inventing tired home devices

I’ll admit it: I’ve been a design junkie since the first museum show on Shaker furniture that I saw while I was in grad school at Syracuse (come to think of it, that epiphany was really when I visited Denmark with my parents, and saw Shaker-inspired Scandinavian design by Georg Jensen et. al.). I just love things that are sleek and functional.

Sentri home security system

Now, following in the Nest’s footsteps, there’s a neat Kickstarter project, the Sentri home security system, that repeats the Nest’s double-whammy of reinventing a tired product to add IoT functionality, and make it beautiful to boot.

Sorry, ADT, but the only reason anyone would display your monitor prominently would be to scare the Bad Guys: they’re just pug-ugly. As
this picture shows, the Sentri is another work of art — and it is more versatile to boot. A built-in HD camera and sensors not only detect movement, but also temperature (a sudden spike could mean a fire), humidity and air quality.  Like the Nest, it will learn from your behavior.

I like their design principles — would that more products were based on them:

 

  • Simple elegance: The best technologies are the easiest to use. Sentri is ready to use right out of the box – simply plug it in, power on, and download the Sentri smartphone app. No assembly or installation required. Hang up your Sentri on the wall, or set it right on your shelf and let Sentri take care of the rest.
  • Intelligence within reach: Minimize the rate of false alerts and create a security system adapted specifically to you with Sentri’s built-in notification system that not only keeps you in the know, but also learns — and acts on — the alerts that matter most to you.One of the biggest challenges traditional home security systems face is that most alerts delivered are false alarms, leading to many households opting out of security systems, or simply not turning their systems on.  With Sentri, maximize your home’s security with timely and accurate alerts.
  • Empowering you: While safety at home is essential for everyone, we know that your home and what security means is as unique as you are. Take control of how your Sentri looks, feels, and behaves by customizing when and where you want to see certain information and alerts. From choosing the background for your Sentri to showing which sensors are displayed and which smart devices are connected, always stay in control of your home.

Sentri as smart home hub

OK, it doesn’t have wired-in-place switches on each window that could detect a break-in (score one for the incumbents), but on the other hand, you just plug the Sentri in and it’s ready to go. Perhaps most important, there are no monthly monitoring fees: who needs them when you get an instant alert on your smart phone if there’s a problem.  Also, there’s another bonus: it’s designed to be a smart home hub: the illustration shows it also controlling your HUE lights, WeMo sockets, and a Nest.

Before I get too rhapsodic, I’m reminded of the recent headline about a crowdfunding project that wasted millions and didn’t produce a usable project. However, overall, it seems to me that, out of the soup of crowdfunding dollars, IoT reinventions of conventional products, inspired design, and plunging sensor prices, we’re seeing a real revolution in product design and manufacturing that can pay multiple benefits to all concerned! Bravo!

 

 

Chatting up Alexandra Deschamps-Sonsino.There at the beginning!

Posted on 19th September 2013 in Internet of Things

I’m about to launch a new venture: paid speaking about the Internet of Things to corporate audiences and college students (details to come in the near future — but feel free to contact me NOW if you think of an audience that would be open to my evangelism for the IoT!).

One of the speeches I’m preparing is aimed squarely at college students — I’ve been excited to see how many 20 and 30-somethings play a lead role in the IoT and I’m also concerned about the future for these kids (my youngest very much included) in terms of the conventional economy — we’re in the process of leaving them with a very sorry mess, and I think they’re best advised to think outside-the-box and create their own opportunities.

WHICH IS A LONG WAY OF GETTING TO A GREAT CONVERSATION that I had at six AM today with one of those leaders who I plan to feature in the speech to provide inspiration, Alexandra Deschamps-Sonsino,  who I knew primarily as the designer of the Good Night Lamp. I was quick to learn that she’s done much, much more, and was really there at the beginning of the IoT movement!

Here’s what I learned!

Alexandra Deschamps-Sonsino

She began studying product design in Montreal, and her professor told her to investigate the field of interactive design.

Wanting to go back to Europe, she enrolled in the program that many credit with being the home of the first maker movement in the IoT, as one of 17 students in the Design Institute of Ivrea, Italy. If that rings a distant bell, it’s because that’s where the Arduino board was developed, which has been the entry point for so many to the IoT. It was during this period that she actually designed the Good Night Lamp.

 

Good Night Lamps

She then moved to London, forming an Arduino distributorship with inventor Massimo Banzi.

She grew the business to about 12 people, which also did R & D on inter-connected products for companies such as BBC and Nokia.

Deschamps-Sonsino closed the business and then went back to consulting in 2010. In early 2013 she revisited the Good Night Lamp, getting it into production.

When I asked her whether her lack of a programming background was a handicap, she laughed, and said “I still don’t know how to program, but I know enough to be dangerous .. I have a really good understanding of what’s possible and what isn’t” in terms of programming. She thinks her awareness of programming is much higher than most product designers, who are ” …  still interested in designing chairs and salt and pepper shakers!” She thinks that design education must evolve — too much of it is still focused on the kind of mid-20th century design that created cults around designers such as Philipp Starck. She is adamant that there is a role for product designers in the IoT, saying that most of the products have been designed by programmers, who come at product design from a technology perspective. In fact, she thinks that a lot of education will have to change because of the IoT, which she sees as a disruptive technology:  “We have to get away from vertical learning niches, and put more emphasis on collaboration.” She shakes her head at one leading European manufacturer, where the product designers are physically isolated from the technologists and others, making collaboration impossible.

When I asked whether she’d faced any discrimination in the IoT world as a woman, Deschamps-Sonsino said:

“Not really, being a woman was actually useful because there aren’t many around: as long as it’s to my benefit, gets me in front of audiences, it’s OK. Some  who got involved in the IoT in their 30s act inappropriately,but I’m managing it!”

Since I’m hoping to use these speeches to motivate young people to seek IoT careers, I concluded by asking her what the future holds:

“I think it has such tremendous potential, incredible opportunities. I think curiosity is the key. Start looking online for examples of IoT products: people keen to get feedback on their designs. Try to engage: take a 2-day workshop with Arduino. I’d particularly say to younger girls, the idea that tech for boys is total bullshit.

Young people have a lot to contribute. Opportunity for a lot of products because of the freshness of their outlook. You don’t have to learn to code.  Other parts of the industry are ossified , but this is so open.” (my emphasis)

We wrapped up the conversation after 45 minutes. My day was already made! What an inspiration. Thanks, Alexandra!