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IoT – Is Your Company Prepared? (Part 3)

Thought Leaders

In 2014, the Internet of Things (IoT) made the transition from nerdy esotericism to global phenomenon. It is especially desirable to manufacturing companies that want to connect their products and add new services. With the technology, companies can streamline internal processes, differentiate offerings, generate new revenues, or enhance customer experience. It’s no surprise that these companies can see the business potential. But to achieve success in the long term, they have to understand that IoT is not chiefly a technical enhancement, but an organizational one; the products don’t only have to change, the whole company does.

In this four-part series Robert Brunbäck, CMO at Telenor Connexion, describes why and how IoT is an issue of competence that cuts across a company’s entire organization, and what a company should bear in mind in order to enter into the ‘connected’ world. Each installment focuses on one of these four main divisions of a company, Information Technology (IT), Business Development, Sales & Marketing, and Customer Support, and how IoT is revolutionizing each.


Part Three – Sales & Marketing

Product companies are accustomed to marketing and selling standardized, ready-packaged goods unit by unit. This is especially true in manufacturing companies, where everything from the sales organization to product information and advertising is optimized for one single purpose: to guide the customer before and up until the point of purchase. Then it all stops. But with a connected product, the shared journey of service-provider & customer doesn’t stop with the conclusion of a transaction at checkout. And, for the larger Business-to-Business (B2B) operator, the journey doesn’t stop with the signing of a contract in the conference room. This is where it starts.

Let’s take a simple, connected consumer product as an example. 94Fifty sells connected basketballs. The ball, which looks and feels just like any other basketball, contains sensors that detect precisely how you dribble, pass and shoot. The ball comes with an app that provides its user with statistics, practice routines, and subsequent tips on how he or she personally can become better based on performance. It also lets the player challenge other athletes. In contrast to a traditional ball, which loses value every time it is used, the value of 95Fifty’s combined product and service grows instead every time it is used, both functionally and emotionally. And this is the same with Spotify or any other completely digital services.

A Different Sales Pitch

The connected basketball naturally deserves a different sales pitch from that of a traditional basketball. After all, it’s so much more than just a ball. And that’s exactly how it is with all connected products.

With an offering based on IoT, it falls to Sales and Marketing departments to develop the ability to highlight the value of the combination of product and service. They need to explain the value offering as it regards a customer’s specific needs – not just today, but in the long term. They should describe how customers can become X percent more effective in their day-to-day activities with the aid of the connected offering, or how they are guaranteed a given number of productive hours per month at a fixed price through a service agreement. These are two of the most common value offerings made possible by IoT. It is far more complex than selling finished products straight from the warehouse shelf. But connected products themselves lend a helping hand.

The Product Becomes Social

In a ’Connected World’, user data is a company’s extremely valuable asset. Access to information about how, when and why products are being bought and used also enables the company to customise marketing initiatives for individual customers. IoT is already optimized for use with social media, the product can automatically share information. This paves the way for the development of new communities adapted entirely for users of specific products.

Nike understands that it is far more effective to talk with its users via the Nike Communities that have been created around exercise services for running than it is through traditional marketing channels that need be purchased. It also provides Nike with direct access to new trends and ideas about how they can further streamline their offering – both their physical products and digital exercise tools.

A Different Kind of Partnership

IoT offers companies opportunities to have more direct contact with the end user. Manufacturing companies are no exception. And for operators that are dependent on middlemen (eg. distributors, resellers, service partners), the time has come to give serious thought about how to utilize the boon of IoT. This is especially true in geographical markets where the company does not have a physical presence.

If a company wants to continue using resellers, it has to make sure the reseller learns how to sell connected products and services. This can require a fairly ambitious training initiative and educational sales support from the original company. But if the company wants to build a direct relationship with the end user, it must build up sales and communication channels that the end user prefers ahead of the current network of partners.

It’s necessary to remember that Sales and Marketing departments are the first step in the user’s relationship with the product. IoT brings with it an ongoing, oftentimes daily, relationship between the user and the brand. How a company chooses to manage the ongoing service is therefore decisive in terms of how relevant, attractive and competitive the company’s offering is perceived to be by the customer.


In the next series installment, Robert will be focusing on IoT’s effects on Customer Support.  If you missed out on Part 2 about Business Development, you can find it here!