July/Aug 2012

Throughout the last two decades many technologies have matured, making the promise of M2M (machine-to-machine) a reality. During this time, most industry meetings related to “connected devices” have focused on the ubiquitous network, the microcomputer/radios, and in recent years the cloud or big data. It is clear the underlying technology now exists to make the envisioned connected world a reality.

In this connected world where machines talk to machines and the Internet connects things, all too often the humans are an afterthought. But during this same period of transformation of products, a related, but far greater evolution has been occurring—that of the consumer. Consumers themselves have started to transform around these technologies by constantly consuming and growing dependent upon this always-on, mobile information.

Their expectations of how their products, services, and life experiences should function are also beginning to change. Companies must recognize this shift in order to compete in this new environment and fight for mindshare of this digitally savvy, ultra-connected consumer.

In a nutshell, it is really rather simple: The connected consumer is emerging as the customer. Consumers have become so connected that companies have had to change their approach of how they engage with them. Early on, companies were only prepared for reactive styles of post-sale conversations. They were focused on exception-based events like product usage or product failure. As time wore on, customers demanded that interactions across the brand be consistent, and they voted with their almighty dollar, making it known that brand loyalty depended on this consistent interaction. This evoked automation inside of a corporation’s customer-experience process.

This was immediately recognizable in large-scale call center BPM (business-process management) projects, and massive CRM (customer-relationship management) implementations that would ensure customer information was consistent across the entire sales and post-sale processes where they “touched” the customer.

The most meaningful shift has begun this decade. With mobile devices in hand, and realtime connectivity everywhere, almost all consumers can be considered “connected.”

This is often discussed as social media, but this is simply the front edge of a more complete connected movement. An entire generation has been raised in this world and the expectation that life is “connected” no longer only means that a communication signal (such as cellular or Wi-Fi) can reach them, but that their experiences are integrated throughout their lives.

There are many fundamental shifts occurring due to the rise of the connected consumer. Three that are important to understand early in your corporate-planning process are:

  • Reactive vs. proactive: For a long time, consumers have accepted different forms of reactive interaction. From traditional “inbound” customer interactions, to the current practices of “active listening” to manage the social media channels, companies have focused on managing the discussion when customers raise their hands. Expectations are changing, however. The consumer is beginning to expect engagement at the point of usage. No matter if this is realtime fixes (flashing), on-demand upgrades, or simply more knowledge by the call center staff; a connected customer interaction looks a lot different than the standard today.
  • Personalization is the core of today’s product design: For long periods of time, products have been designed for “the masses.” Focus groups were formed, and broad demographic groupings were used to assess what product features would drive the highest level of profitability. The connected consumer demands personalization, driving corporations to consider “micro markets” where ultra-personalized packaging of unique features can fit each consumer’s needs.
  • Information asymmetry is a reality: During the early phases, interactions with the customer were considered point-to-point experiences: manufacturer-to-customer and customer-to-manufacturer. In outbound messaging, the manufacturer, aka the OEM (original-equipment manufacturer) controlled the “truth” about a product and put itself at the center of the conversation.

With the advent of connected products and the surrounding environment, the conversation switches to a network of conversations with the product at the center. The social fabric allows the OEM to be left out if not properly managed, while the product generates the truth and a digital society integrates it into its connected life.

This is a massive shift in the target market, and it means senior leaders must rethink internal structure and resourcing in response. There is no universal answer for all companies, but some of the main building blocks that must be considered in a connected consumer-readiness program are:

  • Customer and product information integration: CRM systems being integrated with core product systems. This sounds like an IT thing, but it is really a major organizational thing.
  • Platform/system style product architecture: Product features can no longer be “hard wired” into a product, but instead they must be supported by a broader platform that allows for near-realtime upgrade.
  • IT, engineering, and customer-team alignment: Realtime monitoring of the user experience is going to be key to understanding more about the consumer and ensuring products are relevant. These three “siloed” functions must work together to ensure a brand remains relevant.

These are only a few of the massive changes upon us as the “connected-device” industry has reshaped the consumer market. While senior leaders have allowed the “connected” conversations to take place mostly in the offices of the engineers, they have entrusted their brand’s positioning with the consumer to the offices of the CMO, or in recent years, to the chief customer officer—a position with the daunting task of managing a company’s touch points with customers.

It will be the most successful leaders who creatively bring these functions together and ensure they hail the new connected king: the consumer.

Gregg Garrett leads a team that advises clients on how to harness innovation in the connected economy as CEO and president of CGS Advisors. He lectures at several universities and contributes to Connected World. He can be reached at greggory.garrett@cgsadvisors.com

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