7 years of IoT and CX: What are we learning?

Marcus Hickman
Director
Davies Hickman Partners
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In 2011 we wrote about how Internet of things technology would impact customer experience in “The Big Switch – How customer service is becoming smart”  

Back then and in 2015 with this report, we identified several drivers which we thought would smooth the way for IoT technology:

  1. Minimising customer service.
    Organisations were excited by ‘the best customer service is no service’ mentality.This often meant little or no customer service or customer self-service.
     
  2. Simpler problem identification.
    IoT technology and the proliferation of sensors linked to the internet meant faults with products, technology or user error would be easier to identify.
     
  3. Easier problem prediction.
    IoT sensor information linked to customer databases would allow predictive service to resolve customer problems before they realised the problem existed.
     
  4. Communication methods.
    Notifications to warn customers of problems, via messaging, text and calls, were becoming more widespread.

IoT technology are changing customer experience now

Seven years later in 2018, how are Internet of things technologies being deployed to improve customer experience? Despite the constant exhortations in the media regarding the speed of change, progress has been slow and steady.  Just some of the applications of IoT technology which have begun to impact our lives (and are linked to Apps) include:

  • Cars can be connected to the internet notifying emergency services in case of an accident (uptake 2% UK)
  • Black boxes assess our driving habits and safety levels for insurance companies (uptake <10%)
  • Smart utility meters show energy usage in real time allowing cost savings (uptake 50%)
  • Parking apps identify spaces in car parks and cities, saving time (more and more)
  • Expected bus arrival times in real time improve overall travel times (widespread)
  • Smart speakers offer unstructured customer service conversations with some organisations (very early stages).

But success is not always easy…

The attractiveness and consequent uptake of these new technologies is influenced by what they do and by how consumers interact with them.  While these technologies are improving customer experience as predicted in 2011, paradoxically they are also creating a need for further customer service in terms of:

  • Customers wanting to find out how the technologies work
  • Customers often needing to be educated to get the best results
  • New technology creating uncertainty which in turn leads to questions.

Negative feedback from IoT technology include comments from car insurance ‘Black box’ users:

  • “It can be somewhat random in the scores it gives.”
  • “Terrible.  It is a great idea but executed poorly.  At one point I didn’t drive my car at all for 2 months yet somehow my insurance went up by £35.”

There have also been reports in the media questioning the accuracy of Smart Meters for utilities.  For instance, a report by Dutch academics: https://www.telegraph.co.uk/news/2017/03/06/smart-energy-meters-giving-readings-seven-times-high-study-finds/

While Which? Magazine also looked at problems arising from Smart Meters: https://www.which.co.uk/reviews/smart-meters/article/smart-meters-explained/smart-meter-problems-and-solutions

One element that wasn’t evident in 2011 is the concern that these technologies are tracking people’s behaviours which has been translated into a belief that IoT technologies are ‘spying’ on consumers.  The flipside to this issue is that these technologies offer a further data stream for organisations to differentiate their offer to consumers based on past behaviour.

Implications for organisations are clear require resources to resolve

The key strategies when deploying Internet of things technology in order to improve customer experience are threefold:

  1. Ensure the technology works and is reliable (easier said than done).
  2. Educate consumers about the extent and limits of the technology (difficult with consumers focused on instant gratification).
  3. Establish effective customer support capable of answering questions, reassuring customers and preventing a bad publicity bombshell (essential).

Where do we stand in 2018?

There is still a very long way to go before realising the Smart Service future we discussed in 2011.  But maximising the chance of success means researching needs and reactions of customers combined with great usability testing. 

About Marcus Hickman

M hickman

Consumer data and customer insights consultant working in B2C customer experience and B2B marketing. Set up Davies Hickman Partners in 2007. Was MD of the Henley Centre (now Kantar Futures), part of WPP.

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