I recently wrote about the strong need for data to be an integral part of value creation and customer experience design. I was commenting on a McKinsey research paper that highlights three key areas that executives need to understand:

• Internet of Things; what data is being captured? What is possible to capture? Are you capturing information that can be used to shape insight?
• Capturing value; how does your business define value? What insights do you want to find from the data you have? Can you see, or define, a path from the raw data to business intelligence?
• Insights Value Chain; defining the complete set of requirements that lead from the capture of the data to the creation of intelligence. What physical attributes, properties, systems, or skills are needed for you to make this work in your business?

In this article I want to focus on the first of these three areas – the Internet of Things (IoT) and why this emerging technology is important for executives to understand in the context of the modern customer experience. In short, the IoT creates an entirely new connected environment for customers where almost any device can be connected to the Internet and controlled or used to gather data continuously.

The Smart Home predicted a few years ago has become a reality far sooner than many people imagined because the Internet of Things (IoT) makes it easy to control any device that can connect to your home wifi network. This can include lights, heating, and any device that can connect up to your home network. Tools such as the Amazon Alexa and Google Home are making it even easier to connect and control devices – and to control everything just by speaking.

As an example, I recently read about a device called the Furbo. It’s a device that you can load up with treats for your dog. It has a sensitive camera that can be viewed live using your smartphone and the owner can click a button to call their dog remotely and give them a treat. It sounds like a gimmick, but what’s really interesting is that the device also scans your home for facial patterns and barks from your dog. So if you are away from home and your dog is alone, the device will send an alert to your phone if the dog has been disturbed or if it detects a person in the house when you don’t expect someone to be there.

A few years ago this all sounded like science-fiction, yet it’s now a product that retails for less than $200. The wifi network and smartphone app store provides the infrastructure for a product like this to be a reality and to be installed by anyone without any technical knowledge of computer networks.

But here is what I think is really interesting and is rarely mentioned when most commentators are discussing the opportunities for the IoT. It is creating an entirely new type of customer service requirement. Almost every device in your home is not only connected in a way that allows you to control it, they can also communicate with the manufacturer, run diagnostics, self-upgrade, and self-repair when problems arise. The Tesla electric car company has already demonstrated this – Tesla users have become used to their cars upgrading themselves when sitting unused in the garage at night.

This creates a new dynamic for brands that build devices and want to offer a great customer experience. They not only need to plan a regular customer service strategy involving contact from the customer, but they need to also plan for the product itself to be reach out to the manufacturer and asking questions or checking on certain data. The important change here is that devices are creating data continuously without user control. They are networked and controllable, but also communicating with the network.

This requires a layer above the usual customer service system that allows products to interact with automated bots, that can escalate automated queries to human agents when unusual conditions are detected or a problem is impossible to rectify automatically.

The IoT creates a need for a new type of customer service where the customer or the product can be in contact with a product manufacturer or retailer. This is missed from most of the debate about connected customers, but I believe it creates a new paradigm for customer service strategy. We don’t just need to plan for self-help and multichannel service – we also need to plan for automated systems that can answer questions from the product, not the customer. We need to be planning for IoT data as an integral part of the channel mix in any customer experience strategy today.

Photo by Raneko licensed under Creative Commons.