The New Customer Experience Is Determined by the Algorithm of You


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Companies are revolutionizing the way businesses create differentiated customer experiences using the Internet of Things (IoT). IoT allows for the processing of massive numbers of device events and for mingling those events with business and customer events. This combination generates the next-best, in-context business actions, and thus, smart, differentiated customer experiences.

Futurist brands can use this "the algorithm of you" to collect and process myriad data on each customer and potential customer via the IoT. This allows companies to know customers and prospects better and to deliver offers, products, and services that are relevant and in context to clients' real-time needs and desires via the channels and devices that customers prefer. In essence, the company learns over time about ?its customers and can automate the data processing and reasoning tasks to create superior customer experiences. In turn, these IoT-enhanced customer experiences, designed to impress, amuse, and increase the customers’ loyalty, will allow companies to gain more revenue and deliver on their brand promises.

How can your company turn the idea of "IOT-driven customer experiences" into a tangible reality? Using mass personalization at scale. A retailer can, for example, use IoT analytics to predict which customers will respond to a variety of offers. When those analytics are streaming, sales associates and systems can make offers when customer walks into the store, visit the Web site, or open the mobile app. This specialized, personalized attention drives customer loyalty. Why? Customers prefer to shop with companies that know them, know what they need and want, and deliver it. Customer lifetime value, a measure of how long a customer purchases from a company and how much his purchases increase over time, is increased when a customer is more loyal. The higher the overall customer loyalty, the higher the company's revenue.

Yesterday's companies were greatly defined by their logos, taglines, and other tangible representative icons. A company's future is its promise to customers. Today, a company's promise is delivered through the experience a customer has with the company at every step of the customer journey. The best companies deliver on their promises in every customer interaction. The brand promise is so solid that consumers develop expectations for the customer experience. Customers trust that the company will deliver on those expectations and its promise in every interaction. As your company grows through consistent customer interactions, it continually delivers on the brand's promise. The customer interactions evoke feelings in customers that deepen brand trust and loyalty. Brand loyalty translates into enhanced customer lifetime value, revenue, margins, ?and profits.

Our research shows there are seven building blocks that provide the foundation of mass personalization at scale. The building blocks are the following:

  1. Channel ubiquity ensures enhanced customer access.
  2. Contextual relevance drives customer engagement.
  3. Choose your own adventure journeys provide a wider variety of choice for customer engagement.
  4. Learned patterns provide insight to make future customer experiences better.
  5. Intention-driven design anticipates customer preferences.
  6. Cognitive capabilities learn over time to improve the customer experience.
  7. Products become smart and drive unique customer experiences.

To learn more about how IOT can create better customer experiences, you can check this out.


Natalie Petouhoff, Ph.D, is a vice president and principal analyst at Constellation Research.