IoT: Closing the Deal of Things
For service providers, selling smart devices alongside connectivity services is imperative as the IoT becomes more mainstream.
Service providers need to understand what inherent advantages they can offer to consumers to become the primary provider of not only connectivity, but also of connected things in the IoT. In order to sell IoT devices and services effectively—to close the deal of things—service providers need to consider new, but not entirely alien, models for putting IoT devices in customers’ hands, homes and automobiles now and through multiple upgrade cycles in the future.
Devices Beget Devices
Netcracker’s recent survey of more than 1,500 U.S. consumers shows that when people own certain types of connected devices, they are more likely to own or purchase an increasing variety of IoT devices. For example, many users of first-wave IoT devices like web-connected cameras already own several other IoT devices. More than 37 percent of respondents who own connected cameras also own wearables; nearly 28 percent of them also have connected cars.
Selling Things With Digital Style
The range of new IoT devices is expansive—many new device categories were unveiled at CES 2017. Everything from app-controlled shower faucets and voice controlled clothes dryers to robot assistants and smart trash bins that can, for example, order a new bag of coffee by throwing an empty one away were on display.
For service providers, selling smart devices alongside connectivity services is imperative as the IoT becomes more mainstream. The sales approach should allow customers to build their own device collections, take advantage of superior deals for self-made bundles and access multiple ways to finance or lease not only today’s devices, but also multiple upgrades of those devices for years to come.
This IoT-driven personalized approach infers fundamental analytical capabilities that allow service providers to:
- Identify groups of customers with keystone IoT devices like wearables and personal assistants.
- Offer digital, catalog-driven shopping experiences to create customized bundles.
- Provide clearly visible device pricing and financing advantages that beat offerings from other retailers.
Service providers should also consider leveraging two-sided business models that feature proven digital-economy techniques, such as the reverse-auction. Service providers can offer a finite device catalog to customers with dynamic pricing that creates superior bundle deals. Service providers will know exactly the demand volume they have for specific devices as more users engage in the shopping process. Acting as an intermediary between customers and the variety of IoT device manufacturers and distributors, the service provider can match the best bids to provide specific devices with real customer demand. Interested shoppers can be invited to join buying group to drive prices even lower and to lock-in superior prices for future upgrades.
Similarly, offering a variety of finance or lease options is a concept the auto industry proved out and which mobile operators adopted in recent years. Service providers can offer financing and leasing for IoT devices with perpetual upgrades; in other words, customers pay monthly in perpetuity for today’s devices as well as tomorrow’s. Digital models like multibid financing, such as Lending Tree pioneered, can de-risk financing and leasing for service providers by allowing them to minimize capital outlay while profiting as a financing broker for IoT devices at rates far superior to what credit cards offer.
While these varying approaches to selling and sourcing IoT devices might seem farfetched to some service providers, remember that just a year ago most people would not have believed that talking to a device that looks like a hockey puck could buy movie tickets, start the shower, turn off the dryer or feed the dog. But that hockey puck-like device is now the hottest IoT gadget in the world.