How Manufacturers can create Smart Products to Enhance Customer Loyalty
Smart technology can provide manufacturers with opportunities to enhance their customers' experience by integrating solutions related to troubleshooting on the one hand and optimizing performance on the other hand. Smart technology is attractive for end-users for the interactivity and feedback it creates between product, user and service provider.
The underlying principle consists of virtual communication via sensors integrated into the product that are activated when operated. In such a way, information about the usage of products by end-users is gathered directly by manufacturers.
From a strategic point of view, this enables manufacturers to compete with retailers and the owners of technology platforms, who have dominated the battle for customer loyalty
until so far.
Retailers thrive for instance with the use of loyalty cards, which facilitate gathering customer data while enabling targeted discount campaigns. Online platforms such as Amazon benefit from smart technology in building greater awareness of customers' likes & preferences, which leads them to fine tune their recommended products.
In a similar vein, manufacturers can benefit from developing proximity with their customers via smart technology. Current pioneers in the field are for instance:
- GE that relies on smart technology to troubleshoot jet engines' problems.
- Sonos enhances customer experience by fitting sensors in sound equipment that automatically adjust to the environment.
- Gooee goes a step further, in developing the capacity of its lamps to activate alarms in case of a break-in or fire.
Thereby, from a mere product, a manufacturer extends its value proposition towards a service.
Manufacturers can embrace smart technology in the following way:
1. Bring on-board IT technicians.
2. Focus on building strengths related to information systems management.
3. Build a culture around smart technology and innovation in spreading greater knowledge and know-how of real world applications.
Source: The Economist, "Smart Products, Smart Makers", 21 November 2015.