It is hard to overstate how revolutionary the Internet of Things (IoT) could be for revenue and customer interactions. IoT solutions will soon prove invaluable for product management, and will also offer a chance for companies to understand customer needs like never before. Companies can correlate data from connected devices to optimize product performance.

Customer experience

A company’s interaction with its customers used to be limited to the point of sale. Organizations relied largely on anecdotal reporting and product returns to gauge device durability and customer satisfaction. But through new capabilities to manage and analyze the real-time data that connected devices provide, companies can now gain key insights into product performance, consumer trends, and purchasing behavior—at an unprecedented speed and scale. For example, Coca-Cola’s data from its Freestyle and other vending machines have enabled the company to gain valuable understanding about patterns in where, when and how customers are purchasing and consuming their products.

IoT solutions vastly accelerate product R&D. By using sensor, diagnostic and user interaction data from devices, companies get full product transparency. By seeing how customers are using their products, businesses can quickly update features or adjust future models to more closely align with customer desires and behaviors. They can also better anticipate where consumer preferences are going in the future. This insight is invaluable – rather than going through tedious trial and error, companies can know in real time what is working and what is not, enabling organizations to make data-driven decisions and immediately react to correct or adjust issues. This leads to better product design—both now and in the future. For instance, iRhythm, a company that manufactures a patch that can detect heart problems, leverages its devices to better understand use and ensure that its products operate as intended.

Understandably, discussion of the IoT framework brings to mind privacy concerns for consumers. But personally identifiable information (PII) can be aggregated, masked or omitted to limit the identification of individuals— e.g. public healthcare. It’s much like the type of information consumers provide to websites currently when learning more about products or making purchases. And the tradeoff for customers is worthwhile, as companies are better able to create products and services designed to improve their lives.

Increasing revenue

According to a study from Tata Consultancy Services, across the board, those companies investing in IoT solutions are reporting significant revenue increases as a result of IoT initiatives with an average increase of 15.6 percent in 2014. Almost one in ten saw a rise of at least 30 percent in revenue.

An IoT framework dramatically reduces the time and the cost to invest in IoT applications. Multiple solutions exist for enabling legacy, field-deployed equipment. The cost savings from a connected product infrastructure, especially the initial investments in field services and support, which form a critical base of a company.

IoT capabilities and the execution of IoT strategies will change the company and change the way they compete. A big part of this will be changing what they sell and what strategies they use for sales. Some of the methods are listed below:

• Providing mobile apps to customers
• Production and distribution operations to track product flow to customers.
• Digital sensors in products that send data to the company on how products are performing are the three leading uses of IoT technologies today.

It is therefore clear that the data collected from products can be turned into economic advantage, if it is transformed into services. But data itself, by virtue of which the information it can give, may be a direct source of revenue. Data on operations, consumption or customers’ behavior, if strategically crossed, becomes strategic information with a tangible market value.