A successful roadmap for the Digital Economy includes some of today’s biggest business enablers: mobility, social interactions, and the Internet of Things (or, some form of product or service usage information).
The Internet of Things Provides New Revenue and Customer Insight
Internet of Things (IoT) adoption is moving along, ranging from connected productivity devices to value-added services embedded in products . When it comes to revenue generation for connected devices, Capgemini notes that less than 30% of companies find ways to monetize connected devices.
“Most organizations are still in the early stages of adapting their offerings to the new IoT world.” [FN2]
The Phase 1 Internet of things, is focused on device connectivity to enhance productivity, or provide value-added services, including things like:
- smart meters for managing energy usage
- remote readers for utility meter readings remotely
- smart refrigerators
- computer printers connected to the cloud
- home security systems managed through smartphones
- smart appliances with smartphone notices (such as those from Whirlpool)
- GM’s OnStar system
Mass Customization Finally Becomes “Customerization”
It has long been a goal of product and service providers to perform “mass customization”. The idea that you can sell a unique product or service to just one person at a price which compares to a mass produced item. As noted in Customerization: the next revolution in mass customization, pg. 14: [FN3]
Hart (1996) defines mass customization as “using flexible processes and organizational structures to produce varied and often individually customized products and services at the price of standardized mass-produced alternatives.” [FN3, pg. 3]
While the idea of “customerization” is over a decade old, the digital economy is making it a reality.
Customerization is “a redesign of marketing from the customers’ perspective.” [FN3]
Marketing activities change when you consider this definition in the context of deep analytics including: social media, the Internet of Things (product or service usage insight), and mobile devices. Engaging in highly targeted marketing, down to the individual customer, is now a reality. The technologies finally enable cost efficiencies and the analytics to support individual marketing efforts.
Digital technology is transforming mass marketing into individual marketing.
Mass Marketing is Now Personal Marketing
Amazon was one of the early personalization pioneers. Their recommendation engine has served as a model to organizations everywhere. Google’s targeted advertising, along with many other firms is beginning to change the Internet shopping experience. Eric Schmidt, the Chairman of Google, states:
The ability to find people, to talk specifically to them... to rank what they’re doing, to decide what to do with your products... changes every business globally. [FN5]
Individually personalized marketing is happening today in the form of targeted online advertisements. Have you ever searched for something online, didn’t buy it (or maybe you did) and then notice as you visit other websites there are banner ads for the same, or similar items you were considering earlier?
Personalization is mobile, local, and individualized.
Go Digital offers a brief guide for digital economy personalization: [FN6]
- Leverage Big Data
- Use targeted rewards and deals
- Use a multi-channel approach, including social media
- Leverage existing marketing content
- Be persistent and patient
- Get local
Personalization is a key marketing component of the Digital Economy. That personalization, and your marketing efforts, are driven by data analysis, through multiple data channels and several delivery mechanisms. The components are all there for your Digital Marketing future--, but those components must be deployed and integrated into your ERP system for the greatest benefit.
Whether you are far along in that journey, or just getting started, there are always ways to improve your navigation. Contact me today on how Capgemini can provide a map to your technology-enabled business transformation journey. We can help you get to where you want to go without all the detours, dead-ends, or u-turns.
Best wishes and good luck on your journey!
Prev: The Impact of the Digital Economy on Your Industry
Prev: ERP III and the Digital Economy – Building the Borderless Enterprise
With about 145,000 people in over 40 countries, Capgemini is one of the world's foremost providers of consulting, technology and outsourcing services. Contact me today for more information on how Capgemini can help your business take advantage of the digital economy.
Bill Wood – Principal
(704) 905 – 5175
[FN1] Westerman, G., Bonnet, D., McAfee, A. (2014) Leading Digital. Turning Technology Into Business Transformation. Harvard Business Review Press, ISBN 978-1-62527-247-8.
[FN2] The Internet of Things. Are Organizations Ready For A Multi-Trillion Dollar Prize? http://www.slideshare.net/capgemini/internet-of-things-34854286 (retrieved Jan 20, 2015); See also, Monetizing the Internet of Things. Extracting Value from the Connectivity Opportunity. http://www.slideshare.net/capgemini/iot-monetization (retrieved Jan 20, 2015).
[FN3] Wind, J., & Rangaswamy, A. (2001). Customerization: the next revolution in mass customization. Journal of interactive marketing, 15(1), 13-32.
[FN4] Hart, C.W. (1996). Made to Order. Marketing Management, 5(2), 12–22.
[FN5] Ask a Billionaire: Eric Schmidt's 2014 Predictions. https://www.youtube.com/watch?v=vzKM8oyCsUg retrieved December 10, 2014. Bloomberg Youtube Interview of Eric Schmidt.
[FN6] Personalized Marketing Campaigns: Meet the New Normal. http://www.godigitalmarketing.com/personalize-marketing-campaigns-nationalblog/ retrieved December 10, 2014. Go Digital, a Gannet Company.