How will IIoT drive more sales?
This question stalls many industrial IoT projects.
How will IIoT create more shareholder value?
Now that is a much better question.
Successful IIoT projects are customer and engagement focused, creating value through digital transformation.
To accomplish this, your IIoT project should encompass the 3 R’s:
Relationships Create Value
IIoT projects are change agents. They help create new digital ecosystems and value chains. Participation in these value chains can be the difference between success and failure.
“As companies increasingly integrate their core business functionalities with third parties and their platforms, forward-thinking leaders leverage these relationships to build their role in new digital ecosystems.”
These relationships are both internal and external. Digital ecosystem opportunities are abundant. Look at your supply chain, distributors, financial partners, service providers, and beyond. Be sure to understand where you fit in the ecosystem. Take part in it or create one yourself, but don’t wait.
Having a vibrant digital ecosystem adds value for all participants in many ways, including:
- Lower operating costs
- Improved efficiencies and productivity
- Increased asset uptime and availability
- Reduced problem identification and resolution time
- Improved financial results (top and bottom line)
Learn more about these relationships and their value in my prior post.
Retention Creates Value
How customers experience your products impacts the success of your IIoT projects, but so does how they experience you and your ecosystem. IIoT projects should enable digital transformation and access to the right information, at the right time and to the right people. Retention should not solely focus on NPS scores or a customer satisfaction index (CSI). They are important, but lagging measures of outcomes. They are also poor indicators of customer engagement.
Limited information access also impacts your operations, especially employee retention. Poor visibility to data is very frustrating. It’s stressful being on the defensive about product issues. Employee satisfaction impacts productivity, and without it, turnover is expensive.
Retention Value Creation
Well-managed IIoT projects can help transform customer, employee and partner engagements.
Phone calls, emails and coordination activities are costly. Combining IIoT and legacy application content eliminates these manual, time-intensive activities. The value created is significant.
Product availability improves.
- 70% faster problem diagnosis
- Up to 50% less downtime
- 90% better service effectiveness (fix-it-right the first time)
Service and support providers are more efficient.
- Up to 40% reduced administrative overhead
- >2,000 hours per month of reallocated resource time
- Up to 25% increase service throughput
Customers gain additional value.
- $100,000s per year reduction in administrative costs
- Elimination of high percent of unscheduled downtime
Employees take part in the upside as well.
- Proactive customer communications reduces stress
- Transparency creates more trusted relationships
- Improves employee productivity and job satisfaction
Retention Value Examples
Be sure to review non-revenue related opportunities across your company. Below are a few examples to consider.
|Product||Capture IIoT and other structured data to improve decision making, increase availability, and enhance maintenance scheduling||· Faster triage time|
· Improve repair effectiveness
· Reduce repair times
|Customer Support|| |
Information access to improved CSR productivity and increased call capacity (with minimal incremental costs)
|· Faster resolution times|
· Reduce cost of support
· Improve customer satisfaction (NPS or CSI)
|Service Management||Proactively engage service providers and more easily track service delivery quality||· Increase repair capacity|
· Reduce repair/triage times
· Improve service effectiveness
|Claim and Lease Processing|
|Increase process efficiency and eliminate manual data entry||· Higher Claims/FTE/Month|
· Lower time to pay/close
· Improve 1st time approvals
· Better service effectiveness
|Channel Development|| |
Drive sale efficiency by proactive customer engagement and elimination of “surprises” at sales calls
|· Sale productivity increase|
· Increase average selling price
|Field Support||Proactively engage customers and partners with real-time issue prioritization (not squeaky wheel) around parts expediting, policy approvals, excessive repair costs and time, and other repair issues.||· Reduce escalations|
· Lessen repair time
· Eliminate parts availability issues >x hrs.
· Reduce warranty authorization time
New product development is also affected. Well structured, consistent. and reliable data is foundational for new value-added services. It’s required to create prescriptive application experiences.
Revenue Creates Value
Like bad product experiences, sales interactions can negatively impact value. Too many sales relationships are reactive. But creating an ongoing and contextual dialogue with your customers creates great value.
Digital transformation should enable proactive engagements–not sales opportunities but relationship building–delivered with a clear picture of your customer’s experience with your products and visibility to how they have experienced your company and partners.
Servitization of product companies is a critical part of IIoT. It creates many opportunities to drive revenue. But selling this value is different than selling products, so organizational and ecosystem alignment is critical.
More manufacturers are shifting their focus from products to end solutions in a means to enhance their competitive advantage…It’s a fundamental change in how you approach customers as well as how you bill them and maintain the products you sell them.
Changing the sales dynamic creates value.
- Contextual access to information at the point of sale becomes a competitive differentiator
- Improved product performance delivers valuable case studies to show ROI
- Sales of new products and services to existing customers increases customer lifetime value
- Attacking new conquest customers becomes easier
Don’t get stuck trying to show the money. Provide a clear IIoT plan that includes relationship, retention, and revenue value creation.