As marketers – and as consumers – connecting the dots between previous and future behavior is the key to appreciating a good offer when we see one. And today, that’s not as simple as recommending a fun pair of boots after I bought designer jeans. With our offices, mobile devices, and homes all connected and talking to each other, being on time and on message is increasingly complicated. I recently sat down with our CEO Michael Caccavale to talk about the challenges and opportunities that marketers can uncover when we look at the smart home market.What’s your take on smart homes?
Though Alexa and Google get most of the credit, they aren’t what makes a home “smart.” It’s really more about your platform or hub that brings it all together. It’s your home security, your wireless thermostat, your appliances that record data and not only fill out your grocery list, but also flag any issues in how they’re operating.
Is Amazon’s Echo a gateway gadget?
Yes. Right now, it’s used as a new interface to these smart home devices. It’s still not the hub of the home; your cell phone is more of a hub because that’s where the real controls are – and it’s always with you.
Still, the use varies: there are some people who like to have their fingers on the keyboard to control their smart homes. Some people like to be able to talk to a device and have it make the updates. And that’s where the appeal is for things like Amazon’s Echo. You don’t have to learn a new interface, you just use a feature function and it commits it to memory. Voice-activation is far more intuitive than pushing buttons and learning devices.
Are people creating smart homes regardless of whether they rent or own?
The options definitely look different. As a renter, I wouldn’t install something like a security system because it’s fixed and expensive to bring with you when you move. But I would install an Arlo camera system. One is a hosted security platform while the other is your own, very simple and self-contained device.
There are side benefits to each. Like with a camera, you can be in your house, show a project remotely, and say, “how can we fix this?” On the platform side, you have more control options. For example, I have a friend who travels a lot and he’s worried about his pipes freezing. If he puts in a Honeywell, he can be notified when the temperature drops, and he can turn up his thermostat remotely.
Talk to me about the smart home customer. Who are they? What are their priorities?
There are different classes, for sure. Some are purely convenience-driven. There’s the social household where they play games, the kids ask questions, etc. That’s different than the busy executive who is asking for weather and traffic updates while they get dressed for the day. They’re both early adopters but that might be one of few things they actually have in common when you dig deeper into why they’re building a smart home.
How do we get their attention?
You can’t just go to these buyers with a general sales pitch. You have to get specific. That’s segmentation modeling and targeting. You have the DIY user and the “I want to pay someone else to monitor it for me” customer. They may be looking for the same outcomes – home security, monitoring, controls – but how they get there is going to look a lot different.
What are the most useful pieces of data we can extract from IoT?
Taking all this data and making heads or tails of it is really the challenge for marketers. Take a three-pronged approach. They’re using the data to identify patterns, like when you turn the heat up or down, and so on. But the trick is that I don’t think we’re as patterned as the machine assumes we are. When a retired couple says we have a Nest at home, it’s perfect. We’re saving money. But actually, Nest doesn’t know you’re on vacation. It works off of averages. So are you really saving money? And is the pattern you’ve created true to your lifestyle, or is it just that you never programmed your old thermostat so Nest turning down the heat in the living room at 1am is simple and efficient?
Now, if it’s fulfilling orders, IoT can make things smarter on the design floor to inform supply and demand. Similarly, early IoT was done by the airlines when planes used to send information/data back to the manufacturers. That’s what’s in your appliances now. So there’s a lot to be harnessed there for mechanical issues and reliability of products. But that’s on the production side, not the consumer-facing side so it doesn’t necessarily benefit marketers.
What’s the bottom line?
People with these devices are more open to an exchange. They’re willing to provide a lot of data in exchange for better customer service. But really, if you haven’t tackled other marketing challenges in your organization, you shouldn’t be focused on IoT. In general, your customers are expecting more, period.
Home automation and energy industry marketers should be working on how to solve their customers’ needs differently – part of that is segmentation. And they need to understand their customers’ willingness to adapt their usage to be more efficient. So stop mass marketing to them. These customers understand the value of technology, so show them how you can improve their user experience.