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Internet Of Things Begets Internet Of Services

The IoT demands a new level of comprehensive tech services and support 2/29/2016 02:30:00 PM

There’s an irony in our increasingly tech-dependent lives: While we yearn for simplicity, the “things” we purchase in the name of convenience are more complex than ever before.

We purchase IoT and smart-home devices from multiple retailers; bring them into highly personalized environments with technologies and services from diverse manufacturers and solution providers; then struggle to bring it all together in a way that gives us the control, convenience, simplicity and value we expect.

Turning to the “thing makers” or “thing sellers” for help doesn’t offer us much in the way of satisfaction ... or results.

While we’ve seen impressive innovation in the connected lifestyle market, IoT “thing makers” and smart-home solution providers have neglected to transform their technical service and support to properly underpin the real-world use of these products. The challenge is that this is now a world in which no one product is being used in a vacuum, and as more organizations awaken to this reality, more companies are expanding their role in the IoT ecosystem to include a new kind of tech service and support.

Of course, many brands cover the basics like “do-it-for-me” installation and in-warranty repair or replacement. Unfortunately for them — and certainly for their customers — that traditional support paradigm of “if it’s broken, and it’s in warranty or in scope, we’ll fix it” is no longer enough, neither for the technology at hand or for the customer.

How do we know? Experts like the folks at Parks Associates have said that no-fault-found returns (NFFRs) average 12 to 14 percent, while other groups, like WDS, say that NFFR for smartphones can be as high as 63 percent.

>>See Why Your Smartphone Doesn’t Work: It’s You!

 The plot thickens when you hear from all the brands that are worried about product adoption. Then pair that with rising internal support costs (and complexities) and all the efforts being poured into call deflection. The upshot is a one/two punch: revenue is taking a hit, and negative customer experiences are being shared universally on social media.

Said another way: A bunch of really neat “things” are sitting in warehouses instead of delivering value in consumers’ houses.

While the market is awakening to this challenge, the sheer volume, diversity and velocity of “things” will prove an enormous barrier to success, making service definition and delivery complex and, at times, unpredictable.

What’s being done about the service and support need? To understand the ecosystem building around the “thing” makers and resellers, and what is standing in the way of victory in the IoT space, let’s take a look at the current drivers for meeting that need, the associated challenges, and the keys to success.

“Thing” Makers (manufacturers and software providers)

*Why they’re in the game: IoT device and software creators are on the front lines of the IoT, and manufacturers are also front and center for tech support inquiries. While they have an advantage in their ability to replace hardware, it is their reputation and financial success that are on the line when it comes to  addressing consumers’ varying and heightened technical needs swiftly and confidently. Simply being able to replace and upgrade devices or software isn’t enough. These brands seek sales, greater share of wallet, product adoption and increased ownership of — or at the very least, deeper engagement with — the customer.

*Challenges: Many of these organizations get wrapped up in the innovative nature of their creations, or simply remain locked into the traditional feature/function product development approach. They service customers only on a warranty basis (though some even forego that!), and overlook the services and support needed to help consumers use and integrate their products within larger, increasingly complex tech environments. If these companies are thinking about support at all it’s an afterthought, and they’re typically leaning on their call centers to handle whatever comes in post-purchase, which is too little, too late.

*Today’s approach: Some brands, like Google’s Nest, rely on a do-it-yourself service model for installation and upgrades, and do it well. This approach can be great for tech savvy consumers, but misses the mark for consumers who want someone to “do-it-for-me” or “do-it-with-me.”

*Keys to success: Brands must broaden the definition of support for both technical and non-technical shoppers and customers, offering support services across multiple channels (i.e., phone, chat, social, text, remote, on-site), and throughout the full consumer lifecycle, from acquisition, installation and integration through advanced usage and future purchases.

Solution Providers (ISPs, telcos and cable providers)

*Why they’re in the game: Solution providers like Internet service providers (ISPs), telcos and cable companies are on firm footing when it comes to selling, delivering and monetizing service. After all, their portfolios are comprised of services that start with things like broadband and Wi-Fi. Solution providers also have a unique billing relationship with the consumer. This combination makes support services a natural business extension and logical next step to creating a positive customer experience.

*Challenges: While having an existing relationship with the consumer is a distinct advantage, it presents challenges for solution providers when it comes to the new technical support requirements of the IoT. Although inherently motivated to support their core services, many do not support the consumer at every step of the technology journey, which means customers are likely to look elsewhere. Another challenge is that the solution provider simply doesn’t have the expertise to support products and solutions that they are reselling.

*Today’s approach: Most solution providers offer technical support for their core services and products they sell. For their IoT/connected home solutions, they typically offer installation and activation. However, as consumers’ technology environments grow in size and complexity, the current support paradigm falls short, limiting average revenue per user (ARPU) and minimizing lifetime value.

*Keys to success: Solution providers can increase lifetime value by adopting support that encompasses the consumers’ entire technology environment and lifecycle. While a retailer might sell the consumer the smart light bulb, it is the solution provider who delivers the network connectivity that enables that consumer to achieve the desired use, which is efficient, cost effective lighting.

The existing relationship with the consumer represents a tremendous opportunity for the solution provider to be the trusted advisor. What’s more, brand-agnostic, end-to-end technology environment support enables differentiation. More frequent support touchpoints, embracing the entire technology environment and making support costs part of the existing subscription model, will go a long way in ensuring the solution provider creates loyalty, thus achieving greater lifetime value.

Retailers

*Why they’re in the game: Big-box stores and other retailers also want to differentiate and sell products and services, increasing size of basket and securing greater lifetime value. More importantly, they want to avoid NFFR, including those that stem from varying consumer skill sets for installing, activating, using and/or integrating those products.

*Challenges: Retailers are organizationally biased to support their core products; they are not designed to support “things” they don’t sell. Legacy business models and customer service strategies, combined with the desire to push the customer back to the manufacturer for help, can send that customer into a tailspin of frustration.

When a retailer does offer support, it’s most often limited to specific phases of the customer journey, like installation and setup, and they’re typically restrictive about how that support is delivered via a particular channel or within a certain timeframe, warranty or scope of service determined by the brand.

*Today’s approach: Some resellers, like Best Buy with Geek Squad, have established and grown technical support programs that encompass the products they sell. Very few, however, support products they don’t sell. And even fewer have comprehensive support before the sale, for installation and activation, integration with the entire technology environment, product upgrades and fixes, and advanced usage. Most retailers focus on on-site and depot support.

*Keys to success: Retailers, like the “thing makers” themselves, must broaden services to those beyond their core products and enable support for an array of customer skill sets and delivery preferences (chat, phone, social, on site, depot, remote). Brand-agnostic services are a must, as are support service offerings for every stage of the journey,  vs. being limited to warranties and installation.

The “Other” IoT guys

Other IoT vendors who offer promising solutions to the support disconnect include platform providers like AlertMe (now part of British Gas), iControl Networks, ThingWorx and Zonoff.

Using APIs and other integration technologies, these companies enable device communication and begin to bridge the gap between the previously siloed, heterogeneous tech brands/environments. The majority of these vendors support only their own platforms and not the devices they interconnect with, though they’re quickly awakening to an opportunity to provide support and services to the full IoT ecosystem.

Many are nimble and innovative enough to pivot to a more holistic IoT support paradigm. Being behind the scenes for the consumer and having limited support resources, however, means they have a long road to travel to 1) establish brand trust for direct-to-consumer support and 2) scale for the breadth and depth needed for the ecosystem in which they play.

Third-Party Support Providers

With the influx of technological advancements brought on by the IoT, there has never been a more important time to provide superior services that surround the customer and their entire environment — not just the device or solution that you, the maker, solution provider or retailer deem important.

While IoT brands can shift their businesses to better address connected consumers’ expectations, and some have, two things remain true: Helping end users integrate and optimize sizeable technology environments isn’t part of their core business; and the IoT is evolving so quickly that current models and the rapid influx of new technologies and devices make it next to impossible to support anything beyond what each brand makes or sells.

Many third-party support providers like PlumChoice and Trusource Labs have evolved their tech support businesses from more traditional home/business IT (i.e., computers, tablets, routers, smart phones), to address the IoT market’s more complex needs. For many third-party providers, support is about the whole environment vs. the limited scope and definition established by the manufacturer, solution provider, retailer or protocol creator.

Third parties have no specific service agenda other than support. And the right third parties — purpose-built for supporting the consumer and their environment, rather than a specific device — are delivering heterogeneous support designed for any protocol, any device and any solution via any channel. They work alongside and often partner with thing makers and sellers and solution providers to support the many facets of the complicated IoT consumer journey, from product purchase, installation, onboarding, training, activation and integration to advanced usage, break/fix and optimization.

All brands in the IoT ecosystem have an obligation, to both their business and to the end users, to deliver the support and services needed for the consumer to realize the value they expect from their “things.” As technology has evolved, consumers’ expectations for the output and usability of those technologies have also changed, and less tech savvy users have begun to adopt these products.

Brands that don’t develop a thorough services and support foundation for their products, and enable thoughtful integration with other devices and applications, will fail. Products will be returned because customers don’t know how to effectively use them, and those companies will lose credibility as newer, “smarter” brands step to the fore. 

The IoT services and support market is an untapped gold mine. Which brands will tie their innovations to the kind of technical support that delivers a superior customer experience to generate greater lifetime value?

Wynn Grubbs is business and partner development senior VP at PlumChoice, a company that specializes in technical support for the IoT and cloud enablement.

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