However, are these concepts mutually exclusive?
The Industrial Internet of Things (IIoT) ecosystem describes industrial manufacturing environments. Manufactured output can provide raw or finished goods to B2B (Business-to-Business) as well as B2C (Business-to-Consumer) buyers who, in turn, sell finished goods as well as products for assembly to end-users in manufacturing, commercial/business or retail settings.
- Should we even be explaining customer loyalty in a B2B context, involving the software vendors and capital equipment suppliers serving the industrial Internet of Things (IIoT) ecosystem?
- How might B2B IIoT customer loyalty programs differ/compare with traditional B2C customer loyalty programs?
Let’s explore, shall we?
Can traditional customer loyalty models serve IIoT environments?
Traditionally, customer loyalty is a growth strategy deployed to impact primarily B2C (Business-to-Consumer) industries.
In explaining customer loyalty, the goal of these programs is to grow the number of customers purchasing a product or service. B2C customer loyalty programs constantly fight to keep customers happy and, therefore, retained.
Traditional B2C customer loyalty programs engage and convert potential customers into buyers through customized, targeted marketing and engagement programs.
In addition, some customers are more valuable than others, based on purchase history, demographics, habits and other defined variables. Big data and predictive analytics have elevated B2C understanding of what motivates and serves high-value customers, almost to an art form.
Are traditional customer retention models too reactive?
The traditional concept of B2C customer retention is reactive and transactional, focused on preventing customer defection.
The traditional measurement tools for customer retention are customer satisfaction and customer experience (CX) surveys. These tools are deployed periodically. They most frequently measure post-utilization and post-service experience and satisfaction. When products and services create positive customer experiences and perceptions, the thinking is that a customer’s business is retained for a while longer.
When periodic CX or satisfaction surveys detect undesirable levels of customer dissatisfaction, then reactive measures are triggered, designed to win back the customer. These measures include empowering customer service representatives to identify and incentivize disgruntled customers so they do not elect to defect.
Proactive and anticipatory IIoT customer loyalty programs fuel IIoT customer retention over the duration of capital equipment lifecycles.
The pace and cadence of IIoT environments do not favor reactive strategies for keeping one’s fingers on the customer’s pulse. Instead, enlightened organizations focus on using big data and predictive analytics to become proactive and anticipatory, on behalf of their customers.
Consider that the lifespan of a piece of capital equipment easily exceeds 15+ years. However, while capital equipment lifecycles are lengthy, smart plant environments are dynamic, not static. Consequently, capital equipment lifecycles represent thousands of software iterations as well as thousands of employees cycling through the plant.
That’s a long time to continuously react to “What Just Happened?” and attempt to win back disgruntled customers.
On the other hand, the dynamic IIoT environment presents multiple opportunities for suppliers and vendors to create memorable customer experiences, business cases for customer success and a roadmap for enduring customer retention. Then ponder the volume of client touchpoints and CX surveys conducted over capital equipment lifecycles. Finally, add in the tsunami of sensor-enabled machine data continuously gathered within a smart plant environment, peppered with a large dose of predictive analytics. Oh, and let’s not forget a data-savvy, collaborative workforce.
If that is not a recipe for revolutionizing the value chain and creating IIoT customer loyalty, what is?
In explaining customer loyalty for IIoT customer retention, it’s all about revolutionizing the value chain.
Ultimately, it is time to re-define customer loyalty within the context of a rock-solid customer retention long-term growth strategy for the smart plant ecosystem.
Customer and capital equipment lifecycles become two critical customer pulse points for continuously determining the impact of customer experience and success on customer loyalty and retention.
Customers expect IIoT equipment to become better-and-better over its lifecycle, due to upgrades in equipment and software interfaces supporting production. Companies can utilize insights and modeling from predictive analytics to continuously address these two enduring client concens:
- Will my suppliers/vendors continuously have our backs technologically throughout the capital equipment lifecycle?
- Will my supplier’s/vendor’s offerings remain scalable, innovative and competitive, allowing our organization to continuously deliver on strategic manufacturing initiatives over a 15+ year capital equipment lifecycle?
IIoT customer loyalty is about continuously applying technology over the duration of the capital equipment lifecycle within a smart plant ecosystem.
Consider the business cases of enlightened companies like Caterpillar, Siemens, IBM and GE. They leverage technology and incentives, and options for leasing, rather than outright purchasing, capital equipment. As a result, these giants continuously have their customers’ IIoT backs over the long haul.
Also, these companies are completely customer-centric, rather than product-centric. They focus on continuously evolving a product and service portfolio which enhances customer success and customer experience. As a result, their customers are completely committed in their relationships with their supplier-partners.
Finally, as a result of customer-centric partnering, these giants have client bases which sustain them. In a sense, these tech giants are liberated from playing in traditional competitive environments. They, and their clients, become leaders and innovators as a result of IIoT symbiosis.
- The industrial IoT has revolutionized how we do business, how we work and whom we hire, and how we interact with each other.
- Not surprisingly, the IIoT revolutionizes how we create and measure competitive impact on the value chain.
- Isn’t it about time to revolutionize how and where customer loyalty fits into a rock-solid customer retention strategy?
Babette Ten Haken writes, speaks, consults and coaches about collaborative value creation for customer success and customer retention. She connects the dots between strategy and execution. She works across leadership, human capital / HR and technical/IT/engineering teams within the industrial Internet of Things ecosystem. Her focus? Creating enduring business outcomes. Babette’s playbook of technical / non-technical collaboration hacks, Do YOU Mean Business? is available on Amazon.
Image author: Robert Wilson. Image source: Fotolia.