Altimeter: 5 ways the IoT improves customer relations

28 April 2015

With the Internet of Things more and more real, brands cannot afford to ignore its power, research by Altimeter Group shows. According to the consulting firm, the IoT provides mutual benefits for brands and its customers, as a result of which, brands should embrace the IoT in their customer experiences, Altimeter lists 5 use cases to do so.

Internet of Things
The Internet of Things (IoT), which refers to an interconnected world where every-day physical objects are connected to the internet and communicate in a high-fashion manner, is no longer a distant future. With consumers expected to own 20 or more connected devices by 2020, brand cannot afford to ignore the phenomenon. In fact, the IoT presents a new paradigm for building relationships, states research and consulting firm Altimeter Group.

In its recently released report, titled ‘Customer Experience in the Internet of Things: Five Ways Brands Can Use Sensors to Build Better Customer Relationships’, the firm looks into the IoT and its potential for brands to improve their customer relationships.

Altimeter Group - Customer Experience in the Internet of Things

According to Altimeter, the IoT has the potential to mutually benefit both brands and consumers. The IoT will help brands gain visibility brand awareness, insight, contextual relevance, satisfaction, efficiency, loyalty, innovation, and conversion, while consumers will gain empowerment in the form of doing: controlling, allocating, conserving, monitoring, and accomplishing.

In its report, the firm highlights 5 use cases for how brands can design customer experiences while embracing the IoT, creating actual value for businesses and consumers. provides a brief summary of the use cases:

1. Reward
Brands can reward consumers for their interaction (time, money, effort, engagement, purchase) with an incentive (monetary, promotion, points, gamification, entertainment) to further drive customer interaction.

2. Information and decision making
Brand can assist customers with product and service decision-making by providing informational media (for shopping, navigation, monitoring, news) at the most convenient time and place. This allows for customer engagement on new levels.

Use cases for consumer-facing IoT

3. Facilitation
Brands can foster easier, more accessible and convenient customer experiences (transaction, identity authentication, conversion, interaction). In addition to the enhanced customer experience, this will forge emotional connections between the brand and customer.

4. Service
Brands can support and retain customers by proactively identifying opportunities (support, sales, other brand service opportunities) and providing them a better (more enhanced, functional, secure, compatible, or personalised) experience.

5. Innovation
Brands can use feedback from customers and to requests for product or service improvement to enabling product and service development, design, or customisation,

The report states that the real potential, differentiation, and richness in the customer experience are reached by combining the five case uses, by applying a holistic approach. This approach will allow brands to better serve customers at each stage of their journey: awareness, consideration, evaluation, purchase, experience, loyalty or advocacy.

Customer experience use cases in IoT encompass entire customer journey


To craft such a consumer-facing IoT strategy, Altimeter suggests brands to take the following four steps:

  • Prioritise use cases: define a future state customer experience vision
  • Make the business case: align the IoT initiatives with the business objectives
  • Building the infrastructure for interoperability: collaborate and integrate across teams and workflows
  • Engage with transparency: prioritize transparency in consumer communications

Four steps for architecting consumer-facing IoT Experiences