A technological revolution is happening around the globe, that affects every sector of the industry. Some examples of this include manufacturing 4.0, hospitality 4.0 and customer service 4.0.
The overarching label for this tech revolution is Industry 4.0. There is no doubt that Industry 4.0 is having a direct impact on sales and marketing and will only continue to do so.
This means that sales teams need to rethink their tactics to keep up with the ways in which technology is changing how consumers shop and ultimately interact with products. Here are some ways that Industry 4.0 is changing the market and how sales teams can keep up with it.
1. IoT Products Produce Tremendous Amounts of Data
According to a recent Gartner report, they predict that there will be upwards of 20 billion connected devices by 2020. Those devices are going to generate an avalanche of data regarding the habits, tastes, and preferences of pretty much every consumer on the planet. Needless to say, that much raw data is basically useless without the ability to compile it into actual actionable intelligence.
This is where AI and machine learning come in. Advancements in AI will soon allow software programs to sort through massive amounts of data generated by all types of connected devices to create stunningly accurate consumer profiles.
While some think that privacy may soon be a thing of the past, there are still rules to play by. Retailers will have an almost unprecedented amount of information about their consumers that sales teams can use to better sell their products.
2. The Sales Cycle is Longer and there are more Stakeholders
20 billion connected devices forecast to hit the market presents something of a conundrum. On the one hand, connected devices are clearly the wave of the future, but they also present something of a marketing challenge. It is fairly easy to see how a connected thermostat or smoke detector can benefit almost anyone, but what is the advantage of a connected blow dryer or coffee pot?
Not only will manufacturers have to come up with a benefit to a device being connected, but they will also have to work with a wider range of stakeholders to create a viable product. These will include developers to create apps that control the devices and home hub manufacturers for integration, among others.
3. X-as a Service Model
Some devices can use the connection as a selling point, but others will need to offer something more. This is where X-as a service comes in. Manufacturers will no longer be simply selling a product, but rather a product that also offers a service.
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A connected coffee maker that can order its own coffee and accessories like pods or filters is both a product and a service. An HVAC unit that can schedule its own appointments for servicing, after checking your schedule and putting the appointment on your calendar, is both a product and a service.
4. Superior Aftersales Insight
Once a product has been purchased, most manufacturers have little idea how or how much consumers are actually using their product. Industry 4.0, however, is poised to change all that.
The same way we now know what websites consumers are visiting, what they are shopping for and how they make their purchasing decisions, we will now have access to the same amount of data post-sale about almost every product purchased.
5. Improved Value to Customers
Access to the massive amount of consumer data that connected devices will soon be generating will also allow business to better tailor product pricing and services for individual consumers. Perhaps the industry that has the closest model that most businesses will follow in the future is the auto industry.
Cars come with a wide array of options and prices can vary drastically from dealership to dealership. Buying a car can be a time-consuming process, but it also puts a tremendous amount of control in the hands of the consumer, largely because dealerships have an enormous amount of flexibility in pricing and packages. Soon, even businesses selling less expensive products will have a greater degree of flexibility as well.
HOW INDUSTRY 4.0 BENEFITS THE CONSUMER
1. Better diagnostics
Perhaps one of the most frustrating issues for consumers today is when something goes wrong with their technology. On the one hand, it might be something simple or it might be something complex. Better diagnostics on connected devices can allow technicians to access equipment remotely to provide guidance without a costly service call. In some cases, the device itself may even be able to offer solutions to fix simple issues.
2. Products tailored more towards consumer needs
Most businesses are constantly making innovations and improvements to their products but in many cases, their “innovations” actually make their product less user-friendly rather than more.
By having more insight into how consumers are actually using their products businesses can better tailor their products to the needs of their consumers. This will lead to products consumers are even happier with than what they currently have.
3. Better longevity
Most products require a complex system of pieces and parts to function. In most cases, if a single piece fails, the whole thing stops working. When a consumer buys an expensive product that doesn’t last as long as they feel it should, they will most likely not buy from that company again.
Industry 4.0 will allow businesses to not just see how their entire product is performing but how every component is performing. This will allow them to quickly replace underperforming parts before the entire line is obsolete.
4. Better inventory management
There is perhaps no greater challenge in any sales-driven business than inventory management. Sudden demand can come without warning and then dry up just as quickly. When businesses cannot get the inventory they need when demand is high, they lose business. If they have too much inventory, they lose money.
This shortfall eventually drives up prices, which ultimately get passed on to consumers. Industry 4.0 can not only help better predict demand, but it can help businesses better manage supply as well. Both of which are better for the consumer.
5. Lower prices
Every time a business experiments with a new product it costs something, particularly if the product is a failure. Those costs generally get rolled into the price of high performing products, which drives the price up. The more insight manufacturers have into what consumers really want, the more they can create products right out of the gate that will be big sellers. The fewer failures they have, the fewer costs they have to roll into their successful product lines.
BETTER TECHNIQUES FOR SELLING INDUSTRY 4.0 CONNECTED PRODUCTS
1. Flip in revenue models
Currently, most businesses derive the majority of their profits from sales of an asset. Soon, only 20-40% of their profits will be derived from the asset and the remainder generated by services.
2. Data as a Product
The products people use will soon generate enormous amounts of data, which can be a product in and of itself. Not only can businesses share or sell this data to other businesses, but they can also sell it to the consumer.
A learning IoT thermostat may generate diagnostics about energy usage and have improvement strategies to generate savings, and access to those diagnostics can then be sold as a vital part of a subscription back to the consumer.
3. The Balance Between Standardization and Customization
While businesses will have a greater ability to offer customized products and services than ever before, some products and services will always remain more cost-effective than others. This means you still need to balance more cost-effective offerings with pricier ones. It also means sales staff will need to be more knowledgeable and educated than ever before on what products can legitimately be paired with what services and what services can be offered at a certain tier or price point and which can’t.
Industry 4.0 is poised to revolutionize almost every aspect of conducting business online, from the top to the bottom of the supply chain, from the front office to the back. Businesses that get ahead of the trend will thrive, while those that find themselves behind the curve risk becoming obsolete.
Lisa Michaels is a freelance writer, editor and a striving content marketing consultant from Portland. Being self-employed, she does her best to stay on top of the current trends in business and tech. Feel free to connect with her on Twitter @LisaBMichaels.