IoT and the Importance of Strategic Differentiation

This is the third part in a three-part series on IoT value drivers.

Our previous post outlined Operational Effectiveness and how IoT can help optimize operational performance, risk management, and reduce product and service costs.

Here we will discuss Strategic Differentiation and how IoT can provide new and exciting opportunities for companies.

We will continue to center our attention on the Healthtech industry.

Strategic Differentiation 

Each product or service that comes to market should have a Unique Selling Proposition (“USP”) that distinguishes it from other products or services in a similar field. 

But what is a USP? According to Entrepreneur Asia Pacific, a USP is a,

“… factor or consideration presented by a seller as the reason that one product or service is different from and better than that of the competition.”

Strategic Differentiation then is a strategy that aims to create this USP for a product or service.

To be specific, Strategic Differentiation looks at elements such as product design, features, brand image, quality, and customer service.

For businesses, there are hidden opportunities in each that can be used to set themselves apart from others. They just need to be discovered.

The power behind a differentiation strategy is found in its customer first approach. It seeks to develop products and services that provide intrinsic value to the customers the business serves. 

By utilizing the above approach, a company can succeed in creating a unique image in the market and can command a premium price for its uniqueness.

We have identified three areas where you can improve your strategic differentiation with IoT:

  • Improve Customer Experience
  • Differentiate Product and Service Offering
  • Enable New Revenue Streams 

Customer Experience (CX) 

The term customer experience (CX) covers the full range of customer interaction with the company, from initial contact to order fulfilment and after-sales service. Each interaction will either develop a positive or negative perception of the organization.

Developing a quality CX is critical to business longevity. In a study conducted by Oracle, 74% of senior executives believed CX was paramount to acquiring loyal customers.

If a customer does not have a good experience with a business, why should they return?

It is for this reason that customer experience has been listed at the top of executives priority lists over the next 5 years along with pricing and product development.

What is striking however, is less than half of all organizations are planning on investing resources into developing their overall customer experience.

It appears that whilst this may be on the top of executives lists, few organizations ever get around to doing something about it.

We believe that now more than ever, organizations must focus on providing a better customer experience. This includes Healthtech companies investing in IoT.

Luckily, IoT can provide many benefits to those wishing to improve their customer experience.

Typical elements that IoT can directly help with include,

  1. Response Times

The power of providing real-time data {link to former post} cannot be overestimated. Today customers expect rapid response times. IoT will deliver just that.

  1. Customer Support

According to Gartner, 64% of customers find customer experience takes priority over the price of a product or service. IoT can help by identifying potential customer issues before they occur and relaying those issues back to support team members.

  1. Personalized Service

Every customer wants a personalized experience. It is hard however, to offer personalized experiences at scale. Furthermore, it requires great resources from both finances and personnel. This is where IoT can help.

“You can suggest relevant products or guide them to use the specific features of a product based on the gathered statistics through IoT. The personalized interaction makes the consumers feel valuable, and they bond an emotional connection with your business. Using a passionate connective action significantly improves overall customer experience.” – Readwrite

Customer experience is one of the three elements we have identified that can help with your Strategic Differentiation.

Differentiate Product and Service Offering 

In our experience, often Healthtech companies center developing their USP around their customer requirements. This is useful, but it is only one third of the equation.

These companies must also consider strategically defining their product and service differentiation as well.

The reason that companies do not consider strategically differentiating their products and services is in part because they are generic.

Harvard Business Review writes further,

“On the commodities exchanges, for example, dealers in metals, grains, and pork bellies trade in totally undifferentiated generic products. But what they “sell” is the claimed distinction of their execution—the efficiency of their transactions in their clients’ behalf, their responsiveness to inquiries, the clarity and speed of their confirmations, and the like. In short, the offered product is differentiated, though the generic product is identical.”

Why do your customers buy from you? If your product or service is “generic” there may be others offering the same solutions. Yet, your customers continue to use your solutions.

Without knowing it, you may have already differentiated yourself from the crowd. In this case, it is a matter of identifying your differentiation and developing it further.

In the case of those who are yet to find product and service differentiation, a strategic partnership with a consultant or purposeful meetings with executive teams should help.

So where does IoT fit into this?

Real-time data can provide valuable input to marketing and sales.  It gives instant insights into potential and existing customer behavior which can result in identifying new opportunities that help to differentiate your business. 

An example of an identified opportunity could be billing and pricing models. This leads us to our next IoT value driver.

Enable New Revenue Streams

All businesses seek to maximize revenue opportunities and capture additional value. This is fundamental to good business.

IoT can help here in many respects. According to ITChronicles, two thirds of companies currently utilizing IoT have credited the technology with increasing revenue by 1% to 5%.

There are many ways that IoT can be used to increase profits. Propane gives one example saying,

“When nearly everything is connected, consumers will have the ability to search for and purchase things from almost anywhere. More and more often, consumers will be able to get recommendations and make purchases directly from products.”

Conclusion

Strategic differentiation can give insight into various opportunities available to a business via a connected product.

Customer experience, business differentiation, and new revenue streams should result by implementing the above strategy.

In our opinion these value drivers unearth low hanging fruit that would have otherwise been hidden.

We are still only at the beginning of understanding the true potential of IoT. Whether you are a Healthtech business, or any other business for that matter, IoT presents some intriguing opportunities that are waiting to be explored.