How IOT in connected cars is transforming the customer experience

When is a car not a car? When it’s also a channel for fast and effective Customer Relationship Management (CRM), of course, says Dr Setrag Khoshafian.

The proliferation of ‘connected’ and ‘smart’ devices today means that we all find ourselves constantly having to reassess the value that the technology we interact with on an everyday basis can provide. In the modern world of the Internet of Things (IoT), your fridge, washing machine, toaster and even your home thermostat can begin to learn your preferences and adjust themselves and the service they provide accordingly.

The potential economic impact of IoT is huge. By 2020, conservatively we will have between 25 and 50 billion connected devices. These devices are becoming channels to up-sell and cross sell third party products and services generating a potential market that exceeds ten trillion.

With this in mind, perhaps it should come as no surprise to hear that our cars are also becoming an increasingly important part of this connected technological revolution. But what are the potential benefits that a connected car can provide, beyond the ‘in-car assistance’ value that you might take as read?

To answer this, it is perhaps worth re-evaluating the way we think about IoT to examine the value it can add to our lives. It’s true that IoT connected devices can provide sensing, monitoring, and control of applications to perform specific tasks, but what about analytics and the predictive intelligence that can be uncovered from all of the data collected?

Businesses have many ‘hidden treasures’ in amongst their data including customer purchase patterns, satisfaction drivers, geographical location, age and income. The purpose and motivation for predictive analytics is to discover these patterns – or predictive models – use them to predict future behaviour, and then act on the insight.

Prediction is ubiquitous. Almost every business flow or business rule has some element of prediction in it. However, without predictive insight, many decisions will be bad decisions. It is surprising how many bad decisions are made based on hope, gut feel, mere assumptions, or a naïve interpretation of historic trends. Advances in statistical analysis and machine learning have made it possible in many cases to predict customer behaviour with a high level of accuracy, based on the data collected from connected sensors and devices.

So, the main philosophy of predictive analytics actions in CRM is to aggregate and mine historic operational data (and sometimes publicly available data) in order to make predictions about behaviours, and then use these predictions within operations automated through evolved CRM solutions.

IOT changing models of customer interaction

However, what many overlook is the extent to which IoT – and in turn the analytics associated with IoT – is changing the modes and models of interaction between the consumer and the product or service provider. A great example of this is new, in-car assistance technology that is currently in the process of being rolled out across Europe.

On the surface, it is a piece of technology that allows customers to remotely connect with an operator to get assistance with navigation and security issues, or in the event of an emergency breakdown. In reality, this is an innovation that is able to offer several additional applications outside of these functions, many of which can benefit both customers and automotive manufacturers in terms of improved CRM.

For instance, automobiles connected through 4G LTE connections can offer WiFi as well as vehicle diagnostics and maintenance opportunities. This connectivity provides opportunities for advertising, sales, and marketing – all of which can directly benefit the consumer.

This technology can help customers to find and reserve a hotel that is close to where they are, leveraging geo-location and the profiles and preferences of the customer to provide personalised and relevant offers. For example, a retail chain might advertise and offer special coupons or discounts when within the vicinity of the connected car. The opportunities are diverse and can be disruptive for some industries.

How do you drive your car?

You can tell a lot about people by the way they drive their cars. Over time, you can see where they shop, where they work, what hours they commute and what they like to do on the weekends. Imagine a scenario where it’s late at night, pouring down with rain and you find yourself driving in a strange city, looking for a place to stay. Using this technology, your car will be able to help you not only find a list of local hotels, but also locate one that has vacancies and is suitable for you and your tastes.

In effect, your car – or rather the connected technology inside it – learns about you and your preferences, and takes these into consideration before offering you what’s known as the best possible option (known as the ‘next best action’). For example, if you are allergic to dogs, your in-car assistance technology will not offer you a pet-friendly hotel option. It is also worth noting that it allows other companies and businesses to promote products and services using the car as a CRM channel. These companies can benefit from understanding the customer and understanding what the next-best-action is for them in any particular context.

Connected cars bring manufacturer closer to consumer

Beyond this, such technology can act as a more indirect CRM channel for manufacturers, who can use the data their users provide to offer a better customer experience. Indeed, the emergence of connected cars will mean that automotive manufacturers are now much closer to consumers than they have ever been before.

The same sensors that are used for in-car assistance can also provide incredible feedback on how the device is being used as well as the services from the manufacturer or third parties – retail stores, hotels, restaurants, etc. – offered through the connected car. Through analytics techniques such as predictive analytics and machine learning, an intelligent connected car can gauge customer needs before they arise and even be a catalyst for innovation.

CRM is in the midst of a major digital transformation and IoT is the turning point in providing service providers with a means to understanding their customers and creating a truly symbiotic relationship, beneficial to both parties.

The new generation of tech-savvy, interactive, and socially active consumers is very demanding and advances in IoT technology have made it even easier to collect and exchange information to tailor customer interactions to fit their specific needs. If your customers feel as though you have taken the time to understand their individual requirements, they are more likely to give up more about themselves, and in turn the relationship with them can only get better.

Of course, there are ongoing healthy discussions and concerns around privacy and security in this instance. However, it is nevertheless true that this connectivity and continuous sensor feedback is in fact transforming the relationship between the manufacturer and the consumer.

Take maintenance as an example – IoT means that automotive manufacturers now have the ability to quickly analyse real-time events and then act on the data in the context of end-to-end dynamic processes that intelligently orchestrate manufacturers, services, dealers, the car, and the consumer for specific business outcomes. Examples of these outcomes include proactively maintaining the car or resolving potential issues with the car such as sensed vehicle status levels that need to be addressed (e.g. oil, emission) or recalls.

Put simply, it’s easy to consider cars as a simple mechanical device that allows us to get from A to B. The truth, however, is that in a new connected world which is becoming increasingly dominated by IoT, we are being forced to change this perception.

Cars will become communication devices

Today, the devices we use are becoming more than just simple applications, and the automotive industry is a prime example of that. Increasingly, we’ll begin to see the cars we drive as more than just a means of transportation. They will be a means of communicating with our peers and manufacturers and even a means of paving the way for innovation. For instance connected cars provide innovative partnership opportunities between car manufacturers and third party businesses that can leverage a connected car as a channel for marketing, up-sell or cross-sell.

Mass adoption of IoT is inevitable. The business world certainly isn’t waiting. As car manufacturers race to get their connected cars on the road, other industries are integrating IoT into their operations as well. For IoT proponents, the road to revolution is pretty clear. The age of in-car customer experience is here, and one thing’s for sure – it’s going to be a very long and interesting journey!

Dr. Setrag Khoshafian is Chief Evangelist and Vice President of BPM Technology at Pegasystems