Return On Investment, along with Security and Technical Difficulty, is right up there in the top 3 reasons companies aren’t adopting and launching Internet of Things projects.
So what is a “good” ROI for an Internet of Things project? I haven’t done the homework, but here is how I would figure it out.
The Internet of Things is such a new space that you should ignore any one person claiming to be an expert. Instead, you need to take the top 100 estimates from people who know about distributed command & control structures and other initiative outcomes, and come up with their average for a “good” ROI on a project. That average will probably be very very close.
A study was conducted for 100 people to guess how many peanuts were in a large container to be shipped. The guesses were wildly varied. From less than 100 to more than 4,000, and most people we’re quite a ways off. The average of all of the guesses? 10 away from the actual number in the container.
The Statistical Law of Large Numbers always wins.
Whatever “good” ROI ends up being, I know we have been able to surpass it with Internet of Things projects and it comes down to the clients’ business model and per customer revenue/lifetime customer value. Does your client make $.20, $2.00, $20.00, or $200.00 in profit for each buying customer?
In some sectors we are able to provide a 5 to 1 return on the price of our services. In other sectors, companies would lose money if they bought and implemented the technology Auximiti sells. Nonetheless, our services do bring in new customers, create brand loyalty, and have other positive effects, like customer insights, that aren’t fully captured in a pure marketing ROI \ mindset. Without concrete valuation, these end up being “cherries on top”.
Here is a basic chart that showcases Beacon Marketing effectiveness:
You can download this Case Study Here.
I think the chart above and the situation it represents will be reproduced for a number of other industries as well. Gym memberships come to mind as something many people pay for every month but are under utilized in their capacity. The problem is that it costs too much to cancel the membership. “You might think, it costs too much what? Cancelling saves them money!”
The reality is that it costs too much time. There is a company out there waiting to be created that cancels gym memberships for people and charges one month membership to cancel. I’ll cancel your $20.00 a month gym membership if you pay me $20.00. Then expand it to other services.
Companies like Orange Theory Fitness and EOS may want to deliver more value to their members with reminders to train once a week or offer special deals for their personal training sessions. Additionally, health sensors and the Internet of Things for Health, Wellness, and Healthcare is going to be big and gyms should start looking at how to integrate their marketing and customer engagement with the health stats they can track on their machines.
Another key retail sector ripe for disruption is cosmetics. Women have changed their make-up and accessory habits to “online first”. They are researching online, watching YouTube videos online, and even ordering and subscribing to makeup products online. The only buying in retail happening for makeup is during a rare visit to a large retail sale. There is big potential to disrupt the industry with free make-up training sessions, tests of new brands or styles, influencer marketing visits and other beauty engagement experiences. Letting someone try before they buy sounds crazy in this industry, but it might be necessary and disruptive in the next couple of years. Wouldn’t you go to stores for a free trial and large promotional discounts?
Even better, augmented reality experiences with celebrities could be introduced to brick & mortar locations as unique experiences. Get your makeup and hair done with Oprah sitting next to you in your selfie. This works for men as well for men who are interested in snapping a selfie with Robert Downey Jr. (or Iron Man since we’re doing augmented reality, let’s go all the way.) The customer engagement here will be disruptive, just like video games in kids hair cut locations attract so many parents today when it comes to getting ready for the school pictures.
The bottom line is that we need to start looking at what can be tested instead of what is or isn’t working. What can you test in 30 days, 60 days, 90 days that will push the boundaries, attract and interest your customers, and get them talking about your brand to the point where they can’t stop? Is it a chat bot? Virtual Reality? Augmented Reality (AR) Competitions or AR Lotteries? New Products and Influencer Marketing? GaryVee signing your merchandise for all your customers?
There is no time to waste.
Get out there, test, find out what is going on, come up with a plan, and go execute it.
The alternative is to wait ten years while the golden age of marketing passes you by.
It’s your choice.