According to Gartner’s IoT forecast, 2017 will witness 8.4 billion connected devices, which are further expected to increase to 20.4 billion by 2020. As per the forecast, around 62 percent of these Internet of Things (IoT) devices will be for consumer applications which will aim at enhancing customer relationship management (CRM) operations of all business.

So what does this mean for a small business? With an explosion of consumer-centric IoT devices such as fitness monitor (Nike FuelBand and Fitbit) and wearables (Google Glass), small businesses can use huge amounts of data generated by these devices to:

  • Streamline CRM processes
  • Understand customers better
  • Improve customer retention
  • Customize marketing promotions
  • Adjust product pricing in real time as per demand

In this article, we will discuss the future of CRM in terms of the latest IoT trends that will be shaping CRM for small businesses. The first three trends are based on Gartner’s How to Use IoT to Extend Customer Experiences (available to Gartner clients only). The last two trends have been compiled from secondary research from specialized CRM and IoT websites.

Before we delve into those trends, let’s briefly discuss how IoT affects CRM for small businesses.

How does IoT affect CRM for small businesses?

IoT can provide small businesses a huge volume of data from devices (used by customers) to their CRM database. Since CRM solutions thrive on customer data, small businesses will have more insights on the purchasing behavior of customers. These insights will enable small businesses to better plan their sales and marketing campaigns.

The impact of IoT on CRM for small businesses can be summarized according to the three important components that define CRM:

  • Sales – Small businesses can fine-tune their sales strategy by analyzing potential sales prospects through motion sensors and facial recognition camera in real time.
  • Marketing – With a large stream of information generated through communication between IoT devices stored in CRM software, small businesses will be able to customize their marketing campaigns to their target audiences.
  • Customer service – With the integration of IoT devices in a CRM database, small businesses will have the advantage of addressing customer calls before a particular product expires or malfunctions.

Based on the impact that IoT will have on CRM, here are five IoT trends that will determine the future of CRM in the next two to five years:

Small businesses will be able to analyze customer behavior based on large amounts of data generated via connected devices

Picture this: You have a small retail franchise supermarket that is embedded with iBeacon sensors on each aisle of your shop. These sensors are integrated with CRM software and communicate with your customer by sending text messages through Bluetooth connectivity to their smartphones about the latest promotions.

Not only will the sensors help you boost your sales by getting more data on your customer’s purchasing behavior, but they also determine the demand for your products. Imagine the zettabytes of data you will collect in a year to get a better understanding of your customer’s behavior.

What does this mean for your business?

High volume data streaming means a need for more data storage for small businesses. By using smartphones and other connected devices, the streaming of information from these devices to a database is endless.

Through near field communication (NFCs), radio frequency identification (RFIDs), and wireless communications between devices, small businesses will need larger database platforms to store information in zettabytes. Small businesses can analyze this huge volume of data to customize their offerings and increase sales and revenues in the long term.

Customers will be willing to “trade-off” their personal data as long as they get an enhanced personalized experience

IoT will empower customers to expect a personalized experience in their customer journey maps, since they’re sharing personal data related to purchasing patterns, amount of calories burnt, favorite brand or apparel, and much more. This may seem as a major deterrent in terms of data privacy, however some customers would rather prefer that some of their personal data is leveraged if it adds to their experience.

For example, a customer could use a smart fitness tracker of an small businesses sports shoe company that is embedded in his or her shoe. Data from the tracker indicates that the customer is shifting running preferences to be a distance runner from a light jogger, which might lead him to purchase running shoes that are more durable. The customer may expect the company to use data from his running shoes to target him or her for a new running shoe promotion by providing a discount.

What does this mean for your business?

Data privacy doesn’t take a back seat for some customers because they’re concerned that their personal data is being traded among companies to target the customer for other products. If we take the example above, the sports shoe company might sell the customer’s data to a nutrition company that would bombard them with spam regarding weight loss.

IoT devices can help small businesses monitor CRM engagement opportunities in real-time, however sharing and use of this data must be kept safe without letting it spill over to other unauthorized access. Small businesses can recognize that access to data from IoT devices is a ‘license’ taken on behalf of the customer to decide their purchasing preferences.

Sales and marketing managers will base their decisions on real-time streaming from IoT devices

Smart devices communicate without any human intervention which allows business to make intelligent sales and marketing decisions. The focus of IoT (unlike big data) is not just about gathering data but streaming data between smart devices to enhance machine-to-machine communication. Due to these digital communications between devices, IoT will be a player in the CRM (for small business) space.

It will make the most of the data from the sales and marketing managers, such as generating a list of prospective leads based on data provided by consumer wearable devices. With real-time data, sales and marketing managers will have reduced workloads because they won’t have to a spend significant amount of time searching for leads.

What does this mean for your business?

Due to the role that IoT will play in the next two or three years, new CRM industry models will be created. Real-time data collection will power CRMs to predict the sales cycle, sales leads, and customize marketing campaigns for specific clients.

For example, one of the sources for identifying leads is through social media feeds. In this model, data is not collected in real-time. However, with the help of IoT devices, sales and marketing managers will get live-streamed information to generate more sales leads and help retain customer loyalty.

With the help of IoT devices, sales managers can measure the changing preferences in the customer’s purchasing patterns and fine-tune their sales campaign based on the real time availability of data.

IoT will create new CRM channels for small business

Based on industry estimates, in the next two years, small businesses will improve their Platform-as-a-Service (PaaS) and Infrastructure-as-a-Service (IaaS) platforms by incorporating IoT devices to create new CRM channels. Third party platforms for IoT can help small businesses to monetize data streams, similar to larger enterprises. By leveraging IoT, small businesses can reach out to a wider customer base, which helps in creating new CRM channels.

For example, social media is already one channel that helps small businesses implement CRM strategies and engage with potential customers. However, social media requires significant input from customers based on their messages, likes, and discussions. IoT being an ubiquitous concept can help small businesses create new CRM channels to measure customer behavior and predict potential leads.

What does this mean for your business?

With the help of IoT, small businesses can analyze customer traffic in their store to map their shopping journey. Without running an expensive survey, IoT helps retail stores to be more responsive to customer service needs and implement staff training needs.

For example retail small businesses can use Wi-Fi foot-traffic to monitor customers in a product area. Based on this information small businesses can customize the in-store shopping experience, thus creating a new CRM channel of retail opportunity.

IoT and CRM to drive small businesses customer service

Customer service is one of the important pillars of CRM that will be transformed by IoT by:

  • Reducing wait time to resolve customer queries;
  • Troubleshooting technical issues before customers can report them;
  • Customizing product requirements as per customer’s usage.

Through the continuous stream of data, small businesses will be able examine the health of the product or service based on sensor data. This will allow small businesses to provide a personalized experience to customers to retain customers and increase customer loyalty.

What does this mean for your business?

Preventative maintenance would be a major driver for small businesses’ CRM as it will help reduce quality issues reported for a particular product and help in managing customer satisfaction. Before a customer gets a chance of complaining about a defective product, IoT devices will directly communicate with the CRM database, creating a notification to service technicians to address the quality issues.

For example, during real-time analysis of a refrigerator, smart sensors sends data comprising temperature, voltage, and lighting to MS Dynamics 365 database. The sensors notice a malfunction without the customer noticing it and send a notification to a technician on their smartphone. Once the problematic refrigerator is fixed, the field technician updates their supervisor.

What’s next for IoT

In the next two to five years, IoT will play a major role in shaping the sales, marketing, and customer service strategies of small businesses. However, it will be a challenge for small businesses to identify how they can integrate IoT with their existing CRM platforms to enhance business efficiency and revenue.

Based on the five IoT trends that will affect CRM discussed above, we hope that you have some valuable insight into streamlining your small business with the help of IoT. Here are some GetApp resources that you should check out if you are looking for CRM software:

  • View GetApp’s CRM features guide to get a lowdown of some of the essential CRM features that you should consider while buying a CRM software.
  • Find the right CRM software for your business by viewing our CRM Scorecard based on the features and functionality of a CRM software.
  • View GetApp’s Category Leader ranking of the top CRM solutions.