Eric Snow, Senior Vice President, Corporate Communications, PTC, discussed how the Internet of Things (IoT) transforms businesses during his keynote presentation to Argyle's CMO membership at the 2016 Leadership in Digital Marketing Forum in Boston on Dec. 8. In his presentation, "Five Forces of IoT: How the IoT Transforms Competition and Companies," Snow described how the IoT is transforming organizational structures, value creation and the nature of competition.
According to Snow, the changing nature of products is disrupting value chains. As such, businesses must revamp the way they operate to meet the challenges of the rapidly evolving global marketplace.
"The changing nature of products is the new frontier for us," Snow said. "When we put software into something … we can give it a network address, and that allows us to give even more functionality to the product outside of the physical casing."
Smart products empower marketers to replace physical proximity with digital proximity. The products offer immense value by ensuring consumers can connect with a business or one another from any location, at any time. Meanwhile, smart products also enable marketers to track consumer behaviors and trends like never before, empowering marketers to discover innovative ways to connect with customers.
"[The shift from physical proximity to digital proximity] allows us to remotely monitor or control the 'things,'" Snow stated. "We also have the opportunity to optimize what those products do. We can personalize them in new ways. And if they break, we can fix them faster."
How businesses respond to the IoT is critical. If a company is ready to embrace state-of-the-art IoT technologies, it may be able to find unique ways to incorporate these technologies into its products. On the other hand, a business that ignores the IoT may struggle to survive in a highly competitive global marketplace.
"As companies head into this evolution from simple products into a more smart-connected product world … they're finding the competitive landscape has completely changed," Snow noted. "There's an emerging market where companies that used to have a product with a well-scripted value proposition … are being drawn into a different market and a different competitive landscape."
Ultimately, the IoT requires marketers to reconsider the way they look at products.
"As companies head into this evolution from simple products into a more smart-connected product world … they're finding the competitive landscape has completely changed."
Marketers now have the opportunity to learn how customers are using smart products in real-time, and as such, can collect customer data and analyze it to help a business gain a competitive advantage.
"For marketers, we need to really rethink our value proposition," Snow pointed out.
Snow also highlighted the "Five Forces of IoT," a theory based on principles defined by American academic Michael Porter that emphasizes the competitive forces of an industry.
The "Five Forces of IoT" include:
- Bargaining Power of Buyers: The IoT gives consumers more power than ever before, and marketers must be able to help a business use the IoT to differentiate its products and connect with consumers.
- Nature and Intensity of the Rivalry Among Competitors: Competition is fierce among businesses in the IoT space, and this trend appears likely to continue in the foreseeable future.
- Threat of New Entrants: As new technologies become available, the number of business to provide smart products will increase, creating new threats for established businesses in the IoT space.
- Threat of Substitute Products or Services: Smart products may serve multiple purposes, which means a smart product may be able to substitute for another product or service in various industries.
- The Bargaining Power of Suppliers: Suppliers have additional options due in part to the rise of smart products, giving them more bargaining power.
The IoT will serve as a key differentiator for marketers going forward, and marketers who embrace smart technology could drive meaningful results for their businesses.
"We believe that there is a potential shift that we can see because we can now use the product as a sensor to learn about the customer experience."
Conversely, marketers must understand the risks associated with using smart technology to enter new markets successfully.
"There's differentiation that is now available to me that was not available before," Snow said. "But there's also some risk, because our competitive mix is going to shift as we go from competing product to product to competing among systems."
The IoT may empower marketers to transform the customer experience, ensuring marketers can discover the best ways to connect with customers consistently. As a result, smart products could help marketers foster long-lasting partnerships with a broad range of consumers worldwide.
"How do we think about differently about the way we engage with and give our customers new experiences with our brand and with our products themselves? … We believe that there is a potential shift that we can see because we can now use the product as a sensor to learn about the customer experience," Snow said.
Eric Snow is Senior Vice President of Corporate Marketing for PTC. In this role he leads a global team that drives PTC’s corporate brand reputation and supports the creation of demand across PTC’s entire technology portfolio. Over the past five years, Eric played an integral role in the creation of the company’s thought leadership platform, resulting in two seminal articles on the Internet of Things being published in the Harvard Business Review. He also led the team that created the new PTC brand system, including the richly meaningful “yin yang” corporate logo.
Eric has spent the past 20 years helping companies build, manage and protect their corporate reputation. During that time, he counseled large enterprises in how to reposition their brand to meet changing market dynamics, as well as guided numerous start-ups through product launches designed to generate early buzz. Prior to joining PTC, Eric held communications leadership positions at CA Technologies, Concord Communications and Firepond.
Eric earned a MBA from F.W. Olin School of Business at Babson College, and a BA from James Madison University. He has been a guest lecturer at Emerson College and has published articles and delivered presentations on topics ranging from global manufacturing transformation to national telecommunications policy to health care reform.