To uncover valuable data that companies will treasure, think like a customer.
As OEMs work to exploit the opportunities created by vast amounts of product data generated by connected devices, they need to understand the value of that information. But not all information is created equal. Recognizing information-centric opportunities to boost revenue from your connected product requires clarity on the problem you are trying to solve or the opportunity you help your customers exploit. To achieve that clarity, you need to put yourself in your customers’ shoes.
Although OEMs largely understand the broad implications of digital transformation made possible by the ubiquitous connectivity of devices, the speed of change still catches many leaders off guard. They continue to make money selling products, and often earn incremental revenue with adjacent services, but can struggle to answer the deeper business needs of their market – for both customers and end-users alike.
Take the example of the humble blood pressure cuff. Invented over a century ago, this simplest and most common of medical devices still sells in the hundreds of thousands of units each year. Innovation in precision and electronics continue to add value, but larger opportunities exist for leveraging this data. The smartest of these medical device OEMs have expanded into providing monitoring services, using their equipment in clinics and nursing homes (where most of their products are used). But neither of these offerings exactly address the deeper market need: Improving quality of care while at the same time driving down the cost to deliver that care.
That kind of customer intimacy will come in handy as you map the information your clients will need to deliver this higher level of service to their customers.
Information Value Journey Mapping
As an OEM, your product likely is only one part of your customer’s daily routine. As simple as this seems on the surface, the change in perspective shows us information needs at many different points – and how data from your product may help create information-centric value.
Step 1: Ask your customer’s questions, not yours.
Many OEMs are familiar with a “journey mapping” approach, following customers through their day. Information Value Journey Mapping builds on that approach. To identify the information opportunities, track the data available and information needed at each stage.
For example, grocery managers may begin their checking the cleaning routine from the night before and confirming temperature records from coolers. The data includes the cleaning schedule (likely a paper form) as well as a temperature reading on each cooler (likely a digital display). But the information needs are different: Did the cleaning get done? Did the temperature spike during the night? Mapping information flow is as easy as mapping the questions your customer needs answered.
Step 2: What do the answers look like? How will you provide them?
As you do that, it is likely that your product (let’s choose a cooler temperature sensor for this example) provides only part of the data required in order to answer that question. To provide more value, the OEM could consider combining temperature sensor data with proximity data (confirming the cleaning crew arrived) as well as clock-in data (who was on the cleaning crew). Instead of checking each item off her list, the OEM’s information-centric solution would provide the grocery manager a status update before she walked through the door each morning, freeing her up to tackle other issues and reducing the associated labor costs.
Step 3: Play the devil’s advocate.
However, collecting, processing and delivering the solution described is much more complex than it appears. Does your sensor collect data overnight? At what rate? Does it store the information in on-board memory? Or send it to the cloud? Do you have a proximity sensor in place? How do you know it was the cleaning crew and not the night restocking crew? Can you even get access to the clock-in data? Does that company offer an API? Will they charge for it? How complete is the data stream? Does the availability of that data match your data in order to combine them at the right moment in time?
Even if you answer all of those questions successfully, in the end, is it simply easier for the grocery manager to take a look as she walks by in the morning? Many OEMs’ first attempts at delivering information value fall into this trap. Just because you can turn your lights on and off using a complex iPhone app doesn’t mean it is better than simply flipping a physical switch.
In the end, customers pay for real value. That is the secret to a sustainable information-centric revenue model.
Understand Your Product’s Information Opportunities
OEMs have a natural advantage when it comes to creating info-centric revenue streams. They they know the product’s features and limitations. They understand the quality of the data it produces. They also have access to their customers and often understand their needs quite well. Using an Information Journey approach can uncover unmet needs that may be easily met by incremental updates to the product or combining product data with outside data sources.
But OEMs only realize those advantages if they take advantage of them. Often, in a rush to simply meet existing customer and business needs, OEMs struggle to find the time and resources to explore next-generation business model opportunities. They leave themselves open to disruptive threats from outside organizations who may not “own the product,” but instead deeply engage with the customer and deliver innovation more quickly.
OEMs must ask themselves if they’re ready and able to take advantage of the new revenue opportunities presented by their connected devices. Do they know how to gather, share and deploy the date they now generate? Do they know enough about their markets and end-users to tailor their data-driven solutions to previously unmet or unacknowledged needs? The opportunities for OEMs are real and should be met head-on. Not all OEMs have the capacity or bandwidth to pursue them, but the opportunities to create value are worth the effort for these OEMs to work with an experienced partner to realize the full potential of their connected devices.
Visit Compass Electronics Solutions to learn more.