A new kind of massive emerging market is visible on the business planning horizon, analogous to the importance of BRICS to business growth strategies in the past 20 years. We believe that within a decade, billions of connected products will be smart enough to be customers — Internet of Things (IoT) devices and intelligent software assistants will select products and services and transact purchases.
Sound interesting? In Machine Customers: The Next Massive Emerging Market, Mark Raskino and I continue our exploration of “things as customers” with a focus on the business potential of this idea. This research note is part of a series that addresses the forces executive leaders can’t ignore and the actions they can’t avoid as they consider their business strategy.
In this research note we posit the following:
- IoT Devices and Software Assistants Will Select Products and Transact Purchases. One thing we know for sure is that humans are not completely rational. So if a human wants the best buying judgment to be made — without subconscious biases — a machine is likely to perform better.
- Machine Customers Will Evolve in Three Phases of Sophistication Over 10 to 20 Years. We call Phase 1 Bound, where a machine purchases specific items defined by rules. Phase 2 is called Adaptable, where machines make optimized selections among competing products based on rules. Last, Phase 3 is Autonomous, where the machine customer infers human customer needs based on rules, context and preferences.
- Machine Customers Will Expand Many Industry Markets and Might Shrink Others. When a human delegates responsibility to a machine, the order quantity, frequency or timing of purchases will change. In some cases, the machine may buy less than a human would. In others cases more. This would have a positive or negative impact on a market.
- Machine Customers Will Require Changes in Sales and Marketing Disciplines. Marketing and selling to machines would be different than engaging humans. The rules would be much more data driven, with little room for emotion.
Whether you are a skeptical, receptive or convinced business leader, there are actions you can take to prepare for this inevitable future of machine customers.
For more information, you can listen to this free Webinar Mark and I did. When Things Become Customers: The Ultimate Emerging Market