Why IoT Is More Than a Gimmick and Will Drive Better CX (2025)

The Gist:

• IoT devices improve CX. IoT devices enhance customer experience by providing real-time data and enabling more personalized services and proactive support.

• Digital customers rise. As IoT devices collect more data, digital customers will increasingly interact with brands, making up a significant portion of inbound customer service requests.

• Data-driven insights. IoT devices provide actionable insights that help brands optimize customer interactions and improve service quality through predictive analytics.

As of 2023, 61% of peopleworldwide owned a smart device, and that statistic is expected to rapidly increase as the number of Internet of Things (IoT) devices is expected to surpass 32.1 billion by 2030.

The sheer amount of customer datacreated by connected devices presents an opportunity for organizations to better understand and support their customers. While the concept of connected refrigerators ordering new supplies of milk and yogurt may sound far-fetched, there are several other practical use cases available now that are allowing brands to interact more effectively with consumers. With IoT’s prominence expected to increase, organizations must prepare themselves to serve customers through connected devices.

Digital customers, also referred to as “machine customers” by the analyst firm Gartner, are non-human entities that autonomously engage in interactions on a customer’s behalf. The proliferation of IoT devices that collect and share data means that the number of digital customers will likely rise significantly — to the point where they will soon eclipse Earth’s human population. Gartner predicts that one in five inbound customer service contacts will come from digital customers by 2026.

Although to many the concept of a device acting on behalf of a customer may seem futuristic, unnecessary or both, there are already examples of digital customers supporting CX.

IoT Devices Enhancing Customer Interactions

Fitness Trackers

Wearable fitness trackers have become commonplace, working alongside smartphones to monitor activity and provide detailed insights to users. Devices now go beyond just activity tracking and can monitor a number of health metrics such as heart rate, blood oxygen saturation and blood pressure. As a result, users can share data with a range of relevant health care providers and allow remote monitoring, and consumer brands can provide better services, offers and promotions based on a customer's location and activity level.

It isn’t just fitness trackers, such as Fitbit devices, which provide vital health information. Other popular wearables such as smartwatches and smart glasses are also collecting and sharing insightful data.

Smart Metering

Smart metering is significantly less sexy than the latest wearable tech, but the benefits these devices provide make them an important advancement. Smart meters allow customers to have up-to-date and accurate billing, and they let them participate in promotions such as discounted energy at non-peak times.

For providers predicting energy usage, real-world data is invaluable. Additionally, supply outages can be spotted instantly, and this allows providers to communicate proactively with customers. It removes the need to self-report disruptions and enables ongoing updates on the status of repairs.

Insurance Monitoring

Monitoring for insurers — via devices such as “black box” devices in cars — allows providers to predict and monitor risk more effectively. Traditionally insurance premiums have been based on stereotypical risk markers such as age and gender. As a result, risk wasn’t fairly or accurately predicted. Insurers can now monitor speed, braking, steering, seat belt usage and what times of day drivers are active. As a result, tailored premiums can be offered, with lower-risk drivers offered the best deals. This is a valuable model for drivers that are typically stung by traditional stereotyping, such as newer or younger drivers.

Related Article: Where the Internet of Things Meets Superior Customer Experience

Connected Devices Drive Contactless Resolution

Real-world data is already being used to improve experiences. Customers can now get better service without the effort of contacting providers. In effect, this creates “contactless resolutions.” It also allows businesses to achieve a greater understanding of customers and almost-live insights that ensure customers are serviced more fairly and efficiently.

Learn how you can join our contributor community.