Abuse of Trust, Lack of Transparency: HP Shows How to Kill the IoT

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There's been a lot of virtual ink spilled about the glorious future promised by the Internet of Things: just-in-time service, data-assisted performance optimization for devices, automatic software upgrades, and a host of other hands-off solutions that make life easier for customers and results better for businesses.

Over the last 18 months, many have come to see the IoT as an inevitability: It's just the way things will be done in the very near future.

Sixty-five percent of all enterprises already are using the IoT, according to 451 Research. Nothing's gonna stop it, right?

Well, you might be surprised. With its ability to deliver data and trigger transactions, the IoT has its hazards. Chief among them is the dangerous tendency to alter the relationship between seller and buyer into one of seller and data.

The IoT reduces the interactions between buyers and sellers. A lot of times, that is a good thing -- if a customer never again has to call about a broken device, the level of satisfaction increases, and customer loyalty is more likely to be assured.

However, if the IoT causes sellers to lose the ability to sense when direct interaction is preferable to automated actions, there will be problems -- especially when it seems that the seller is exploiting technology to put one over on its customers and drive them to spend more money through possibly less-than-ethical actions.

A good example came earlier this month, when thousands of HP users tried to print things, only to be greeted with messages like, "One or more cartridges appear to be damaged. Remove them and replace them with new cartridges."

The message was not accurate. The cartridges themselves had not suddenly become inoperative. What had happened was that a March firmware update apparently contained code that blocked third-party toner cartridges, and it was set to go into effect in September.

HP took roughly a week to acknowledge the firmware issue -- and then only after tech journalists had figured out the cause of the error messages.

Of course, HP said the move was intended to " protect HP's innovations and intellectual property."

It also, coincidentally, would force customers to buy HP-produced toner cartridges -- and thus put more money in the company's coffers.

HP provided no explanation for the six-month lag before its "protections" went into effect. One might imagine that HP hoped most users would accept that their cartridges had broken, and they would not associate the problem with a firmware upgrade that took place months earlier. HP may have believed users wouldn't compare notes through social media.

This is how the IoT could stumble: Without their customers' approval or knowledge, companies start taking actions that appear to be overt efforts to force business decisions on the customer.

Suddenly, customers have no control; they are being forced to accept the whims of the seller, without recourse beyond ending the relationship.

If that happens, how likely is it that the customer's next such relationship will feature the IoT?

An IoT relationship must be built on trust. In the Internet of Things, customers are sharing data with sellers for their mutual benefit. The customer has the ability to monitor that data -- but probably won't, since being forced to make regular checkups on the vendor's trustworthiness negates all the financial benefits the IoT offers to customers.

However, when a business abuses the relationship, look out. Rather than auditing the data or collaborating on a system of confirmations, customers will go to other vendors with better trust track records, or they will simply abandon the IoT.

HP's printer maneuver was not carried out over the IoT, but it has the elements in place that mirror it: The seller uses technology to create an automatic trigger that impacts the customer. Unilateral actions like those taken by HP -- especially ones that take place with no notice and with an apparent intention of keeping the customer in the dark -- are anathema to relationships.

The temptation always will be there for businesses to exploit the customer data they collect for short-term gain -- to surreptitiously upsell, to inch up replacement times for parts to sell more of them, to deliver quantities of consumables slightly greater than actually needed. All of these tactics will contribute to an environment of mistrust that will hold back the IoT.

So, if you're a vendor, what do you do? First, realize that an IoT agreement with a customer is an invitation extended to you as more than a seller -- you're also a guest. You must respect that invitation and behave with a degree of transparency you might find uncomfortable at first.

You must realize that the IoT gives you a chance to sell not only more responsively, but also more responsibly. Positioning yourself as a partner sets the foundation for longer and ultimately more lucrative relationships, even if that means fewer dollars this quarter.

It challenges your sales team to find ways of using data to make the sales process more collaborative. A successful IoT relationship can't be adversarial.

Business moves made in the dark -- the actual dark or virtually over a network -- rarely make customers happy. Learn from HP's example what not to do. Internalize the values of transparency and trust in your organization before you leap into the IoT.

CRM Buyer columnist Chris Bucholtz is director, content marketing, for CallidusCloud and a speaker, writer and consultant on topics surrounding buyer-seller relationships. He has been a technology journalist for 17 years, focusing on CRM since 2006. When he's not wearing his business and technology geek hat, he's wearing his airplane geek hat; he's written three books on World War II aviation.

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