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How to Increase Customer Loyalty Thanks to IoT?




August 22, 2023

In today’s fiercely competitive business landscape, customer loyalty holds the key to sustainable success. Establishing strong and lasting relationships with customers is a top priority for businesses aiming to thrive in the market.

With the advent of the Internet of Things (IoT), businesses now have a powerful tool at their disposal to significantly impact customer loyalty. By leveraging IoT technology, companies can deliver personalized experiences, optimize processes, and enhance customer engagement.

With projections of 125 billion connected devices by 2030, harnessing the potential of IoT is crucial to gaining a competitive edge. In this article, we will explore the various ways businesses can leverage the IoT to increase customer loyalty.

What is the Internet of Things and how can it Improve customer loyalty?

Establishing a personal connection: connecting physical objects to the Internet

The Internet of Things (IoT) refers to a network of interconnected physical devices embedded with sensors, software, and connectivity that enable them to collect and exchange data. By integrating IoT technology into their operations, businesses can enhance the customer experience and foster loyalty. 

The IoT allows companies to gather real-time data on customer interactions and behaviors, enabling them to gain valuable insights into customer preferences, needs, and behaviors. This information can then be used to personalize interactions, deliver relevant offers, and build customer loyalty seamlessly.

By connecting physical objects to the internet, such as wearable devices, smart home systems, or connected vehicles, businesses can establish constant and personalized connections with their customers. This creates a sense of closeness and relevance, making customers feel valued and understood.

How to use the IoT to create more effective loyalty programs? 

Loyalty programs have long been a popular strategy for fostering customer loyalty. The IoT can enhance these programs by providing real-time data and insights that enable businesses to deliver more targeted and personalized rewards.

By integrating IoT devices into customer loyalty programs, businesses can track customer interactions, monitor usage patterns, and gather feedback to better understand individual preferences and behaviors. This information can then be used to offer tailored rewards, exclusive promotions, and personalized recommendations, creating a sense of value and recognition for loyal customers.

Rewarding your customers: incentivizing loyalty and engagement

A crucial aspect of building customer loyalty is incentivizing desired behaviors. The IoT offers businesses the opportunity to reward customers for various actions that contribute to loyalty, such as making repeat purchases, recommending the brand to others, or leaving reviews.

By leveraging data from IoT devices, businesses can identify and reward customers who consistently engage with their products or services. For example, a retailer can offer exclusive discounts or personalized offers to customers who frequently purchase through their connected mobile app. This not only encourages continued engagement but also strengthens the emotional connection between the customer and the brand.

Implementing the IoT in your customer loyalty strategy

To successfully implement the IoT in your customer loyalty strategy, careful planning and execution are necessary. Here are key steps to consider:

Define clear goals and metrics for IoT implementation

Before integrating IoT technology, clearly define your objectives. Determine the specific outcomes you want to achieve, such as increasing customer retention, boosting customer lifetime value, or improving customer satisfaction. Establish relevant metrics to measure the success of your IoT-powered loyalty initiatives.

For example, if your goal is to increase customer retention, you can set a metric to track the percentage of customers who remain active and engaged with your IoT-powered loyalty program over a specified period.

Choosing the right IoT devices and platforms for your business

Select IoT devices and platforms that align with your business goals and resonate with your target audience. Consider the devices your customers are already using or are likely to adopt. For example, if your target audience consists of fitness enthusiasts, incorporating wearable devices into your loyalty program may be a strategic choice.

Here are some examples of IoT devices and platforms that can be integrated into your customer loyalty strategy:

  • Wearable Devices: fitness trackers, smartwatches, or health monitoring devices can track customer activities and provide personalized rewards based on their fitness goals or milestones achieved.
  • Connected Home Devices: smart home devices like voice assistants, connected thermostats, or smart appliances can offer personalized recommendations, automate loyalty-related tasks, or provide exclusive offers based on customer preferences and behaviors.
  • Mobile Apps: a mobile app with IoT capabilities can enhance the customer experience by offering location-based rewards, personalized notifications, or seamless interactions with connected devices.

Designing and executing IoT-Driven loyalty actions

Leverage the capabilities of IoT devices to design loyalty actions that resonate with your customers. Here are some examples:

Points programs: elevating loyalty with points and rewards

Implement a points system that allows customers to earn rewards based on their interactions with connected devices. For instance, customers could earn points for using a smart home device or making purchases through a connected mobile app. These points can be redeemed for discounts, exclusive products, or unique experiences.

Gamification: engaging customers through interactive experiences

Create interactive experiences using IoT devices to engage customers and incentivize loyalty. For example, a retailer could develop a gamified customer loyalty program where customers earn badges or unlock levels by completing specific tasks or making purchases. This adds an element of fun and competition, encouraging customers to actively participate and earn rewards.

Recommendations or exclusive experiences: personalizing loyalty rewards

Lastly, use data collected from Internet of Things devices to offer personalized recommendations or exclusive experiences to build customer loyalty and retention. A fashion retailer, for example, could use IoT-enabled dressing rooms to provide personalized style recommendations based on the customer’s body measurements, style preferences, and purchase history. This enhances the customer’s shopping experience and strengthens their loyalty to the brand.

Success stories of companies that harness the power of the Internet of Things

Several companies have successfully integrated the IoT into their customer loyalty strategies, setting a benchmark for others to follow. Let’s explore some notable examples:


Domino’s implemented the “Domino’s Tracker” feature, allowing customers to track the progress of their pizza delivery in real-time. This transparency and convenience enhance the overall customer experience and foster loyalty.


Beverage company Diageo introduced “smart bottles” equipped with NFC tags, enabling customers to access exclusive content and personalized offers. This Internet of Things initiative deepened customer engagement and loyalty marketing.


E-commerce giant Amazon utilizes IoT devices like Amazon Echo to enhance the shopping experience. Customers can use voice commands to order products, track deliveries, and receive personalized recommendations, creating a seamless and convenient shopping journey.


Starbucks leverages IoT-enabled mobile apps and connected coffee machines to provide personalized offers and rewards to its loyal customers. The app allows customers to order ahead, earn rewards, and customize their beverages, resulting in enhanced customer loyalty and retention.


Nike offers its customers an application for measuring their training progress and connecting with a community of fellow fitness enthusiasts. This IoT-powered initiative strengthens the emotional connection between customers and the brand, building customer loyalty and engagement.


Sephora’s Visual Artist app utilizes augmented reality to scan a customer’s face and provide personalized makeup recommendations. By leveraging the Internet of Things capabilities, Sephora delivers tailored experiences that resonate with customers, enhancing loyalty and satisfaction.

Embracing the future with the Internet of Things and digital expertise

In the rapidly evolving landscape of IoT, businesses must stay ahead of the curve to fully leverage their potential and maximize customer retention. Embracing the Internet of Things technology requires expertise in both technological implementation and digital marketing strategies. 

That’s why partnering with a knowledgeable digital marketing agency can provide valuable guidance and support in navigating the complexities of IoT integration.

Rubik Web (by ABCW) is a digital marketing agency that understands that IoT developments continue beyond implementation. We provide ongoing optimization and support for your IoT-powered customer loyalty strategies. We can help you monitor and analyze the performance of your IoT systems, make necessary adjustments, and identify opportunities for improvement.

We’re ready to face the future with you. Contact us now! Together, we can harness the power of the Internet of Things to cultivate lasting customer relationships and thrive in the digital age!