Hi Ayla,

We’re embarking on an IoT project. How can we be sure the benefits of the project will outweigh the costs? What is the ROI for an IoT project?

We’ll give you the good news first: the benefits of a connected product far outweigh the costs. But you’ve got to give it some time.

Initial development, testing and minimum viable product (MVP) launch of an Internet of Things (IoT) product requires significant investment, and you probably won’t see the benefits in the short term. But once you go through those hoops, the long-term benefits can be substantial.


As we see it, connected products deliver return on investment (ROI) across three categories. They:

1. Reduce costs through optimization of IoT data.

2. Increase revenue through consumables and “red-carpet” services.

3. Build your brand through connected-consumer engagement.

Let’s take a look at some use cases illustrating all three ROI categories.

How IoT Data can Reduce Costs:

● From data collected through a connected product, a consumer-electronics manufacturer finds that the product’s rechargeable battery is much bigger — and more costly — than it needs to be. In the next product iteration, the manufacturer uses a smaller, less-expensive battery and is able to sell the product at a higher margin.

● A dealer for a household-appliance manufacturer diagnoses — and maybe even solves — a homeowner’s problem by logging into the appliance remotely. If a service visit to the home is required, the technician has the right repair parts in the truck, which saves time and avoids the expense of repeat trips.

How Consumables and Service Subscriptions can Improve Revenue:

● A connected water softener detects when filters need changing and automatically orders replacement filters and alerts the dealer to schedule a service trip.

● An HVAC supplier asks consumers at setup if they would like to select a certified technician for their thermostat and HVAC system. The servicing company pays a referral fee and is notified automatically when service is required.

How Engaging Consumers can Develop Affinity with Your Brand:

● Connected door locks on vacation homes not only make the process of guest check-in and checkout easier and more efficient, the connected locks also provide monthly activity reports to homeowners, along with tips on maintaining home security.

● Connected home air fresheners change their intensity and type of scent, according to users’ profiles.

Pairing users’ data with ongoing communication is a powerful way to find out what consumers really want from your products and keep them engaged with your brand. The data you gather from your IoT products ultimately benefits everyone in your value chain, and it continues to provide rewards through your entire product life cycles.

Yes, there are up-front costs to the IoT, but the benefits hold enormous promise for transforming your business model over the next few years.

Find out how the Ayla IoT platform can speed and simplify your path to secure, reliable connected products, so you can more quickly start reaping the rewards of your IoT investment.