What drives the successful launch of IoT-related business models?

Abstract

PurposeCustomer value perception of Internet of Things (IoT)-based services has not been studied in the context of a company’s readiness to adopt IoT technology. The purpose of this paper is to address this gap by indicating a research framing that combines insights from the IoT business model literature and customer perception of the value of such models and their drivers.Design/methodology/approachThe interplay between a company’s IoT readiness and its perception of the value of IoT services is tested using a sample of 90 Eastern European business customers in a competitive business field. The conceptual framework described also examines relationships among constructs that refer to relationship quality. This study evaluates its quantitative sample using partial least squares path modeling.FindingsCustomers’ perceived value of IoT business models strongly relates to their digitalization capabilities and their own company’s innovativeness. When referring to disruptive technical offerings, existing trustful and satisfactory relationships cannot enhance the customer’s value perception.Research limitations/implicationsThe sample of Eastern European buyers is not representative of the majority of manufacturing companies. A randomized sample using other sources such as large industry databases could be useful. In addition, a replication of the study in other countries would allow for a cross-border validation of this study’s results.Practical implicationsThis study suggests a detailed process that is based on a careful preselection of test customers working for innovative companies. A marketing communication approach must state clearly the benefits the buyers get in return for their sacrifice of sharing data.Originality/valueTechnology readiness refers to the user’s propensity to embrace and use new technologies. The results indicate that IoT readiness influences the successful launch of IoT-related business models. For managers, this study proposes a process to implement IoT-related business models.