When IoT first hit the scene, most customers probably didn’t think much about the security of their connected devices.
But nowadays it’s one of the first things to come up when you talk to enterprise customers about IoT. A few (ok, more than a few) well-publicized security breaches have made companies and consumers alike hyper-aware of the potential threats that come along with their IoT investment.
The question is, are these concerns actually having an impact on customer buying behavior? Will worries over IoT security actually change where customers spend their money – and how much of it they spend?
When you’re on the frontline of IoT, developing products, acquiring customers and growing your brand, it’s difficult to see this bigger picture and understand the role that security should play in your strategy.
That’s why we’re taking a deeper look at the actual impact of IoT device security on customer purchase behavior. We’ve combed through the latest research on IoT customer behavior to answer three questions:
- Do security concerns stop customers from buying IoT?
- Does security affect a customer’s choice of IoT brand?
- If so, does device security affect the amount they’re willing to pay for a product?
Let’s dive into the research.
Do security concerns determine whether customers buy IoT?
If you’re a product manager for an IoT brand, you probably already have a sense that security concerns are stopping customers from buying IoT.
Whenever you mention that you build or sell IoT devices, you’re likely to come across someone who has sworn never to buy a connected device because they worry about being hacked.
That’s hardly surprising, when you look at how IoT is often implemented in organizations. The average CISO or CTO is used to having endpoint protection embedded in every piece of IT or OT that their company owns and operates.
But most IoT devices don’t come with endpoint security – which means many enterprises see investing in IoT as a major security risk. In many cases, if you can’t demonstrate that you’ll offer at least the same level of security as they get from their other forms of technology.
There’s some solid scientific evidence to back this up. In a recent survey, 35% of IoT non-buyers said that their main reason for holding back was concerns about security and privacy.
It’s clear that some customers won’t even consider IoT if they don’t think it’s secure.
What does this mean for your IoT brand?
The basic takeaway here is that you don’t have a hope of converting some customers if you can’t show them you’re protecting their networks.
These non-buyers are tough to convert – but the brands that can manage to overcome those fears and show that their device security is airtight will have access to a whole new pool of customers that their competitors can’t touch.
You can start by doing some customer research. It’s tempting to only focus on your existing customers, but spend some time getting to know non-buyers too. Identify the specific security concerns that stop them from buying, and then build some marketing campaigns that show how you address them with your security.
Does security affect a customer’s choice of IoT brand?
So, a lack of security will stop some customers from buying altogether. But what about the customers who still want to buy, despite security concerns? Do they always choose the brands that offer superior security? Or will it all fall by the wayside in favor of lower prices or powerful branding?
A 2021 study presented respondents with a range of smart thermostats that varied in terms of price, functionality and security and asked them to identify which device they would choose.
They found that security had a strong effect on the brands that respondents gravitated towards; when given the choice, their instinct was to buy from a brand that offered better protection from hackers.
The really interesting thing is that this effect multiplied when respondents were given more information about IoT security and scenarios of different ways that security breaches could occur. Most importantly, they gravitated towards secure devices much more when the researchers painted a clear picture of what a secure IoT device looked like and the benefits of IoT security.
This study focuses on consumer IoT devices, but the effect extends to enterprise customers too. As we discussed above, CTOs and CISOs tend to put much more trust in IoT brands that can show they offer better security – particularly those that can offer the kind of embedded endpoint protection that’s common in other forms of IT and OT.
Increasingly, they’re also looking for brands that can help make it easy to manage and monitor the performance of their IoT devices. Their other technology generally integrates with their Security Information and Event Management (SIEM) systems, making it easy to keep an eye on their whole tech stack from one central dashboard.
What does this mean for your IoT brand?
If you ignore security in your marketing, you’ll lose customers to brands who place it center stage. If you can make it clear to customers that you’ve taken steps to secure your devices against cyberattacks, you won’t have to compete with other brands on price or functionality.
In addition to investing in endpoint detection and response (EDR) for your IoT devices, look for a partner that can help you integrate your security with those all-important SIEM systems. If you can do that, you’ll gain a significant edge over the rest of the competition – and offer your customers far better visibility into the safety of their connected devices. Partners like Firedome can help you seize this competitive advantage by providing you with advanced EDR that integrates seamlessly with SIEM tools.
With the right preparation and a bit of marketing investment, you could win more market share by going one step further: educating customers on the topic of IoT device security. Customers are more likely to choose secure devices when they have a clear understanding of the risks of unsecured devices. So, if you can make your brand a thought leader on IoT security – whether that’s by writing informative blogs, making engaging videos, or running events and talks – you might be able to shift the market even further and make device security a major selling point for everyone.
Does security affect how much a customer will pay for IoT devices?
We’ve established that security is often more important to customers than price or functionality when it comes to buying IoT.
But let’s think a little bigger.
If two brands are exactly the same in every way, but one brand has better security than the other, will customers pay more for the more secure brand?
Or, in other words, can brands with better security charge more for their products?
In 2021, a group of researchers set out to answer this question. The results were astounding. They stuck a security label onto a few different types of IoT devices, providing some information about steps that had been taken to protect customers from hackers.
When asked how much they would pay for a variety of different types of IoT devices with different packaging, participants consistently said that they would pay more for the devices that carried a security label compared to devices without it.
These labels – which gave information about how the device was protected and how long the protection would last – convinced customers to pay, on average, £33.60 more for security cameras, £65.71 for smart TVs, £19.03 for wearables, and £35.76 for smart thermostats.
In a previous study, interviewees said that they were willing to pay 10% to 30% more than the listed base price of a device in exchange for improved privacy and security.
What does this mean for your IoT brand?
Obviously, this doesn’t mean you should just slap a security label on your packaging and raise your prices right away. But it’s worth doing some customer research to assess how much extra your audience would pay for your products if you upgraded your security.
Once you’ve established whether you have grounds to increase your price point, start looking into how you can make security a core pillar of your marketing strategy. The most obvious route is to add security labeling that provides easy, accessible information about the steps you’ve taken to secure customers’ devices. But you might also want to look into running dedicated advertising campaigns based around security, so you can spread the word to customers even before they reach the point of purchase.
Investing in security pays off
When you look at the research, it’s clear that security is incredibly important to customers; it has the power to make them pay more, choose one brand over the other, or even avoid IoT altogether.
But if these studies show anything, it’s that superior security and marketing need to go hand in hand. Customers want security, but the effects described in the research are most powerful when customers are educated on the importance of security, when they’re given easy, accessible ways to understand how a device is protected, and when they’re reminded of the cost of sub-par security regularly.
At Firedome, we’re experts in helping brands upgrade their security, then educate and persuade their customers with marketing campaigns centered around security – and, in the process, we help them sell more and grow their business.
If you want to see how better security – and some powerful security-based marketing campaigns – can help your brand, get in touch. We’d love to help.