One of the most interesting aspects of our work is helping a client expand into a new market, and the process is very similar for a start-up about to launch its first product or an established company eyeing a new customer base. Success requires so much more preparation than simple designing the packaging. There are new sales and marketing collateral to create, new web site copy and pages to develop, new advertising options to consider, salesperson training and partner education sessions to hold, and trade show booth spaces to book. Not to mention identifying the media, bloggers, analysts and online communities that influence the customer’s purchasing decisions. The first step is to develop the key messaging that will serve as the foundation for all of these sales and marketing activities, and that is where the company’s marketing team and its agency partner play such a critical role. Sounds simple, but it can quickly grow complicated and frustrating as different departments weigh in with their recommendations. We work with several companies in the wearable fitness technology sector, and are helping a number of them through this process as they try to stay ahead of a market that is quickly moving from serving one niche audience to a much broader customer base.
Not long ago, heart rate monitors, GPA watches and bicycle speed and cadence sensors were developed primarily for serious athletes training for triathlons and marathons. They did not mind strapping expensive, unattractive and uncomfortable pieces of plastic and metal to their chests or attaching sensors to their bikes in order to gather data that could help improve their training regimens.
Today, as more people carry smartphones capable of aggregating and analyzing data streaming from different devices, manufacturers are developing wearable fitness tracking devices (a.k.a. “wearables”) that place equal emphasis on form, function and price point. These devices look like fashion accessories, are more affordable than their predecessors, and make it easier for the user to interpret how the information they provide can help him lose weight, lower blood pressure, improve sleep habits and exercise smarter.
So in a short time, we have seen companies like Nike, FitBit, Misfit, Wahoo!, Scosche and netatmo move from selling to hard core fitness enthusiasts to a much broader audience of consumers. Wearables have quickly become one of this holiday season’s must-have items alongside a new smartphone, tablet or videogame console. Many consumer tech sites like CNET and Engadget even have entire holiday gift guides devoted to wearables.
The money men are taking notice. Deals in the space increased by 135 percent in 2013, and are on track to surpass the $1 billion mark by the end of this year. However, the industry is still in its infancy, and money invested today does not guarantee success tomorrow.
The PwC Health Research Institute (HRI) warns that many consumers abandon their devices once the novelty of their new wearables… well… wear off. HRI this year conducted a survey of 1,000 U.S. consumers on their adoption of wearables. According to the report “Health wearables: Early days,” only one-in-five American adults owns a wearable, and of those owners, just one-in-10 use it every day.
The research also points to a new target customer: human resources professionals and CFOs. Not because they’re more likely to be out of shape than the average American, but because they are under pressure to help their companies reduce health care costs.
The Affordable Care Act (ACA) emphasizes the importance of taking healthcare proactive measures over reactive ones. In other words, spend a little money and time now to improve your health to avoid the serious and costly consequences of diabetes, high blood pressure, poor nutrition and smoking later. That, in turn, should reduce healthcare costs for employees and employers.
ACA offers financial incentives to companies that take an active role in helping their employees take these proactive measures, opening a new market for manufacturers.
According to the PwC report, most consumers do not want to pay for their wearables. They would rather be paid to use them, and that companies who offer incentives for use may gain traction. HRI found that nearly 70 percent of consumers would wear employee-provided wearables streaming data to a database in exchange for rewards such as breaks on insurance premiums.
Convincing HR professionals and CFO’s to purchase wearables in bulk and distribute them to employees requires an approach that is very different from the one to consumers and fitness enthusiasts. Manufacturers must make the business case for how their wearables can help HR develop and roll out employee health programs that encourage more employees to participate and continue doing so year-round. The CFO wants to know how the investment will translate to a reduction in healthcare spending.
One of our clients, Jiff, can help our manufacturing clients do just that. Jiff has developed a platform that HR can use to aggregate the data streaming off all employees devices and apps, no matter the manufacturer, to determine the effectiveness of specific activities in terms of helping improve employees’ fitness levels and long-term engagement. Jiff recently secured more than $18 million in a Series B funding round, and along with its platform, has built a store that connects employers' benefit design and incentives with consumer health products.
It has been fascinating to watch this market grow and evolve so quickly as we help our clients’ efforts to get their products and services in front of both consumers and enterprises. It’s also an excellent case study on the importance of identifying the key influencers who customers look to for research and guidance and developing messaging that will resonate with those influencers and customers before launching a campaign.