Identifying your target market
Hi, I’m Mark Sisson, cofounder of NanoTouch Materials. We started about four years ago in downtown Lynchburg in a beautiful historic building on the riverfront, and I’d like to share with you today a story of a winding path of how we established our target market and the value proposition for that market.
First, I’ll tell you how we started. My business partner and I were having lunch in a restaurant and we looked around and we noticed that there were people using anti-microbial wipes on the table, hand sanitizer, someone sneezed in their hand and then touched the door handle. I remember thinking “I don’t want to touch that on the way out!” Obviously there was an environment where people were concerned about clean and germs and health. At the same time, we were doing business with a couple of hospitals, and we got an education about the business challenge they faced with hospital acquired infections. So my partner asked a very simple questions. He said, “What if we created a material that you could put up at touch points where lots of people touched that would constantly kill germs?” We thought that was a great idea because it would really change the hospital business. It would change healthcare outcomes for people, and in a way, kind of change the world. We were pretty excited. We set out to do that and we successfully developed this material and started marketing it to hospitals. After several months we weren’t really getting any traction. We weren’t developing sales and we couldn’t understand why. About the same time, we got a call from the EPA. The EPA representative said that our products were pesticides, and I said “I think you have the wrong number. We don’t use poisons. We’re not trying to kill bugs. I think you have the wrong company.” And he said the EPA views any product that claims to kill anything, no matter how small, as a pesticide. And so, at the time, the way we were marketing the hospitals was we were very focused on telling what the product did. It’s an anti-microbial. It continually kills bacteria, virus, and fungi, and we were all about the science. So, when the EPA told us that we thought, “My gosh, how are we going to sell the hospitals if we can’t say that our product kills germs?” At the same time I got a call from a hospital asking if I would serve on their board of directors. I said “of course!” because I thought that would give me a deeper understanding of that industry and it might develop into a sale at the same time. So, after my first couple of board meetings, I realized that hospitals are judged on about a dozen metrics. Urinary tract infections, slips and falls, bedsores, things like that. And they’re judged by medicare, and Medicare sets the reimbursement rates for hospitals. So what I understood was unless we could prove through years of clinical trials that we could address in a positive way those metrics, the hospitals were not going to buy our products. We were faced with some serious business problems. We can’t say what our product does, and the market that we had chosen was probably not going to buy our product. So we decided it was time for a pretty radical change. We needed to pivot to a different industry. We were getting calls from different businesses – businesses that weren’t hospitals. And those businesses were buying our products and installing our touch points within their facitilities, adn the feedback we were getting from them was their customers, employees, and guests loved our products because it made them feel like the facility was cleaner. It made them feel safer and more secure. It was generating this perceived value for those customers that was making them buy our products. We listened to that. In fact, that perceived value was so powerful we actually had a person in a school system say that he didn’t care how it worked. He didn’t even really care if it worked. It made the parents so happy because they felt like their kids were going to a cleaner, healthier environment in the school, so he’d buy our products if they didn’t do anything. That really stuck with us and showed us how strong the perceived value of our products was and helped us make that pivot.
We started investigating what industries dealt with the concept of clean. We came up with commercial cleaners, distributors that sold cleaning products, and facilities management companies. All of those were responsible directly for delivering the concept of clean for facilities. So in order to serve them and develop a value proposition for those industries, we had to understand their challenges – their business challenges. What we discovered was it was a highly commoditized industry, they were all competing on price, there was no differentiation between firms, and most importantly, the concept of clean – the service they were delivering – was invisible. For people psychologically, it’s very difficult to generate a perceived value for something when you can’t see, hear, taste, smell, whatever. You can’t sense it. We thought our products directly addressed each of those challenges, so we came up with a unique value proposition for those industries, and that was we were going to deliver new products that no one has ever seen before. It’s going to be a differentiator for you, especially as early adopters – you’re going to be showing your customers and prospects products they’ve never seen before and your competitors aren’t offering. We’re going to generate a new revenue stream for you so your cleaning crews now aren’t going to just be cleaning the facility. They’re also going to be installing and maintaining these touchpoints. And most importantly, we’re delivering a visible element to the services they provide so that perceived value can be generated.
In addition to coming up with the new value proposition, we had to come up with some messaging that matched that. Our initial messaging was that we were an anti-microbial. We can’t say that because of regulations. We can’t say what it does. We can’t say that it kills germs. We needed to come up with something that replaced that concept. We came up with the brand NanoSeptic. We also needed to come up with a tagline that delivered that value proposition, so initially during the transition we came up with “the new clean.” What we wanted to do was establish NanoSeptic as the new definition for clean. When we really gave it some more thought and distilled it down to the essence of the value we were delivering, we came up with our new tagline, which is “NanoSeptic: Make Clean Visible.”
So the lesson today is, if you’re open to listening to your customers and prospects, you may find out that there are business opportunities for growth and success that you never would have anticipated in new markets if you’ll just listen.
About Mark Sisson
|Date Added||June 30, 2016|
How did NanoTouch Materials find their particular market niche and establish the right market positioning for a product that has never been sold before? Learn how to better understand your market as Mark retells lessons learned along his journey as a local entrepreneur.