How to Benefit from Distributor Partnerships

Over the past several years, drug wholesalers have increased the number of
"value-added" services they offer their independent retail accounts.
Distribution alone is no longer enough to help them remain competitive and
profitable.

As these same distributors expand into home health care (HHC), they are
providing the same services to help increase turns and profitability. These
retail services include merchandising, layout, marketing, coop advertising
and promotion, sales training, referral marketing programs and reimbursement
software systems. Following are a few of the key areas in which to partner
with your distributor.

Product Selection

Distributors and their account managers can easily identify the top selling
HHC categories and products. Individual HHC providers know who their
customers are in relation to age and sex. Combine this information and you
can merchandise the top HHC products that your customers need and want to buy.

Start merchandising by identifying key categories for disposable products
that your customers return to buy on a regular basis, such as incontinence,
wound care or diabetes products. Have the distributor provide a planogram
that prominently displays these products and the preferred package sizes your
customers buy. No retailer wants to lose sales or loyal customers due to
being out-of-stock on one of these key products.

Request that your distributor also provides planograms and end-caps for
several related products that you can cross-sell to these same customers. A
profitably managed category displays numerous add-on and impulse products
that appeal to similar customer needs and values.

Marketing Support

Distributors can play a key role in selling-through product for HHC
providers. Successful providers educate both their referral and retail
customers about diagnosis's, patient care and new products before any sales
occur. Often distributors will help educate and pre-sell your customers by
providing turnkey marketing programs that include:
· Generic HHC brochures for handouts, stuffers and mailers.
· Specific illness/diagnosis brochures for handouts, stuffers and mailers.
· Specific product fliers to follow-up the respective brochure.
· Newsletters to update and remind customers about your HHC expertise.
· In-store merchandising support to focus on the categories being highlighted.
· In-store product promotions to increase sales of highlighted categories.
· Co-op advertising to generate foot traffic and increase sales.

In-store marketing materials work to close sales and increase sales per
customer in two ways. First, they attract customers to featured categories
and products. Second, they highlight personal benefits that will appeal to
them. Such collateral materials include stand-alone modular displays,
point-of-purchase (POP) displays, shelf signs and talkers, brochures,
laminated product information guides and rebates and coupons.

Co-op Advertising

Co-op advertising programs offer two benefits for providers. First, co-op
moneys become an additional product discount that increases margins and
profit. Second, the co-op advertising helps provide the frequency and
repetition necessary for retail businesses to develop a recognized business
image and loyal customer base. Providers are able to increase their ad
budgets by 25 to 33 percent, while building retail walk-in business as a
direct result of increased visibility.

Distributor's co-op programs vary from simple discounts of 5% to specific
quarterly rebates for which providers must contract to qualify. These
programs also differ in features, ranging from ad slicks to complete turnkey
packages that include camera-ready customized art, ad scheduling and
placement, custom direct mail pieces, product discounts and/or rebates plus
in-store collateral promotional materials such as signage, POP and instant
rebate coupons.

Product Training

Distributors are an excellent resource for product information. They have
already formed alliances with the manufacturers for whom they distribute, and
work with these manufacturers and their representatives to provide product
literature, inservices, demos and in some cases certification courses.
Information sells products in the HHC marketplace, and distributors have all
of the sales tools necessary to educate your salespeople so that they in turn
can educate and sell your referral and retail customers.

Schedule a regular product training program for your sales staff. Request
that your distributor help set-up weekly or monthly inservices on specific
categories and products. Use role play and a post-test to develop more
professionalism. Training manuals and videos offer excellent follow-up, plus
videos (and CD's) are greatly appreciated by customers as a value-added
service.

Sales Training

Providers sometimes wonder why they cannot sell HHC products. They go out
and talk to referral sources. They greet every customer who walks in their
door. But rarely have any of their staff been professional trained in retail
and referral selling.

"Successful floor sales people are trained, not born!" insists Ross Rankin,
Certified Professional Manufacturers Representative (CPRM) and president of
Rankin Representations, Santa Ynez, CA. Rankin is also a professional sales
trainer who instructs providers to first designate specific staff as retail
"sales associates" and then train them to do only this job during their
scheduled floor time.

The only way to successfully sell HHC categories and increases sales per
customer is by having a sales associate, thoroughly trained in both sales and
product knowledge, question a customer to first determine their needs and
then demonstrate how certain HHC products will not only meet their needs but
improve the quality of their - or the patient's - life.

Getting Paid

The most frequently asked question of distributors by new accounts is how
they can help them get reimbursed by Medicare and other third party payors.
Distributors help providers understand and streamline their billing and
reimbursement systems. Medicare guideline books and electronic billing
software programs are the two most utilized billing tools provided to their
accounts.

Remember that distributors have a vested interested in your business: if you
succeed and grow so will their sales to you. The handful of distributors in
the HHC marketplace that look beyond distribution and understand this
mutually beneficial partnership will provide you with all of the
merchandising, marketing, sales and reimbursement tools necessary to be a
successful HHC provider.

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