Retaining Customers and Profitability

A recent call for help posed an interesting question: a manufacturer of mobility aids is designing hand painted, colorful canes, quad canes and walkers that consumers buy whenever they see them. However, this company is having a difficult time getting shelf space because they cannot get distribution. Reps, distributors and chains prefer full-line, one-stop suppliers to simplify the supply chain and maximize profitability. Fewer choices means fewer suppliers, fewer shipments, less inventory, fewer invoices, fewer checks and a higher return-on-investment.

But what about consumer demand?

What about satisfying customers?

What about the growing number of family caregivers and baby boomers who are buying these products and desire lifestyle accessories instead of sickroom supplies?

The successful home healthcare retailer:

1)    Provides these additional niche products; and

2)    Maintains ongoing marketing and advertising programs to educate their community that they provide a complete selection of home healthcare products.

Finding a Happy Product Medium

If your mission statement highlights meeting the needs of your patients and customers, then patient choice and consumer demand are retail business strategies rather than simple buzzwords. But how do you accomplish this goal and remain profitable without overloading your inventory?

The goal of category management is to meet the majority of a customer’s needs within a particular product category. Usually this means stocking a selection of good, better and best product options, or at least a nationally branded product (better/best) and store brand (national brand equivalent) or private label (good) option. A rule of thumb is to only stock one or two of each as long as your distributor provides same-day or next-day service.

Identify your core categories and key product or products within each respective category. These are your “must stock” items that you usually carry in depth because you cannot afford to be out of stock and miss a sale or lose a customer. Then identify the related products that you often cross-sell to someone who buys these key products. You need to maintain at least one of each to be able to demonstrate and sell. For any similar products, such as different manufacturers or models, you can simply show catalog or brochure photos to the customer.

Suppose a caregiver is shopping for a walker for their parent. The salesperson needs to qualify the end-user’s needs - as well as have the products in stock to demonstrate and sell. Does the parent remain in the house or go out? If they go outside, do they go shopping? They would need five-inch wheels plus a basket. Do they tire easily? Then they would want a seat accessory. Does the parent like to get their own food at home? Then they would need an attachable tray. Do they get up at night and walk around? Then they would need a flashlight holder.

Judging from sales figures and common scenarios I witness when visiting home healthcare retailers around the country, this caregiver probably started by looking at the folding chrome walker but ended up buying the brightly-colored, four-wheeled rolling walker with all of the accessories. They are paying two or three times the cost of the “good” version, but they are thrilled to find the best product that meets their parent’s own needs. Plus, the provider has doubled or tripled their profit by selling the higher-priced option. Everybody wins when the retailer sells the product best suited for the end-user’s needs.

Customizing Product Selection

Retailers no longer believe in the “one-size-fits-all” approach. They have striven to create brands and niches for themselves, and their displays and product selection mirror this retail image. Home healthcare retailers are no different in that they tailor their image and product selection to meet their niche customer’s preferences and needs.

Home healthcare customers usually fall into one of three categories: seniors (or end-users), adult children (or baby boomers) and family caregivers. Each group has their own preferences that are reflected in their product selection. Seniors often maintain the Depression-era conservatism and value function and price over personal choice. However, Boomers are just the opposite, choosing lifestyle and comfort over basic necessity whenever possible. And caregivers, being primarily female, will try to buy the best product they can afford for their family member or friend.

If your customer base is primarily senior, then a selection and stock of basic models will meet the needs of your 20 percent who buy 80 percent of your merchandise. However, if your customers are adult children and caregivers, then knowledgeable salespeople, product selection and consumer choice are all crucial for closing sales and satisfying customers.

For example, a salesperson will first determine a customer’s needs and then demonstrate all of the products that offer solutions. They will highlight personal benefits rather than product features for each model. Then the customer, after having learned about the product options available for them, can choose which item they believe is best for their own personal situation. And once again, given this choice, they usually select the better or best option.

The Retailer’s Responsibilities

How do you become your community’s home healthcare resource center? Providing product is just one component rather than the complete answer. If no one knows you sell these great products, they will simply gather dust on your showroom floor. Here are a few recommendations that successful home healthcare retailers follow on a regular basis:

Marketing: Take advantage of every contact you have with your customers to remind them that you are the experts in home healthcare. Use brochures, fliers, newsletters and even product sales sheets on a regular basis as bag and statement stuffers, handouts, delivery literature, mailers and physician office literature. Use your displays as educational library shelves with shelf talkers, medical brochures, product selection guides and product comparison charts.

Advertising: Don’t worry about what percentage of sales you should or shouldn’t be spending. Advertising must be frequent, consistent and continuous to be profitable. Focus on Boomers buying lifestyle products for their aging parents on holidays such as Mother’s Day, Father’s Day and Christmas. Advertise weekly in your local throwaway or on a bi-monthly basis on TV or radio. And save money when you advertise by only advertising products from distributors and manufacturers that offer co-op advertising money.

Information: Become a resource center by constantly providing information to your customers. Know where to refer them when they have medical questions. Create an in-house resource center with books and audio and video tapes on all medical conditions. Provide a computer and online service with the major medical data bases listed for customers to search their own questions. Sponsor medical and health care newspaper columns or radio/TV talk shows. Hold open houses to coincide with national support groups’ special events. Become known as your community’s home healthcare center and primary medical resource center.

Never Say No: Too many salespeople and customer service representatives automatically tell customers that they don’t carry the products in question and go back to whatever they were doing before they were interrupted. Don’t let this happen to your business, or you will have a difficult time building a loyal customer base. Whenever a customer calls or walks in and requests a certain product that you do not carry, have your staff tell them you don’t carry it right now but you will try and get it for them. Do whatever it takes to source the product - and you will see why Nordstrom’s customers are so loyal to them! Yes, that first product will not be a profitable sale, and you might lose money, but you have just earned a customer for life - and this is the lifeblood of every successful retail business.

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