Maximizing Sales & Profits
A 12-Step Program for Building Retail Cash Sales

by Jack Evans

How do you advertise and market a retail home healthcare business? Following are twelve fundamental steps that are the building blocks for a profitable campaign.

What is the difference between a success or failure in retailing? Build a brand. Target a demographic customer base. Run advertising to them frequently and repeatedly. Whether you are a shopping-center showroom HHC retailer or traditional back-door driven DME, you can grow your retail business profitably by committing your time, effort and resources to the following program.

Retail business is based upon three underlying principles:

1. Retail is cash and cash is king.
2. Successful retailing is the result of careful strategic planning.
3. Branding, target demographics and repetition are the core in this planning to build a profitable advertising and marketing campaign.

Following are twelve fundamental steps that will help you develop your own successful advertising and marketing campaign. Two retail HHC businesses have been profiled. The first is Pathways HomeCare Center, a new state-of-the-art retailer with a 5,000 sq. ft. showroom in Aurora, CO. Built by Developmental Pathways, a non-profit state-funded agency providing services to several thousand developmentally disabled patients and their families, their mission is to meet the medical equipment and related healthcare product needs of these families.

Home Medical, Medford, OR, is the second HHC retailer profiled. Originally hospital-owned, they are now an independent operation with five locations throughout southern Oregon. Home Medical has successfully used retail advertising to build both brand recognition and sales throughout their region. Taken together, both of these retailers offer the building blocks to a very visible and profitable advertising and marketing campaign.

Maximize sales and profits. This sounds simple. However, in our insurance-driven industry, selling retail is often a completely different perspective that results in a radical daily change of doing "business as usual."

There is no cookie-cutter approach to boosting cash sales in a home healthcare business. But there are several basic fundamental elements in marketing and advertising to which most retail businesses adhere. From image to open house, the following action steps will help you focus on your business's goals, customer's needs and how to market your company to your customers.

1. Positioning - Brand Your Company

Business Plan for Pathways HomeCare Center

Over the years in working with our families who have a member with a developmental disability, Developmental Pathways has heard time and again about the difficulties and frustrations they encounter in seeking equipment and supplies needed for the care of their family member with disabilities. (ID Customer Need/Market Shortcoming)

By reviewing this situation, we found that families had retail access to only a limited range of products. In our local market, most HME stores are located in light industrial districts that demean the individual shopper. Many commercial providers refuse to accept Medicaid. Their poor shopping experiences are exacerbated by the lack of trained technicians. Finally, many of the items needed are only available through mail order, again providing the individual with inferior customer service. (Competitive Review)

In short, families and individuals with disabilities have little access to dignified and appropriate shopping opportunities for the purchase, fitting and repair of HME. Developmental Pathways is determined to improve this situation through the application of lessons learned from our families and operate a retail HME operation properly. (Mission Statement)

Retail businesses must define themselves in the minds of their customers. Who are your current and potential customers? What are their home healthcare needs? What HHC niche do they need fulfilled? Who are your competitors and what are their strengths and weaknesses? Once you know these answers, then you can write a business plan and mission statement that clearly identifies the main benefit you are offering to your current and prospective customers. Your marketing plan can then promote and sell this unique benefit to differentiate you from your competitors.

2. Logo - Visualize Your Mission

A business logo needs to visually encapsulate a business's mission statement. In other words, when consumers see your logo, will they know who you are and what you do?

Pathways HomeCare Center brainstormed with their employees, board of directors, a marketing consultant and graphic designer. The result was line art that shows they represent families (three people instead of two) with disabilities (one person in a wheelchair). As their customers range in all ages and both sexes, they decided that photographs would be too limiting and not show at a glance that they served everyone with disabilities.

Pathways HC Center then decided on the tag line, "The Store for Independent Living," and included it in the logo. This further refines their identity by stating that they are a store selling products for families with disabilities. Taken together, this marketing/advertising "shell" of name/logo/tag line precisely defines who is Pathways HC Center and how they meet their customer' needs.

3. Business Cards - Create Value to Keep

The business card is the lifeblood of the independent retailer. A card is given out at every point of customer contact: in-store sale, home delivery, envelope stuffer, community event and any business/community/social function.

The more information contained in a business card, the more value perceived by a consumer - and the more likely they are to keep it. Folding cards provide enough space for all of the key marketing elements: name/logo/tag, mission statement, product selection, services, map to location and of course the person's name and phone numbers. A second color also helps make the card more impressive and recognizable.

4. Brochure - Sell With Every Customer Contact

Retail businesses use consumer brochures for more than simple product descriptions. They present their brand to their customers, showing visual images along with the copy that conveys the emotion and feeling they represent in their customer's minds eye.

In the HHC market, tri-fold brochures serve as mini-catalogs that present a company's core categories and products, using one to all three of the inside panels for photos of salespeople demonstrating products to customers (these are warmer and more effective than simple product photos). One panel is often devoted to presenting their professional staff with photos and brief bios. Another panel highlights services and benefits such as overall selection, staff expertise, Medicare acceptance, third-party billing, delivery and pick-up and 24-hour availability. Sometimes a panel is devoted just to the business's philosophy or mission. Finally, the back cover specifies their location(s) and a call-to-action with map and phone numbers.

Pathways HC Center's customers look to them to help better their quality of life through the products and services they offer. The smiling customers in their photographs connote comfort, satisfaction, fulfillment and even gratitude. The basic brochure components are all included: visual image, product selection, services, mission, location and call-to-action. Customers continue to comment how much they like the brochure because the photos show them how much the HHC products help to make their daily lives a little bit better.

5. Showroom - Touch & Try Retailing

The showroom floor is where the buck stops in retailing. Two out of three retail customers make their purchasing decisions after they have entered a store. Therefore, the goal of any retailer is to stimulate consumers to buy. Consumer research has shown that customers like to touch and try before they buy. What sells is having products out-of-the-box on display adjacent to signs inviting customers to try the products out for themselves.

The front-end of a retail HHC business displays their core category or categories that meet the majority of their customer's healthcare needs. The back-end includes all of the related and demand (disposable) categories. By creating room sets for bathrooms, bedrooms and living rooms, HHC retailers enable customers to see, try and then buy all of the products that together help to improve the quality of their or their family member's life.

A track pathway on your showroom floor invites customers to try out mobility products from canes to scooters. Try placing signs on walkers that say, "Let's Go for a Walk" and on scooters that say, "Take me for a Test Drive." Also try positioning products so that their handles face towards the walkway or aisle from where your customers will approach.

To display healthcare products, try to display as many as possible in the home settings in which they are used, such as blood pressure monitors in the den, eating aids-to-daily living in the kitchen and sheets on a bed. The more products that are displayed in use the higher their sales. In other words, the fewer fixtures in a showroom to shelve products, the more products that are out-of-the-box for customers to try and then buy.

6. Catalogs - Send the Silent Salesperson

The continued growth of end-user consumer healthcare catalogs validates their value. People enjoy paging through product catalogs to find out what other products they might be able to use. The retailer's catalog marketing goal is to simply get their catalog into the hands of as many current and prospective customers as possible. This includes every in-store customer, every delivery, every telephone inquiry, physician offices, health fairs and inservices.

Many distributors and manufacturers offer private label catalogs that are very affordable for retailers. For example, Bergen Brunswig has a 36-page end-user catalog that includes healthcare products from seventeen categories plus consumer tips and disease-specific information. Finished costs for custom catalogs average $1,000 per page, but many retailers off-set these costs by charging vendors a modest fee to be included or selling a minimal number of ad pages.

7. Yellow Pages - Sell More with Less

The skyrocketing costs of display advertising in the yellow pages have forced many HHC retailers to re-evaluate their advertising strategies. Retailers who consistently query customers (to find out how they heard about their store) report that although the number of telephone responses remain high from yellow page ads, the resulting number of customers who buy is actually decreasing. In other words, fewer qualified leads are being generated from yellow page advertising.

How have HHC retailers responded? By reducing the size and number of their yellow page ads. Many run one display ad in their primary niche such as respiratory or wheelchairs, or in the main generic HHC category such as medical or hospital equipment. Four-color ads are overkill and not cost-effective. What usually works are two-color display ads that are as large as your largest competitor's ad. To increase response use red, which stops the reader's eye, instead of blue, which people look past without reading.

Home Medical, a five-location HHC operation in southern Oregon, has opted to eliminate all of their display yellow page advertising in favor of bold line listings. Now they have the funds to advertise in more sections in the main regional yellow pages books as well as in all five of their local "green pages" books. Aside from advertising under hospital and medical equipment sections, they also advertise in the sections for their specialties such as women's health and diabetes.

"The local green pages telephone books are read by everyone in those small towns, so that is where we place our advertising, " explains Andy Boesl, Home Medical's marketing director. "People usually come in to buy diabetic supplies as a result of a referral from a healthcare professional and not from looking in the yellow pages. We find that our simple local listings have helped make us more visible in these communities."

8. Print Ads - Target Your Customer Demographics (or target your customers)

Target demographics, repetition and frequency are the keys to a successful advertising campaign. A campaign means developing a planned schedule: targeting a demographic group of customers with a specific message and/or products over a period of time. One ad in one paper will not generate traffic and sales, because people need to be exposed to ads repeatedly before they respond.

Most HHC retailers survey their customers to find out their preferences. Simply ask a few questions such as: What newspaper and section do you like best? Which radio station and personality is your favorite? What TV station and shows do you watch? Retail businesses successfully "clone" their current customers by identifying who they are and they advertising to people with similar values or needs.

"We determine where and what to advertise by surveying our customers and using cyclegraphic studies," explains Boesl. "We build a customer profile by understanding what each demographic customer base is doing over a period of time. For our rental business, for example, we run ads on beds, wheelchairs and oxygen in the markets that are specific for this audience. One is a monthly regional senior newspaper, another is an annual senior resource magazine.

"Our print advertising is different for each of our five locations, based upon learning what our customers read. In one small town, we are able to advertise in the weekly paper with a larger 3 by 5 column ad because it is inexpensive at $100 per week. We also have learned that everyone in this town gets and reads the paper - customers as well as physicians and referral sources. The result is that we are educating our referral sources as well as getting exposure to the doctors."

Home Medical has used their print advertising to keep their business up during their traditional flat periods. "While our competition just advertised products at a price for Mothers and Fathers Days, we advertised a free lift chair with every scooter purchase. We are now selling lift chairs all summer long, keeping the momentum alive during a dry time with this strong cash business. This is a unique campaign just like a retail mass marketer, and we plan to always have something new to promote to our customers."

9. Radio Ads - Send the Right Message to the Right Audience

Saturation is a key term in radio (and TV) advertising. The more spots aired during any given 24-hour period, the greater the chances of your targeted audience hearing (or seeing) your ads. The best results are usually produced from saturating a two or three-day period, often Monday through Wednesday because people are home or working on their regular schedules at the beginning of the week.

Radio enables a HHC retailer to reach their desired customer base. "We focus on the 38-year-old and older audience," says Home Medical's Boesl. "And this age group has different radio station preferences in each of our five locations. In the largest city, we run spots on a country western station. We use oldies (i.e., Glen Miller '40's music) and talk radio stations in other cities.

Home Medical also has a different schedule in each market. "In the rural, more conservative markets," Boesl explains, "we can afford to run all five days at $3 per spot. But in the metropolitan cities, we must pay twice as much so we only run 3 days, five spots per day. Each ad campaign is also directed to a specific audience, such as women's health to women on talk radio and orthopedic supports to men (weekend warriors) on ESPN radio.

10. TV Ads - Show & Tell Quality of Life

The greatest challenge for HHC retailers is to visually demonstrate the personal benefits of each product. Television is the best media to achieve this goal, but it is also the most expensive. To be profitable, TV ads need to be placed where your current and potential customers will see them. Determine the station and, if possible, the program(s) that your customers watch before you place your advertising.

"We only advertise on TV when manufacturers have co-op programs," says Boesl. "Some vendors offer 50% back on all paid ads, while most give 3-5 percent off invoice. We also get free product for giveaways or raffles that help as part of the advertising campaign.

What ads do you run? In markets where network affiliates compete against cable stations, usually a station will produce your ad for free as long as you sign a contract to run for one month. Otherwise, many manufacturers have ready-made ads and you simple add a "tag" line to personalize the beginning and ending. Home Medical has dubbed a scrolling text line with their locations and phone numbers at the bottom of each vendor's ad to show that they are "everywhere" throughout their territory of southern Oregon.

"We have opted to pay more per spot in order to reach our targeted customer base," says Boesl. In one city, we spend $100 per spot ($1500 per month) to advertise on Bob Barker's "The Price is Right" show. We could spend a lot less advertising at night, but we know from our deliveries that almost every retired senior watches this show daily.

"We also advertise on an NBC network affiliate ($2500 per month) because although it is not the most popular station, it is the only one that offers reach (i.e., coverage) to all of our rural, small town customers who would otherwise not know about Home Medical. On this station, we advertise on evening sit coms, Sunday's "Meet the Press" and NBA games. Last month we sold four lift chairs and two scooters for cash as a direct result of these ads."

11. Web Sites - Sell Larger Than Life Online

As in the Yellow Pages, web sites enable independent retailers to look like home healthcare superstores. Operating a successful HHC business has traditionally been dependent upon having a large physical location and showroom, trained salespeople, Medicare acceptance, third-party billing, drop-shipping capabilities and maintaining a large inventory. Now add having the resources to create your own web-based business. But by taking advantage of one of the private label HHC web sites that are now available from distributors and website developers, HHC retailers can be one-stop HHC stores without these up-front costs.

Parkviewrx.com was started five years ago by Craig Paivo, Parkview Pharmacy and Medical Supplies, Rancho Cucamonga, CA. Paivo had developed a large ostomy business and wanted to expand his business online. He also bought the web site names "ostomysupplies.com" and woundcaresupplies.com." Whenever consumers searched for ostomy or wound care products, they found Parkview. His web site displayed these products, but to order customers had to call their store.

Paivo still wanted to be able to meet all of his customer's home healthcare needs without investing in a new showroom or additional staff and products. He scanned in Bergen Brunswig's entire HHC catalog and set-up a credit card shopping cart ordering system. Was his online HHC business successful?

"Overnight we became a one-stop HHC retailer online," says Paivo. "We currently receive 20 to 30 orders per week and 600 to 800 monthly telephone inquiries off the 800 number that only appears on this website. Our customer base includes Canada, Europe, Asia and South America. And Bergen Brunswig is now planning on including our web site instead of a printed catalog in a HHC kiosk for their 2,200 Good Neighbor Pharmacies."

Parkview has grown from a community pharmacy to a national ihealth retailer. This is just one case study demonstrating that the online HHC business is still a pioneer market waiting to be developed. "This is a win-win business for consumers, retailers and distributors - and any independent can be in the HHC business," adds Paivo.

12. Invitation-only Events - Educate & Thank Your Customers

Retail HHC businesses are hosting more events than ever now. Many hold quarterly "awareness days" or luncheon programs to both educate their customers and generate sales. These events highlight a specific disease state or niche and include product demonstrations, presentations and one-on-one counseling/education. Retailers usually work with one or more vendors to help defray the costs of catering these events, as well as having the "expert" product specialists on hand to demonstrate the newest product.

"We hold invitational programs each quarter to bring current customers back in the door," Boesl reports. We have recently held a Leg Health Day, Diabetes Check-up Day and Women's Health Luncheon. These events are disease-targeted and we host them in conjunction with a major manufacturers. We prefer smaller events, usually between 35 and 50 people, in order to organize several stations with one-on-one consultations." For example, for the Women's Health luncheon they offered free consultations with a nurse, nutritionist and oncologist.

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