Page 30 - HME Business, April 2018

Standard Power’s Gear Change
The question is, how do standard power mobility providers do retail right? The answer isn’t as simple as one might initial assume.
“We can’t today say that the proven opportu- nity, the proven meat, is in retail because the truth of the matter is the majority the standard power business is still being done through Medicare and reimbursement,” Swick says. “Unlike scooters, which have made a real transition to retail, stan- dard power is still largely existing there simply because of the nature of the device and the common perceptions of the products.”
Instead, what retail offers to standard power providers is the opportunity to gain margin, according to Swick.
“There’s the opportunity to build on your business,” he explains. “We have to say, ‘Okay, I’m drawing a customer and I have a known very small margin opportunity through Medicare and through private pay, private insurance. So how do I then build on that? How do I build incremental income? How can I grow my sales opportuni-
ties with that existing customer base or to other customers that are coming in? And how do I build that standard power business?’”
Also known as “caretailing,” a blended approach to retail sales is perhaps the most logical angle for standard power mobility providers, since the funded environment represents a sizable chunk of market — maybe not in terms of revenue or margin, but at least in terms of volume. What providers want to
do is leverage the Medicare and private payer models to get customers in the door and then build on that.
A Key Revenue Multiplier
And when it comes to that blended or caretailing approach, there’s a consider- able amount of upselling potential. A good example would be accessories for standard power mobility devices (read “Don’t Forget Accessories,” on page 21 to learn how to approach this critical revenue opportunity). Another is home access.
Obviously nearly anyone with a medical condition that necessitates a power mobility device will need some help accessing and using their home. Bearing that mind, home access is an important caretailing avenue, because not only does it let providers grow their revenues, but nearly all those revenues are retail. Home access products and services are largely cash-driven and cover a wide range of catego-
ries from bathroom grab bars to entire home remodels. But most importantly, they are items that mobility users truly need.
“I think about it this way: For anybody with a mobility problem, probably the rst ought to look at is a stairlift, if they don’t have a ranch home,” says Bob Heffernan, president and CEO Access4U Inc., which makes access equipment such as ramps. “I go around my house and up and down the stairs three times as often as I go out. I imagine most other people do, too.
“So, if I was mobility challenged, I’d spend my rst couple thousand dollars on a stairlift,” he continues. “And the businesses who sell power mobility, your DME providers, if they aren’t carrying any \[stairlifts\], they probably ought to.”
Plus, as a business opportunity, home access offers providers a pathway building a business that lets them get started now, and expand later. They can start by offering simple products, such as threshold ramps and simple bath safety items, and work their way up to more complex undertakings, such as vertical platform lift installations, as they build relationships and gain knowledge.
The best way to get started it to partner up with the right expertise, according to Heffernan. Providers can nd local contractors and handymen that would partner up with a provider to home access equipment installations. The provider drives the sales and marketing, and
the contractor does the installation. Both busi- nesses focus on what they do best and gure out an amenable way to split the revenues.
Heffernan says the pitch would go something like this: “I go to any number of local people and say, ‘I want to get rich slowly. If you’re willing to partner with us, we send you the inquiry.’ Then, we agree on an install price, and we do business that way. But I don’t have to have a truck, a guy sitting around waiting for the work on my payroll, and things like that.”
Providers can get started by looking at local handymen and contractors. The key is to ensure they have the essential capabilities and tools, such as a a truck, saws, levels, and as Heffernan
emphasizes, “a good attitude towards taking care of customers and being safe about it.”
That includes solid understanding of local building codes.
“The local codes, the local building codes, and what the building department is sensitive to are known by local contractors, far better some- times than even the most professional organiza- tion coming in from outside,” he notes.
Similarly, Heffernan advises that providers work with installers and contractors that carry at least a $1 million insurance policy against accidents, liabilities, injuries and those sorts of claims.
When it comes to the marketing side of such an arrangement, the provider is in the best posi- tion to spread the word, because it already has the patient and referral partner relationships,
as well as the local market presence. That said, Heffernan adds that providers should also look at local marketing venues that they might not
“When it comes to accessibility, rather than you getting into hiring a guy and buying a bunch of equipment and ... a smarter move is to nd a local, respected contractor or handyman and partner with them.”
— Bob Heffernan, Access4U Inc.
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