The retail home medical equipment business requires patience, verve and creativity — even in the best of times. But opening a new store in the middle of a hard winter and planning a grand opening while gearing up for competitive bidding definitely adds a whole new dimension to stress. You have to have game.
Two years ago, Bridgeville, Pa.-based AdvaCare Home Services defined the strategies and tactics the company needed to score. With an eye to further developing both its referral and customer bases, AdvaCare developed a game plan with a marketing strategy that included store branding, design, manufacturer support, promotions, advertising and Web strategy, along with publicity outreach.
It was a key maneuver in positioning the company to respond in a rapidly changing HME environment, and it paid off with a bottom line that grew by triple digits.
A New Direction
In 2006, all the signs pointed to Pittsburgh as a likely candidate as one of the initial top 10 competitive bidding areas. That was a major concern to AdvaCare, a 10-year-old firm with three locations in the Pittsburgh major metropolitan area, including Bridgeville, Beaver and Aspinwall. So in a proactive move, Tammy Zelenko, CEO and president, made a strategic decision to alter the course of the business.
Competitive bidding, increasing competition and the company's own referral and customer input provided stimuli for new ideas, insight and direction, Zelenko says. AdvaCare had built a reliable brand with a strong referral and patient base over the past decade. But it was clear there were untapped product and service opportunities that could not be fulfilled in its Beaver location.
“Our three locations have some retail but are primarily respiratory, HME and offices. The Beaver location had 900 square feet, with office space and limited retail in bath safety and compression hosiery,” Zelenko explains. “My original thought was to get a presence in the community near the local hospital, but the opportunity arose to expand with a storefront near the original location.”
So, believing that a more visible storefront downtown would increase awareness of AdvaCare and build new patronage, Zelenko decided to capitalize on that opportunity and expand the Beaver showroom with retail products and services.
Following a strategic decision “to proactively change our payer base,” Zelenko says, “we structured our efforts to emphasize our strengths: respiratory services, home medical equipment and compression hosiery.
“It was natural for us to increase our depth in obstructive sleep apnea treatment, bariatric and health professional supplies.”
Still, retail was a stretch for a company that had never really focused on that area.
“Competitive bidding loomed. I prepared myself and staff. I attended every retail program at Medtrade 2006 to understand retail and the opportunities it offered,” says Zelenko. “It was not easy to ‘think’ retail, since [in] the last 20 years [we had] been so engrossed with the day-to-day operations of a respiratory and home medical equipment company.”
But the facts were compelling. In downtown Beaver, the over-65 population is 18.3 percent versus 12.2 percent nationally and 15.2 percent for Pennsylvania. Forty percent of that over-65 audience has a disability. In sum, there are 31,000 people 65 years and over with a disability.
And, with the need to create a new revenue stream, “cash sales made perfect sense,” Zelenko says.
It Takes a Plan
Zelenko and her team moved quickly. A designer was hired, and product and merchandising plans were fleshed out.
“This was a brand-new adventure for me. I sought the insight and guidance of consultants, community and industry resources to build the plan, components and time deadlines on how to make the grand opening a huge success. The specialized expertise enabled me to focus on operations and competitive bidding,” notes Zelenko.
AdvaCare created a launch scheme to build awareness, demonstrate its expert knowledge of Beaver and home care needs, encourage store visits and engage referral sources in the excitement of the new approach. Lifestyle departments, such as a bedroom display with striking bedding and a draped back wall, were defined, and lifestyle graphics specified. Manufacturers were contacted to provide knowledge and expertise on displays, promotions, merchandising methods and the latest ideas in store events.
Zelenko describes the move to the new retail location as “exciting but nerve wracking. By the time we opened the store, our metro area had been named in the CBA Top 10. I hoped we had made the right decision. Our calendar was collapsing quickly.”
By late January 2007, the store was complete. However, winter in Pittsburgh is not the time to do a grand opening, so a soft opening was held; the gala grand opening was scheduled for June, when the weather would be nice.
The soft opening gave AdvaCare time to prepare materials, make contacts and alliances, train the staff and work closely with manufacturers on in-store merchandising and upcoming promotional needs. The company contacted its referral sources, did a gradual release of advertising and fine-tuned its merchandising and displays as the grand opening week approached.
“We took this time to sharpen our presentation and information, not only about us as a firm, our position and services, but also our industry and geographic market expertise,” explains Zelenko.
“We developed key facts that the press might need about home care and those who use it. We created ‘Facts at a Glance’ for inclusion in our media kit explaining home care services and supplies (courtesy of the American Association for Homecare), national and local demographics and caregiving statistics. We also developed a concise company fact sheet, and added our recent company press coverage to our Web site.”
Grand Opening Week
Preparing for the grand opening was time-consuming. Zelenko and her staff worked with manufacturers to fill the opening week with educational and helpful events featuring speakers, product information, free screenings and caregiver tips. They also held drawings and provided door prizes.
“We had laid the groundwork with our referral sources, media, employees and the community at-large. And our grand-opening strategy touched every stakeholder audience,” Zelenko notes.
“At the week's end, everyone was exhausted, but exhilarated,” she says. “The impact with the community through the media, our events and the press went a long way to build our name with consumers and referral sources.”
Timing Is Almost Everything
Planning to expand any business is usually based on the market, resources, opportunity and timing. In AdvaCare's case, the team was stretched on all fronts. The weather had been horrible for months. They were opening a new store with new concepts and tactics, and competitive bids were due.
But sometimes when the timing is the worst, a team relies on its strategies and tactics and makes a run for it. That's what AdvaCare did with its Beaver opening.
So how is the store doing?
“It was the right decision, the right time,” affirms Zelenko. “The Beaver store has exceeded our best expectations. Not only has location revenue increased 107 percent, we also increased our name recognition and have distinctively branded ourselves in our local communities.”
In fact, the plan worked so well that Zelenko and her team did it again this year.
“We've just finished remodeling our second location in Aspinwall using the same color scheme and product layout,” Zelenko says.
“As with Beaver, this location was small and office-oriented with a little bit of retail. New retail space in Aspinwall was unavailable, so we remodeled and changed the entire location to all retail with professional-looking working areas for reimbursement and billing.”
The grand re-opening in Aspinwall was held June 9-13 “and it went very, very well,” Zelenko says, adding that “it made things so much easier since we followed the same plan” that had been devised for opening week at the Beaver store. “We had a nice mixture of referral sources, Aspinwall residents, the mayor, the borough manager, and the president of Aspinwall's [Chamber of Commerce]!”
All in all, the company's master plan, the addition of retail and grand openings at two locations has made a difference, she says.
“The changes have mobilized our company, our direction and our outlook on the future,” says Zelenko. “The community support has been extraordinary.”
As for competitive bidding? AdvaCare bid in four categories in round one — oxygen, hospital beds, CPAP and walkers. “We received the oxygen bid,” Zelenko says, noting that oxygen/respiratory currently represents 68 percent of the company's business.
On the July 1 start date — except for beneficiaries who were confused by letters they received from CMS, Zelenko says — it “was really business as usual,” and that's exactly how she expects to continue now that the program has been halted.
Colette Weil, MBA, is managing director of Mill Valley, Calif.-based Summit Marketing, specializing in strategic marketing, branding and program development for manufacturers, wholesale distributors and retailers. She may be reached at cweil@summitmktg.com or 415/388-5303.
Avoiding ‘Analysis Paralysis’
Thinking of expanding your business and/or opening a retail showroom? A key component in succeeding in such an endeavor is a good marketing plan. But the idea of coming up with marketing objectives, strategies and tactics should not put your firm into analysis paralysis.
Think of it as a game plan, something that enables you to define the best potential courses to invest in. It should be short, understandable and flexible, and it should be based on the best information about your market, competitors and opportunities.
This is a living, breathing guide that every staff member needs to know about and understand, one that is flexible enough to change when the potholes are bigger than you thought. You'll be glad you spent the time to prepare yourself and your employees.
Once you've devised a marketing agenda, start making plans for a grand opening when the project is completed. Grand openings or celebration events are the times to introduce, tell and sell. Events build buzz about a business and create excitement about you, a new or special merchant in the community.
Equally important, this is the time to get a prospect or customer on your mailing list to begin the continuing work of building a relationship. Raffles, donations, drawings and speakers are all excellent ways to engage and build your target lists. The key is to invite the customer back with more new and exciting educational and promotional events or special offers in their product area of need or interest.
Don't forget follow-up press releases to the media. That news not only demonstrates event participation but it is also a good vehicle for sharing information about the specific target audiences' needs, the market, the changes and how your new or expanded store serves the community.
Grand opening week, June 11-15, 2007, at the Beaver store looked like this:
Day 1 Caregiver and Patient Tips Day
- Safe Lift/Transfer/Transport
- Free blood pressure checks
- Guest speakers: Visiting nurses
Day 2 Leg Health Day
- Free non-invasive vein screening
- Ribbon-cutting ceremony with Beaver Chamber of Commerce
- Guest reception with refreshments and appetizers
Day 3 Traveling with Oxygen and Oxygen Safety
- Free pulse oximetry checks
Day 4 Sleep Healthy Day: The Great Awakening
- Free CPAP pressure checks and mask refits
- Guest speakers
Day 5 Scrubs, Lab Coats and Accessories
- The latest styles and selection
- “Balloon-popping” discounts
AdvaCare Goals and Action Plans
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Expand payer mix and increase retail revenues
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Expand community market position, referral and consumer awareness
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Marketing Objectives:
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Increase cash sales
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Establish community leadership position
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Strategies:
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Open new retail-oriented showroom location in Beaver, Pa.
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Build strong market position in obstructive sleep apnea and fitter segments
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Tactics:
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Design showroom with distinctive lifestyle presentation
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Soft opening for store to build ground-level recognition
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Grand opening in June with integrated marketing campaign
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Advertising, promotion and public relations campaign
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Increase public relations information on company Web site and develop baseline statistics for community on home health care and AdvaCare services
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Engage primary manufacturers in design, program development and launch support
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