The changes occurring in the HME industry are affecting all product categories, and the scooter market is no different. Declining reimbursements are now the norm, not to mention impending competitive biddng, but for providers who are willing to think outside of the box and make a push toward retail sales, there is opportunity for increased profits and an expanded customer base.
There is no doubt the reimbursement environment is shaky. “It is still in a state of flux, as it is with all Medicare mobility-related devices,” says Jim Ernst, vice president of product development for Leisure-Lift, Kansas City, Kan.
Michael Bower, president and CEO of custom rehab provider Aplus Mobility in Augusta, Ga., adds that he has seen fewer sales because of the changes in Medicare reimbursement. “As semi-ambulatory, client-friendly mobility devices, scooters have historically strong marketplace validity, but it's too bad they don't get more ‘medical’ respect,” he says. “Down the road, the scooter market will normalize at some level and should then begin to bounce back, but for now, Medicare reimbursement has driven scooter sales down.”
Bower's current outlook is not positive. “The scooter channel has narrowed to a few cash sales. Although they were never a big part of our business, we at least had them as options, whereas now, practically speaking, we don't,” he says.
Because of the changes, a growing number of people who are interested in scooters may have to rely on their own financial resources.
“The way that reimbursement is hitting scooters, you will probably see less people choosing Medicare as a channel and more people going to a retail-type market and cash sales,” says Judson Cummins, associate product manager of scooters for Invacare, Elyria, Ohio.
He adds that from a consumer standpoint, there could not be a better time to buy a scooter. “Today, the consumer can get a better scooter than he or she could five years ago — and it is cheaper. You're seeing prices deflate, but features and benefits of the scooters increase,” he says.
“Manufacturers are trying to one-up each other with features, yet consumers are seeing prices decline. In that regard, I think a provider can look and say there is definitely a need out there for a scooter in the consumer market, and manufacturers can provide scooters to meet that need and can provide them at an attractive retail price.”
Creating a Retail Focus
Shifting toward retail sales can be profitable, but providers must have a plan in place. Namely, successful scooter providers must create a strong retail program that focuses on marketing, says Cy Corgan, retail sales manager for Exeter, Pa.-based Pride Mobility Products. “This is a good time to get into the scooter market,” he says. “Increasing retail transactions can help compensate for the current [reimbursement] environment.”
But what elements need to be included in the plan?
“If providers want to stay in the scooter business, they have to be open-minded to the retail business,” says Cummins, acknowledging it may be difficult for some providers to make the switch. Yet, he says, they can be successful if they create a marketing plan that focuses both on consumers and referral sources and includes the right product selection and retail environment.
Marketing to Consumers
Pride's Corgan says providers can use a variety of media options to advertise their scooter business, but all must be consistent with the company's overall advertising and its message.
“[Providers] can advertise in newspapers, television and direct mail,” he explains. “It really is a consistent daily message that they have to get out there to the community that they are the mobility specialist in their area. It's not a one-time thing; it has to be on a consistent basis.”
Cummins advises providers to consider direct mail. “Direct mail is a great way to increase your business and get visibility for your scooter business,” he says.
He also reminds providers to focus on the “four Ps” of marketing: price, promotion, product and place.
Of course, marketing to referral sources cannot be overlooked as an effective method of capturing sales. Providers should not automatically assume that their traditional referral sources know about the scooters they have available, experts advise.
Many of an HME company's referral sources may still be confused about CMS' new mobility coverage policy and guidelines regarding powered mobility devices, as well as about what types of patients may need scooters, says consultant Alison Cherney of Cherney & Assoc., Brentwood, Tenn. Give them brochures including the company name, and make sure they know you would be happy to assist in getting the right scooters for their customers, she says.
Providers can also build scooter business by gaining a reputation in their local area — among consumers and referral sources — for having a wide variety of models in different colors and different sizes. “This means you will have to think like a car dealership,” Cherney says.
Maintaining Good Service
Service during and after the sale is essential, manufacturers say. HME providers should try to wow their customers, since they are actually the best form of advertising.
Ernst says providers must show their customers why buying a scooter from them will be a better experience than buying from a mass retailer. “Otherwise, you are just the showroom where they get all the facts, then they go buy the cheaper one,” he adds.
Good service also means good training for staff, says Corgan. “Staff members have to be well-trained across the board, and they have to be well-trained in addressing questions on everything from reimbursement to product knowledge,” he explains.
“Like any other transaction, if you go into a retail store and start asking questions and the individual is able to give you those answers to those questions, your confidence level increases that you're making the right decision purchasing from the supplier, that provider. It's important that the individuals who are going to be interacting with customers are able to answer questions about the [scooters].”
Cummins also believes customers typically do research before visiting a showroom to purchase a scooter. “They are getting savvy about Web surfing, so they're probably going to research products before they come in,” he says, “so just knowing the basics of the scooter and how fast it goes and things like that are probably not going to be enough to sell a scooter to someone who has already learned about it.
“Once you've chosen … a couple of different scooters to sell, you should know them inside and out,” Cummins continues.
“The reasons a provider chose to show that scooter on his or her floor should be communicated to the potential buyer effectively and with some hard, good-quality evidence of why this is the scooter that person should choose.”
Corgan agrees. “Their customers may have spent hours doing research before they ever walk into a provider's showroom to actually do a test drive on a product or ask more detailed questions.
“I would say they are very well-informed, and that's why it's important for the staff that is going to interact with those consumers to be equally well-informed on the products that they're going to be discussing,” he says.
To fulfill the commitment to retail scooter sales, providers should ensure their showrooms are well-merchandised, properly laid out, well-lit and complete with educational materials for consumers.
“Customers should be able to walk in and see there are some things there to help direct them to the right product at that point, but they should also have the ability to get on the [scooter] and feel free to drive it around inside the showroom,” according to Corgan.
Providers should also consider what benefits are available when choosing scooter lines and creating alliances. Many manufacturers offer co-op advertising programs as well as point-of-purchase displays and retail space plans.
Some may also offer merchandising tips and additional help, like how to co-sell lifts along with scooters, and financing programs, Corgan says.
New Products, New Sales
With a solid marketing plan, building scooter sales can offer HME providers new opportunities. With more and younger consumers in the market, today's scooters are shedding the look and the stigma that some traditional medical equipment carries.
“They are smaller, sleeker and more attention is paid to how they look and how they function,” says Cummins, “and as we as manufacturers get better at designing scooters and putting the features on them that our consumers want, that stigma will continue to be lifted.”
Corgan says he sees considerable growth in the travel scooter market. Pride's Go-Go Elite Traveler and the Go-Go Ultra X are the company's current scooter leaders. “That's where we've seen the marketplace grow overall,” he says.
For Leisure-Lift, Ernst says the Fusion is its best model to demonstrate growth. “It provides the ease of a scooter yet performs like a power chair, so some customers who were shut out by the Medicare regulations are able to enjoy the best of both worlds,” he explains.
Ernst also sees growth in the bariatric scooter market. “We find the bariatric products are still moving well, perhaps because there remains some profit in that end of the Medicare business or maybe, just maybe, because the bariatric end of products has not always enjoyed substantial support from Medicare,” he says.
“That, combined with the fact that many obese people are well under the age of Medicare and not yet tied to social services, makes for a lucrative cash market.”
Invacare's Cummins says the three-wheel microportable or travel scooter is the most popular model.
“The three-wheel model is where the market is going,” he says. “With a three-wheeler, you get a better turning radius and it's a little less bulky. It might not be perceived to be as stable as a four-wheel scooter, but obviously with a three-wheel scooter you get a more lightweight, more compact product without that fourth wheel. It provides a better turning radius so it can be used in the home … and can still be used outdoors.”
This year, Invacare will be introducing two larger three- and four-wheel scooter models that have more features and higher weight capacities, Cummins says.
“The model will have connector lift disassembly so it takes apart into four pieces, and will offer an on-board or off-board battery charger so if somebody wants to take their scooter apart, they can charge the battery inside their home. Or, if they want to leave the scooter put together in their garage, they can charge it there,” he says. “We focused on aesthetics, functionality and ease of use.”
Scooters are not just a health care sell anymore, Cherney says. Providers will still have patients with medical needs, but there is a consumer sell as well, and HME companies will need to tune in to those aspects to build sales in this market.
Medicare's fee schedule does create some specific challenges both for providers and end-users when it comes to scooter sales, but the retail opportunity also creates new solutions. Providers who have properly trained staff can work with consumers to walk through both reimbursement issues and retail sales options while helping them select the right product.
