It’s easy to be swayed by Cindy Ciardo’s vivaciousness and youthful spark. But be certain: This diminutive, red-haired CEO packs a punch in a velvet glove. Her intensity quickly mobilizes in a common sense discussion about her firm’s devotion to community, professionalism, consumer education and contemporary solutions for her customers and the HME industry.
Ciardo co-owns Knueppel Healthcare Services with William Knueppel, grandson of the company’s founder. They have guided the firm from its 1955 roots as a pharmacy to solid standing as a three-location, progressive HME provider and retailer in southeastern Wisconsin.
Once a pharmacy with gifts, cards and a candy counter, Knueppel now operates out of a 25,000-square-foot, light industrial building in West Allis. The building contains 5,000 feet of retail space, along with the main warehouse location; billing, shipping and receiving; service and repair; and a custom fabrication area and shop for rehab.
The 3,900-square-foot Mequon branch and 4,900-square-foot Racine branch are located in business complexes. Neither branch is a particularly good retail location since they are well away from main traffic patterns and have poor main street visibility. No matter. Challenges just make Knueppel more creative.
Old-Fashioned Values with Contemporary Flair
Knueppel’s customer experience is based on old-fashioned values: compassionate and exceptional service; continuous education for staff, clients and health care professionals; and dedication to the community and industry.
The company’s business model is based on thousands of referral touch points. The primary source of revenue is professional, referral driven, with 78 percent third-party payers. The company has one outside marketing person, so Knueppel’s biggest tools are networking and relationship building.
A key for Knueppel is to be the go-to source for education—both for professionals and consumers. It provides continual in-services and CEU courses for health care professionals.
“We believe we earn referrals based on their extensive knowledge and product selection,” Ciardo said. “We have invested in building our brand to represent a unique, distinguished level of uncompromising expertise. Our main goal is to get them in the store, since no matter what you say they either don’t hear or remember anything—and seeing is believing. So to that end, we offer onsite in-services, give professional discounts on purchases, host open houses—anything to get them through the doors.”
The same tenets apply to consumers. Knueppel uses traditional and new media tools to reach existing customers and prospective customers. The company sponsors educational programs, open houses, instructional and special events, guest speakers, case studies, sales and special offers.
Proof of success is in the metrics. Sales have grown more than 8 percent the last two years. Knueppel stores see more than 125 customers per day plus phone orders. The website does not handle e-commerce, but directs consumers to customer service where orders are taken. The website receives more than 2,200 unique visits a month with more than 8,000 pages viewed.
Daring to Diversify and Dedicate Resources
Ciardo and her team have a knack for spotting niche opportunities and building them into solid revenue streams. Knueppel dared to diversify, even before competitive bidding loomed.
Its core business is based on custom fitting in rehab, mobility, compression hosiery, women’s health, orthopedic supports and diabetic shoes, but cash sales were always part of the company’s offerings and are poised for expansion.
In 2000, the company opened its Racine location. Then, in 2001, Knueppel concentrated on building a retail strategy with cash sales around core reimbursement lines. With competitive bidding gaining steam, Knueppel moved the main office and showroom to the larger location in West Allis in 2005.
Analyzing the changing demographics and Knueppel’s expertise in custom fitting, the company sought strategies to further hedge bets against competitive bidding.
In 2009, it expanded into home modification. In 2011, Knueppel completed an extensive remodeling of the West Allis showroom to demonstrate the latest in home modification technology.
Terry Helland, Knueppel Home Modifications Division consultant, is a Certified Environmental Access Consultant with more than 26 years experience in the HME industry.
“We are very proud of our new simulated showroom display where we can give live demonstrations of the latest in home modification technology,” she said. “We have two model rooms, really a bedroom-bathroom-stairway combination suite that has a ceiling lift system, a walk-in tub and several bath safety products and a stair lift. People can really see what it would look like in their home.”
The retail showrooms are among the most modern and progressive in the industry. Only retail packaged items are on the floor. All merchandising is based on groups of complementary products with bright signage and fun tchotchkes. All products are displayed as they are intended to be used.
“Demonstration and hands-on trial by professionals and consumers alike are paramount for our shopping experience,” said Kate Griger, retail and customer service manager.
Endcaps are used to highlight promotional items or a special category of featured products like those used for diabetes or women’s health. Seventeen employees are cross-trained as salespeople to knowledgeably serve retail customers.
Griger shops top local retailers to see how they meet their customers’ needs, and then she tops them.
“Our clients’ shopping experience reinforces our brand—knowledgeable information, personal help, modern environment with the latest technology and a bright, easy, fun shopping experience,’’ she said. “We love doing it.”
Building Buzz and Store Traffic
At the core of Knueppel’s strategy is the ability to communicate effectively with all stakeholders with the right information, education, products and offers. The company’s primary means of advertising is through its website and direct mailers to existing clients.
The direct mailers are designed in-house, and combined with marketing campaigns, such as a semiannual sale in women’s health products and a home modification open house. The direct mailers are featured on the website and in stores.
Educational offerings—such as the one-day program, Seating and Mobility for Children and Adults—attract support and endorsement from manufacturers.
Knueppel occasionally advertises with local newspapers and magazines if there is a special focus, and it dovetails with one or more product lines. Also, press releases are submitted to local media.
“Media releases are a hit or miss,’’ Ciardo said. “We feel that community presence in the media complements our other efforts. We have been fortunate in obtaining special feature story coverage. It has been well worth our time as we make use of the press coverage over and over. It becomes content for our website and in-store. Regular press contact has also helped reaffirm our brand image as local experts in home health care.”
The newest marketing endeavor is social media. Knueppel creates content and programs, and social media opens new vehicles to expand the messaging and share content.
The website was updated in 2010 to include a newsletter, YouTube videos, Facebook and a blog. The overall goal is to drive traffic to the website and showroom. Future plans include using an e-mail marketing service to send content-rich interactive e-mail blasts to referral sources and customers who opt in for delivery.
Changes and Challenges
Retail sales continue to grow, and the investment in home modifications as a revenue stream is still in early growth stages as is expansion into social media.
One of the biggest changes on the payer side is the move from straight Medicare to Medicare Advantage programs. Rates are negotiated with the commercial insurance company and may be at or below Medicare allowables, but Medicare Advantage plans are not subject to the competitive bidding program and will allow beneficiaries the freedom to choose their provider and permit companies like Knueppel to maintain its senior client base.
Audits, competitive bidding and the struggle to secure a rehab carve-out are all looming.
“For our firm, we will not let these challenges beat us,” Ciardo said. “We are fighters. We are continually conducting informed due diligence with a sharp eye on operational changes and market growth areas. We are focusing on profitability, versus the expectation of revenue growth. Getting bigger for the sake of revenue growth in this caustic environment is shortsighted. Looking at the big picture enables us to make our best decisions on service level, product line and market profitability.”
So Knueppel picks its battles, and wins them through community service and profitability.
It has been building that foundation for years to weather competitive bidding and the other challenges. Change is in the company’s DNA. It stays true to core capabilities: innovative product and service delivery, deep educational sophistication and contemporary adaptation to the competitive environment … along with creativity and the fighting spirit.
