2016 HME Handbook

How to Build a Successful Compression Business

Getting started in serving this important service category involves a few key concepts.

CompressionFor providers looking to expand revenues while serving both existing patients and new clients, compression represents a important market opportunity. Compression garments and wraps are used to treat a variety of conditions, including foot swelling, mild edema, varicose veins, thrombosis, varicosities of varying severities, and diabetes. And there are a wide range of compression products used to treat these conditions, helping providers tailor solutions to specific patient needs.

Furthermore, the demographics of compression are extremely enticing. There are a large number of diabetic patients, seniors and other major patient populations that need compression, and the number of transactions can get very large. In fact, one market study reported that the worldwide compression market will swell from $2.4 billion in 2012 to $3.4 billion in 2019, at a compound annual growth rate (CAGR) of 5.1 percent. Not surprisingly, it is possible for providers that specialize in compression to derive as much as a quarter of their revenues from compression garments alone.

In terms of funding, the revenue from compression products is largely based on retail sales, because there are only a few scenarios in which compression is reimbursed by Medicare, so for the most part compression transactions are free from the complexities, frustrations and funding cuts that are part of dealing with Medicare.

So how do providers get started building a successful compression business? Let’s review some key concepts:

Concentrate on marketing. Providers should strive to develop marketing appeals that can drive increased sales. Given that there is such a large and diverse range of patients that need compression the provide must develop a variety of marketing messages that will resonate with each patient group.

And the marketing channels the provider uses to spread these messages is just as important. Providers will need to exploit a variety of media, including traditional formats, such as print, direct mail and possibly TV or radio, as well as social media, email and web marketing. In fact, the latter will likely become critical given how strong a connection providers can make with patients using electronic media.

Also, because these are retail items, seasonal marketing and special pricing promotions will become important. If providers strategize in advance, they can building pricing and discount plans that will keep customers returning to the store to take advantage of the latest values.

Merchandising is equally critical. You want to provide a wide range of product types, sizes, colors and styles. In fact, color and style are more important than providers might initially realize. While compression garments serve a purpose, at the end of the day they are clothing, and that means that fashion does play a role. Compression therapy or not, people want to feel what they’re wearing makes them look good.

Also display the products in an attractive and engaging fashion. Ensure that there is adequate signage and product information to help the products do the selling if staff are attending to other customers. Also, focus on product packaging, which can often be as important as the “look” of the actual compression garments. Seek out products that are packaged like other retail items.

Make sure to stock related products. Remember that due to age or flexibility issues, compression users often have difficulty putting on and taking off (“donning” and “doffing”) compression garments. Providers need to think about the related products they can offer that add value for compression patients. Donning devices and washing solutions are good cross-selling opportunities, with perhaps the best cross-selling product being a second garment, because you need at least two — one to wash and one to wear at all times. Also, think about crossselling opportunities. For instance, compression hosiery is beneficial for patients with diabetes, so diabetic shoes are an ideal cross-selling item. In fact, there are some diabetic shoe makers that releasing compression hosiery, given that they see the cross-selling opportunity, as well.

Education is essential. Product expertise is the cornerstone of a providers value, so provider staff should have a solid understanding of disease states that are involved and the products that service them. Staff should know the features and benefits of key category products and to be able to effectively communicate that with customers. Moreover, it is a good idea to have a certified compression fitter on the team, who can help ensure that patients are getting the right grade of compression and the correct format of garment (such as closed, or open toe) for the patient. Many compression manufacturers offer webinars, in-store training and knowledgeable customer service reps that will help providers learn more about their products, compression technology and matching patients with product. With that knowledge you are better armed to help patients and capture referral sources.

Know the referral sources. While much of the revenue for compression is retail, the referral sources should prove familiar to providers. Referral sources that providers should target to expand their compression business include wound care specialists, vascular centers, lymphedema therapists, breast cancer treatment centers, and vascular surgeon practices. Also, local vascular doctors, orthopedic physicians, OBGYNs, general practitioners, podiatrists and diabetes educators make solid referral sources.

Work with these referral sources both through marketing and in-person venues such as in-services to ensure that they clearly understand the range of options that you provide for their patients. Moreover, communicate your on-staff expertise to your referrals to drive home the point that you are a knowledgeable, dedicated and reliable resource for them.

Points to Remember:

  • Compression represents a critical market opportunity for providers looking to expand revenues and their patient base.
  • The demographics of compression are exceedingly convincing, given that so many different types of conditions and patient populations need it.
  • Marketing is an important part of any compression business. You will need to employ multiple channels to send targeted campaigns.
  • Merchandising is just as important. Providers will need to ensure the right range of products and styles, while creating a retail “experience” that will help sell the products.
  • Staff education is critical. Provider staff should understand the conditions affected and the ideal products for each condition. Consider having a team member become a certified compression fitter.
  • While the revenue is retail, the referral sources are familiar territory for providers. In fact, there is a very broad range of referrals providers should be reaching.

Lean More:

This article originally appeared in the June 2016 issue of HME Business.

About the Author

David Kopf is the Publisher and Executive Editor of HME Business and DME Pharmacy magazines. Follow him on Twitter at @postacutenews.

Comments

Thu, Jul 21, 2016 Francis Sheehy Minneapolis, MN

Great ideas about marketing! Especially your thoughts on education. We try to educate our customers online as well with blog posts. http://www.libertyoxygen.com/blog/tag/compression-stocking/

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