2016 HME Handbook
How to Build a Successful Compression Business
Getting started in serving this important service category involves a few key concepts.
- By David Kopf
- Jun 01, 2016
For 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
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
This article originally appeared in the June 2016 issue of HME Business.
David Kopf is the Publisher and Executive Editor of HME Business and DME Pharmacy magazines. Follow him on Twitter at @postacutenews.