Product Selection, Customer Service Key to Retaining Customers
- By Angela Neville, Cynthia A. Parkman
- May 01, 1999
Arecent call for help posed an interesting question: a manufacturer of mobility aids is designing hand-painted, colorful canes, quad canes and walkers that consumers buy whenever they see them. However, this company is having difficulty getting shelf space because it cannot get distribution. Representatives, distributors and chains prefer full-line, one-stop suppliers to simplify the supply chain and maximize profitability. Fewer choices means fewer suppliers, fewer shipments, less inventory, fewer invoices, fewer checks and a higher return on investment.
What about consumer demand? What about satisfying customers? What about the growing numbers of family caregivers and baby boomers who are buying these products and desire lifestyle accessories instead of sick-room supplies?
Home health care providers who stock these additional niche products and maintain ongoing marketing and advertising programs to educate their community are joining a group of providers who are laying the groundwork for success and long-term profitability.
Finding a Happy Product Medium
If the provider's mission statement highlights meeting the needs of patients and customers, then patient choice and consumer demand are retail business strategies and not buzzwords. How does a provider accomplish these goals and remain profitable without overloading inventory?
The first step a salesperson should take is to determine a customer's needs and then demonstrate all
of the products that offer solutions.
The goal of category management is to meet the majority of customers' needs within a particular product category. Usually this means stocking a selection of good, better and best product options, or at least a nationally branded product (better/best) and store-brand (national brand equivalent) or private label (good) options. A good rule is to only stock one or two of each as long as distributors provide same-day or next-day service.
Core categories and key products should be identified within each respective category. These are "must stock" items usually carried in depth because a provider cannot afford to be out of stock and thus miss a sale or lose a customer. Then related products that providers often cross-sell to customers who buy key products should be identified. Providers need to maintain at least one of each to demonstrate and sell. For any similar products, such as different manufacturers or models, providers can simply show catalog or brochure photos to the customer.
Suppose a caregiver is shopping for a walker for his or her parent. The salesperson needs to qualify the end-user's needs and have products in stock to demonstrate and sell. Does the parent remain in the house or go out? If the parent goes outside, is shopping involved? A solution would be a walker with 5-inch wheels plus a basket. Does the parent tire easily? Then a seat accessory should be considered. Does the parent like to get his or her own food at home? Then an attachable tray could be helpful. If walking around at night often occurs, a flashlight holder is an option.
Judging from sales figures and common scenarios I witness when visiting home health care providers around the country, this caregiver probably started by looking at the folding chrome walker but ended up buying the brightly colored, four-wheeled rolling walker with accessories. Customers are paying two or three times the cost of the "good" version, but they are thrilled to find the best product that meets their parents' needs. Plus, the provider has doubled or tripled his or her profit by selling the higher-priced option. Everybody wins when providers sell products best suited for the end-users' needs.
Customizing Product Selection
Manufacturers no longer believe in the "one-size-fits-all" approach. They have created brands and niches for themselves, and their displays and product selections mirror this retail image. Home health care providers are no different in that they tailor their image and product selection to meet their niche customers' preferences and needs.
Home health care customers usually fall into one of three categories: seniors (end-users), adult children (baby boomers) and family caregivers. Each group has its own preferences that are reflected in their product selection. Seniors often maintain the Depression-era conservatism and value function and price more than personal choice. However, baby boomers are the opposite and choose lifestyle and comfort over basic necessity whenever possible. Caregivers, who are primarily female, will try to buy the best product they can afford for their family member or friend.
If the customer base is mostly senior citizens, then a selection and stock of basic models will meet the needs of the 20 percent that buys 80 percent of the merchandise. However, if customers are adult children and caregivers, then knowledgeable salespeople, product selection and consumer choice are crucial for closing sales and satisfying customers.
The first step a salesperson should take is to determine a customer's needs and then demonstrate all of the products that offer solutions. Then, personal benefits of the product, rather than product features, should be highlighted for each model. After learning about the product options available for them, customers can choose what items they believe is best for their own personal situation. Customers usually select the better or best option.
The Retailer's Responsibilities
How does a provider become the community's home health care resource center? Providing products is just one component rather than the complete answer. If no one knows these great products are available, the products will simply gather dust on the showroom floor. Here are a few recommendations that successful home health care providers follow on a regular basis:
*Marketing: Take advantage of every contact with customers to remind them that you are the expert in home health care. Use brochures, flyers, newsletters and even product sales sheets on a regular basis as bag and statement stuffers, handouts, delivery literature, mailers, and physician office literature. Use displays as educational library shelves with shelf talkers, medical brochures, product selection guides and product comparison charts.
*Advertising: Do not worry about what percentage of sales you should or should not be spending. Advertising must be frequent, consistent and continuous to be profitable. Focus on baby boomers buying lifestyle products for their aging parents on holidays such as Mother's Day, Father's Day and Christmas. Advertise weekly in your local throwaway or bi-monthly on television or radio. Save money when you advertise by only advertising products from distributors and manufacturers that offer co-op advertising plans.
*Information: Become a resource center by constantly providing information to customers. Know where to refer them when they have medical questions. Create an in-house resource center with books and audio and video cassettes on all medical conditions. Provide a computer and online service with the major medical databases listed for customers to search their own questions. Sponsor medical and health care newspaper columns or radio/television talk shows. Hold open houses to coincide with national support groups' special events. Become known as your community's home health care center and primary medical resource center.
*Never Say No: Too many salespeople and customer service representatives automatically tell customers that they do not carry the products in question and go back to whatever they were doing before they were interrupted. Do not let this happen to your business, or you will have a difficult time building a loyal customer base. Whenever a customer calls or walks in and requests a certain product that is not carried, have the staff tell them it is not carried right now but you will try to get it for them. Do whatever it takes to source the product, and you will see why Nordstrom's customers are so loyal to that store!
No, that first product will not be a profitable sale, and the provider might lose money; but he or she has earned a customer for life. This is the lifeblood of every successful retail business.
This article originally appeared in the May 1999 issue of HME Business.