Retail Sales: From Patients to Clients
How provider owners and managers can help their staff members adopt a helpful, consultative sales approach that keeps the emphasis on care.
- By Joseph Duffy
- Feb 01, 2016
A cash-product sales strategy is not just a good idea — it’s integral for enhancing your revenue streams and giving your customers the best care possible. The question is, how ready is your team?
As our industry becomes less payer dependent and continues to be patient centric in all that we do, it is a logical transition for HME providers to engage in cash sales, explains Ty Bello, President, Team@Work LLC.
“There are those providers that still do not have a store front and there will always be a place for those businesses, but there has been an overwhelming surge in store front development and expansion,” he says. “We are not relying solely on the population which we serve with our medical equipment and services to become our base for cash sales. Rather a fair amount of cash business is from those we currently do not serve.
“These new customers are not currently under our care and may never be, but they have other medical needs that we can serve from and through our retail location,” Bello adds. “Also, regarding those HME providers who do not have storefronts — when their base customers need other medical services, where do they shop?”
Emblematic of that trend, members of VGM group that have seen cash sales success are generating annual cash growth between 10 percent and 20 percent year over year, according to Rob Baumhover, Director of VGM Retail, and Maria Claire Markusen, VGM’s Director of Operations & Development. Why is a cash sales strategy important? Baumhover and Markusen outline some key factors:
- There are more health and care products entering the market than ever before but many will not be covered by insurance intentionally by the manufacturers.
- To grow traffic and customers, cash is an integral strategy. Retailers will need healthy customers for the repeat business now required to grow business.
- Cash is a solution to cash flow as there is no third-party waiting for payment.
- Today’s consumers research products themselves for health and wellness and are willing to pay for those products.
However, despite the import of cash sales, there are still HME employees who aren’t onboard, or are simply uninformed regarding the necessity of cash sales, or don’t know how to generate cash sales, and, very importantly, don’t realize that these products can enhance patients’ quality of life.
Up-caring Instead of Up-selling
Mike Speduti is the owner and operator of four companies, including Emerge Sales, a business development firm that helps manufacturers and HME providers launch retail products and services, and Mike Speduti Training, which helps manufacturers, distributors and providers increase retail sales and revenue growth through sales and leadership training.
“We are seeing tremendous growth in cash sale products,” he says. “Reimbursement cuts have shrunk margins so much that it’s very important that companies not only provide those reimbursable products but also provide products that will help the patient go through their challenges in a much easier and better fashion. That helps the patients live more comfortably, which in certain conditions will make them more compliant. When they are more compliant the HME company gets more referrals because they see readmission rates go down.”
But the motivation to drive that revenue doesn’t necessarily have to come from bottom line-oriented impulses. Speduti notes that the motivation behind a cash sales strategy should not be focused on the money, although that certainly is a perk of a successful strategy. The inspiration for selling has to be that cash sale products give patients a better quality of life, help them be more compliant and ultimately keep them out of the hospital. An increase in revenue per patient will be the result of trying to show patients how cash products can provide a better quality of life.
“Here is where the fundamental change is,” he says. “They used to call it up-selling. I came up with the word ‘up-caring.’”
And that is where employees who aren’t on board might just come around. According to Speduti, employees don’t want to feel as though they are selling the patient. Many HME employees are clinically oriented and want to do the right thing. So when you up-care instead of up-sell — when you care enough to really understand the patient and what the patient’s condition is — it’s appropriate to provide cash paid products to make their lives easier and better.
“What I teach my students is this: If it is something that you would recommend to your mom or dad, brother or sister, or your own child, then you make that recommendation to your patient and you can sleep well knowing you helped improve the life of that patient and his or her family,” he says. “It is nothing to do with money. It was just the right thing to do. Once salespeople make that mind shift, everybody wins.”
To get employees to adopt this mindset, fundamentally, the first thing you have to do is deal with their psychology, said Speduti. Employees have to make the fundamental mind shift that cash sales are good for patients and they are doing it for the patient and not only for increased profitability. So according to Sperduti, the messaging here has to be: “We are going to increase the level of care to our patients. We are going to up-care, and the reason is we are going to help them live with their condition much easier and better.”
To help employees adopt this mindset, Speduti will have them bring in pictures of family members who are of their patients’ ages so that when they are talking to older people they can think of their parents or their grandparents.
“Then, I have them script the dialogue,” he says. “I have them work on messaging where they are talking lovingly to the patient and not ‘salesy.’ So the first thing is to get them to buy in philosophically. The second thing is work with them on standardized questions in ways to have dialogue. Then you role-play every condition in every situation that they will face and you get them comfortable in a classroom setting. Then you roll it out on the floor and on the phone and watch what happens. What I always tell managers is come up with the reason why, then teach them the how and monitor their progress.”
Once you instill this cash product mindset, Speduti offers the following steps:
- Look at who your target customer is. Who are the customers you are looking to serve or you serve most often.
- Create a list of cash paid products that you currently carry or want to carry that would help your patients live better and be more compliant.
- After creating a list of products, get to know those products inside and out, including their features and benefits, and why and when it would be proper to make recommendations.
- Put together different language patterns that would help your salespeople ask smart questions to uncover the needs of your patients so they can tailor a recommended line of products designed to help the patient live a happier and better life.
- Practice your strategy by role-playing.
- Launch the strategy over the phone or in your retail store while monitoring and measuring constantly to improve your employees.
Speduti said that providers shouldn’t get caught up in a formula that says you must carry a certain percentage of reimbursable products and a certain percentage of cash products.
“It should be 100 percent of the focus to provide as many products to the patient that the patient needs because they have a condition that warrants it,” he said. Make the recommendation for a cash product every single time it makes sense. The right percentage is 100 percent of the time you are recommending the right products to the right patient.”
Finally, to help sale people to focus, consider creating a list of cash products that can enhance the reimbursable products you carry.
“For example, do you think people who are going to be confined to a wheelchair for an extended time want to be as comfortable as possible?” said Speduti. “Do you think they would want a cushion to make it extra comfortable for them because they are going to be in the chair longer? Do you think they may want a tray because they want to eat in the chair? Those are two no-brainers. For every single chair you should be selling a seat cushion and a tray. And it’s because that’s what people need.”
While the employee might understand with the notion of caring cash sales, they might not know how to execute. VGM’s Baumhover and Markusen says that the average HME employee is in need of more sales training. VGM secret shops hundreds of DME businesses every year. Baumhover said that 95 percent of the time during a secret shopping excursion, the secret shoppers are told not to pay cash for a product even after giving cues to the salesperson that they are willing to pay cash and not submit to insurance.
“The biggest barrier and major weakness is a consistent focus on insurance and sickness and a ‘protection’ of the customer, discouraging them from cash sales and leading them to focus on only reimbursed products,” Baumhover says.
Bello adds that the average HME team member should be in constant training both from a sales and product perspective.
“It has been my experience that some of the weaknesses of today’s DME cash sales workforce is threefold,” he says. “In specific order they are engagement, specialty by product, and need-based selling or ESPN.”
What Bello means by ESPN is Engagement, Specialty by Product, and Need-based selling. Engagement is critical, he said, and every cash sales person needs to study the basic engagement principles for consumers.
Engagement is critical, he said, and every cash sales person needs to study the basic engagement principles for consumers.
“We need to have more specialists by product category on our sales teams,” he said. “Our role is to fulfill the needs of the consumer. HME cash sales are about matching the consumer with their needs.”
Baumhover and Markusen also recommend hands-on, sales floor roleplay training for all different types of customers and products, along with giving sales people permission to sell cash. They suggested holding a half-day kick off training, followed by similar monthly training updates, and using vendor partners on a regular basis to assist with specific product training.
“A focus on the add-on sale is also necessary,” Markusen says. “We also recommend a two-tier incentive plan based on the selling of individual seasonal or new products on the floor, coupled with a team incentive plan based on incremental quarterly or annual goal growth.”
And Baumhover adds that the sales force has to better understand that reimbursement products aren’t always what is best for customers’ needs.
“Not only are we missing the opportunity for cash sales,” he explains, “but the consumer is missing out on great products that can help them recover better and faster and live a more comfortable life.”
Bello said that the key to on-boarding and engaging sales teams is found in both education and a hands-on approach.
“The team members must be held to a higher standard in education and training,” he says. “They must be versed in products, consumer adaptation to certain products, consumer engagement, billing, and service. The only way for managers to on-board and engage their sales team is for the manager to possess a strong ability to train, coach, and do the job themselves.”
The next step, he said, is that product training and education must be a part of the team members’ performance evaluation. There must be continuous testing of all retail team members. Minimum acceptable scoring in each area tested must be established and an incentive must be paralleled with team members achieving these milestones.
“We can teach, train and coach all we want but unless the sales numbers increase and we have satisfied customers who not only come back but also refer their friends and family to our business, we are not successful,” Bello says. “Managers can gauge success and effectiveness through the sales numbers and a customer referral program, social media comments, and customer surveys.”
Related to VGM’s secret shopping, Bello stresses the mystery shopper is an essential measurement for each HME retail provider.
“A mystery shopper program can be the catalyst needed to really drive customer satisfaction,” he says. “This is not a very complicated system to put in place and can be very affordable.”
This article originally appeared in the February 2016 issue of HME Business.