Understanding the 3 Online Models of HME Digital Business

Find out where you stand and how to expand your online presence.

Regardless of your industry, starting or improving an online presence that uses some level of digital marketplace tools should be top of mind. Recently, a Forbes article reported that online sales grew faster in 2016 than they had over the past three years and account for 11.7 percent of overall retail sales.

And there seems to be no stopping this sea change of how customers shop and get much of their product information. Even though customers are seeking information online, an astounding 46 percent of the small businesses who were surveyed still don’t have a company website, according to a Clutch business report.

Although the evolution of online shopping tools is fast, ever-changing and demanding of a constant education for effective results, technology has also simplified the process by offering easy-to-use modules that can enable your business to have a presence online. According to, which helps HME providers succeed in the digital world, there are three basic online models that HME providers follow. For HME providers wanting to advance in the digital space, this white paper explores each model (or level) to give readers an understanding of where they stand, how they can expand and how to make the best use of their current model.

The three models of an online presence

Before describing the models, it’s interesting to know where the HME provider population is regarding online activity. According to Throndson, and this is a loose estimate based on personal experience with VGM Forbin customers, about 60 percent of HME providers with an online presence would fall into model 1, about 35 percent would be model 2 and only approximately 5 percent would qualify as model 3. That said, the overarching goal of each model is to grow sales. The difference is in the digital strategy the HME provider implements.

Model 1: Community or local awareness

As the most common and easiest level for HME providers to rollout, model 1 is a basic online presence that informs customers where to find or contact you and what you do as a business. It is more of a billboard than an interactive marketplace. The main goal of the website is to drive customers into your brick and mortar store to conduct business. But even at model 1, success is much more involved than it sounds. From using social media to mining data analytics, creating, maintaining and measuring your customer pipeline is perhaps the biggest learning curve for online HME providers. Every detail can’t be covered here, but you should understand that the more you know and act on your data, the more successful you will be building an online presence, regardless of the level.

Tips for a successful model 1:

  • Start with the basics: Have a website that provides what your audience needs. Thenstudy your data and analytics to better know your audience. Make adjustments based on your data. Look for opportunities to gain market share.
  • Know your goals and articulate them clearly. You should have multiple call-to- actions (CTAs) on your website or through social media that invite your customers to enter your sales pipeline. Do you want them to like your Facebook page? Come into your store to try a demo? Fill out an online form for more information? Is your contact info easily available on your website?  These CTAs should be easy to understand and find.  The attention span of an online user is shorter than the attention span of a goldfish.
  • Attract customers and build trust via insightful and educational content. Customers often are visiting websites to educate themselves before they walk into your store.  Is your expertise well displayed and accessible?  Think about the FAQs you often get from customers and apply to your website in a way that is easy to share.
  • List your store and website information in online directories, such as My Google Business, Yelp, Facebook, Yellow Pages and Bing. Make sure your store locations are listed correctly on map sites as well.

The cost for model 1 is difficult to calculate, as HME providers have many options, such as building a site or using a third-party vendor. Are you doing online ads, paying for content, using a web designer? All considered, expect to spend about $500.00 a month to maintain a robust model 1 site.

Model 1: Case Study

HME Home Medical (hmehomemedical.com) does not sell any products on its website, but uses it as a marketing tool to get current and potential customers to visit one of its three brick and mortar locations. The goal is not for the website to take them nationwide; it’s to offer information and a product offering via an online catalog to local Wisconsin customers and encourage them to visit their store in person.

Although they don’t sell online, they use their website data as part of their market research, and coordinate TV, print and monthly email marketing efforts with the website’s product focus. In fact, according to Executive Director Don Bye, just last month, they had 2,463 total engaged web sessions with an average visit duration of about two minutes. And while most visitors come from within the state, they have people searching from outside the area, as well.

According to Bye, the website data has put them on a path to find out more information about growing their online presence and introduce features found in model 2 businesses. Today, they have a full-time communications manager who is dedicated to the website and Facebook presence. Bye said his website costs are “minimal.”

Model 2: Convenience

Sharing elements of model 1, model 2 provides even more convenience to your customers. This model allows customers to explore more information online -  such as individual products with purchase capabilities. Unlike model 1, model 2 can have elements of e-commerce, which is the ability to order, re-order and purchase online using credit cards – so customers don’t have to come in the store to get what they need. The online strategy is likely limited in its use of online marketing campaigns to bring in new customers. Like model 1, the focus is on a local presence, but you are giving convenience to current customers and potential prospects by letting them purchase online.

Many model 2 providers see the value in partnering with distributors and member organizations, such as McKesson and VGM Forbin, to take advantage of online platforms and product databases – making it easier to build an online catalog of products with online purchasing capabilities. These modules enable complimentary regular data feeds to keep on top of product changes and availability. In addition, HMEs can leverage distributors drop ship models to ship the products directly to the customers home.

Tips for a successful model 2:

  • Consider all model 1 tips
  • Consider using a catalog feed from manufacturers, such as McKesson or VGM Forbin, which significantly reduces the hassle of managing product images, data and attributes.
  •  Consider providing customers the ability to review their purchase history, get reorder reminders and fulfill their reorder with a couple of clicks.
  • Consider using a drop ship program to send products direct to your customer’s door, eliminating your own inventory or delivery pains.
  • Consider selling your items in online shopping sites, such as Google Shopping, to create another convenience channel for your customers.
  • Use online advertising and paid search on more of a local rather than nationwide level.

Cost for a model 2 presence depends on your effort, capability, motivation and needs of your audience. Expect more time addressing questions, web maintenance and creating content to stay fresh and relevant. Depending on your location, product span, and the number of locations you have, your model 2 costs can easily range in the thousands of dollars per month.

Model 2: Case Study

Williams Bros. Health Care Pharmacy (williamsbrospharmacy.com) is a pharmacy that also does HME retail. With 9 DME locations in Southern Indiana and Illinois, the company sells products online,  distributing some products itself from its own warehouse and other products from manufacturer product feeds. They have one website covering all locations.

According to Lisa Fouts, director of advertising and marketing, although they are offering customers a convenient way to buy online, the main goal of the website is to drive customers into the stores. Not everything in the store is online for purchase. In fact, William Bros.’ online purchasing strategy is to place “featured products” (about 200 to 300) for sale on the website to give customers a “taste” of what’s in-store.

Finally, to support the feeds and their overall marketing efforts, Fouts said they run special deals to push customers to the website and do some SEO and SEM to generate better search results.

Model 3: E-commerce

Model 3 could incorporate some of the goals and tools of model 2, but the main focus is running a full-fledged e-commerce platform (purchase, fulfillment, online marketing, social media, database management, etc.) that lets you re-engage with past clients and seek new ones. E-commerce HME providers must realize that they compete online with retail heavyweights, such as Wal-Mart and Amazon, so a strategy of adding value that differentiates you from big-box retailers is integral to success.  It can also be difficult to re-engage as this model is often seen as a transactional (one-time) experience.

Tips for a successful model 3:

  • Consider all model 1 and 2 tips.
  • Model 3 puts you against all other retailers both regionally and nationally. Consider that at this point, you are competing against retailers such as Amazon, Walgreens and Wal-Mart.
  • Live chat is important to customers, especially those who may be outside your location and haven’t built up a level of trust with you yet.
  • You must constantly research competitors and watch price, benefits, and product bundles, all while trying to remain unique to customers nationwide.
  • An online advertising plan is integral for model 3 success.
  • Model 3 does not support your brick and mortar business – you must consider model 3 as a separate business effort to your physical stores.
  • Model 3 HME providers have a company department mainly focused on its online business. Therefore, model 3 e-commerce should be treated like opening a new location.
  • Many HME providers starting on their model 3 phase will lose revenue at first, but it depends how niched and competitive you are.
  • The higher the model, the deeper HME providers must go in creating a memorable experience. Video production, email campaigns and social media management are all integral to success at this level. Therefore, costs are much higher because it takes a lot more effort to convert sales.

Whether you have an established online marketplace or are just beginning to use digital tools to grow your business, here are tips from Christina Throndson, director of business development, VGM Forbin.

Know your audience. There are many digital tools to use, such as online advertising and social media, that let you target specific groups of people. But this won’t help unless you know your target market. You might not want to talk to everyone in the United States about buying CPAP products because the tools let you target exactly who's interested and who's already been researching CPAPs. People with sleep apnea are more likely to be clients of yours than someone who doesn’t have related issues. Or maybe you sell mastectomy products. You don’t need to advertise to every woman – just those with the need. So spend your target dollars carefully by knowing your audience behavior and reaching only those who need your services.

Live inside your customers’ shoes. This sounds easy but it can be very difficult to walk your customers’ walk. First, get an idea of how comfortable your customers are with technology. Then, create your own online goals: Do you want to drive business to your brick and mortar? Do you want customers to call you when they see something on your website or instantly purchase it? Oftentimes you may assume you know what your customers are doing. Take the time to see their perspective of the experience. You also have to know what is top of mind so you can capture interest using social media content. This can be product news or something talked about in a newspaper editorial. For example, let's say that there's a trending topic on something that's related to one of your products. Maybe people are caught up doing something trendy that is causing back pain. In response, you should be supplying them helpful information that draws them into your store or onto your website to view products that can help.

Use your data. What data are you collecting that can help you market to new and established customers? How can you use what you know to help your customers? For example, are you creating a FAQ that helps them better understand your products? Educating your customers is a sure way to be known as an expert in your marketplace. But don’t forget to track that content to see what works and what doesn't.

Be mobile friendly. Whether researching product information or finding your store hours, customers are reaching for their mobile phones as part of the sales process. If the information they seek isn’t easily found, they will go elsewhere. Soon, Google’s algorithm for organic search will be weighted more heavily on whether your website is mobile friendly.

Conclusion

Digital business is growing and evolving every day, as customers turn more frequently to using computers, tablets and smartphones to purchase and research product information. A consumer’s first step is no longer picking up the phone to ask you a question about a product – the expectation is that this information is available with just a few clicks or keystrokes. So regardless of the level of your digital business today, it is imperative that your business plan soon reflect a digital strategy that supports customers who are quickly accepting and expecting a robust e-commerce model as a condition of doing business.

For more information about digital business, contact Christina Throndson, director of business development for VGM Forbin at 877-659-5241.

To learn more about McKesson product feeds, contact VGM Forbin.

About McKesson Medical-Surgical:

McKesson Medical-Surgical Inc. is an affiliate of the McKesson Corporation. McKesson Corporation, currently ranked 5th on the FORTUNE 500, is a global leader in healthcare supply chain management solutions, retail pharmacy, community oncology and specialty care, and healthcare information technology. McKesson Medical-Surgical works with health systems, physician offices, extended care providers, in-home patients, labs, payers and others across the spectrum of care to build healthier organizations that deliver better care to patients in every setting. McKesson Medical-Surgical helps its customers improve their financial, operational, and clinical performance with solutions that include pharmaceutical and medical-surgical supply management, healthcare information technology, and business and clinical services. For more information, visit mms.mckesson.com.


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