Consumer need drives retail scooter sales

Thursday, July 22, 2010

Though consumer spending remains weak in a fragile economic recovery, retail sales for scooters remain  steady due to consistent demand, manufacturers say. Fueling that demand: The belief that scooters are a necessary product, not a luxury item that consumers can cut from their budget when money gets tight.

"This is a market where the audience is growing, thus consumption is there," said Mike Serhan, executive vice president of Port Washington, N.Y.-based Drive Medical. "Those who are shopping for scooters have reached a point where they need assistance with mobility."

Cy Corgan, national sales director of retail mobility for Exeter, Pa.-based Pride Mobility, shares the same optimistic outlook, although he concedes that the retail market for scooters "has not yet risen to its fullest potential." While the need is definitely there and consumer interest in scooters is strong, HME retailers need to put a lot of time and energy into their sales efforts, he said.

"They have to be in the forefront of best practices," he said. "They have to do everything possible to raise consumer awareness."

HME providers also need to embrace the concept of consumer financing, Corgan said, because while people are continuing to buy scooters in economically sensitive times, an inducement like monthly payments can be the deciding factor for fence sitters.

"It's much easier to sell people a scooter that costs $100 a month as opposed to $2,300," he said.

Retailers also need to be aggressive in finding their customer base, Serhan said.

"Don't wait for the customer to come to you--you can't cross your fingers and hope they come," he said. "Find out where that customer is and go get them."

Among the places he recommends that providers seek out potential customers besides senior centers, church groups and civic organizations are flea markets and RV shows.

"Think outside the box when contemplating places where you might find this demographic group," Serhan said.

Jason Davis, vice president of sales for Old Forge, Pa.-based Golden Technologies, says hosting community events like open houses, free wheelchair repairs and "appreciation days" for referral sources is a great way to bring in customers. To assist providers with these events, the company has converted a 30-foot mobile home into a traveling showroom called the Golden Bus.

"We have attended several 'appreciation' events to help our partners increase sales," Davis said. "The contents of the Golden Bus can be customized with the Golden products each provider wants to promote to their customers."

Elyria, Ohio-based Invacare has developed an online marketing toolbox to assist providers in creating their own ad slicks, TV commercials, fliers and posters, said John Koster, product manager for consumer power.

"This allows providers to create their own marketing campaigns to draw consumers into their store and give them a better showroom presence," he said.

Overcoming Medicare

The Medicare option for scooters continues to be less and less lucrative for HME providers as reimbursement rates decline and competitive bidding consolidates sales channels into the hands of a select few companies.

"Medicare has had a negative impact on scooter sales from the beginning when they changed the codes," said Serhan. "It is difficult to get a scooter approved and when it is, it is downcoded. Having a Medicare strategy is another leg in your table and spreading around revenue is good, but don't rely on it to keep your business alive."

The history of reimbursement cuts shows that "what goes down, typically doesn't come back up," Davis said, which is why cash sales are gaining importance and why the advanced beneficiary notice should be an important tool in the provider's Medicare approach. Moreover, competitive bidding will force providers serving the program to handle more low-end scooters "because that is the only way to make a profit on these items."

John Wright, executive vice president of sales for Carson, Calif.-based Shoprider Mobility, says current reimbursement levels are already so low that providers have cut back on un-reimbursed services or have outsourced departments like billing and repair.

"We will continue to see declining reimbursement from Medicare as they continue searching for just how low providers will go through the competitive bidding process," he said. "This last round has shown CMS that there is still 'fat' to be cut, but do providers that bid low really believe that they can survive at these levels?"

Enticing cash sales

There is a multitude of tactics providers can use to "sweeten" their retail deals for consumers without sacrificing too much, manufacturers say. One of the most effective methods is to bundle other products in mobility or related categories, such as lifts, ramps, rollators, bath safety and other accessories for a modestly discounted price.

Corgan cautions, however, that the sales process for a complete mobility package can be protracted and involved, requiring astute focus and patience.

"Talk about the day in the life of the individual," he said. "The provider needs to spend a fair amount of time assessing the situation and thoroughly discussing it with the customer and family members who factor into the decision. This is a business where you have to spend the time and do everything necessary to make the sale. You can't dabble in this--you have to be 'all in.'"