MED scans cyberspace for sales leads

LUBBOCK, Texas - The MED Group ventured further into cyberspace recently with a new vendor agreement that promises Internet-generated sales leads for the association's National Respiratory Network. "I think the potential is tremendous," said Geoff Swindle, president and founder of cirrusdata, which offers the service. "I think it will be a necessity for groups to move in that direction in the future, especially as Medicare puts margin pressure on the DME business. It is a cost effective platform for them to acquire customers." cirrrusdata's new lead-generating product, the Sleep Disorder Alliance Group, started Jan. 1 and generates Internet leads for providers who offer CPAPs and supplies. The company offers similar services to HMEs that carry rehab and diabetic supplies. MED and cirrusdata have partnered on rehab referrals since last fall. cirrusdata's strategy places click-through ads in locations on the Internet that potential customers visit in large numbers. The company currently generates about 40,000 leads a month. Given the size of the sleep market, Swindle said, once the new sleep product gathers momentum, it could generate another 40,000 leads. "I think it's a wonderful strategy," said consultant Tom Williams, managing director of Strategic Dynamics in Scottsdale, Ariz. In a conventional HME company, Williams said, providers hire sales people, pay them a salary, benefits, mileage and bonuses. The cost of converting an Internet lead should be much lower, he said. By most estimates, it costs about $1,000 of TV advertising to generate one power wheelchair sale. "Assuming the provider is running the program well, we are far below that," Swindle said. According to cirrusdata, healthcare Internet advertising is increasing 25% annually and will top $1 billion in 2007. Online lead generation represents the fastest growing segment, increasing 71% annually to $592 million in 2006. Given that growth, it makes sense for HMEs to develop an online strategy for developing leads, Swindle added. Any HME can work with cirrusdata, but The MED Group's agreement gives members preferred pricing. cirrusdata charges $25 a year to join a network. Providers then pay a fee per lead. (Swindle declined to reveal the price per lead.) Once a lead is generated, the company forwards the customer-supplied contact information to the provider most able to handle the business. Once delivered to a provider--via e-mail or directly into a database--cirrusdata has nothing more to do with the customer. It's up to the provider to land the business. "If you have the right person on the end of that phone, you are going to establish that relationship--that is what you want to do," said Kelly Riley, director of MED's National Respiratory Network.