Product design and marketing unite
MUNDELEIN, Ill. – Rich Derks, the new president of Medline’s DME Division is the total package: He has an undergraduate degree in engineering and an MBA in marketing. “Usually you have an engineer who knows nothing about how products are sold, or a marketer who knows nothing about how products are built,” he said. Here’s what Derks had to say about how he plans to use this experience to make Medline a stronger company for DME providers.
HME News: Medline also sells DME to hospitals and others. Within the DME Division, how big of a role do HME providers play?
Rich Derks: We probably have the heaviest presence with DME providers, with the rest long-term and acute care.
HME: What’s the company’s strategy in the DME provider market?
Derks: If you look at the movement within health care to discharge people out of acute care as quickly as possible and if you look at the population of seniors ballooning, the homecare industry is very important. There’s going to be more of a need for quality manufacturers than there ever has been.
HME: There’s a lot of talk of consolidation in the DME provider market due to competitive bidding. Are you working with fewer DME providers?
Derks: We are actually working with more providers. After they experimented with some of the new, low-priced players, we’ve gotten those customers back, and we’re growing at a pretty fast clip. With the sophistication of DME providers today and with the challenges they’re facing, they want competitive prices, not necessarily the cheapest prices. They want to partner with a manufacturer that provides overall value.
HME: A few years ago, Medline acquired Guardian, a bath safety and walking aid line, from Sunrise Medical. Was that a good decision?
Derks: It proved to be one of the best decisions we’ve ever made. We’ve kept the design and quality—and we’ve improved upon it. There were gaps in the line, in terms of sizes and weight capacity, and areas for vertical expansion, in terms of good, better, best.
HME: The last time Medline was in HME News, it had launched a program to help DME providers add online shopping carts to their websites. How is that going?
Derks: We’ve had hundreds of customers sign up—I think we’re nearing 1,000.
HME: What’s new in the DME Division?
Derks: One of the things we’re trying to do, especially as we move closer to Round 2 of competitive bidding, is help DME providers become better marketers. That’s why we’re providing customizeable marketing brochures/catalogues with almost 100 products. They can go online and add a photo of their staff or a map to get to their business. We also have signage kits for all the product categories to make their stores look more organized.
HME: So that’s the marketing in you. What about the engineering in you?
Derks: I’ve accelerated a lot of product launches. We’re launching twice as many products in 2012 as we have in any other year in the DME Division’s history.
HME: What can we expect from these new products?
Derks: There will be a more stratified good-better-best approach in every product category. One of the secrets of success of DME providers in the bid world is selling better and best products by up-selling and invoking the ABN process. That’s a very valuable part of a DME provider maintaining good cash flow.