'Saks Fifth Avenue' of mail order uncorks TV ads

Monday, December 31, 2001

CLEARWATER, Fla. - A company that considers itself the Saks Fifth Avenue of the mail order medical supplies industry hopes its first national TV advertising campaign will help boost the $32 million in revenues it earned last year to an even more impressive $45 million this year.

Not bad, considering Diabetes Supply of USA was started just seven years ago with two employees servicing 100 patients. Today, the company's 120 employees serve 30,000 patients, 75% of which have Medicare as their insurance carrier. By the end of this year, they hope to service nearly 43,000.

"We're aggressive marketers," said Ray Candiano, the company's operations manager. "We realize growth means bringing more patients in, and of course, keeping the current ones."

Diabetes Supply's core business is supplying diabetics with all they need to manage their disease, including blood glucose monitors, test strips and lancets. It makes, on average, 20,000 shipments a month. The company also has respiratory and ostomy care departments, as well as a mail order pharmacy.

But Candiano said Diabetes Supply is more than a specialty provider - it's a disease manager. The company has developed custom software that tracks supplies, maintains patient specific shipment schedules, bills insurance companies and processes the required paperwork. He said the company processes 75% of its claims electronically.

"That's the secret," Candiano said. "The quicker you grow, the more you need to be compliance smart, and this software allows us to do that."

Diabetes Supply's move to TV is no surprise to mom and pop providers of diabetes supplies. Take Richard Sutherland, president of North Texas DME in McKinney, for instance. He's already competing against Liberty Medical, a company airing TV ads featuring Wilford Brimley, an actor from the movie "Cocoon." (Diabetes Supply considers Liberty its closest competitor for diabetes supplies.)

"Talk about a face every senior knows and trusts," Sutherland said. "But we get customers because of our local service and delivery."

Sutherland said his company garners patients the "tried and true" way - through physician referrals (at least 80%) and word of mouth. And he said diabetes supplies isn't a market well suited for the branding opportunities a national TV ad campaign typically results in.

"There isn't that much money in it, and there isn't the wide variety of products," he said.

Caryn Benline, marketing director for Diabetes Supply, said until now, the company has primarily used direct marketing to attract new patients. She estimates 50,000 patients are reached each week through that medium. Although the company still believes that's effective, TV ads were the next logical step, she said.

The Diabetes Supply ad currently airing on TV depicts diabetics enjoying "the simple things in life" because they're managing their disease properly with Diabetes Supply's help. It also shows a diabetic receiving a shipment of supplies in the comfort of his own home. It ends: "Try a better way. Try Diabetes Supply of USA."

Benline said where her company's ad differs from those of competitors, including Liberty, is that it's product orientated. In it, a product is featured, such as the Glucometer Dex from Bayer. The company carries products from Bayer, Roche Diagnostics, LifeScan (a Johnson & Johnson company) and MediSense.

"We carry top notch products," Benline said. "We're proud of that, and we want that right out front."

To better manage its expected increase in business this year and years to come, Diabetes Supply of USA also has a 20,000-square-foot expansion in the works. The company currently does business from a 25,000 square foot facility here but wants to bolster its customer service and shipping departments, Candiano said. HME