Scooters rev up retail potential

Thursday, May 31, 2007

The desire among HME providers to migrate away from Medicare dependence has not been lost on mobility manufacturers. They report interest in retail scooter sales reaching unprecedented levels.
Falling reimbursement rates and competitive bidding for durable medical equipment have left HME providers reportedly scrambling to find alternative sources of revenue to counter the deficit. And for pure cash sales potential, scooters are in a class by themselves, vendors say.
"When it comes to selecting a product that is tailor-made for retail, you can't do any better than scooters," said David Lin, president of Carson, Calif.-based Shoprider Mobility.
A swell of interest
At Medtrade Spring in late April, exhibitors reported that providers were actively looking for products that could boost their retail operations. For instance, George, Iowa-based Ranger All Season fielded numerous inquiries at its booth.
"Based on the high volume of visitors to our booth, there is a very healthy level of interest in retail out there," said Randy Reicks, national sales manager. "We were very pleased with the turnout."
Sarasota, Fla.-based Harmar Mobility, which makes lifts and ramps, is also handling a swell of provider calls, said President Chad Williams.
"We are hearing from more and more companies that are looking to boost their cash sales," he said. "Our sales force is in overdrive training provider salespeople and technicians on how to promote, sell, install and maintain our products, which are 100% cash. The days of the single payer are gone, so proactive providers are becoming better merchandisers and realizing substantial profits by fully supporting their customers with ancillary products."
The entitlement mentality
HME retailing's biggest hurdle--and perhaps the main reason why providers have long been reluctant to enter the cash sales arena--is the "entitlement" mentality among consumers. Since the program began 42 years ago, Medicare has conditioned beneficiaries to expect mobility products to be furnished at little or no cost. Convincing them to dig into their pockets for a scooter puts the seller at a disadvantage. Or does it?
"You have to be creative in creating a retail demand for these products by focusing on the aspects that entice them to buy," said Judson Cummins, product manager for consumer power and scooters at Elyria, Ohio-based Invacare. "It comes down to showcasing the choices available and letting customers know that even if they qualify for a Medicare scooter, they have virtually no choice over which model they get."
Through astute salesmanship, retailers can effectively tell consumers how Medicare scooters are "bare bones" models and that adding features and functionality is well worth paying for, he said.
"The scooter buyer will become more savvy as time progresses," Cummins said. "They will come in knowing the features and will want to take a test drive--even a week-long demo."
Offering a prospective client an extended test drive is an excellent tactic, Lin agrees, adding that it has multiple benefits.
"Let them use it for the day--that way they can see if they like it," he said. "You can even charge a rental fee. It gives your scooters public exposure and it is the perfect lead to a sale."
Retailing basics
C.J. Copley, executive vice president of sales and marketing for Old Forge, Pa.-based Golden Technologies, has an idea or two about scooter retailing. If providers adhere to the three basic principles of location, service and sound inventory management, they should achieve success in scooter sales, he said.
The keys to location, Copley says, are being in a high-traffic area, posting eye-catching signage and lighting, offering ample parking and creating an attractive window display.
"Location must be in the highest traffic area possible," he said. "For example, if you had an option to sell out of a retail store in the middle of town with 40,000 cars passing by per day or out of town with 10,000 cars passing by, a good retailer is going to recognize the first option is best. While the first option may be more expensive per square foot due to the traffic, advertising dollars can be less. Think about it--each person passing by is a potential customer."
While it's essential for sales staff to be motivated and have exemplary communication skills, their most important function is to position themselves as problem solvers for the client, Copley said.
"People visit the store to find ways to live better," he said. "Business owners must be sure to staff their shop with employees who have the right personality to help store patrons find products that offer solutions to their specific needs."
Paul Gamboa, sales supervisor for CTM Home Care Product in Chino, Calif., suggests that sales staff create a list of questions to help them ascertain the most appropriate scooter for each customer.
That list can also help boost sales of the myriad accessories available for scooters, like baskets, oxygen holders and protective covers, he said.