Sleep & Wellness Centers

Offering Real Cash Flow Alternatives to Assignment

Presentation Overview• Market Analysis and Potential• Diversify Selling Medical Solutions into a Patient’s

Continuum of Care

• Display Layout and Creating the Right Product Mix

• 3-Tier Marketing Targeting Referral Sources & Your Patient Base

• Sales Training, Presentation & Motivation

• Consumer Financing Program Thru CITI Finance

• Retail Competitive Analysis and Market Advantages

The Sleep & Wellness Center Advantage

The Sleep & Wellness Center Retail Program is available to VGM member home medical equipment companies to promote the sale of ergonomic products in each category of our continuum of care patient program.

This comprehensive, tested program is designed to increase revenues through cash flow alternatives to assignment by expanding product solutions to patient referrals and customers.

Market Size

• Back pain sufferers spend over $70 billion annually on support products to relieve pain while they are sleeping, working, traveling and relaxing at home, for rehabilitation and exercise.

• Market forces in our industry is expected to fuel incredible growth over the next 30 years.

• Only Sleep & Wellness shows how to apply certain ergonomic products to help each patient’s specific symptoms or illness.

Market Forces

• Most of our patients and potential referrals make up the 76 million Baby Boomers and the elderly that comprise more than half the consumer market.

• They are looking for a source to provide real solutions to improve their quality of life by minimizing pain and improving their comfort.

• HME companies can become that source and are looking for cash flow alternatives to assignment.

• Traditional retail market does not know how to provide the needed product solutions to meet this untapped market.

Market Facts

• It’s estimated over 100 million Americans are sleep deprived, over half blame their innerspring mattress.

• 31% of Americans have difficulty just lying in bed because of back pain.

• Expert estimate over 80% of Americans will experience significant back pain at some point in their lifetime.

Market Facts

• 76 million aging U.S. Baby Boomers are more sedimentary than any previous generation, spending up to 85% of the day, sitting or laying down

• Major innerspring mattress manufacturers design their bedding to breakdown within 4 years instead of 10 to 15 years so they can sell more beds. On the average a consumer will now buy a new bed every 6 years because of the discomfort and pain they are experiencing.

Market Potential

• One out of 6 consumers could purchase a new bed in the next 12 months.

• If an HME service a patient base of 5,000 households, approximately 833 patients may be purchasing a new bed in the next 12 months.

• Assuming an average price of $1500 per bed, this would generate total sales of $1,249,500.

• If only 1 of 4 patients purchase from the HME this could generate sales of $312,375.

Diversify Selling Medical Solutionsinto a Patient’s Continuum of CareMedical Solutions

• HME Products & Services Address Immediate Medical Needs– Address Immediate

Recovery Needs

– Deal with the Severity of the Symptoms & Stabilize the Patient

– Address on-going medical needs.

Continuum of Care• Address On-Going

Living Needs– Aid in Recovery

– Minimize Pain during 24/7 Daily Activities

– Improve the Patient’s Quality of Life Through A Healthier Lifestyle

Creating the Opportunity for Add-On Sales and Sequential Selling

To create a patient continuum of care program, an HME must integrate ergonomic solutions

that will compliment prescribed medical products to help minimize pain and improve comfort for a patient during their daily activities while they

are:– Laying Down or Sleeping

– Sitting– Traveling

– Working, and– During Rehabilitation

Retail ExamplesMedmarcoIn the 1990’s, my HME company, Medmarco operated ten 300 square feet retail displays generating approximately annual sales of $300,000 per location

Relax the Back (former HME dealer)The average Relax the Back generates annual retail sales of $740,000. The Oklahoma franchisee has been marketing to his old referral sources. Oklahoma City generates $2,250,000 in annual sales and Tulsa is generating $1,700,000.

Retail Sales Potentialfor Hospital HME Companies

Retail Sales Potential for Independent HME Companies• For retail sales, a HME Company needs to

refocus to target market in at least these 4 areas:– Patient Referral Sources – Address the

referral’s specialty by offering symptom specific solutions

– Existing Patient Base by Symptom Category– Medical Professionals – Direct Sales– Advertising for Retail Consumer Sales

Comprehensive Components of Sleep & Wellness Centers

• Display Layout• Exclusive Product Mix• 3-Tier Marketing Plan

– External Marketing

– Internal Marketing– Retail Marketing

• Finance– Consumer Financing– RTO

• Sales Training and Presentation

• Competitive Analysis

• Support Staff

Display Layouts• Display Layouts can be customized to fit any

floor space.

– Create a retail showroom within a HME showroom from 400 square feet to 1000 square feet.

– To creating freestanding locations from 2000 square feet to 5000 square feet – HME/Sleep & Wellness Center 2nd Generation Superstore.

Display LayoutsBeaumont 20x20 Floor plan

Advantage DeluxePro

HealthCore

Rhapsody

Waiting Area Natural

Essence

GS 700

Solution

Points for Branding Your Showroom

Within seconds of entering your showroom, the look of your showroom will help a customer decide

if they want to do business.

• Use warm inviting colors to create your retail experience– Make the showroom feel like home – allows the customer visualize

using the product at home

• In retail the entry area is the transition zone, if you don’t have a greeter then use product videos to introduce your store

• Combine displays with elevated product displays and eye catching window displays

• Use branded POP posters, easy to read hang/price tags and customized brochures that address symptoms & solutions.

Creating a Product Mix• Core Products are determined by your patients’ needs and

demographics to create your brand identity, offering unique and exclusive solutions separates you from the competition.

• Add-On Products work in conjunction with the recommended core products for better relief and support.

• Marketing Support Products are products with national name recognition - decreases the desire to shop around because “while we offer unique solutions we also have this too”.

• Lost Leaders are seasonal or special price reduced products to get customers in the door creating the opportunity for an up-sale to a core product that would be a better solution.

Exclusive Product Mix

• The product mix can be customized to best meet the needs of HME’s patient referral base and size of the showroom.

• A number of the products are exclusive.

• The ergonomic product mix is designed to offer choices for sleep, sitting, travel, relaxation, for rehabilitation and exercise.

Product Mix• Sleep Systems, mattress toppers and pillows

– Martenique 2nd generation visco elastic bedding and toppers

– Gellogic visco/gel bedding and toppers

– National Brands – Tempur-pedic, Comfortaire, Restonic, King Koil and Natura

• Ergonomic supports, wedges and seating

• “0” gravity and massage chairs

• Therapy and rehabilitation products

3-Tier Marketing Program

• External marketing provides referral sources with symptom specific marketing materials to direct patients to the HME.

• Internal marketing focuses on existing HME patient bases to educate patients on how specific product will help their symptoms and pricing comparisons.

• Retail marketing uses TV, newspaper, radio, and Internet to make the general public aware of the viable alternatives offered over traditional retailers.Think out of the box through alternative marketing channels, public service, events, trade and home shows.

Sleep & Wellness Center Marketing and Advertising Program

Creates the power to customize your ad campaign through a easy 3 step process in which the components of our advertising program are easy to execute and focused on your target markets.

1. We work with you to develop and implement a customized advertising strategy

2. Select the right ad components to target your specialized market segments

3. Scheduling ad implementation for each market segment

External MarketingReferral Sources

Doctors’ Clinic Educates the Patient on Products That

Will Improve Their Quality of Life

Directs the Patient to the HME’s Sleep &

Wellness Center Instead of a Retailer

Wall Brochures, Table Tents, Publications, Internet and Patient Questionnaires

Internal MarketingHME Patient Bases

Targets Existing HME Patient Base

Educating Existing Patients and Referrals Based on the

Products that will Aid in the Recovery Process, and Provide

Lasting Symptom Relief

Direct Mail, Billing Inserts, Pre-approach Signage, Videos, Questionnaires,

Handouts, Brochures and Internet

Designed to Direct the Patients to the HME by Helping to

Identify Individual Needs to Their Solutions and Create Urgency to Make a Decision

Marketing Must Target Symptoms to Identify the Right Solutions

to Create Sequential SalesFor example if a Patient is recovering from back surgery or has limited mobility,

we would market a lift chair but if we expand into the patient’s needs to enable them to perform daily activities, we could also recommend:

1) An attachable bed rail to help with turning during the night.

2) Mattress topper to provide better spinal support.

3) Back and leg wedges to create a “0” gravity position to reduce pain.

4) An alternative sleep system with adjustable frame to minimize pain and promote better sleep.

5) A Perfect Chair that reduces stress on the spine or support cushions that will help maintain proper posture in any chair or while traveling.

6) Therapy Products to aid in recovery.

Another example would be to insure better compliance for new CPAP users

1) An ergonomic pillow properly fitted will help insure proper support of the cervical curve helping to insure the airway is open and minimize interference with the CPAP mask.

2) The counter pressure from most inner spring mattresses cause a sleeper to toss and turn 100 to 200 times a night. A mattress topper or one of your new sleep systems reduces movement to 17 to 25 times a night minimizing the chance of becoming tangled with the air hose and in frustration pulling the CPAP mask off.

Marketing Must Target Symptoms to Identify the Right Solutions

to Create Add-On Sales

Retail MarketingCreating Public Awareness

• Designed to compliment through newspaper, radio and TV ads as an add-on to your medical marketing channels.

• Add links to your Internet Sites and run your ads on your site.

• Designed to make the general public in the HME’s market area aware of the viable alternatives offered over traditional retailers.

• Press releases to get your message out.

Retail MarketingThinking Outside the Box

Creating More Sequential Sales• Sports Teams

– Ice It to promote products for sports injuries.– Team Sponsorships to sell ergonomic products.

• Home Shows– Every sale at a home show will generate a residual sale in your

showroom.

• Speak at CEU Seminars & Health Fairs• Make Your Referral Sources Believers• Sponsor Patients in Need Through Civic Organizations • Press Releases and Holiday News Stories

Integrating E-Commerce Into the Sleep & Wellness Center Business

Model For Our Dealers and Strategic Partners

Market Potential

• In 2008, the furniture and bedding industry sold $12.3 billion online, representing 9% retailing sub-sectors in the U.S. market.

• Despite the impact of the housing crisis and weakening U.S. economy, these numbers increased to approximately 11% in 2009 and are forecasted to more than double to $26.7 billion by 2012, the firm estimates.

Sleep & Wellness Center Websites

Sleep & Wellness Centers.info

Designed to market to VGM member to develop Sleep & Wellness Center Dealers

Sleep & Wellness Centers.org

Information, Retail and Wholesale Sales site designed to be a marketing and sales tool for S&W Dealers

Finance

• Sleep & Wellness Centers offers an exclusive fast response finance program through CITI for clientele purchases including term and same as cash consumer loans.

• In addition, through our RTO program, we offer a hybrid lease/purchase supplemental program that approves 9 out of 10 applications regardless of credit history.

National Home Furnishings Association

• Sleep & Wellness Center Dealers automatically become a NHFA member and have access to its programs and services including:– Special Discount Rates Thru CITI Retail Services– Alternative Finance Program for Credit Challenged

– Truck Signage, Special Fleet Pricing, Discounts for Federal Express, Shipping and Office Depot, Product Catalog

– Retail Training Programs, Retail Sign Solutions, Direct Marketing Solutions, Promotional Product Services

– Business Financial Services

CITI Retail Services

No Dealer Recourse

No Set-Up Charge

Easy Application

Fast Response

Offers two ways to process a credit application – online or through CITI’s desktop credit card machine.

Financing Program Examples for S&W

Same as Cash ED Discount

03 Month SAC 0.00% 06 Month SAC 1.20% 12 Month SAC 3.90%

Interest Free Equal Pay ED Discount

24 Month IFEP 9.60% 36 Month IFEP 12.25%

Alternative Finance ProgramHelp Credit Challenged Customers

Lease/Purchase Alternative Finance Program

4-Sales Finance provides members with a hybrid lease/option for credit challenged customers that are

declined by the store’s primary credit source. Customers can qualify for the program if they have been employed for the last 6 months and have a gross monthly income of at

least $1000.

6% DISCOUNT FOR SLEEP & WELLNESS DEALERS

Sales Training and Presentation• Staff is trained to present sleep systems and other

products from a medical prospective instead of high pressure retail presentation.

• Training enables staff to describe the benefits and differences in the products.

• The sales presentations, while short, demonstrate empathy as it explores patient’s needs, identifies solutions and creates a sense of urgency to act without the use of high pressure sales tactics.

Motivate Your StaffCreate Opportunity Not More Work

• Sales success should be tied to compensation and recognition.– Establish clear goals and guidelines for determining their base salary

level as well as raises.– Create incentives to promote retail sales through commissions or

spiffs. That way there is no up-front risk for taking on the added work and responsibility

• Never stop training your staff. An educated sales staff promotes confidence to make the kind of sales presentation that creates trust with the patient. – A potential customer decides in the first minute if they are interested

in buying.

Sales Tips by the Numbers

If you ask 48 people to buy something – 1 will!

• People are looking for solutions to minimize pain and feel better. Ask questions, understand their problem and help them identify their needs, then recommend the products and explain the benefits. Give them choices, they are there to buy.

• At check out, Customer Service or sales staff should ask at least two questions to determine interest in add on products and future needs.

• Knowing the patient’s symptoms, at checkout, the patient should be given information brochures on beneficial products and future specials.

Competitive Analysis Support

• Our program offers HME companies the competitive analysis support needed to compete against third party retailers.

• Our educational and presentation pieces are designed to show the deceptive product shortcomings, pricing and return polices of retail competition to minimize the chance of a patient purchasing elsewhere.

On-going SupportOur support staff is available every step of the way

to help: • set-up the display; • set the product mix; • set-up and execute the marketing plan; • train staff and provide on-site sales support; • provide marketing, sales and competitive

analysis materials; • as well as on-going marketing materials,

internet and sales assistance.

Sleep & Wellness Centers can help your HME

company:• Create a continuum of care for the HME’s

patients

• Create a competitive advantage

• Increase market penetration• Increase patient satisfaction

• Diversify the HME’s income

• Retain patient base

Create a Continuum of Care for Patients

• To enhance their recovery, patients need to make changes in their lifestyle to help support the injured area, maintain good posture and minimize pain in their daily activities.

• Coordinates a wide range of products with their recovery creating a continuum of care to help them live more comfortable and productive lives.

• Fosters greater patient reliance and dependence on the HME products and services by enhancing the patients recovery and satisfaction.

Create a Competitive Advantage

• Identify core abilities and products that will create sustainable advantages to avoid pure price competition.

• Positive differentiation adds more value to patient referrals increasing market appeal and retention.

• Retailers and other HMEs can not compete because of limited knowledge of benefits and products to meet patient needs as well as competing on product pricing and value packaging.

Increase Market Penetration• Maintain and increase patient base by adding value

through products and services diversification to increase patients’ reliance while avoiding price competition.

• Create greater referral and patient reliance on products that enhance their quality of life.

• Increases patients’ satisfaction with their recovery and generates greater patient loyalty with the provider.

• Greater loyalty and satisfaction increase the likelihood of patient recommendations and referrals in the future by providing fair priced but hard-to-find products.

Increase Patient Satisfaction

• Primary contributor to patient satisfaction is the patient’s perception of the range of services, products, and information offered.

• The function of this range is the availability of the services, products and information that will fulfill the patient’s needs and enhance their life and their awareness that it is available only through a specific HME’s Sleep & Wellness Center location.

Diversify Income• To remain financially viable and survive in

today’s economic times, providers must include programs that are not only beneficial to their patients but also can generate additional income for the provider.

• Sleep & Wellness will enhance patient care and potentially increase annual cash sales:– $150,000 to $400,000 in existing locations dedicating

300 to 400 square feet – To annualized cash sales of $800,000 to $1,500,000

in free standing locations of 1500 to 2000+ square feet.

Retain Patient Base• Retention of a HME’s patient base is critical for

survival.• Findings from a study by University of California

at Berkeley on health plans and services found: – Patients who are offered and/or utilize wellness

promotion programs were more likely to be satisfied with their care;

– Would recommend the programs to others;

– And less likely to switch to another provider or alternative treatment source to make their purchases.

Food for Thought

If you are not selling the products your patients and

customers need….Then someone else will.