Many of my presentations are met with tremendous enthusiasm for the concept of a retail initiative within the particular campus/system that I am visiting. They can see the benefits of offering their staff, visitors and patients a much desired, and in some cases a much needed, service. They see the extremely lucrative potential to generate tens of thousands of dollars in profitability to the benefit of the operational "bottom line" or "gifting" to the hospital. With that being the case, what causes such extensive delays in at least signing up for one coffee station. is it the cost? I have a hard time thinking that the initial cost is the problem as we have proven with our benchmarks that the ROI on the initial study would be almost immediate (less than a year), in healthcare terms. But just to be sure we did not have any such hurdle to navigate, we designed the program to be a virtual "no capital required" program to the first 10 coffee stations.
Now I have to ask, "Is this a sign of the times?" A time that causes us to freeze at the idea that something could actually still generate a positive income? A time where any remote risk is so amplified that it creates a "constipation" of decision making? A time when, even provided the tool of success for free, there is so much budgetary tension that any appearance of an investment will cause outcries similar to that of an AIG bonus pay out?
While I understand the need for caution and protocols when inviting such venues into our healthcare world, why is it so easy for some systems to throw the keys to a third party retailer and say "here, you take this ball and run with it and we will watch you take the money to the bank"? I see this occur almost every week and it drives me insane.
Since a recent article ran in the Detroit Free Press regarding the retail concepts in healthcare, I have received no less than 20 calls and emails from people that are clamouring to be part of the program. These are companies that see the potential and want to invest in it.
The hospital community can benefit greatly with the appropriate guidance. It MUST BE appropriate and purposeful to the mission at hand. I cannot emphasize enough the importance of remembering who we serve and where we serve them. This is not a mall, Sam's Club or Home Depot. This is a hospital that serves a community in a manner that should be respectful of what those that come through the front doors are dealing with on a daily basis. This includes the physicians, nurses, environmental services, administration and volunteers. We want our front line people to experience just as much of a positive experience as those that you treat or nurture within the beds of the facility.
I believe that there is a real need that the hospital community is realizing more and more in these difficult/different times. It is a need to make the hospital experience more comforting and
appealing for the staff and visitor communities. This is so evident in almost every design element being implemented throughout the country. The first impression areas of atrium's, lobbies and vestibules are critical spaces to create that immediate comfort and "AAAAAAHHH" appeal. My dentist even knows this. I hated going to my dentist, until he put in a huge plasma TV, big comfortable recliners, field stone and wood finishes and a big area rug. This could almost describe someones living room........which is the idea. I am so de-stressed when I go in that I almost forget where I am (almost!). This is more of "the Sign Of The Times".
Our business plan provides for a net operating income of $500,000.00 annually for every 5 coffee stations MINIMUM. Can you imagine what a well designed, size appropriate and managed retail program could generate? I think it is "Time To Sign!", but that is just my 25 years of retail marketing experience talking.
I just remembered, I have a dentist appointment today. AWESOME!
Tuesday, March 24, 2009
Sunday, March 1, 2009
Productive Travels & The Competition
It has been quite a while since I have been able to sit down and update the blog page, but it has been a productive time in the field. For the last week and a half I have been able to develop some very strong relationships with vendors that will greatly benefit our clients. During the Coffee Fest in Chicago we were able to secure some great information, and validate our initiative to improve the buying power for the health systems. The approach is one of true Owners Representation and not one built on compensation from the vendor partners. It will create an environment of transparency and accountability for service from the vendor, without an incentive for the hospital system rep to promote any particular brand or vendor.
In addition, my travels to the west have solidified that the opportunities for implementation and change are vast within the healthcare community. I found campus after campus that did not have viable coffee/cafe settings to deliver high quality products or services. In turn they could not provide strong financial returns for the campus / system. Those that had offerings, were occupied by third party groups that were under performing due to placement or service. It was very inspiring to see this opportunity to still help such locations.
Our people in Arizona and Nevada have been sending over the same type of feedback on a regular basis. A recent visit recap from the Ohio market by a team member had virtually the same content.
I recently was shown some information related to some other consultant groups that have positioned themselves as guides for the retailing within healthcare. Here is an excerpt from my response to them on the issue of our competitors.
A few things to remember about "companies X & Y":
· Their expansive client list in the area of retail is not focused solely on Healthcare.
· Their clients receive guidance that is not solely directed towards the ownership of the hospital for the bulk revenues, despite what they claim. Please note their quote at the top of the Real Estate tab….“Being a landlord has never been easier!”
· The word on them is that they ultimately guide the hospitals towards some of their “retail partners” to have the space and pay the hospital a lease rate with percentage of sales. Scary familiar.
· They create spaces that consume vast amounts of capital to build BEFORE it even gets to the implementation of the systems, training or product placement. One of my current clients originally called around and many of the “clients” stated that the spaces and the selections implemented were under performing “ghost towns”.
· They are crazy expensive and a big reason (I am finding out) why most systems are afraid to look at retail. Their costs are immense on the front side and they typically charge a large fee for each hospital. This makes for a difficult and long ROI process.
· The “on going guidance / assist” is extremely self fulfilling. I would call out items such as their “Private Label” partners. This clearly has some ownership on their part, so how can they advise honestly if it is not the best product to use when they are paid on its implementation?
· TMS is not paid by the prospective vendors, designers, architects, builders, etc. Beyond the cost effective management fees, (which are part of the initial business plans) we are paid on the successes and increased volumes of the space.
· They do not approach the entire project as a true Owners Advocate. Not to overkill this, but the designs and vendors are costly on the capital side, while diverting much of the profit away from the clients.
· I can speak from personal experience that our approach of being referred to some of the largest systems from inside their own networks is working very well. The last three people that I have spoken to have never heard of either group.
My approach has been one of “less is more” right now. I purposely downplay the initial roll out of any retail as it relates to size and investment. It has been my experience over the many years of trying to implement much larger initiatives that you cannot overwhelm the clients with your grand vision. For me the image that was on the Internet a few years back of the python that tried to eat the huge alligator down in Florida is what happens to a client when you try to put too much on the table from day one (it was not pretty I can tell you). Start them off by showing the bigger potential via a simple coffee cart and/or portable café. Feed their financial minds with a true success on a smaller scale and use it as a building block. Let the bigger picture become their vision, but keep them on track.
I know you have heard this before, but I love to use this as an example of using what already exists to accomplish a goal.
When Gatorade was launching its smaller size beverage line (a long time ago) with hopes to get into the convenience stores, we were in Chicago trying to come up with a way to get it in the doors of the coolers next to the pop guys. There were some guys from California that suggested the leasing of an army of trucks plastered with the logo to get it out there. I suggested that we partner up with the guys that hated the pop guys as much as they did and use their trucks that are already going to these stores. That began a national initiative to align with the beer distributors, who had the adjacent doors. We gave them free product to put wherever they could, and paid them to do it. The rest is history as they say. I was also able to use this same system to launch Tropicana and Ocean Spray juice brands. We used what was already in existence and accomplish the goal with far less capital.
We have the appropriate audiences for what we are trying to accomplish. We need to stay true to our mission and constantly display our passion for its adherence; to the benefit of the client. I am very confident that this will “separate the wheat from the chaff”.*
* SEPARATE THE WHEAT FROM THE CHAFF - "Distinguish the wanted from the unwanted, the valuable from the relatively valueless. It is what one did literally in the ancient agricultural practice of winnowing, one form of which was to expose, say, wheat to the wind so that the chaff blew away and the grains remained. The thought appears metaphorically in the Bible, where John the Baptist, speaking of the one 'that cometh after me,' continues (Matthew 3:12) 'Whose fan is in his hand, and he will thoroughly purge his floor, and gather his wheat into the garner; but he will burn up the chaff with unquenchable fire.'." From "The Dictionary of Cliches" by James Rogers (Ballantine Books, New York, 1985).
In addition, my travels to the west have solidified that the opportunities for implementation and change are vast within the healthcare community. I found campus after campus that did not have viable coffee/cafe settings to deliver high quality products or services. In turn they could not provide strong financial returns for the campus / system. Those that had offerings, were occupied by third party groups that were under performing due to placement or service. It was very inspiring to see this opportunity to still help such locations.
Our people in Arizona and Nevada have been sending over the same type of feedback on a regular basis. A recent visit recap from the Ohio market by a team member had virtually the same content.
I recently was shown some information related to some other consultant groups that have positioned themselves as guides for the retailing within healthcare. Here is an excerpt from my response to them on the issue of our competitors.
A few things to remember about "companies X & Y":
· Their expansive client list in the area of retail is not focused solely on Healthcare.
· Their clients receive guidance that is not solely directed towards the ownership of the hospital for the bulk revenues, despite what they claim. Please note their quote at the top of the Real Estate tab….“Being a landlord has never been easier!”
· The word on them is that they ultimately guide the hospitals towards some of their “retail partners” to have the space and pay the hospital a lease rate with percentage of sales. Scary familiar.
· They create spaces that consume vast amounts of capital to build BEFORE it even gets to the implementation of the systems, training or product placement. One of my current clients originally called around and many of the “clients” stated that the spaces and the selections implemented were under performing “ghost towns”.
· They are crazy expensive and a big reason (I am finding out) why most systems are afraid to look at retail. Their costs are immense on the front side and they typically charge a large fee for each hospital. This makes for a difficult and long ROI process.
· The “on going guidance / assist” is extremely self fulfilling. I would call out items such as their “Private Label” partners. This clearly has some ownership on their part, so how can they advise honestly if it is not the best product to use when they are paid on its implementation?
· TMS is not paid by the prospective vendors, designers, architects, builders, etc. Beyond the cost effective management fees, (which are part of the initial business plans) we are paid on the successes and increased volumes of the space.
· They do not approach the entire project as a true Owners Advocate. Not to overkill this, but the designs and vendors are costly on the capital side, while diverting much of the profit away from the clients.
· I can speak from personal experience that our approach of being referred to some of the largest systems from inside their own networks is working very well. The last three people that I have spoken to have never heard of either group.
My approach has been one of “less is more” right now. I purposely downplay the initial roll out of any retail as it relates to size and investment. It has been my experience over the many years of trying to implement much larger initiatives that you cannot overwhelm the clients with your grand vision. For me the image that was on the Internet a few years back of the python that tried to eat the huge alligator down in Florida is what happens to a client when you try to put too much on the table from day one (it was not pretty I can tell you). Start them off by showing the bigger potential via a simple coffee cart and/or portable café. Feed their financial minds with a true success on a smaller scale and use it as a building block. Let the bigger picture become their vision, but keep them on track.
I know you have heard this before, but I love to use this as an example of using what already exists to accomplish a goal.
When Gatorade was launching its smaller size beverage line (a long time ago) with hopes to get into the convenience stores, we were in Chicago trying to come up with a way to get it in the doors of the coolers next to the pop guys. There were some guys from California that suggested the leasing of an army of trucks plastered with the logo to get it out there. I suggested that we partner up with the guys that hated the pop guys as much as they did and use their trucks that are already going to these stores. That began a national initiative to align with the beer distributors, who had the adjacent doors. We gave them free product to put wherever they could, and paid them to do it. The rest is history as they say. I was also able to use this same system to launch Tropicana and Ocean Spray juice brands. We used what was already in existence and accomplish the goal with far less capital.
We have the appropriate audiences for what we are trying to accomplish. We need to stay true to our mission and constantly display our passion for its adherence; to the benefit of the client. I am very confident that this will “separate the wheat from the chaff”.*
* SEPARATE THE WHEAT FROM THE CHAFF - "Distinguish the wanted from the unwanted, the valuable from the relatively valueless. It is what one did literally in the ancient agricultural practice of winnowing, one form of which was to expose, say, wheat to the wind so that the chaff blew away and the grains remained. The thought appears metaphorically in the Bible, where John the Baptist, speaking of the one 'that cometh after me,' continues (Matthew 3:12) 'Whose fan is in his hand, and he will thoroughly purge his floor, and gather his wheat into the garner; but he will burn up the chaff with unquenchable fire.'." From "The Dictionary of Cliches" by James Rogers (Ballantine Books, New York, 1985).
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