With the aging of the Baby Boom population and a growing acceptance of the subject of incontinence, the sales of disposable products for adults have increased exponentially. Today, they represent a $1.1 billion annual market.¹ While that fact is naturally

appealing to home health care businesses—which have long stocked their shelves with adult diapers and related products—they are not alone in seeking those sales.

Well-known superstores, such as Wal-Mart or Kmart, and chain drugstores have jumped on the bandwagon as well, and now pose a competitive risk to many home health care stores across the nation.

The result of that expanded competition is that HME providers have necessarily become savvier about their sales. Take Houston-based Northshore Medical Supply, which was founded by Ray Normand and recently purchased by his son and daughter-in-law, Paul and Schura Normand. Ray Normand has long focused on boosting sales of incontinence products, winning and retaining customers through a combination of variety and expertise. The result: Northshore averages $6,000 to $8,000 a month in cash on sales of incontinence products.

“If there’s one thing my dad taught me, it’s that cash is king,” says Paul Normand, who began working in his dad’s business when he was 16 years old. Schura and Paul Normand also own A&T Medical in Houston. “As a result, we concentrate on our cash business in both locations, and one of our goals is to consistently get more cash than insurance sales. We’re finding that the less insurance we do and the fewer CMNs—Certificates of Medical Necessity—we have to chase down, the more profit we’re making.”

Moving Away from Medicare
Frozen or shrinking Medicare reimbursement rates combined with Medicare’s heavy paperwork requirements hastened the Normands’ desire to reduce their reliance on Medicare payments.

“It’s getting harder and harder for HME companies to turn a profit with just Medicare business,” Paul Normand says. “What we have done in the past 10 years is shy away from Medicare, and go more to stocking uniforms and even gift items that are specialized for workers in the health care industry. That kind of stuff really helps subsidize your profits, and we have incorporated that into our business at A&T as well.”

For instance, while A&T used to do respiratory, bed rentals, wheelchairs, and walkers, Paul found that with all the trucks, employees, and billers needed for that scope of products, the profits were low. Once he downsized, profits went up.

“As anybody in this business knows, dealing with customers and having a retail store take a lot of time,” Paul Normand says. “As I downsized, I was able to find other businesses that did only the DME portion and I ended up making a good relationship with them. They didn’t do much retail, so they needed the extra insurance business, and in turn they would send me customers for orthopedic items or incontinence products.”

Selection draws cash customers
While A&T carries a range of incontinence supplies, it is still outdone by the stock at Northshore. That store carries six different types of disposable and reusable diapers, including some pull-up versions and some that feature a reusable lining. Northshore also has underpads available in numerous sizes to fit chairs or mattresses.

“What’s nice about Northshore Medical Supply is that we have 10,000 square feet of space, which means there is 8,000 feet of retail space,” Schura Normand says.

This means they have the room to stock and display all of those incontinence products. In contrast, A&T has only 3,000 square feet of space, which limits the selection it can practically display. “At A&T we are raising our business, but we are not yet focused as much on that niche as we probably should be,” Paul Normand says.

Northshore’s incontinence section is especially huge as compared to someplace like Walgreens, Schura Normand adds. “They have about four little packages of diapers on their shelves,” she says. “Also, at those kinds of stores if you ask where the products are, they’ll direct you to the aisle, but there is no one available to explain the difference between various brands.”

Expertise equals sales
Ray Normand long ago found that educating his staff about the products was crucial to sales. Staff members therefore were trained to be able to explain the differences between products, and help customers decide on the right item for their particular needs.

“If employees know the product, they can sell the product,” Paul Normand says. “For instance, we need to know whether someone is dealing with a slight or a full bladder problem, or if they simply have a ‘leaky faucet’ when they cough or sneeze. Some people need something ‘just in case’ because they can’t quite hold it until they get to the bathroom. Some men have had prostate surgery and need help with leakage, though they don’t want a full-scale diaper. Once we know these things, we can help the customer choose what is most appropriate.”

The biggest problem Paul Normand says he hears is that the diapers sold at drugstores do not hold enough fluid.

“One of the most common complaints we hear is that the diapers leak all over everything—the car, the bed, furniture,” he says. “That also brings about skin problems, and a lot of the products at the drugstore don’t have a polymer to wick the moisture away from the skin to keep it dry.”

Proper product selection can solve many of these problems and win lasting customer loyalty. “If we have a customer who consistently wakes up with wet undergarments or a wet mattress, for example, we will guide them to the product that holds 500 cubic centimeters of liquid,” Schura Normand says.

Expertise also helps offset some customers’ objections to the cost of some high-end incontinence products.

“You can train your staff about diapers and skin care products, but when they begin telling clients how much these are going to cost over a drugstore brand, that’s a problem,” Paul Normand says. “Many customers go to Walgreens or Wal-Mart and buy whatever is available, because their decisions are based on price, not quality. Our products may cost a few dollars more, but that is because they are worth it.”

To prove it, the Normands make a habit of handing out samples to their customers at both Northshore and A&T.

“They need to know why these items do cost a little bit more,” Paul Normand says. “And once they become accustomed to a higher absorbency or better fit, they don’t go back to those other stores that offer a limited choice.”

For example, one adult diaper brand sold at Northshore is superabsorbent, but breaks down to about $1.50 apiece. Once customers try them, however, Paul Normand says they quickly realize that they can use one per night versus three or four of some of the other less-expensive brands. “It saves money in the long run,” he says. “My father always said when you are comparing, you have to look at what each individual diaper costs instead of the cost per case. Samples are the biggest way to get customers. If you give them samples, you can get them hooked every time.”

To help their clientele deal with incontinence-related problems, Northshore and A&T stock adult wipes that are larger than baby wipes, skin care creams for bedsores or rashes, and pH-balanced skin care supplies.

“Those items bring them coming back in,” Paul Normand says.

And repeat sales are key to a successful incontinence product business. “Once you get them to buy these products, you’ll have them for the rest of the time that they’ll be wearing diapers,” he says. “From both a business perspective and a customer perspective, you’re solving a serious problem.”

Elizabeth Finch is a contributing writer for Dealer/Provider.

1. Overview: Urinary Incontinence in Adults, Clinical Practice Guideline Update. Agency for Healthcare Research and Quality. Available at: www.ahcpr.gov/clinic/uiovervw.htm. Accessed January 19, 2004.