Twelve-Percent Solution

Edition: July 2006 - Vol 14 Number 07
Article#: 2437
Author: Repertoire

Combine over-the-top service with adaptability and a knack for identifying profitable niche markets, and you have the makings of a successful — and growing — business. That’s certainly true for Medico-Mart, based in Waukesha, Wis., a suburb of Milwaukee.

The 12-percent bleach solution from the local pool supply house says it all. “We have a customer that requires a 12-percent bleach solution,” says Harlow Wilford, VP of marketing. “There is, I assume, some place you can buy a 12-percent bleach solution and pay a fortune for it,” he says. “But I pick it up at the local pool supply house, put it with the customer’s order, and ship it to him for dollars a gallon. That’s one of the things that makes people think of us. We tell our customers, ‘Either we’ll get what you want, or we’ll tell you where to get it.’”

It’s so second nature to Medico-Mart that no one in the company, not even a driver on the dock, questions things like the bleach solution. “They assume it is going to some customer, since we don’t have a swimming pool at Medico-Mart,” he jokes.

Adaptability

Medico-Mart was founded in the 1930s by a group of Milwaukee-area pharmacists. In those days, pharmacists supplied doctors not only with pharmaceuticals, but with supplies as well, says Wilford. At some point, they sold the company to a group of doctors, who hired Gerald Walsh Sr. to run it. (Eventually, Walsh bought the company. Today, his son, Gerald Walsh Jr., runs it.) Under Walsh’s direction, the company pursued the physician market, and began actively promoting its products and services. In other words, it began to take on the look of a modern distributorship.

Wilford joined the company in 1997, after 30 years of sales experience with Ames Laboratories (later, Miles Laboratories, and ultimately, Bayer AG), which produced a variety of diagnostic products, including the first glucose meter. In February 2004, Medico-Mart brought on Barry Wormington as VP of sales to pursue new niche businesses, including dialysis and blood centers, as well as long-term-care.

For 70 years, the distributor has continued to service the Milwaukee area, but it has expanded its reach throughout Wisconsin, the Upper Peninsula of Michigan, and northern Illinois. It has six reps on the street, most of whom have been with the company at least 15 years. “I’m coming up on 10 years here, and I’m the junior guy,” says Wilford. Only Wormington is more junior.

Last September, the company moved into a new distribution center and office in Waukesha. Located on 18 acres, the facility is expected to help Medico-Mart stock more than enough supplies to service its physician and long-term-care customers.

Conduit for products and knowledge

“Service is part of our company’s culture,” says Wilford. Tracking down hard-to-find products, such as the 12-percent bleach solution, is an important part of its offering. “My research leads me into all kinds of areas, which may or may not be directly related to medical supplies.”

In fact, Medico-Mart’s primary mission is to serve as a conduit between manufacturers and customers, says Wilford. Manufacturers introduce products that meet customers’ changing needs, lead to improved patient care, or simply represent a better way of doing things, he says. Examples include electronic diagnostic equipment and power exam tables. To simply replace a physician’s old box table with a new one might be doing him or her a disservice, says Wilford. “It’s our job to explain to that doctor, ‘That’s not the product you should be looking at, and these are the reasons why.’”

Customers might not always be eager to make the change. Perhaps they find it difficult to afford new technology, because reimbursement is flat or declining. “[That customer] may look at you and say, ‘You’re kidding.’ But our job is to review what’s new and efficacious for the physician and patient,” says Wilford.

“I imagine in the 1930s, somehow, the patient or insurer paid for [new technology],” he says. “Now, if you have something new and innovative, you have to validate why you’re going to [sell] it. And the distributor’s job is to provide the rationale for it.” Medico-Mart reps present new products in terms of disease management, but respect the economic constraints that their customers face. “Ideally, if money were no object, we’d all be driving Bentleys,” says Wilford. “So where do you draw the line? That’s a collaborative thing between the customer and you.”

What’s more, the distributor is responsible for making sure that the products it sells fit into the customer’s practice and workflow. “It’s consultative selling,” says Wilford. “You have to sit down [with the customer], and sometimes you don’t know what will work in that practice. So it’s trial and error, and you try to avoid the errors.” The worst thing, of course, is to sell something that won’t produce a return for the customer. “If you’ve been dealing with clients for years and years, to sell them something they don’t need destroys the relationship.”

In a sense, then, the distributor is a conduit not only for products, but for education, he says. That’s particularly true for physician customers. (Hospitals presumably have staff resources available to help them judge the clinical and economic merits of new technology.) Nor is he talking just about product education, but about education on new regulations, such as sharps safety and hazardous waste disposal. In partnership with Welch Allyn, for example, Medico-Mart reps collect old lithium batteries and makes sure they are returned to the manufacturer for proper disposal.

“Some refer to this as ‘added value,’ but to us, it’s second nature,” says Wilford, adding that routine ride-alongs with manufacturer reps “are learning experiences as well as selling experiences.”

Niche-seeker

As Medico-Mart looks ahead, it sees opportunity in niches that other companies might not. “Medico-Mart has been around for 70 years,” says Wormington. “It has always picked its niche and gone for it.”

Since Wormington joined the company two and a half years ago, he has been looking at businesses that fit Medico-Mart’s “niche mentality.” As a result, the company has created specialty programs for dialysis and dental practices, and it now serves as a prime vendor to the Blood Centers of Wisconsin. Wormington expects that its foray into the long-term-care and home-care markets will fit the niche mentality. Certainly the new distribution center in Waukesha positions Medico-Mart to provide nursing homes with some of the bulky items they use most often, such as incontinence supplies.

In the long-term-care market, Medico-Mart is up against some tough national competition, including McKesson Extended Care, Medline and Gulf South Medical Supply. But Wormington believes Medico-Mart can succeed in the marketplace. Its membership in Nashville, Tenn.-based ABCO is one reason why, because it gives the distributor access to a wide variety of products at competitive prices.

But an even bigger advantage is the fact that it’s a local firm. “We have local customer service people with years and years and years of experience,” says Wormington. “They have a knowledge base and the ability to source and get at things.” Medico-Mart is proud of its high fill rates, which Wormington says routinely exceed 98 percent. And its local drivers make sure they service the customer correctly, he says.

“What sets us apart from everybody else is the amount of experience that’s here, the customer service, the sales staff, and the fact that we don’t just go the extra mile, but many extra miles to make sure our customers are serviced the way they should be.”

Medico-Mart can’t be everything to everybody. “We won’t have 14 lines of gloves,” says Wormington. “Instead, we’ll have one and maybe a backup.” But what it lacks in SKUs it makes up for in other ways. And that brings the conversation back to service.

“Our mantra is ‘Service is the difference,’” says Wilford. “Service and responsiveness to the customer. We are a size in which we can respond and serve a customer without being encumbered by a bureaucracy and a chain of decision makers who take forever to decide whether you can or cannot help the customer.”

If push came to shove, everyone in the company — vice presidents included — would roll up their sleeves and sell, fill trucks or “do whatever it took to take care of a crisis,” adds Wilford. “At our Tuesday morning marketing meetings, I joke that our account managers have to remember who they work for, because the lines can sometimes get blurred in their advocacy for the customers. If you were to sit in on a meeting and listen to them plea for their customers, you’d understand what I’m saying.”