SEVEN Ways to Grow Your AED Business’ Sales in the Next SIX Months

-By Micah Bongberg Google+ | @annuvia

There are a number of businesses within the AED industry, ranging from AED unit manufacturers, direct AED sellers, distributors, training companies, records management service providers, and candidates of all of the above. These organizations may be structured for local, regional, or national markets, and everything in between. By identifying a business model that most closely resembles yours, and analyzing attributes that have made similar businesses successful, you can increase your AED business’ sales in a highly competitive market. By assessing the general dynamics of the marketplace, and then the most common structure of AED distribution businesses, you can identify seven achievable ways to grow your AED business in the next six months.

 Existing Nature of the Automated External Defibrillator (AED) Sales Market:

 AED Manufacturers:

Each of the AED unit manufacturers has independently analyzed the AED sales market in order to determine a sales structure that will help them maximize their sales. Currently, there are six major AED Unit manufacturers with strong sales in the United States: Cardiac Science, Defibtech, HeartSine, Philips, Physio Control, and Zoll. An analysis of these manufacturers sales structure and philosophy can be broken down into the following three categories:

• Strong Emphasis On Direct Sales: While most of the AED unit manufacturers do not focus the bulk of their efforts on direct sales, it is the preferred approach of at least one of them. Presumably, the direct sales approach is preferred, as it gives the AED unit manufacturers more control over their product’s messaging when delivered to sales prospects and higher margins on closed deals in that they do not have to include the distributor in the sale’s profits. The downside to any company that focuses on direct sales is increased labor costs and associated expenses, as well as the perception of competition between the manufacturer and distributor. Thus, a decision must be made as to whether the benefits of strong messaging and higher margins outweigh the increased expenses of a larger labor force.
• Direct & Indirect Hybrid Sales: Most AED unit manufacturers use a hybrid sales approach that combines direct and indirect selling. Each of the manufacturers that use this approach divides the sales market differently. Some prefer to “cherry pick” the more lucrative markets directly, such as government, hospital & medical, Fortune 1000, and EMS and allow their indirect distributors to sell to the remaining “commercial” market. The benefits of this approach are higher-margin sales to large, critical accounts, while retaining product messaging, and revenue with lower ongoing expenses.
• Indirect Sales Only: Two AED unit manufacturers sell only through their network of distributors. These manufacturers cultivate sales opportunities internally and pass them off to their trusted network of distributors to close opportunities and process order fulfillment. This method allows for broad market share with low overhead costs. The downside to this approach is a possible loss of messaging when a manufacturer gives a lead to a distributor, as there is a high reliance on trust between the parties.

 AED Distributors:

In the United States, AED unit distributors typically fall into one of the several categories. Certain distributors carry one AED unit manufacturer’s brand exclusively, although, most prefer to carry several options. Diversification of inventory and AED unit types offered by distributors appears to be an increasing trend, perhaps due to the detrimental impact AED unit recalls can have on small distribution businesses. Additionally, AED distributors are finding an agnostic approach to selling helps generate increased sales opportunities. Commonly, “getting in front of” customers is the most challenging part of the sale. Once in, distributors benefit from carrying a diversified option of models, thereby increasing the odds that they will have what’s right for the customer and the odds of closing a sales opportunity. The following are the most common classification of AED distributors:

• Exclusive (“Master”) AED Distributors: Exclusive AED distributors carry only one AED manufacturer’s equipment. Exclusive distributors have close relationships with the AED unit manufacturer with whom they’ve partnered and such relationships lead to sales leads and increased sales opportunities. As the name implies, master distributors sell a high volume of products, have the best pricing, and typically sell to a group of one or more sub-distributors.
• Regional (“Sub”) distributors: Most AED distributors are regionally-based e.g. Southern California, and commonly sell AED units on a part-time basis through a relatively passive approach. Many regional distributors have a primary career in the field of paramedicine, such as EMS or Fire Protection and, typically, buy products from a Master Distributor at a discount.
• Large National Distributors: This is, perhaps, the rarest distribution sales model, due to barriers such as branding and high start-up costs. In the United States, there are a select group of large, national, distributors that emerged early in the AED industry. Coming from industries such as first aid supplies and facility equipment sales, large national distributors with lengthy client lists, existing market presence, and brand recognition, added AED units to their product offering as an additional method of generating revenue. While they’re generally not focused experts in resuscitation, they are in front of customers daily. Additionally, with techniques such as in-house financing, large national distributors have been able to lock in sales utilizing monthly fees (plus a premium in the form of interest income).
• Online Retailers: Perhaps the most common AED sales approach is that of online retailers. Online retailers benefit from low overhead and, reduced sales prices to spur sales opportunities. Due to the passive nature of online selling, online retailers commonly supplement online sales by responding to public bids and similar sales tactics. Online retailers thrive due to low acquisition costs, broad online advertising, and vast inventory that allows for fast, accurate order fulfillment.

As noted, while the nature of the AED manufacturers’ sales industry varies from direct-to-hybrid-to-indirect sales, and the AED distribution business is equally diverse, there are common challenges and opportunities available to all organizations in the market.

The following is a list of the top Seven Ways to Grow Your AED Business in the Next Six Months:

1. Reduce Internal Labor Costs and Administrative Needs

While on the surface, reducing internal costs and administrative burdens doesn’t seem to be a likely driver of growing a business, it is. Each hour saved from performing administrative functions, like paperwork, is an hour that can be re-deployed to a revenue-generating activity, such as calling clients or prospecting new accounts. And each dollar saved in labor costs can go to marketing and/or new sales staff. In the AED industry, AED manufacturers and distributors are surrounded by bureaucracy and red tape, consuming an immense amount of time, which affects the bottom line in the form of direct and indirect costs. Below are two brief examples of how AED distributors are met with bureaucratic complications:

• In many states, AED distributors must notify the “local EMS” of new AED units that are sold and deployed. Unfortunately, the standards, forms, and requirements vary from county-to-county and state-to-state. As an example, selling a ten-unit deal to a new health club franchise could result in finding, completing, and filing ten different forms – a task that could easily consume one-to-two full working days. As sales increase, either: (a) the problem is compounded, consuming more time or (b) the task is not properly completed, increasing risk for owners and distributors.
• If an AED unit is recalled, it is the AED unit manufacturer’s responsibility to track down the AED owner, notify them of the issue and communicate their recommended corrective actions. Since AED units are commonly sold directly to a “master” distributor, re-sold to sub-distributors and finally delivered to the end-user, tracking the location of AED units is challenging, time-consuming, and burdensome. Additionally, if appropriate action is not performed, the AED owner may be in the possession of a non-functional AED unit, and the manufacturer, distributor, and owner could be subject to increased liability. Tracking the location and ownership information of AED units and then verifying acknowledgement and receipt of the recall and corrective action can take AED distributors and manufacturers months. Unfortunately, this challenge isn’t as rare as one might hope.

The solution to these issues and the way to reduce internal labor costs and administrative needs is to subscribe to an oversight service that can deal with these issues automatically for the distributor. An oversight service is capable of recording the serial numbers and locations of every AED sold and a good service will also notify the local EMS of the presence of the AED. An AED oversight service will take the task of compliance out of the hands of the individual, freeing up administrative time, reducing labor costs, and human error – all while saving time and money that can be better used for revenue-generating activities.

2. Automate the Retention of Residual Sales – Forever!

With every AED that is sold, depreciable parts such as batteries and electrode pads are required to keep the AED in compliance. AED owners need to locate distributors who can help them get replacement accessories when they need them. Every AED requires a combination of the following:

• Replacement Batteries: An AED battery is typically non-rechargeable and lasts anywhere from 2-7 years. Customers must not only be made aware of when their battery will expire, but also where they can purchase replacements. All customers want a reliable source that can get them their replacement accessories on-time, before they expire.
• Replacement Electrode Pads: the adult and child electrode pads of each AED unit need to be replaced whenever the AED is used and any time after the pads are opened. Additionally, electrodes have a far shorter lifespan than most batteries and will need to be replaced more often, commonly every 2-3 years.

AED owners must replace these disposable items and AED distributors have a strong financial incentive to provide the sale. On its surface, a $35 pair of electrode pads and a $150 battery may not sound like an appealing sales opportunity or enough to become the focus of one’s time, but what if the sales could be captured and closed with little-to-no effort, while retaining high-margins and full brand recognition? Assuring your customers that you will be able to provide residual accessories for the AED years down the line will guarantee that they keep you on as a source for their safety needs in the future. It can even earn you referrals. A strong AED Oversight service, such as Arch, can automate residual sales – forever. By automating the process of alerting your customers when it’s time for a replacement, you become the source that they rely on for the replacement of these items.

3. Add Important (Mandatory) Complementary Products to Each Sales Order

Automated External Defibrillators are Class III medical devices, subject to strict oversight by the FDA. One requirement is that AED units are prescriptive units, like other Class III devices and drugs. Each physician that approves an AED program is granted the authority to require and impose the restrictions and ownership practices they see fit. As all AED industry professionals know, AED units are easy to use with little-to-no introduction and oversight, however, proper medical direction and ongoing oversight is critical for several reasons. In addition to FDA mandates, over 40 states require specific medical direction of AEDs and AED programs.

• Changes in resuscitation standards: Every five years the American Heart Association convenes to review research and evaluate their AED-related curriculum. Any changes to the standards should be articulated from the AED’s Medical Director to the AED owner.
• Importance of CPR/AED Training: While CPR may not be required to operate an AED, and studies have shown untrained users successfully using AEDs within minutes, training can speed up the time to defibrillation by improving the recognition of sudden cardiac arrest, understanding the need to search for, locate, or call for an AED. Every second counts and trained responders act faster than untrained responders. Some states require AED/CPR training for “anticipated” responders. Additionally, legal protections may be stronger for trained responders even in states where training is not mandatory.
• Ongoing Maintenance Needs: The best AED Medical Directors know when an AED unit needs maintenance or has been recalled. And, aside from advising on day-to-day activities and routine program management, an AED medical director can communicate important, “big picture,” issues to AED owners. They also provide a valuable service by reviewing the AED unit’s EKG after it has been used.

Fortunately, solutions exist to help keep AED Owners in compliance with state and federal laws at an affordable rate, while offering AED distributors a supplemental source of revenue. The most successful distributors package online, cloud-based medical direction and oversight services into every AED unit they sell. If their clients aren’t interested in exploring the benefits of such services or aren’t persuaded by the value-add services such as Arch allow AED distributors to add their clients’ information to the medical direction and oversight system for internal use, so that they can track important product information for recall assistance and disposable product sales opportunities.

4. Offer & Sell Truly National CPR/AED and First Aid Training

The selling-point and deployment of an AED is only the penultimate step in a several-step client engagement. In conjunction with, or prior to, providing an AED, all owners should train their staff in how to use it, how to recognize sudden cardiac arrest (SCA), and how to perform CPR. Rather than focusing efforts on a narrow territory or walking away from business opportunities, package all your sales with affordable and, perhaps, mandatory, CPR/AED training to maximize your profit potential, while providing your customers with a national, one-stop-shop experience.

AED distributors selling equipment nationally e.g. through an e-commerce website, can increase sales by also providing training on how to use the AED, no matter where customers are located nationwide. Training comes with a range of benefits beyond the extended sale. Like replacement accessories, CPR training needs to be renewed every two years for each employee who is a responder for the AED location and becomes another aspect of customer-retention. Providing replacement accessories and selling customer training certifications, instantly turns regional AED “sub” distributors into national organizations.

But what if you’re not a current training provider? How can you ensure a high-quality training experience for your customers without a loss of quality control? Fortunately, a few options exist. For instance, AED distributors that use the Arch AED Management Solution have access to Annuvia’s national team of instructors all of whom are healthcare providers with years of experience responding to, and teaching CPR. Annuvia’s instructors are strategically located across the country and available, on-call, to all of our partners. Importantly, these experienced training providers don’t only teach high-quality training to your clients, but they do so using your firm’s name and brand – while giving you an opportunity to make money selling affordable, market-rate services that your customers need and desire.

5. Offer and Sell Multi-Year Deals

Customers know that it saves to pay for upfront deals, and buyers feel confident in a seller that can guarantee them that not only will they be able to sell them a product, but they can provide all of the services that they are going to need for years to come.

Selling a multi-year deal is a great way to lock-in the customer upfront and guarantee repeat business. Additionally, multi-year deals free time by reducing the number of quotes, orders, and invoices AED distributors have to process. Whether offering oversight, training services, replacement accessories, or a complete package, a strong oversight service will greatly simplify the processes of alerting customers to upcoming needs. For instance, Arch shows and displays all account details so AED owners always know where their program stands.

6. Use (a White-labeled) Professional Program to Differentiate You From the Crowd

As the aforementioned growth opportunities articulate, having an oversight program available to customers can be a vital tool in managing your records and your client’s AED data, while spurring new business opportunities. Creating your own program from the ground up is an expensive and time-consuming endeavor, and with the right options already existing in the market, it’s no longer necessary. With relatively few options available, partnering with another company may mean that you have to use their brand and logo. This can be overly intrusive, especially if you sell products for multiple manufacturers and desire to keep your vital AED data private. Given today’s competitive landscape and the ownership structure of the current AED software providers, these risks are validated. How should you choose a program that will fulfill the needs of the customer and still let you use your own branding that personalizes and individualizes your company?

You will need to choose a service that allows you to import your company information into a landing page that customers will see when they are accessing the oversight service – all while retaining your brand, identity, and contact information. With Arch, you control the messaging, display, and even how (and by whom) your customer’s inquiries are processed. This directly leads us to the final tip to grow your AED business in the next six months:

7. Partner With An Innovator

Without the proper tools to maintain your customer’s AED compliance, they will eventually seek other means; there are companies out there that can provide the whole package for them. On the other hand, there is no reason to invest the money and time into designing your own oversight program when the right one may already exist for you. Partnering with an innovative company that can provide the most comprehensive online oversight service allowing you to display your own company logos and autonomously manage your customer’s accounts is available today. This oversight program will help you:

• Streamline AED sales.
• Manage your customer’s compliance.
• Manage your customer’s training.
• Assist you, as a distributor, in the event of a recall.
• Allow you to maintain your own professional branding and distinguished sales strategy.

Annuvia addresses this issue by adding new enhancements and frequent updates to the arsenal of services it provides to Channel Partners for use with their direct clients. For instance, the Arch service was the first to:

• Integrate e-commerce with AED medical direction – so your customers can search for what they need, when they need it, and you keep the profit.
• Offer a mobile app – so customers can perform readiness checks and file support tickets on their smartphone while they’re in front of their AED units, rather than using paper records or walking to-and-from their computer terminal
• Automatically register AED units with the nearest dispatch center – so customers know their AED is on file with the nearest 911 call center and the 911 operators know your customers have life-saving AEDs available.
• Integrate helpful color-coded maps – so large customers can quickly view their AED program’s status in real time.

Many of the largest AED program management services, including those built and maintained by the AED manufacturers, hire outside website developers to build their platform. Once built, the code is handed over to the buyer and updates and “bug” fixes are rare due to the costs involved, let alone time spent developing and launching innovative technologies. In fact, some of these services have only offered 2-3 major improvements since launched almost a decade ago!

With the right partner, you can be on the forefront of the newest innovations for our industry. Arch combines compliance innovations with emerging technologies to map out your client’s AED program from everything to placement location, the names and qualifications of responders at each location, the type, model, and identification numbers of each AED your company has sold, and the expiration dates of those items. Assurances of this kind will keep customers for years, and help increase sales by increasing the message of safety, reliability, and innovation.

By the end of 2012, Annuvia will introduce a new innovation that’s the biggest thing to hit the AED market since biphasic technology. Only existing Arch distributors will be the first in line to offer this exciting innovation to their clients!