For a secondary profit center with a high rate of return, offer sleep products to your patients

The sleep-service provider market is expected to see double-digit revenue growth for the period 2004–2009. Nearly 44 million Americans have reported sleep-related disturbances, and another 35 milion may need treatment based on new studies linking sleep apnea to hormonal and cardiovascular disease.¹

Chiropractors can see high profit margins by tapping into this market. Chiropractic, in combination with complementary and alternative therapies, has proven effective in diagnosing sleep disorders and delivering treatments that offer the promise of a better night’s sleep. Sleep products can serve as a secondary profit center that offers a high return on investment (ROI). Chiropractic Products spoke with two experts to find out how DCs can make this a successful venture.

Jackie MacPherson is vice president—administration, Therapeutica Inc, Toronto, Ontario, Canada. Philip Mattison is president of Core Products International Inc.

Why are sleep products a good investment as a secondary profit center for chiropractors?

MacPherson: They will help their patients stay well between appointments, which makes for a happier patient. The Therapeutica Sleeping Pillow helps with the recovery of whiplash patients. It works in conjunction with the chiropractor’s adjustments by keeping the patients’ spine in alignment sleeping on their back or side and supporting their upper back while sleeping on their back. Most people do not realize the benefits of the proper sleeping pillow.

Mattison: High-quality support pillows are an excellent product for chiropractors to dispense as they relate directly to the patient’s ongoing treatment and well-being. The doctor is in a perfect position, knowing the patient’s needs, to recommend and dispense the right type of pillow for each particular patient.

The combination of the chiropractor’s expert treatment in concert with advice on product selection solidifies a positive relationship with patients and enables the doctor to make a fair profit, versus the patient possibly selecting the wrong product from a retailer or drugstore.

At Core Products, we have created Product Merchandising Display programs with educational patient brochures and proven retail-point-of-sale materials that make it easy for chiropractors to display and recommend products their patients need as part of their overall practice and commitment to each patient’s well-being.

What steps are involved in setting up this secondary profit center, and what are the startup costs? Which products are a must?

MacPherson: To set up an account with Therapeutica, chiropractor only have to fax their clinic letterhead to us at (866) 348-5721. This shows us that they are entitled to doctor pricing. If they have never tried our products, with their first order of each product they will receive one free (for their evaluation). They can either stock them or order as needed. Which products are a must? The Therapeutica Sleeping Pillow, Back Support, “new” Auto Support, and “new” Anti-fatigue floor mat.

Mattison: Getting started is as easy as dedicating some space in your waiting room to feature a product display. We like to say that in the space of one chair you can turn your waiting room into a profit center. The key for your clinic’s success is selecting products that will satisfy your patients’ needs and finding and working with suppliers who have high-quality products and who have developed programs that make you competitive with retail.

Initial startup costs can be as minimal as your first investment in a single-pillow display package. A complete pillow display such as our TriCare Pillow Display program, which includes free rack and support materials, has a suggested professional price of $330.

As far as “must” products, surveys indicate that pillows are the most popular products stocked in chiropractic offices. I would also suggest that you select only the highest-quality brands, but then I might be slightly biased since we are known for our pillows.

What type of return on investment can be expected?

MacPherson: Besides having happier patients, DCs can expect to supplement their income. ROI is approximately 50%.

Mattison: The exact return on investment will depend on the type of products selected, any discounts or specials your distributor may offer, and the price at which you choose to sell the pillows. Using the TriCare Pillow program as an example, if you sold everything at suggested retail price (which happens to be listed on the display), your $330 initial investment would generate $520 in cash revenue and $190 in profit each time you sold all of the pillows on the rack.

What literature, patient education, or marketing/promotional tools do you provide to help DCs market these products?

MacPherson: Brochures, display boxes, a display stand, a helpful hints sheet, a video, pillow measuring tools, and a “Try me” back-support sample for the waiting area.

Mattison: At Core Products, we provide free comprehensive programs that include waiting-room displays, treatment-room posters, and patient brochures. All of these items have easy-to-read selection guides or sizing charts and information that allow your patients to learn more, ask better questions, and make better decisions about their health care. With suggested retail prices printed right on the literature, your patients know up front what to expect for costs and can feel comfortable consulting with you about products for continued good health. The actual purchase can then be handled by your CA or office manager.

The free marketing materials, especially the patient brochures, can be used in your clinic, at local health fairs, and as mailers to your customer base.

What are some of the hot new sleep products currently available?

Mattison: There is a trend to higher end or luxury products. Mattress and pillow products continue to get more plush (and higher in price) so that baby boomers like me can be more comfortable. Hotels are now refitting their rooms with high-end mattresses, pillows, and sheets.

At Core Products, we recently introduced the AquaCore pillow. It is a unique, 3-in-1 pillow with luxurious high loft. It has components that the patients can adjust for their particular comfort and support needs. After all, our company motto is “Making your life more comfortable.”

MacPherson: The Therapeutica Sleeping Pillow. CP

Reference
1. Frost & Sullivan. US Sleep Service Provider Markets, Executive Summary. March 2005. A811-56.