A Sound Investment
The decision to target a particular vertical market isn’t simple. Some have likened it to making a financial investment—if the timing is right, your efforts could reap significant benefits. On the other hand, if the market of choice is regulated or easily influenced by outside sources, your losses could be substantial.
Because a single technology or product line doesn’t necessarily measure success in the supply-chain market, you might be wondering if it’s better to be everything to everyone. Broadening your focus across multiple markets might not pay off as big upfront, but it could be a safer investment in the end.
So, what’s a distributor to do? Research is a good place to start. To help you along in the decision-making process, Print+Promo reached out to proven experts in three major vertical markets.
Here, they discuss trending products, the selling process and hot-button issues.
1. HEALTH CARE
The medical vertical requires nurturing and patience. Clients belonging to this sector are methodical and only truly make a committed decision when a certain level of trust has been developed within the relationship—especially in matters pertaining to health care. Perhaps no one is more familiar with this than ComplyRight Distribution Services (CDS), a provider of government-compliant products and services with manufacturing locations in California and Pennsylvania, and distribution points in Minnesota and Florida. Composed of TFP Data Systems and Apex Business Systems, CDS maintains relationships with numerous government agencies, such as the National Uniform Claim Committee, the Centers for Medicare and Medicaid Services, and the American Hospital Association, to ensure full compliance of product lines ranging from tax forms and software to health insurance claim forms.
According to Jim Magdaleno, product manager for CDS, health care is the leading industry for buyers of ComplyRight products and solutions. “This industry is accustomed to dealing with government regulations, making them extra sensitive to compliance issues,” he noted. “We began serving the health care vertical by supplying medical billing forms, like the CMS-1500, through our dealers. That product offering has been incredibly successful.”
And it doesn’t stop there. More recently, CDS has expanded its product offering to include industry-specific labor law posters and subscription service, safety solutions (e.g., bloodborne pathogens training and postings), Health Insurance Portability and Accountability Act products and HR record-keeping tools. “A great example of [HR record-keeping tools] is our new health care-specific job application that asks pertinent questions about certifications, licensing and preferred shifts,” Magdaleno said.
In late December, the IRS announced it was extending the 2016 due dates for Affordable Care Act (ACA) information reporting. While the deadlines have changed, the requirements remain the same and covered businesses still are obligated to file. Specifically, businesses have until March 31 to supply employees with the 2015 Form 1095-B and Form 1095-C; May 31 to file forms 1095-B and 1095-C with the IRS if submitting paper forms; and June 30 to submit 1095-B and 1095-C to the IRS if filing electronically. “Many of our partners already have achieved significant ACA sales,” Magdaleno shared. “And since the IRS has extended the due dates for ACA reporting, there’s still time for new distributors to get on board and secure 2016 sales.”
To help dealers capitalize on this new revenue stream, CDS offers a full line of ACA products and services, including paper forms and envelopes, and proprietary software. “Our ACA software from ComplyRight is an all-in-one solution to help businesses comply with the new regulations,” Magdaleno said. “This software provides all the tools needed to create and print forms 1095-B, 1095-C, 1094-B and 1094-C, as well as e-file the form data with the IRS. The software has been a top seller for our partners.”
Magdaleno acknowledged that there continues to be “considerable confusion” surrounding ACA filing, which is why CDS created white papers that distributors can use as an additional selling tool. “We have white papers that our distributor partners can provide to their customers to help alleviate confusion and capture the sale.”
The Selling Process
When a market presents so many untapped selling opportunities, extra competition is bound to follow. Magdaleno suggested leading in with a bestselling—and mandatory—form, like the CMS-1500. Be prepared to ask prospects if they are satisfied with their current suppliers of CMS-1500 forms. If the answer is “no,” find out if their forms are compliant or if they have ever been rejected. From there, distributors can introduce other compliant products. “[For example, ask if they] know we provide health care-specific state and federal labor law postings for the medical office,” Magdaleno said.
He also urged distributors to look beyond doctors’ offices. Try targeting hospitals, urgent care clinics, nursing facilities, home health care providers, chiropractors, physical therapists, mental health professionals and dentists. Magdaleno recalled a recent order that stood out to him involving a health care processing company that had converted to high-speed Océ print technology. During processing, Magdaleno said, the company’s CMS-1500 claim forms were printing with burning marks—a cause for rejection. The reseller turned to CDS for a solution. “We explained that our forms would work for them,” Magdaleno said. “However, we insisted they try samples before committing to a large purchase. We provided samples of our forms, which are printed with soy-based ink and go through a comprehensive drying process to withstand high speed and heat.” CDS’ remedy paid off. Not only did the reseller save the job, it secured a monthly order of 200,000 forms.
There are many misconceptions surrounding the nonprofit sector, with “nonprofit” translating to “no money” at the top of the list. But the numbers tell a different story. According to the 60th anniversary edition of Giving USA’s annual report, released June 2015, Americans gave an estimated $358.38 billion to charity in 2014, up from 2013’s $339.94 billion, and officially surpassing the peak last seen before the Great Recession.
The nonprofit sector also has a significant impact on U.S. society and the economy. As highlighted in the 2014 Nonprofit Sector in Brief report by the Urban Institute’s Center on Nonprofits and Philanthropy, the tax-exempt sector in the U.S. represented 5.4 percent of the country’s gross domestic product (GDP) during 2012, contributing $887.3 billion to the economy. “And of those tax-exempt entities, 501(c)(3) public charities accounted for slightly more than three-quarters of the sector’s revenue ($1.65 trillion) and expenses ($1.56 trillion) and more than three-fifths of nonprofit assets ($2.99 trillion) during 2012,” wrote authors Brice S. McKeever and Sarah L. Pettijohn. “Comprised of approximately 1.44 million nonprofits registered with the Internal Revenue Service (IRS) in 2012, the sector has grown approximately 8.6 percent since 2002.”
But there’s more. Only approximately 35 percent of nonprofits registered with the IRS in 2012 were required to file a Form 990, Form 990-EZ or Form 990-PF with the IRS. McKeever and Pettijohn pointed out that reporting nonprofits stated “2.16 trillion in revenues and $4.84 trillion in assets.”
Perhaps Roger Buck, CDC, marketing director of St. Louis-based Flesh Co, put it best: “To me, that suggests not only do they have money, it’s a growth market.”
Nonprofit groups rely on a wide array of printed products to drive their donation and fundraising efforts (think membership cards, parking permits, address labels and direct mail). “Nonprofit groups can be very good customers, assuming you’re either in their area or are willing to travel there,” Buck remarked. “Nationally known nonprofits could have local chapters. Distributors may want to test the water first, then determine if targeting nonprofits as a vertical makes profitable sense for their company. At that time, they may want to create a nonprofit sales arm to continue the focus and momentum.”