Taking HME to the Max

“What if we could create a store where people could see themselves as they might be and not as they are?”

Michael Feuer is successful for two reasons: He doesn’t play golf and he looks at business markets through a different lens. “I think my real key to success is I don’t play golf. [Instead] I think about these things all the time,” he says.

He isn’t thinking about the drawbacks and challenges of a particular market. It’s not that he’s blind to them, it’s just that they aren’t his focus. What Feuer looks for when he delves into a new market is possibilities. What could it be?

That’s what he got to thinking about several years ago after he had sold OfficeMax, opened Max-Ventures (a venture capital/consulting firm in Cleveland) and was searching for a new business. He dredged up an old idea from 1987, when he conceived the OfficeMax concept.

“When I started OfficeMax in 1987, I had three ideas. One was PetMax, one was HealthMax and one was OfficeMax,” he recalls. He quickly dispensed with PetMax because he’d never had a pet. He ditched the idea of HealthMax because “the demographics weren’t right.”

Twenty years later, though, it was a different story. “I started looking at HealthMax again and recognized that with the baby boomers, the world was changing.” He notes the statistics: more than 100 million Americans over the age of 50, baby boomers who are living healthier, more active lifestyles than their parents — and who, as caregivers, may be taking care of their parents.

Then came the 2008 presidential campaign and the emphasis on health care reform. “I sort of had this ‘aha’ moment,” Feuer says. He started doing his homework, which included visiting traditional HME stores.

“Dirty-window stores, I call them,” he says frankly, adding that most of the stores he visited featured dusty window displays that looked as if they hadn’t been changed in years. He describes the interiors as dismal and dreary, with boxes of products and uninspired displays.

“The people were not upbeat,” he says. Often when he asked about products, the employees couldn’t answer his questions. If a customer felt bad going into the store, it seemed to Feuer he or she would feel worse coming out.

Here was something Feuer could improve on. HME was a market with possibilities.

“What if we create a store where it is bright, exciting, where it is colorful and people actually know about the products?”

The savvy businessman did his due diligence. He learned all about the challenges of the market, including Medicare, the Centers for Medicare and Medicaid Services’ impending competitive bidding project, insurance, accreditation, surety bonds, reimbursement cuts and the products themselves.

None of it fazed him.

“I started OfficeMax during the second greatest stock market crash in 1987,” he says. “The challenge and the opportunity are exactly the same — anticipate what the customer needs and then meet or exceed their expectations. I think most people make it too damn hard. It’s not that hard.”

If anything, his research helped define his niche. “We are not fighting with any drug store chains,” he says. “We are carving out a different niche that has not been maximized. It’s middle- to higher-end income people who are willing to pay for products.”

Feuer opened his first store in Westlake, Ohio (Cleveland), in January, followed by stores in Sarasota and Naples, Fla. The fourth store opened in June in another Cleveland location at 5,000 sq. ft. There was no magic formula for deciding where to locate the stores, he says. His company was in Cleveland and he has a home in Florida.

“You have to stay close to your customer,” he says. “You must listen to the customer and you have to interpret what they are saying because most people don’t say what they really mean.”

Feuer’s new stores look nothing like those he visited when he was researching the HME market. For starters, they have bright orange walls. Store hours are liberal and everything is out on open display and marked — sleep apnea solutions, mobility, wound care, diabetic supplements, etc. — and reachable so customers can examine the products.

This is a merchandising tactic Feuer used at OfficeMax. “In the late ’80s and early ’90s, people bought office supplies when the retailer wanted to be open,” he says. “Everything was in a brown box and no one knew what it was. With OfficeMax, we took it out of the box and developed drama and theater and let people see it and play with it.”

The store design includes three distinct sections, with the front third devoted to wellness solutions and a “magnet area” for seasonal products to capture attention when customers enter the store. The middle section is focused on information, complete with an interactive Max-Awareness information kiosk and a One2One Wellness private consultation area.

DME occupies the back third of the store with bath safety products, incontinence supplies and mobility aids from canes and walkers to wheelchairs and scooters. The store also offers a broad selection of orthopedic products beyond the range found in drug stores.

“When people first come in, they are shocked because they don’t know what it is,” he says. “It is like a toy store for adults. It has got products that you would never, ever think about. We are like Sharper Image for health care because we carry things no one else has thought to carry.” In all, the stores currently have 7,000 products.

“We’ve got everything under one roof — high-end vitamins, supplements, items for treating sports issues, footwear. We’ve created a store with all kinds of stuff,” Feuer says. And there is more coming. In December, the company will launch a website with 10,000 items, he says.

“What if we could create a retail store where every item from head-to-toe wellness focused on three things: enhancing life, preventing health issues and treating health issues?”

Feuer doesn’t see Max-Wellness as a store that sells equipment and health products. “We sell freedom machines. If you need a walker or a rollator or a wheelchair or bathroom stuff, you do it because you want to do something more than you do now.”

Max-Wellness, Feuer says, is not about problems. It is about solutions.

“We want to talk to customers. We are about finding and providing answers and solutions. We’re not about products,” Feuer says. “We want [people] to leave with one thought — ‘They really care and they gave me something right when I walked in.’ Maybe that is just advice.”

With that in mind, the company hires bright, engaging sales associates it trains to be “wellness advocates.”

“I would rather hire someone with a good background in a department store than someone from health care,” Feuer says. “You can take smart, competent people and teach them anything.” A typical store employee roster includes a wellness director, a manager and two or three full-time employees, plus a cadre of part-timers.

Training at Max-Wellness isn’t just a tour of the store and a session on the computer. “This is one of the most expensive training [programs] in the business,” Feuer says, noting that each employee gets 40 to 60 hours of training. “We have a training department and we have done it through technology. When a store opens, we have a week at Max-Wellness Academy. If we do our job correctly, we will never be done.”

Just about the first thing new employees learn is the Max-Wellness mantra: “Do no harm.”

“If we don’t know something, we tell the customer to see a doctor or a health care provider,” says Feuer. “Do no harm. You can really screw people up if you don’t know what you are talking about.” Employees are trained not only to supply quality information but also empathy when delivering sensitive answers to personal health care questions.

To help both employees and customers, Max-Wellness created a computerized knowledge base that health-conscious customers hungry for information can tap into. “I would call it WebMD on steroids,” Feuer says of the Max-Answers digital information stations in each store. An assortment of health books under the sign “Wellness-answers to go” is housed nearby.

Feuer, who says his job as CEO of Max-Wellness boils down to being a “teacher and a pot-stirrer,” spends much of his time walking around stores, talking to customers and getting ideas. As an example, he says he was standing at a prescription counter at another store when an employee announced over the loud speaker that a gentleman’s prescription for Viagra was available. That gave him the idea for a private consultation area. “Dignity is what it really gets down to,” Feuer says.

“Always look through the lens of the customer.”

That old business chestnut “The customer is always right” rings a bell with Feuer. It’s customers you need to attract, it’s customers you need to keep and it’s customers who will sell your products for you. So Feuer believes in giving customers what they want; hence, the liberal store hours, the emphasis on solutions versus problems and the attention to each customer.

“Everyone is welcomed,” he says, adding the wellness advocates think first about the customer and then what might be the best solution for them.

“Sometimes you have to tell [customers what they need] before they know they need it,” Feuer says. “You introduce something to somebody before they even knew it existed.”

The idea is not to sell a specific product but to provide answers — the right answers — for healthy living, he says.

“It really starts and ends with customers. And the positives and the negatives are the same. They don’t give a damn about your procedures.”

Consequently, Max-Wellness has no return policy. “Bring it back any time,” Feuer says. In his eyes, there is another opportunity. If someone brings a product back, Max-Wellness can help find a better solution.

“If you can become their source for questions and healthy living, you’ve got a business,” Feuer says.

It’s also important for repeat customers to feel like the employees at Max-Wellness know them. So the company has established a rewards program that tracks what each customer purchases, information that aids in serving them better when they come back.

And they are coming back, Feuer says. “We are getting an 80 percent return rate,” he notes.

This is in spite of the fact that Max-Wellness does not currently accept Medicare. “We will take Medicare eventually,” Feuer says. “We are dealing with a high-income customer; under Medicare, you can only buy a wheelchair once every [five] years.

“The problem I have with Medicare,” he continues, “is the inefficiency. We don’t get to make the rules, we just have to play by them. We would do anything that we could to make money and help our customers. I think there are going to be radical changes in Medicare. I think the Medicare you know today won’t be the Medicare of the future. But eventually — credit cards, cash, third-party, Medicare — we’ll take whatever it takes.”

In Feuer’s view, a company should be fluid, ever changing. “We have a very focused strategy: to learn,” he says. “We’ll never be done learning, so we will continue to change. We are in answers for healthy living. A year from now, the answers for healthy living will be something we haven’t thought of today. So we are not limiting ourselves.”

In the end, it all goes back to the customer.

“The way to success is to have an open mind and to think in terms of reverse — through the customer’s ideas,” Feuer says. “Then all of a sudden, the company gets better and more prosperous.”

Max-Wellness CEO Michael Feuer might be the new kid on the block when it comes to home medical equipment, but he’s been around the block when it comes to business.

So the co-founder of OfficeMax, the office supplies mega-store with 1,100 locations — which he sold in 2003 for $1.5 billion — knows a market with potential when he sees it. And despite all its current overwhelming challenges, Feuer doesn’t view HME as a dying health market. Not by a long shot. No, he sees the HME sector as ripe with exciting possibilities, a segment with a big future — but it’s going to take a different kind of business acumen to tap into that future, he believes, and he is up for it.

Since the beginning of this year, Feuer has opened four Max-Wellness stores and he’s planning to open 10 to 14 more in 2011.

“The timing,” he says, “is darn good.”

Feuer-isms: Business Rules to Live By

• “Look at something and find out how to do it differently.”
• “You have two seconds to sell a product or get someone interested.”
• “Never pick on anyone your own size.”
• “You can change or become a victim of change.”
• “There are more opportunities today disguised as problems.”
• “When you get good, get better.”