Healthcare Market: Contractor's Corner - Aug/Sep 2015

By Dave Stafford

Doing business in the healthcare segment is not for the faint of heart or the inexperienced. Success in this complex arena comes from superior logistics management and personnel with superb installation skills as well as patience and diplomacy. Building and maintaining a relationship with a healthcare client requires time and commitment. Think of it this way: Landing a healthcare account is somewhat like seeing a great gal, dating, getting engaged, married and then going through life together.

Looking each other over. As with any segment, you’ll want to see what is available in your comfortable geographic area. Most will have one or multiple community hospital or university medical center complexes. Some may be government or service related like the VA system. Certainly there will be various short- or long-term care nursing facilities, state hospitals and senior living for assisted or unassisted care. Let your roving eye determine your prospects. What looks good? Do you have contacts within a community hospital or at the local VA? A conversation with someone you know is easier and will allow a myriad of questions. If not, arrange a cold call to get as much information as possible. You can develop excellent info from brochures, the Chamber of Commerce or other associations.

That first date. As with any potential client, have your list of questions written out to be the most effective. What type of flooring do you usually use and what quantity do you replace each year? Do you have large scale projects budgeted for the coming year? How do you approach contractor qualification and selection? What is the bid process, formal or informal? Do you use a specific contractor or several contractors in rotation? How do you feel about blanket purchase agreements? Do you use them? Do you have one in place and does it cover all flooring and installation? What is the typical term of such an agreement?

Of course, you will want to have some small talk and breaks between questions so the client doesn’t become defensive. The goal is to learn as much as you can to decide if there may be any benefit or mutual attraction. I once asked such questions of a large potential client and he was eager to provide even more detail, since he had just parted ways with a supplier. Conversely, I got one-word answers from another who said, “Look, you’re wasting your time and mine; I don’t intend to make a change. Check back with me in a year, okay?” It was a short date where there was no spark at all.

Courtship and the relationship. However, let’s say there was a spark and some potential for business forthcoming. You may foster that initial contact with a simple thank-you note expressing your appreciation for the time spent talking. I cannot overemphasize how effective a simple handwritten thank-you note can be. Follow up to make sure you are on his bid list and remain on his radar. A good technique is to send along information on new products that might be of interest. If he has mentioned a timeline for new bids or a specific project, for gosh sakes, follow up again to make absolutely sure you’re included. I once lost out on a large project because the bid clerk neglected to send me a bid package. And the facility manager was angry, saying, “I thought you were going to bid, but I never got anything back from you!” I sheepishly admitted that I never got the bid. Even though I wasn’t at fault, I still lost the chance to impress the buyer and get the business. Shame on me for ineffective follow-through.

Was it good for you? Perhaps there was a small job that had to be done in a hurry, or you were lucky enough to win a bid. Now is when talk is cheap, and efficient, effective delivery and installation is required. One of the most daunting tasks in doing healthcare business is the logistics of delivery, crew management, floor prep and installation. Talk with anyone who has done healthcare, and they will tell you horror stories about how jobs blew up for the strangest reasons.

Consider, for example, a surgical suite where an inventory had to be completed before any work could be done, and the floor leveling compound had to be poured using laser leveling—it seems that robotic surgery equipment requires an absolutely level floor to work properly. Or how about a hospital pharmacy area where old carpet had to be treated as actual hazardous waste because the debris from various spilled compounds was present. As one well connected installation manager said, “The days of orange cones and yellow caution tape are over.”

Your goal is to deliver an exemplary job to rave reviews without nit-picking complaints by you and your team. Expect delays, glitches and problems. The emotional mindset of your installation team is of paramount importance. A cross word, scowl or complaint directed toward healthcare personnel can completely undo an otherwise perfect installation.

For one lucky fellow, let’s call him Jim, the project went well and the facility manager was pleased. “Jim, great job on that corridor project. I was really impressed with how quickly it was done, and best of all, no noise complaints.” While basking in the afterglow of satisfaction, Jim asked, “What else do you have coming up, Jerry? I’d like to do more work for you.”

Getting engaged. Whether you get the answer you want or not, it’s time to cultivate that recent success. Analyze your new partner’s expected purchases or budgeted projects; where can you be helpful and provide great value?

One opportunity came to light when there was a slip-and-fall incident in one of the hospital stairwells. Jerry remarked, “Yes, I know we need to do some replacement of worn treads and flooring, but the last time we had real problems with adhesive odor.” Using one of the dry adhesive installation methods eliminated most of the adhesive odor problems, and the rest was eliminated through a series of air handlers. Or, “Jim, we’d like to put new flooring in the main lobby. However, all the work would have to be done from 11:00 p.m. to 6:00 a.m., and any areas not completed must be prepared for traffic. Can you do it?”

There may be a whole series of small jobs that must be done to earn their trust. That’s how most test your mettle, by giving you ample opportunity for consistent quality on-time performance with high-quality customer service and a smile.

Or you might really screw up. Just imagine Jim’s chagrin when the call came, “I had two complaints from the nursing staff on 3 West last night: one for noise and the other because the floor was completely blocked and they had trouble answering a code. What’s going on?”

As it turned out, one complaint was related to hidden site conditions and the other because the team didn’t keep both sides of the 8’ corridor open. Jim explained, “We had to use different equipment than we expected to remove the old flooring so there was more noise. And we violated our own protocol by spreading adhesive in an entire area rather than just half of the corridor. I sincerely apologize and would be willing to make that apology personally to the 3 West nursing staff. Fair enough?” He did just that, then reviewed procedures with the crew, and the job continued.

Marriage. By now there was a solid informal relationship with the facility manager, and he had learned that he could count on Jim for a wide range of helpful services and expert quality installation. Jim brought up again the idea of a blanket purchase agreement that would cover most flooring work for the hospital complex. “Jerry, I’ll even work up a draft of the basic products and services I think you might need for the hospital and the extended-care facility over the next year or so. Then you can add things I’ve missed. Would that help?” Jerry was impressed and quite interested, because having to get bids on every single project was time-consuming.

So Jim put together a detailed menu of basic products and services and even gave some estimated pricing guidelines, including a minimum trip charge. Jerry added in some other details and passed his request along to the purchasing department. Once approved, a bid document was generated for products and services for a one-year term with three renewals. Jim got the award as a primary supplier. Thus began a long-term profitable relationship where Jerry’s hospital became a priority client for the company.

Navigating the seven-year itch. As with any marriage, one must keep the passion alive, and that requires constant attention. As the contract began its term, there were stumbles in quality of delivery and installation but nothing serious. Finally, just before the end of the third year, Jerry reminded Jim that the contract was up for renewal and wondered about his commitment. “You’ve missed a couple of deadlines and the punch list work has seemed to take longer than usual. Do you still want the business?”

Shame on Jim for taking Jerry for granted, and so he made it a point to talk with the service team, reminding them of the annual volume the company could expect from this priority client. However, in spite of Jim’s best efforts, Jerry chose to rebid the annual contract “because I want to add some things and make sure I’m getting the best price.” As luck would have it, a competitor decided to lowball product and installation services and wound up as the primary supplier. Jim warned Jerry that it seemed that a “change order game” was afoot, but he still had a chance, though, as an alternate supplier. As that next year unfolded, Jim redoubled his efforts to keep in touch, even though he wasn’t getting much business.

Jim got an excited call from Jerry asking if he had some blue commercial loop carpet in stock, and if so, how quickly he could install it. There had been an accident, and the meeting room had to have new carpet immediately. By that afternoon, the furniture had been moved out, old carpet taken up and new carpet installed. Jerry was thrilled, and admitted that his primary supplier didn’t have product and with every single job that had been done, he was hit with an extra charge for floor prep or some other anomaly. He had had enough, so Jim did the balance of his upcoming work. And the contract was not renewed with the other supplier.

Keys to a successful union. This business is not quick-turn and requires enormous patience to develop. One must have experience with a range of products, including carpet, carpet tile, ceramic, vinyl tile and sheet goods, laminate, linoleum, rubber flooring, and accessories. Installers must be trained in heat welding, flash coving and the nuances of working within a critical care environment, with the willingness to work after hours for weeks at a time to deliver a project. There must be a service team commitment to handle client problems with a quick response of two to three hours. A critical service component is to eliminate odors, fumes, slick floors and improper staging of equipment, and to make areas accessible in an emergency.

Invest time and effort in the healthcare segment if you have those opportunities in your geographic area. Certainly there will be challenges or bumps in the road, and your partner may cast a roving eye. However, you can have a long marriage and build yourself a profitable annuity. It will be worth it.