The HME180 Podcast – Episode 4 – Karter McKinlay from The BONE Store

Introduction: Welcome, you’re listening to The HME180 Podcast. Every month, your host Sue Chen, will interview the best of the best HME retailers who are fearless, innovative, and committed to their work. On this month’s episode, our special guest is Karter McKinlay from The Bone Store, with locations in Fresno, Stockton, Bakersfield and Visalia, California.

Sue Chen: Hi, and welcome to The HME 180 Podcast. I’m your host Sue Chen. And for context, Today is April 2nd. Last week was MedTrade. And while I was not there, I did reflect upon how long this industry event has been around—over 50 years—and what our industry has gone through over the decades. I’m going to take us back to 2003, which was a watershed year for our industry, with the passing of the Medicare Prescription Drug Improvement and Modernization Act, also known as HR-1. The big headline from HME news from late November 2003 was “Medicare Cuts Called Outrageous.”

Well, we now know that outrageous was a gross understatement. 2003 was also the year that Karter McKinley purchased a small HME store in Fresno, California. Today, over 20 years later, The Bone Store has four locations, and is one of the most respected and innovative HME retailers in the country. So much so that last year when I was putting together the retail webinar, I reached out to Karter, and he shared with me so much great information. And when I thanked him, he shared a quote that speaks to his passion for the industry, and inspired me so much. And he said, “Be the rising tide that lifts all boats.” And that is what this HME podcast and the HME website is all about. We are lifting our industry and our mission together. So Karter, welcome to The HME180 Podcast and congratulations on your 20 year anniversary last year!

Karter McKinlay: Thank you, thank you, it’s a joy to be here with you.

SC: It’s fun, we’re gonna have fun together. So if you’re watching this on video, because most of you are probably listening to the podcast, but if you’re watching, you’re gonna notice two things. One is that you’re not watching us on Zoom, we’re actually together in person in the NOVA  lounge. And then you probably also notice that Karter looks very young for having been in our industry for over 20 years.

KM: [laughs] You’re too kind.

SC: So maybe start off share with us how you got into this crazy industry, especially in 2003. And where did the name The Bone Store come from?

KM: Oh, well, first off, thanks for having me here. It’s such a joy to be here with you Sue and grateful to have this time with you. Yeah, the short story is I was in my you know, early 20s, mid 20s, going to school and punching a clock in corporate America and just hated walking into a cubicle every day. And one day I was talking to my dad on the phone and complaining about my terrible—you know—lot in life. And he invited me to move to California and open a business. And we didn’t know what it was at the time. He just said, “Hey, if you’re going to take a leap of faith do it now in your 20s.” And so I did. I moved my wife and my one daughter at the time to California and we just started to shop around to see—you know—what businesses were available. We came across a funny little store called “The Bone Store.” And you know I’ll never forget walking in the store for the first time. I was the one kid in biology class that wouldn’t dissect the frog or the—you know—the grasshopper or whatever. And never in my wildest dreams thought I’d be in the medical business you know, but here we were in The Bone Store. My dad who was a chronic back suffer through the ages could point to what products worked and what didn’t. And so that was probably our first big disagreement. You know, is this really the business we want to go after? But we did. We put in an offer we bought the business from an orthotist and a chiropractor. The first thing we tried to do is rebrand because The Bone Store is such a funny name. It was an acronym. It was B.O.N.E. “B” was for back, “O” was for orthotics and “N” was for knee even though we all know knee starts with a “K”—I guess the “BOKE” store just didn’t make sense. And then “E” was for ergonomics and so we thought this is the dumbest name it’s so silly and we tried to rebrand and it just didn’t work. And what we learned was that The Bone Store—as funny as a name as it is—has some staying power. People remember it. So we embraced it. We changed the motto to “Improving the Way You Walk, Move, Sit, Sleep”, because that’s really what the business is all about. And we ran with it. And, you know, we’ve been embracing The Bone Store ever since.

SC: And now it has a meaning of its own.

KM: It does. Yeah.

SC: I first heard that when you when Renee first told me about the store, I remember thinking, The Bone Store? And that’s probably what everyone does. The Bone Store?

KM: Yeah what do you sell? Do you sell dog food, you sell costumes?

SC: [laughs] Well, now we know who The Bone Store is, and what you guys do. So in your business trajectory, because it’s two decades now, what were the growth milestones in the last 20 years, and maybe land on how your business is doing today?

KM: Sure. I’ll start with today. And I, you know, it’s a tough environment, we’re in a global economy. We are affected by so many different things, from government regulations to just the challenge of keeping and retaining employees. And, you know, that can be a topic for another day. But, you know, I think when I first started as a young 20-year-old, I think my main goal and objective was to be successful to make money. You know, here I was, with a young family, wanting to buy a home wanting to make my mark in life. And I think I lament to a certain degree that that was my main focus. At that time, I’m, I’m grateful that I have a father whose wisdom and guidance over the years really helped me understand that it’s more about people than it is about products or even profits. And once I learned that, throughout the ages, or throughout the years, it really helped me put my priority and focus on the things that matter most. And, and so we never really had, you know, hey, we want to have three stores or four stores by this time. It was more about building people, it was more about helping people. I have a friend who was a very successful coach throughout the years and he was always asked the question, “How are you so successful building championship teams?” And his response was, “I don’t build championship teams. I build championship boys, and championship boys build championship teams.”  And so our benchmark and growth has always been towards building championship employees. When we when we build successful employees, we build a successful business. And, and I’m grateful that that, that we put that emphasis on the people that we hire.

SC: And so you had your first location. And then at what point did you think, “Hmmm… we could do a second store?”

KM: Yeah, it was pretty quick. So we bought the business in 2003. And by 2005, we looked at Visalia, small little community, 45 minutes south of Fresno, we thought, “Hey it’d be kind of cool to have a store in Visalia, let’s maybe let’s give it a go.” And I look back, and I think so many of our decisions were based on emotion. You know, I mean, we didn’t do any market analysis or pull any data to see we just thought, “Hey, this would be kind of cool. Let’s give it a go.” And we did. And Visalia is a great community. It’s a smaller community. It’s a very closely knit community. People know each other and Visalia. But maybe today, it’s not the type of community you would go into if you were looking at, you know, from a number standpoint, but we’re, we’re grateful that we’re there. And it was, you know, my dad retired in 2000, end of 2011/2012. And I decided to bring on a partner, a good friend of mine. Honestly, most of the successes that, that that I have under my belt are attributed to my business partner, Todd, I wish he were here today.

SC: Hey, Todd. Shoutout!

KM: [laughs] Shoutout to Todd! But so, so grateful that I have a business partner in Todd, we really balanced each other out well. So many of my weaknesses are his strengths and vice versa. So, you know, he came on in 2012. And then we opened Stockton about six years ago, and Bakersfield, we’re about two and a half, three years old in Bakersfield. So we’re up to four stores and just plugging away,

SC: I can relate on the partner, because I have that here in NOVA with Ron. And I remember Ron’s father-in-law said how important it was, you’re going to go down this journey to have great partners, because with partners, when things are good, they’re so much better. But when things are really rough, which they will be, they’re not as bad because you have each other so it completely can relate. And so the last few years have been really weird, especially for retailers, especially for our industry. And I think we have to look at growth in a different way. How have the last couple of years been for you guys?

KM: I don’t know that we’ll ever go back to the days of you know, COVID. Boy, COVID taught us so much right. And it seems like as soon as you figured one thing out, it was it was out of the frying pan and into the fire. It was just a constant cycle of trying to figure things out, prices were all over the place and availability of product was all over the place. And, you know, you look at how it changed the restaurant industry. You have some restaurants that really embraced COVID as an opportunity to grow. I mean, Chick fil A, for instance, look, look at what happened to their business during COVID was probably the best thing that happened to them. And you have others that just close shop.

SC: Yeah.

KM: And it was the same for The Bone Store.  COVID really helped us prioritize the things that were most important. And one of the things it helped us prioritize is what products are most important to have in stock. You know, a customer that comes in with a size 14, you know, triple E diabetic shoe is probably okay waiting, you know, four to six weeks for a shoe that’s on backorder. It doesn’t work with a patient who’s coming out of rehab or just had hip surgery and needs a lift chair needs a walker, or, you know, an aide to daily living. And so it helped us identify and structure our store presentation towards, you know, those products that were most important to keep and have in stock and available to our customers.

SC: Yeah, I can, I can see that. Because you really do have to prioritize when things are kind of crazy out there. You mentioned something that I know is on all of our listeners’ minds. But you said maybe for another day, but we’re not going to wait for another day, we’re going to do it right here. And we’re going to double click on that, because it’s so important. And we’ve surveyed people, owners and managers of HME retailers on what’s our industry’s greatest challenge and its people. And hiring, retaining and powering rewarding them. That is always a constant challenge in our industry, but also for really any retailer. But they’re also our greatest opportunities so that your people become your most valuable asset which you spoke to, and our competitive edge and also giving them a job that they love and have purpose. And so with that tee up: What are your philosophies and principles and plans with your people? Let’s dive into that.

KM: Well, we have to build people. Like I said it’s for us really it’s about people not products, but there’s two sides to that coin. The first side is the customer. And I think we really are really short sighted, we do a disservice to our customer when we care more about the product than we do the people. The second side of that coin are our employees. And we need to build our employees, we need to take care of our employees, we need to teach and train our employees. I think we do a real disservice to our employees when we don’t give them the tools necessary. They need to have the arrows in their quiver, so to speak, to be successful. And one of the things—obviously money motivates right? One of the things we’ve learned over the over the years is what’s successful for us anyways, in motivating our employees: We used to have a bonus and incentive programs that were tied into, you know, monthly profits, quarterly profits, and so on. And that makes sense, right? As a business owner, if I’m making money, I want you to make money. But we’ve instituted not too long ago, a new performance pay program that we think is wonderful for our employees. And it’s it, it’s based on what our employees have control over. It’s no longer a program about things they don’t have control over. And we have employees that can make—that will make $10-12 per hour more than their standard hourly wage based on things they can control. We’ve also tied it into behaviors that are important to us. I mean, one of the regulations in our industry that’s very important, especially in the state of California, are meals and rest periods and being HR compliant in those areas.

SC: That’s right.

KM: And so we require our employees, “Hey, you’ve got to, you’ve got to take a minimum of a 30-minute lunch, and you can’t take more than a 60 minute lunch, you have a 30 minute window to clock back in. But if you miss that clock in window, or you show up late to lunch, you have a 15 minute window to show up. If you show up late, you forfeit your performance pay for that payroll period.” And we’re paying it out each payroll period. No more end of the month, you know, the payroll period closes on a Sunday, we process payroll on Monday and we immediately pay out that performance pay to our employees. And that’s been—that’s really moved the needle for us it’s been a great change that we’ve made.

SC: So then you work in tandem with things that you need to manage as an employer and having your employees manage themselves in a way with incentives. But you also spoke about behaviors, that this unique comp plan also drives the behaviors that you want to see. Maybe speak to so what some of those behaviors.

KM: Well, we’ve learned that you know, you can you can ask employees to lengthen their stride to stand a little taller to be a little better. But to incentivize them with certain incentives is very helpful. And we just pick behaviors that are important to us, right? Gosh, we could go so many directions with this. You know, we want to ask a lot of our employees our employees are capable of so much.

SC: That’s right.

KM: We do a such a disservice when we just accept the status quo. There’s so many silent tacit deals where we just accept mediocrity, because, you know, for whatever reason, and there’s a standard of excellence that we can demand from our employees, and they will rise to the occasion when we ask that of them. And so, obviously, there are financial incentives. we try to do other fun things with our employees, just simple things like buying them lunch. And it’s important to say thank you. It’s amazing how much mileage you get out of just a simple thank you and appreciation and a job well done. And this is where my business partner, Todd just shines. He’s so beloved by our employees, and he connects so well with them. And it’s really one of his strengths to recognize and acknowledge the strengths of our of our employees.

SC: So it’s a combination of creating an environment where people feel valued, and then they are valued in their pay.

KM: Absolutely.

SC: And there’s transparency and clarity. And I think you said something that I have not heard, but I really, I can resonate with it, and also use here is: control.

KM: Yeah.

SC: Things that your employees actually have control over and they can start building their own value in their own pathway. And how long ago did you know—these things are a work in progress, I’m sure. So how long have you been kind of working on this combination of performance and pay plan?

KM: We’ve played with pay for ever since the beginning, we’ve always adjusted pay. And, you know, we’ve done spiffs, which we love spiffs are a fun way, it’s a competitive way to you know, incentivize employees. But this, this most recent program, performance pay is just a couple months old. For us, it’s a new program. So we’re still learning, we’re still learning how it you know, how it moves the needle, but we’ve been so pleased and happy with the results that we’ve seen from it so far.

SC: That’s great. And I think that that’s a wonderful takeaway for the listeners, which many of them are managers, but also, you know, people that are employees and they drive the culture too. It’s an all hands on deck approach. But I think that the takeaway is that you’ve got to constantly be present with your most valuable asset, and that’s for people and building, you know, championship companies, or with championship employees. And that is what we’ve said, in all the episodes is what makes our retailers unique from the chains and Amazon is our team, our people.

KM: And we need to stop being conservative. You know, we did a we did a promotion a few months ago, where we asked our employees, you know, we wanted to modify certain behaviors. So we did a one month spiff and we said, hey, we’ll give everybody a $250 bonus, if, you know we do just one thing—if we do X. It was so important to us. Nobody didn’t—didn’t change one thing. And I was talking to a friend of mine who owns a business he says, “Why did you offer a $250 spiff? Offer a $2,000 spiff.” And I thought, “Boy, if each of my employees, you know, hit that benchmark for a month, I mean, what bank is gonna give me a loan to pay out this?” Well we did! We threw it out there. We paid $2000 bucks to anybody, and—even though they—nobody hit it during that period. The next period we had somebody hit that benchmark.

SC: Wow.

KM: And it showed our employees it’s, it’s the Roger Bannister effect, right? It’s the four-minute mile. I mean, here, you have Roger Bannister in the mid-50s. And nobody could run a four-minute mile. They’ve been trying to do it for years, decades. And anatomists and doctors and you know, everybody’s it just wasn’t humanly possible. And then Roger Bannister breaks the barrier in 1954. And what happens? You know, within a week or two, after Roger Bannister breaks the barrier, another guy breaks the barrier. And now today you have thousands of people, including high school students that have run the four-minute mile. And so it just takes a leader, somebody to show you that it’s possible to help others see what they’re capable of, and to rise to the occasion.

SC: That’s right. And rising to the occasion in our industry means giving people the most phenomenal service.

KM: Yeah, and that’s the other side of that coin. So when you’re talking about people, you’re talking about employees, you’re also talking about the customer. And, you know, it’s really about one of the things we’ve learned is, it’s about the customer experience, you know? We have to offer our customer what our competition can’t. And really, you know, we’re not in competition with the guy across the street or the guy up the street. You know, Ray Fisher Pharmacy across the street from us, is not our competition. In fact, we’re probably their number one referral source. And they’re probably our number one referral source. Because when a customer comes in with a need that we can’t fulfill, it’s wonderful to send them across the street. Randy and his people are great. They’re wonderful. And we know they’re going to be taken care of at Ray Fisher pharmacy. But it’s about, we’re not in competition with Ray Fisher Pharmacy or the guy across the street, we’re in competition with a customer who’s uninformed and uneducated. And, you know, should be using the products that we sell. But for whatever reason, and there’s a hundred reasons out there, they’re not using it. If we were just selling our products to the people who could use them, our shelves would run dry, right?

SC: [laughs] Yes, yes. And that is so compelling. But so true. And our listeners all know, that is: our competition is something that you actually can’t see. And that is what we’ve discussed in this podcast is what makes our retail and our industry so uniquely complicated, is that we sell products that people don’t want to use or don’t know that they need. And if you combine that with the relentless blows, that come at our reimbursements, your full retail, but for people that are doing reimbursement, it strips away the value of HME. And so it makes you question, what does retail mean, in this industry? And so I’m going to ask you, so how do you approach retail being that it’s very complicated? And what is your product curation strategy, because that’s why people go into your store.

KM: I love the retail side. When we first started, we billed Medicare, we billed workers comp, we billed health insurances, and I just—I know there’s a place I’m not anti-insurance by any means, but I just I just hated the whole process. You know, I hated the fact that the person that was providing the care, and the person that was receiving the care had no idea what the care was even costing. I hated the idea that when vendors came into my store to sell me on a product, the only thing they sold me on was how cheap it was. And that you could bill it, you know, for an—the HCPCS L code reimbursement was $600 bucks, that, hey, you know, it’s a one size fits all, and it only cost you $42. I hated that. That was a sales presentation.

SC: Right?

KM: I hated that. When a customer came into the store with a prescription. The very first question we asked them was, “Who’s paying for this?” Because if insurance was paying for it, I had a product in the back in a plastic bag that was a one size fits all. And if they were paying cash, I had something that was a third the price and a good/better/best selection that they could choose from and try on and decide. And so, you know, we kind of rode that wave for, you know, rode that line for a few years an—interesting experience: my dad who’s a chronic back sufferer went in for he was finally convinced by his doctor to have back surgery. This was back in probably 2010 or 2011. He walked into the hospital in pain. He walked out—he didn’t even walk out of the hospital. He came out of that back surgery in a wheelchair and in twice the pain that he had. And his quality of life was gone. And he suffered for a couple months until he found a doctor that was willing to—this doctor, all he did was specialize in fixing other doctors’ surgeries gone wrong.

SC: Wow.

KM: And my dad connected with this guy. He walked into his office; it was the doctor and it was one other you know—can you imagine a medical office with just two people? It was the doctor and it was his assistant? And my dad wrote this guy a check for $50,000. Because he doesn’t build insurance on the promise that he would fix his back. And he did. He went into back surgery. And my dad to this day, he rides a bicycle, he swims, he golfs, he’s active, you know? And what is the value of his quality of living for the last, you know, 10-12+ years? And so I I love the retail side going—let me tie this together. At that time, we looked at each other and we said, “Why are we playing this insurance game?”

SC: Yeah

KM: You know it—again, insurance has its place. So we have customers that come in and they say, “I’m trying to bill my insurance,” and we say, “Go across the street to Ray Fisher. They can bill your insurance.” But to the customer that wants a choice, maybe they want something fun. Maybe they want color. Maybe they want something that is better suited for what their needs are. I mean, we love we love, love, love being in retail.

SC: And to two contrasting emotions. You said hate a lot. We hated this. We hated that. Because it seemed to be such a departure from the people part for your staff. Hard on them, and really hard for serving your customer. But you love retail. And so how does that love create the product mix? Because that’s ultimately—you’re giving them the expertise, your people. But they’re coming to your store for you to make the decisions on products for them to choose from. Because you’re not Amazon, you can’t be you’re not going to carry a million different products.

KM: And we don’t want to be Amazon.

SC: And so what’s your product strategy? What do you feel is the right strategy for products for your customers to be able to learn about?

KM:  Sure. That’s a great question. Obviously, we want products that work. I go back to the days when my dad and I walked into The Bone Store for the first time. And he pointed out, “That works. That works. This was a terrible product, you know, this works.” That’s number one for us is, you know, does it work? Does it—is there a need? And does it help the customer? Obviously, we have a we have a checklist when we bring new product in there’s about a 15 question checklist that we go through, you know, yes, no, yes, no, yes, no. And if it meets that, then we take a good hard look at whether or not we want to bring it in one of those is MAP pricing. Is it MAP protected? But we look for high-end product. I mean, you get what you pay for. It’s an old saying, you know, and there’s another saying that I love, that is: “Buy the best and only cry once.” You know, why buy four walkers that don’t work? Just buy the best walker, and maybe you pay 40 or $50 more, but you only cry once. You know, you forget what you paid for the walker, two or three years down the road. And once you know, it fulfills your need. I mean, my dad, yeah, I paid $50,000 for a back surgery. But I’ll tell you what he would write that check again today in a heartbeat. You know, the quality of life is—you can’t put a price on that.

So we like high-end products. And we don’t shy away from—that was one of the mistakes we’ve made in the past, is trying to bring in low end products to compete with Amazon. We don’t want to compete with Amazon. Sometimes I have a customer come in and they say “Hey, I need compression stockings. I can find them on Amazon for $9.99.” And I say, “You should buy them on Amazon. That’s a great price for compression. If that’s what you’re looking for. That’s the place to go.” You don’t find people at Ruth’s Chris Steakhouse, complaining that the steaks at Applebee’s are a third the cost

SC: That’s right.

KM: People at Ruth’s Chris Steakhouse know—But it’s more to you don’t go to Ruth’s Chris Steakhouse, just to eat. You go through McDonald’s drive thru to fill your belly. You go for the experience. So it goes back to the experience that my customers have when they walk into my store.

SC: Right.

KM: And that experience has to be to meet the needs of the customer, and really take care of the customer and provide them that Ruth’s Chris Steakhouse steak, where they leave, and they go, “Wow, that was an amazing experience. I’m really glad I came into The Bone Store.” So we don’t, we don’t apologize for carrying high end product. We don’t. because we know that it works. And we know that at the end of the day, “Buy the best and only cry once.” You’re going to love the product that you purchased. And it’s going to, it’s going to meet the needs that you have.

SC:  And that need continues because your customer is not a one-time customer. And you’re in a small community. And so people know who you are. And they’re going to come back again and again. Because I think we talked about this in a previous conversation. Every customer is a $10,000 customer. And have you seen that? Are most of your customers repeat customers?

KM: Oh, absolutely. Yeah, our number one, you know, when we when we track it, we—our number one customer is the repeat customer for us. Absolutely.

SC: You talked about high-end product. And I think that’s something that for many years, people would be afraid of, you know, I don’t know if my customers can afford this and especially in areas that are heavy Medicaid areas. And well, I think what you talked about giving, you know, “Buy it only once,” and the value of that. Warren Buffett would love shopping in your store because he believes that price is what you pay value is what you get. But what about your low-income customers that are on Medicaid? Are you serving their needs by not providing proper products that they can afford?

KM: Well, that’s a tricky question. Obviously, only the customer can decide whether they can afford it or not. But what we’ve seen is that you just can’t put a price on quality of life and pain. You know, when people are in pain, it’s amazing what people will spend to get out of pain. One of the things we’ve learned is we can’t be all things for everybody. We just can’t and we have to be okay with that. You have to be okay losing a sale because that’s not my customer. And so if a customer comes in and they’re looking for the compression stockings that are $9.99 I hope that my sales associate sales associates will take the time to show them what we have and why we’re different. But at the end of the day, I’m not bringing in a compression stocking for $9.99. I’m just not. Some time ago we had a—one of our managers complained. She said, “ You know I’m having the hardest time selling lift chairs because you know our lowest price lift chair is $1000 bucks and it’s just too expensive. None of our MediCal patients can afford this. And after months and months of complaining, we finally relented and said, “Okay, well, we’ll, we’ll find a less expensive option.” So we went out, we found a lift chair for $524 bucks, we bought a dozen of them, put them in each of our stores, put them in our warehouse, I still have those sitting in my warehouse to this day.

SC: Really!

KM: Taking up space. And the irony is, she has yet to sell one in her store. In fact, she doesn’t even sell the $999 lift chair, she sells a $3,000 lift chair. And so..

SC: Wow.

KM: Sometimes we jump to those conclusions, again, based on emotion, you know, instead of making decisions based on what the data tells us, but I think the data tells us that people really will spend money for product that works, for product that helps. And that’s the beauty to having them in the store. I’m not telling you about the product, I’m showing you the product. And I love sitting people in the product, and telling them what they are going to feel and what they’re going to experience. And, “Notice how your weight is distributed evenly as I tilt you back and notice—” you know, I put away I love putting orthotics in people’s shoes, and just looking at the change of expression on their face and telling them, “Now what you’re feeling is an arch support. You’re feeling that support that the contours of the natural shape your foot.” And I think once you help connect that with people, it’s an easier sale. And again, you have to be okay losing that sale, if the customer is, you know, if their budget is a $500 budget, and you don’t have that. Obviously, there are some things you can do you can, you know, offer financing. I always want my sales associate to be an advocate for the customer. Always, always, always. If a customer comes in, and they say, “Hey, I saw walker online for $99, show me your cheapest walker,” I want the I want the employee to say something like, “I don’t know if I can get you a $99 walker, but let me see what I can do.” And then to go to the back and have a talk with the manager, with Todd or myself, just so the customer feels like they have an advocate in their corner we’re trying we’re working our best to meet their needs.

SC: Wow, I love what you just said. And I think that is—when you talk about championship employees or championship teams, that’s where you really are a champion. That you are an advocate. I always feel that there is such a difference between what our independents do and the value they bring and the chains and Amazon. But when you are an advocate for somebody, wow, you’re really in a league of your own because now in a place where you can change their lives, we’re really in a space where there’s not many advocates for that person. Wow, I really love that.

KM: And so much of that just comes from taking time with the customer. You know my niece, a few years ago, she was vacationing and she broke her foot. And she went into urgent care and taken care of urgent care was given a prescription. She went to the local DME store. She walked in. You know, my sister took her in and handed the prescription to the guy behind the counter and he didn’t say two words. He just walked to the back, grabbed a pair of crutches, and he said as handed her crutches, “This should work.” That was it! He didn’t even fit her for the crutches. He said, “This will work.” Rung her up and she’s on her way. What a cold way to create a transaction, right? You know, if we’re not taking the time to empathize with customer; “Oh my goodness what did you do to your foot? That must’ve been so painful! And how are you doing? And what are the doctors saying? I know there’s some marks on these crutches indicate what the proper sizing and fit is… would you let me fit these for you so I can make sure you’re happy with them before you leave the store?” We need to take the time to do that.

SC: Yes and we do. And that’s what makes our industry unique and special. I have to talk to you about marketing because that was our conversation last year and I know that you guys are very innovative and courageous and creative with marketing and so maybe share with us your overall marketing strategy because you have different markets. And what seems to generate the best ROI? You spoke about last year. And I’m gonna throw you a curveball. Because it seems like we get hit with so many types of advertising these days and so many different platforms and what form of advertising do you think your customers actually enjoy getting, and that doesn’t annoy them?

KM: [laughs] That’s a good question. Well marketing, you know, I wish I held the golden ticket, I wish I had all of the answers. I guess one of the things I learned with marketing is it’s a moving target. And it’s not just the target is moving, but we’re moving too, right? It’s like trying to shoot the target while we’re riding a unicycle at the same time. And I’ve learned that there is no one size fits all program, especially with my markets, because I’m in four different areas. What works in Stockton doesn’t work in Bakersfield. And sometimes that gets frustrating, right? Because you see something work in one space and you want it to work in the other and now you’re trying to fit a square peg in a round hole. It just doesn’t work. But one of the things that we have found that is universal in marketing is humor. Humor is something that connects us universally just by race, age, culture, gender, whatever. We all love to laugh together and to smile. And there’s a  lot of ways that you can creatively find humor in the way we market our products. So we try to do that. Again, that’s Todd’s arena, he’s very very good at that. But we do love TV. TV is expensive to do, but it also is the medium that we think connects best with our customer. Number one, our customer spends a lot of time watching TV. And #2, to create the audio and visual together and to connect it and to use humor in that way. It’s also a trusted medium. I know for me personally, I’m more weary about buying things online. You know, sometimes you don’t get what you pay for when you buy it online. But yeah, and I think that you can’t ignore the fact that the way the market is shifting is towards digital marketing and digital advertising. I think that the stores that are gonna have success down the road in the future are those that learn how to embrace digital marketing, you know, pay per clicks and SEO marketing and that kind of stuff.

SC: And a combination of…

KM: Yeah.

SC: Because you mentioned to me when you did—because you first introduced me to some of the commercials that you did. And I love them. I thought that they were funny and heartwarming and memorable. But also created a brand for your store because then people could see, you know, glimpses of your store, and it really legitimized who you guys are as the authority and the advocate and having the inventory and the community. But then it also gave it a lot of charm that I think, and humor, you know. Sometimes our industry does not have – it’s—you know, there’s some sad emotions around our industry. So I love the humor that you put into it. Talk to me about some of the campaigns you do when it comes to digital, because one thing that I—that you shared with me that I really loved was your email marketing that you send to your customers. And how’s the ROI on that? Do you see that your customers are receiving it well? Are the coming back? For some of the deals that you run?

KM: Yeah, it’s getting better. We try to be really competitively priced. I mean most of our products are internet priced. It makes it difficult to run very aggressive campaigns. You know BOGO or save 20%. Just because it thins the margin so significantly. But it is a way to stay connected with our customer. One of the things we’ve tried to do more through our E-blast campaigns is provide more education. So instead of just the, “Hey save 20%,” or what have you, we can talk about the benefits of wearing compression, or fall prevention or some of those things that are really important. And it’s new for us. I mean, I’d love to say that I’m an expert in that area, but we’re learning daily. We do a lot of AB testing. One of the changes that we made recently was with our software so that we have the capability to do that. And make decisions based on the analytics of things. That’s very helpful to us. But, we’re still pretty new in that area. We’re just excited to learn more and we know that that’s the direction that we’re heading as an industry. Not just in this industry, but marketing in general is moving towards a digital arena, a digital campaign. You know the most important thing with any marketing or advertising is just being consistent.

SC: Yes. Yes, and it sounds like you guys are.

KM: We try. We try.

SC: [laughs] alright. We’re having some great conversation here, which I love and we can chat for a very long time. But I wanted to take you back. Because last year was your 20-year anniversary, which is a milestone. And take you back 20 years to when you decided to take the leap of faith with your wife, Lisa, and your young family and being an entrepreneur. What advice would you give that guy 20 years ago?

KM: Oh wow. I lament a little bit that it took me so long to figure it out. You know, I think as a young entrepreneur, my focus was too muchb on you know building a successful business. I’m really grateful that I had a loving father who was wise and had the foresight to help me understand and see the things that matter most in life. And you know I think if I was giving any advice to you know that young man that was in his early 20s is just to—would be to embrace—it’s cliché to say… you know there’s this saying that “You find joy in the journey. The joy’s in the journey, not the destination.” But as I sit here today, there’ truth in that

SC: Yes.

KM: And if we can learn to find the joy in the journey…you know, and live our life in such a way that we can put our head on our pillow at night and feel good about the work we’ve accomplished. You know? Can we not just be one another’s biggest fan? You know whether its our competition or our customer? Can we not just do what’s best for each other and help one another and try our best and I think that I learned that if I learned that a little bit earlier in life, I would have had more personal joy in the journey. But I’m glad that I’m there today.

SC: Yeah. And it makes me think about something that I don’t believe in the path, or pursuit of happiness. I believe in the pursuit of fulfillment, because happiness is an emotion, and it’s an unsustainable temporary emotion. But rather as I think about my 30 years, I think about the quest of fulfillment. And it’s a state of being fulfilled, which is fueled by this passion and this mission and empowerment, and I feel like that’s what connects us in our industry, is that journey of fulfillment. And so my last question to you is: 20 years. Has It been fulfilling for you? And how would you express that?

KM: Yeah, I’ve loved every moment of it. And, you know it’s really because of the people I’m surrounded by. I’m so blessed with, starts with my family. I just have an amazing family. A beautiful and wonderful wife who is supportive in every aspect of my life, including the long days at the office, the early mornings, the late nights. A business partner, who we just have so much fun together. Sometimes, mid-day, I think, “Are we working or are we just playing today?” You know, employees that are wonderful to work with. It’s a wonderful industry. I’ve loved every step along the way, and I look forward to tomorrow. You know? I’m a real believer that the best is yet to be, and our tomorrows will be better than our todays if we roll up our sleeves and keep working hard. It’s, for me, I think it’s all about the customer experience, and I know I’m repeating myself a little bit there, but we have to compete—we have to do what our competition can’t do, and those personal relationships and connections that we make are so valuable to us.

If I can just say one thing, without getting in trouble… I got really frustrated years ago that I’d have customers come in and they would sit in y lift chairs, and they would say something like, “Well, I’ve been looking at them online but I just needed to come in and I wanted to come in and try them out.” And I got frustrated too that my website wasn’t an amazing website. And I had this epiphany that, you know, I’m never gonna have a website like my competition. I’m never gonna have a website like Spinlife, for instance. So I’ve learned to use Spinlife—I’ll bet if the people at Spinlife looked at who uses their website the most, its’ this guy in Fresno, California, that’s on there every day. And I use it with my customers.

SC: Ooh what do you do?

KM: When I’m working with my customers and I’m on the sales floor, I love having Spinlife up on my iPad, and showing the customer, because I’m not gonna have a website as great as Spinlife, I just don’t have the money to invest in it. But I can utilize them as a resource in helping close—I’m never gonna lose a sale to a customer that’s in front of me. And one of the ways that I can utilize their website is to show, “Hey you can see here that $1849, or whatever the price is, and we sell it for the very same price. And oh, by the way we have it in our warehouse. If somebody is home by three this afternoon I can have it over to your home. I never lose that sale. And it gives me credibility with the customer that—they don’t have to go back home and shop online. I’m showing them the online price.

SC: Yeah.

KM: You know, as it is. And so, I think we have to be creative in ways that we use the resources available to us and in helping us close—that was a little bit of a tangent, sorry…

SC: No, I think—it’s not a tangent because that’s the magic, the magic is the in-person experience that is—you have an opportunity to change their life. And that’s what we have to embrace, when you said, “We don’t lose a single sale to a customer that we actually have the opportunity to change their life, and be an advocate for them.” And that’s the magic of our industry. And the purpose of this and this conversation is as you shared, you know, is to be the rising tide, and that’s what we want for our industry because our industry is so transformative. We are so powerful in what we can do. And so, I love that you ended on that story, because it is about that. It’s about that magic.

KM: Thank you.

SC: Thank you for being on the podcast, and thank you guys for listening today. I really am grateful for all that you’ve shared today, but also over the years. You’ve been such a advocate for not just your customer, but for this industry and thank you for that.

KM: And thank you, you’re not just an advocate for the customer, but you’re an advocate for the dealers. And we so appreciate all that you do, Sue, thank you.

SC: It’s my pleasure. Well thank you for being on the podcast today, and thank you Karter, and we look forward to the next one. Take care!

Outro: A transcript and a copy of the visual companion guide is available on our website at HME180.com. Your host was Sue Chen, Chief Educational Officer of NOVA Medical Products. And our special guest today was Karter McKinlay from The Bone Store in California. This podcast was produced and edited by Melissa Grace Klose. Our theme music was created by Rebecca Klose. Thank you for listening to The HME180 Podcast and we will see you all again next month.