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Q2 2015 Earnings

July 28, 2015
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Opening the Door to Growth

With ingenuity from UPS, Medical Direct Club connects with customers


Medical Direct Club's prospects took weeks to return essential paperwork for Medicare or Medicaid payment - and half failed to return paperwork required to move forward.

When Medical Direct Club's commercials air on TV, prospective customers get excited. "They want to sign up. But, of course, we have to get their signature on paper before we can start working with them," explains Jeff McDaniel, the company's marketing director.

Medical Direct Club delivers urological supplies directly to customers' homes - a huge convenience. But for Medicare or Medicaid to pay the company directly for the supplies, new customers must first complete an "assignment of benefits" form.

And that's where things can get challenging.

"By the time they receive a letter or package... a week or so later, some of the luster of the service has gone," McDaniel says. People may forget they requested the information or they may set the paperwork aside to take care of later. In the past, only about half of the forms made it back to the company - and those that did often took up to four weeks to be returned.

Medical Direct Club experimented with having couriers deliver the forms, sending another courier later to pick them up for return. But the company found that its customers - many of whom are seniors - were hesitant to answer the door to a stranger.

When the courier idea proved no answer to the company's biggest challenge, Medical Direct Club turned to UPS and its well-known, brown-clad drivers to open the door to more business. "Everybody knows the brown truck and the uniform," McDaniel says. "There's a trust factor when UPS comes to your door."

Relying on trusted UPS drivers

At the suggestion of the UPS district marketing manager for healthcare, the company ran a test using a new returns service, UPS Returns® Exchange. This service sends a UPS driver to a customer with a return label and packaging in hand so the driver can quickly repackage an item for return (for example, a faulty cell phone) then simultaneously delivers a replacement item. But the same service could easily be used to deliver and immediately secure the return of vital paperwork.

The trial of Returns Exchange was an instant success for Medical Direct Club. UPS drivers delivered the paperwork, obtained customer signatures, and then repackaged the paperwork for speedy return to Medical Direct Club. Turnaround time dropped from up to four weeks or three-to-four days, and the company quickly realized a 60 percent improvement in recovery rate.

Quicker returns - and more of them

In early 2012 Medical Direct Club started shipping all of its "assignment of benefits" forms via Returns Exchange. McDaniel estimates that the extra cost associated with having the driver oversee the signature process is more than offset by needing fewer employees to place phone calls to track down customers' forms.

The twin benefits of enhanced turnaround time and high return rates position Medical Direct Club for rapid growth. Plus, the improved service provided by the convenience of Returns Exchange greatly improves each patient's perception of the company's customer service, increasing satisfaction and loyalty.

Also, by switching to Returns Exchange, the company has been able to reactivate its "cold cases" - leads with forms still outstanding - and convert them to new customers.

"They've retained those old leads, and now they're using Returns Exchange to turn them into valuable customers, too," says the UPS district marketing manager for healthcare. "It's gone beyond their wildest dreams."

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