Gordon Cunningham, Permobil’s general manager for the UK and Ireland, explains how the high-end mobility specialist is finally making a serious investment in establishing itself as one of the premier healthcare suppliers in the home market. Looking to replicate Permobil’s successes in the US and Europe, the firm has bold ambitions for the UK, and its dealer network will have a significant role to play.
Permobil is a well-established company on the global mobility scene. Known for its high-end powerchairs, the Swedish supplier celebrated its 50th year in October, and although it has operated in the UK for around 16 years, it has never achieved the same level of success as it has seen in European and the US market. In countries like Germany, France, Scandinavian nations and the USA, Permobil claims to stand among the top two mobility suppliers in terms of market share. But until now the company has not made a serious commitment to the UK, which is surprising given the evident size and potential of the market.
Hoping to transform that is Gordon Cunningham, Permobil’s general manager for the UK and Ireland, who is tasked with realising the company’s full potential in Britain. The Glaswegian has more than a decade’s experience of selling medical devices and believes that with the right investment and level of corporate support, he can take Permobil’s UK arm all the way to the top.
Back in 2016, it was the challenge of properly penetrating the UK market that attracted Cunningham to the GM role. He decided to make the leap from a large organisation of over 100 employees to lead what was essentially a start-up business breaking into an already fiercely competitive space. One of his initial moves was to relocate from its former base in Bolton to the steel and glass heights of Number 2 Kingdom Street opposite London Paddington, which also houses Microsoft’s capital offices. Here, Cunningham says, he has excellent access to a large talent pool which has produced young, enthusiastic sales staff who buy into the vision and plan he has for the company.
“I’ve got two customer service guys here looking after our end-customers, processing the orders, managing all the service requirements for our end-users and really trying to lift the level of customer service we give. That’s been one of our big missions. Now we’ve got 11 [employees] in total incluindg six sales guys.”
Currently, the sales team is divided between those focusing on the core business of powerchairs and the rest on the Roho pressure care brand. The powered products are sold directly to private end-users who are mostly self-funded or funded by charities, but this means that volumes are relatively low, Cunningham says. To make “the real step”, the UK’s Permobil boss is aware that his team must gain better access to the NHS’ powered provision and notes that talking to rehabilitation centres and spinal units about equipment as a rehab solution rather than an A to B mobility product is an essential part of this strategy.
Aside from the NHS channel, Cunningham’s team shares the responsibility of targeting mobility dealerships with the SmartDrive wheelchair power assist device, which the company acquired last year from MAX Mobility. This product is being targeted specifically towards mobility retailers and Permobil has even brought a few dealers on to sell some of its powerchairs.
Cunningham expands: “You can’t get enough footfall just through existing customers or just through your private therapist referrals. We get a lot of our business from there but it will only take us to a certain level — I want to take us all the way up there. With the dealer channel, although you dilute your margin, the volume is much better and that’s exactly the model we’re pursuing.”
Permobil’s UK business is now multi-pronged and one made up of different product categories going through multiple channels. Putting all the pieces together is a “whirlwind” job, according to Cunningham, but he is evidently excited about the firm’s potential if his plan pulls off.
“At the moment we’re relatively small in terms of our revenue; we probably do in a year what our other businesses in European markets do in a month and I believe we should be right up there alongside them. We’ve got to get there through expanding the dealer channel, accessing the NHS — there’s a lot to do.”
An vital part of the company’s efforts to expand its dealer network will be spreading the word that its customer service has vastly improved since it first began operating in the UK. And for Cunningham, the benefits of being part of the corporate Permobil parent group will trickle down the supply chain. Every week he speaks to his counterparts in France, Germany and other countries, who have extensive experience operating at a higher level in their respective markets, and who can offer advice and support.
Cunningham adds: “The commitment of the business now, in terms of the infrastructure provision to the UK, has gone up to a completely new level. The company has made a conscious decision. The UK is probably the biggest health economy in Europe and we haven’t been doing the scale of business that we should. And that’s even regardless of the NHS business, you could almost park that — just based on the UK’s GDP and spending power alone makes it one of the biggest. Even our private channel through our dealer network should be as big as some of those geographies.”
Away from the dealer side, Permobil UK is also working to improve its profile with therapists and NHS bodies and to raise awareness of its products in those spheres. Cunningham maintains that most of the powered business to the NHS will continue to go through direct sales, rather than distributors, as the prices it offers the NHS are heavily discounted already and the margins would be too thin. Nevertheless, on some of its other brands, for example Roho, it will continue to sell to wheelchair service and community equipment providers like Millbrook, NRS Healthcare and Medequip.
Permobil’s network of dealers for its SmartDrive is currently around 20-strong, and was inherited from RGK, which was MAX Mobility’s original UK distributor. So it will not have to start a new retailer list from scratch. Cunningham is working to integrate RGK’s former network into Permobil’s fold and ensure a smooth transition. His six sales people are travelling the country introducing businesses to the SmartDrive and he is keen on expanding that side of the firm, using the infrastructure already in place.
Cunningham asks: “We’re going to try and do that with our existing dealer network but is there then another second tier of dealers who can be brought into the fold? We’re exploring that.
“We’re also looking at whether we need to take a more active presence in the spinal units and rehab centres. Do I see the NHS placing orders for the SmartDrive tomorrow? It retails for £4,795 so I think the answer is ‘highly unlikely’. But by having good knowledge of the SmartDrive, when end-users express an interest in a product like that, at least then the therapist will be able to refer the client onto our dealer network.”
This could mean more opportunities for Permobil dealer partners who may be able to step in where the NHS is unable to provide. And this is an increasingly common trend given that the NHS is under greater financial pressure and needs retailers to offer end-users beyond what they can get from standard wheelchair providers.
In fact, access to high-end products that the NHS is unable to afford, is a highly important topic for Cunningham. He finds people can be frustrated when they are aware of a certain product but are unable to access it because neither the NHS nor dealers have it. Part of his “crusade”, as he describes it, is placing a real focus on the value of a product rather than its cost.
“This is a sort of transformational process that Permobil is going through at the moment from being someone that’s maybe seen as a mobility provider, to somebody that is providing a healthcare solution. You look at SmartDrive for example, in relation to the prevalence of conditions for wheelchair users like shoulder injury, tennis elbow. What frustrates me somewhat is that the NHS, in terms of reimbursement, doesn’t see £4,795 as good value compared to someone that then has to have medicine, surgery and other procedures. It can be frustrating for the end-user too.
“That’s part of my job, to transform not only the business but also to change the way rehab is viewed by the NHS. Ultimately, and this will take a few years, I want to get involved in the public affairs side of things and really start to try and influence and lobby for changing reimbursement — it sounds easy when you say it quickly but it’s an absolutely huge job.
“We’ve got huge ambition for the business in the UK, huge ambition. And I’ve got a committed team that wants to be part of that. The potential is huge. We’re almost now where somebody like Sunrise Medical was a decade ago. They didn’t have much of a footprint in the UK either and they’ve been a pretty good success story in terms of what they’ve achieved in the market.”
On the subject of companies like Sunrise, what is the scale of the challenge Cunningham envisages for Permobil breaking into a market dominated by a small number of established key players? Unsurprisingly, he responds: “It’s difficult.”
And one of that hardest parts of the climb to the top will be encouraging, what is traditionally quite a resistant market, to change. Cunningham insists he is never a critic of the NHS and stresses that it provides an exceptional service, but admits that it is overstretched, underfunded and overworked, which means an environment that can be reluctant to change.
“Often the path of least resistance is to stay doing what you’re doing because change can mean more workload, retraining people, getting a new infrastructure in place in terms of spare parts and servicing. So that’s going to be part of the thing that we need to simplify for the customer. We’ve got to make that transition as smooth as we possibly can and we’re willing to try and do that. It’s worthwhile because there is such a huge market potential in the UK.”
Cunningham clearly recognises the size of the opportunity for Permobil in Britain. He is fully aware that it will be difficult to implement the changes he wants to but with a diverse and multi-channel model targeting direct sales, the NHS and an expanding dealer network, he aims to have all bases covered.
Permobil’s proven success in the US and Europe, where it is such a dominant force, is evidence that the company could become a serious player on the UK scene. Cunningham knows it will take hard graft but replicating the achievements of his continental counterparts will mean a huge shift and redistribution of market share in the UK, which should not be underestimated.