CEBI Executive Briefing April 23-24, 2009 Itasca, Illinois Douglas W. Lyon, CPA.
-
Upload
elisabeth-lewis -
Category
Documents
-
view
212 -
download
0
Transcript of CEBI Executive Briefing April 23-24, 2009 Itasca, Illinois Douglas W. Lyon, CPA.
![Page 1: CEBI Executive Briefing April 23-24, 2009 Itasca, Illinois Douglas W. Lyon, CPA.](https://reader037.fdocuments.in/reader037/viewer/2022110401/56649e185503460f94b03a91/html5/thumbnails/1.jpg)
CEBI Executive Briefing
April 23-24, 2009
Itasca, Illinois
Douglas W. Lyon, CPA
![Page 2: CEBI Executive Briefing April 23-24, 2009 Itasca, Illinois Douglas W. Lyon, CPA.](https://reader037.fdocuments.in/reader037/viewer/2022110401/56649e185503460f94b03a91/html5/thumbnails/2.jpg)
Where Were We? (Two Years Ago)
![Page 3: CEBI Executive Briefing April 23-24, 2009 Itasca, Illinois Douglas W. Lyon, CPA.](https://reader037.fdocuments.in/reader037/viewer/2022110401/56649e185503460f94b03a91/html5/thumbnails/3.jpg)
Where Were We? (Two Years Ago)
First to Market
Market Leader – 28%
Virtually no competition
Prices so low, who could afford to compete?
![Page 4: CEBI Executive Briefing April 23-24, 2009 Itasca, Illinois Douglas W. Lyon, CPA.](https://reader037.fdocuments.in/reader037/viewer/2022110401/56649e185503460f94b03a91/html5/thumbnails/4.jpg)
What Happened in 2006 – 2007?
![Page 5: CEBI Executive Briefing April 23-24, 2009 Itasca, Illinois Douglas W. Lyon, CPA.](https://reader037.fdocuments.in/reader037/viewer/2022110401/56649e185503460f94b03a91/html5/thumbnails/5.jpg)
What Happened?
Contrary to popular thinking…the IRS is a
“good guy”!!
![Page 6: CEBI Executive Briefing April 23-24, 2009 Itasca, Illinois Douglas W. Lyon, CPA.](https://reader037.fdocuments.in/reader037/viewer/2022110401/56649e185503460f94b03a91/html5/thumbnails/6.jpg)
What Happened in 2006 – 2007?
IRS announced Form 990 Schedule H
Michigan Hospital Association (MHA) indicated intention to compete “head-on” with us
- Historically, Michigan hospitals only
- Historically, survey process only (minimal hospital-level software)
![Page 7: CEBI Executive Briefing April 23-24, 2009 Itasca, Illinois Douglas W. Lyon, CPA.](https://reader037.fdocuments.in/reader037/viewer/2022110401/56649e185503460f94b03a91/html5/thumbnails/7.jpg)
Digression:
One of my Professional Regrets MHA and Lyon worked together in the late 90’s
- We had the software
- They had specific data aggregation needs
- We collaborated
- Their Senior VP was a supporter
Missed Obvious MHA indicators over 6 year period
- I should have “read the tea leaves”, but didn’t
![Page 8: CEBI Executive Briefing April 23-24, 2009 Itasca, Illinois Douglas W. Lyon, CPA.](https://reader037.fdocuments.in/reader037/viewer/2022110401/56649e185503460f94b03a91/html5/thumbnails/8.jpg)
What Opportunities Did We See?
![Page 9: CEBI Executive Briefing April 23-24, 2009 Itasca, Illinois Douglas W. Lyon, CPA.](https://reader037.fdocuments.in/reader037/viewer/2022110401/56649e185503460f94b03a91/html5/thumbnails/9.jpg)
What Opportunities?
Both a significant opportunity and a scary threat (a double-edged sword)
Opportunity was enormous… a federal agency mandating an annual report on Community Benefit
- Remaining not-for-profit hospitals should be ours for the taking (we thought)
- Lyon Software had a wonderful reputation and our
CBISA had a “Gold Standard” feeling among
hospitals
![Page 10: CEBI Executive Briefing April 23-24, 2009 Itasca, Illinois Douglas W. Lyon, CPA.](https://reader037.fdocuments.in/reader037/viewer/2022110401/56649e185503460f94b03a91/html5/thumbnails/10.jpg)
What Opportunities?
Threat was significant as well… a highly-regarded, state hospital association would be a formidable competitor (tremendously more capitalized than Lyon Software)
And the bad news kept coming… another competitor was emerging
- A large healthcare consulting firm in Maine (but not a software developer)
And, RUMORS have been flying ever since about others, one of which we’ve been able to verify
![Page 11: CEBI Executive Briefing April 23-24, 2009 Itasca, Illinois Douglas W. Lyon, CPA.](https://reader037.fdocuments.in/reader037/viewer/2022110401/56649e185503460f94b03a91/html5/thumbnails/11.jpg)
Digression:
I Liked the “Life Style” Business Model
We had never advertised
Our prices were low (in retrospect, a good thing)
Word-of-mouth was primary source of new business
Warm relationships with two National Associations:
- Catholic Health Association (CHA)- VHA, Inc.- Each having over 1,000 hospital
members, mostly non-overlapping
![Page 12: CEBI Executive Briefing April 23-24, 2009 Itasca, Illinois Douglas W. Lyon, CPA.](https://reader037.fdocuments.in/reader037/viewer/2022110401/56649e185503460f94b03a91/html5/thumbnails/12.jpg)
Digression:
I Liked the “Life Style” Business Model
Figured my blue-chip, satisfied customer list of 1,200 hospitals would fund my eventual retirement
Wasn’t in for a fight … didn’t see one coming
![Page 13: CEBI Executive Briefing April 23-24, 2009 Itasca, Illinois Douglas W. Lyon, CPA.](https://reader037.fdocuments.in/reader037/viewer/2022110401/56649e185503460f94b03a91/html5/thumbnails/13.jpg)
The Hospital Market
![Page 14: CEBI Executive Briefing April 23-24, 2009 Itasca, Illinois Douglas W. Lyon, CPA.](https://reader037.fdocuments.in/reader037/viewer/2022110401/56649e185503460f94b03a91/html5/thumbnails/14.jpg)
The Entire Market – 4,500 NFP Hospitals
The Hospital Market
CBISA Clients:
• Full Paying 1,300 28.9%
• Free in ’08 400
CBISA Subtotal 1,700 37.7%
Prospects 2,800 62.3%
Total NFP Hospital Market
4,500
![Page 15: CEBI Executive Briefing April 23-24, 2009 Itasca, Illinois Douglas W. Lyon, CPA.](https://reader037.fdocuments.in/reader037/viewer/2022110401/56649e185503460f94b03a91/html5/thumbnails/15.jpg)
How Big Was the Opportunity?
![Page 16: CEBI Executive Briefing April 23-24, 2009 Itasca, Illinois Douglas W. Lyon, CPA.](https://reader037.fdocuments.in/reader037/viewer/2022110401/56649e185503460f94b03a91/html5/thumbnails/16.jpg)
How Big Was the “Opportunity”?
A hefty chunk of 2,800 remaining hospitals would have to do something by end of 2009
One 3rd (about 1,000) of the remaining hospitals would be worth over $2,000,000 a year in revenue to us
- It wouldn’t have to be Lyon Software
- It wouldn’t even have to be software
So it was worth spending some money
![Page 17: CEBI Executive Briefing April 23-24, 2009 Itasca, Illinois Douglas W. Lyon, CPA.](https://reader037.fdocuments.in/reader037/viewer/2022110401/56649e185503460f94b03a91/html5/thumbnails/17.jpg)
So What Did We Do?
![Page 18: CEBI Executive Briefing April 23-24, 2009 Itasca, Illinois Douglas W. Lyon, CPA.](https://reader037.fdocuments.in/reader037/viewer/2022110401/56649e185503460f94b03a91/html5/thumbnails/18.jpg)
So What Did We Do?
Market research
Identified new “buyers” in hospitals (CFOs)
Identified new messages:
- “Still the One” (for existing clients)
- “Do you have the systems in place?” (for prospects)
![Page 19: CEBI Executive Briefing April 23-24, 2009 Itasca, Illinois Douglas W. Lyon, CPA.](https://reader037.fdocuments.in/reader037/viewer/2022110401/56649e185503460f94b03a91/html5/thumbnails/19.jpg)
So What Did We Do?
Evaluated our competition
- Way more capitalized than us
- No software companies (as yet)
- Minimal market penetration
- We beat MHA head-to-head in our first 3 health system battles (and one was Henry Ford Health System, in MHA’s backyard)
Did I mention their software was identical to CBISA… screens, screen prompts, reports, etc.? – what a coincidence
![Page 20: CEBI Executive Briefing April 23-24, 2009 Itasca, Illinois Douglas W. Lyon, CPA.](https://reader037.fdocuments.in/reader037/viewer/2022110401/56649e185503460f94b03a91/html5/thumbnails/20.jpg)
So What Did We Do?
We did several real “marketing” things:
• Placed an ad in Healthcare CFOs periodical (called HFM)
- 8 months @ $4,200/month
• Snail-mailed (very expensive) descriptive, color
informational packets (with a specially-made
envelope stamped in red “Important Information on IRS 990H”) to 2,800 CFOs (every hospital we didn’t have)
![Page 21: CEBI Executive Briefing April 23-24, 2009 Itasca, Illinois Douglas W. Lyon, CPA.](https://reader037.fdocuments.in/reader037/viewer/2022110401/56649e185503460f94b03a91/html5/thumbnails/21.jpg)
Digression:
Meanwhile, Went After a New Market
Identified a new market for our software that would not require massive programming surgery – Higher Education
Hired a Higher Ed expert and one-half of a 2nd salesperson for Higher Ed
Developed the product – launched it in February ’09
- Identified 1,100 “community-engaged” colleges and universities as best prospects and mailed promotional packets to Presidents/CEOs of these institutions
![Page 22: CEBI Executive Briefing April 23-24, 2009 Itasca, Illinois Douglas W. Lyon, CPA.](https://reader037.fdocuments.in/reader037/viewer/2022110401/56649e185503460f94b03a91/html5/thumbnails/22.jpg)
So What Did We Do?
Back to Hospitals
Hired a hospital community benefit expert to help sell; hired a 2nd half-time salesperson; reassigned existing staff duties to sell
Conducted educational workshops in 12 cities on new IRS requirements
- 310 attended
![Page 23: CEBI Executive Briefing April 23-24, 2009 Itasca, Illinois Douglas W. Lyon, CPA.](https://reader037.fdocuments.in/reader037/viewer/2022110401/56649e185503460f94b03a91/html5/thumbnails/23.jpg)
So What Did We Do?
Changed our software to incorporate every requirement of Schedule H
- 8 to 10 new or seriously revised screens
- 15 new reports
- Expanded role/access for Finance types
![Page 24: CEBI Executive Briefing April 23-24, 2009 Itasca, Illinois Douglas W. Lyon, CPA.](https://reader037.fdocuments.in/reader037/viewer/2022110401/56649e185503460f94b03a91/html5/thumbnails/24.jpg)
So What Did We Do?
MHA introduced “loss leader” pricing – sweet, one year deals for $900 (our software was $4,000 at the time)
I paid them an evening visit
For my full time staff… established a Christmas Bonus program, focusing on 2009 sales
Revised our pricing – first time in 15 years it went down - $2,000 (from $4,000)
![Page 25: CEBI Executive Briefing April 23-24, 2009 Itasca, Illinois Douglas W. Lyon, CPA.](https://reader037.fdocuments.in/reader037/viewer/2022110401/56649e185503460f94b03a91/html5/thumbnails/25.jpg)
Ongoing Plans
![Page 26: CEBI Executive Briefing April 23-24, 2009 Itasca, Illinois Douglas W. Lyon, CPA.](https://reader037.fdocuments.in/reader037/viewer/2022110401/56649e185503460f94b03a91/html5/thumbnails/26.jpg)
Ongoing Plans
CBISA and 990H educational webinars
More “face time” at conferences
Teaming up with additional states’ hospital associations (except, of course, Michigan)
- Speaking on Community Benefit and 990H at annual membership meetings (6 since November)
(Thinking about) hosting “virtual open houses”
![Page 27: CEBI Executive Briefing April 23-24, 2009 Itasca, Illinois Douglas W. Lyon, CPA.](https://reader037.fdocuments.in/reader037/viewer/2022110401/56649e185503460f94b03a91/html5/thumbnails/27.jpg)
Have We Been Successful?
![Page 28: CEBI Executive Briefing April 23-24, 2009 Itasca, Illinois Douglas W. Lyon, CPA.](https://reader037.fdocuments.in/reader037/viewer/2022110401/56649e185503460f94b03a91/html5/thumbnails/28.jpg)
Have We Been Successful?
Won’t know full effect for a year or more
Preliminary sales are up
18 state Associations are “on board” – compared to none 14 months ago
Competitors haven’t seemed to achieve “traction” (our fingers are crossed)
![Page 29: CEBI Executive Briefing April 23-24, 2009 Itasca, Illinois Douglas W. Lyon, CPA.](https://reader037.fdocuments.in/reader037/viewer/2022110401/56649e185503460f94b03a91/html5/thumbnails/29.jpg)
Lessons Learned
![Page 30: CEBI Executive Briefing April 23-24, 2009 Itasca, Illinois Douglas W. Lyon, CPA.](https://reader037.fdocuments.in/reader037/viewer/2022110401/56649e185503460f94b03a91/html5/thumbnails/30.jpg)
Lessons Learned
Don’t pre-announce a fabulous Christmas Bonus plan for Christmas 2009 (in late November 2008)
Stay close to your strategic partners and clients
- MHA should never have happened
Pricing strategy is so critical
“Short-term” sales help needs to be managed
Recognize some things are out of your control… and let them go
![Page 31: CEBI Executive Briefing April 23-24, 2009 Itasca, Illinois Douglas W. Lyon, CPA.](https://reader037.fdocuments.in/reader037/viewer/2022110401/56649e185503460f94b03a91/html5/thumbnails/31.jpg)