Going from $10,000 to $80,000 units was a big step. But Groop soon realized that another, even more lucrative niche existed for his company, which he renamed Fusion in late 2000. "The same GE sales guys who didn't want to push $80,000 mammography units didn't want to waste their time in the boonies," he says. "They just wanted to concentrate on the big city hospitals. You could sell big iron in the boonies, but who wanted to do that?"
Need you ask?
It's a blustery day in January, and Fusion's Randy Kemp and Jim Mengel are on a sales call. Outside it's 18 degrees above zero, but inside Kemp's dark-green Jaguar it's warm and comfy: cushy leather, high-grade stereo sound, and a lanolin-smooth drive. Kemp and Mengel are middle-aged veterans of the sales wars. Kemp was Groop's first employee nine years ago. Today he's a regional sales manager for the Washington, D.C.-northern Virginia-Maryland area. "Jim," Kemp says of Mengel, "is my guy in suburban Maryland."
When he started at Fusion, Mengel got three weeks' technical assistance from GE. After that, he was on his own. At his first office meeting at GE, the manager asked if anyone was interested in visiting a VA hospital in rural West Virginia. The rookie raised his hand. "Jim," the manager replied, "are you sure you really want to go out on a call this soon?" It was, Mengel thought at the time, "a great way to break the ice." So he set up an appointment and brought with him "a single brochure of an MRI, which I could sorta, I guess, explain." The department manager at the VA told him that he had the boardroom ready for his presentation. And, oh, there would be "three docs and a bunch of techs there too." Mengel thought to himself: "Holy shit! What am I getting myself into?" Drawing upon his long experience in sales, he "winged it," but he learned a lesson: "Dig deeper, know more than you think you could ever need to know."
Now, as they barrel down the interstate and away from Baltimore, Jim Mengel and Randy Kemp explain the art of pumping big iron. Less than a decade ago, says Mengel, there was just one player in the so-called "open MRI" game: Hitachi. After Philips entered the fray, there were two. Only in the past six years or so has GE become a player.
The bad news, of course, is that GE came late to the table. The good news is that GE's late entry into what has become the most popular segment of the big-iron business helped open the door for Fusion, which from the beginning focused its energies on selling to upscale, suburban radiology imaging centers. Almost as good, says Kemp, is "the fact that many first-generation open MRIs are nearing the end of their shelf life."
But it's not just MRIs that Kemp and Mengel are selling. The biggest ticket of all comes in the form of the new 16-slice CT unit. "Slices," Kemp explains, "represent angled views of, for example, the heart. The more slices you get, the more accurate the diagnosis the cardiologist should be able to make." Most university teaching hospitals have 16-slice CT units. Most radiology centers don't. The reason: A new 16-slice CT costs a whopping $1.5 million. Instead, says Mengel, "your typical radiology clinic settles for a four-slice unit that costs upward of $600,000." Even that involves a significant investment. "In order to sell one of these babies," says Mengel, "you gotta overcome some resistance."
The Fusion team's selling point: "Number one," says Mengel, "we offer GE reliability, quality, and financing. Number two, we provide personal service to the small, suburban hospitals and radiology clinics like nobody else. That's the Fusion difference."
Today's visit will be to a typical Fusion client: Olney Open MRI, located in affluent Olney, Md. The co-owner is Michael Buttner. Rotund and immaculately clad, Buttner made a small fortune as the chairman and CEO of Globetrotter Travel Management Services, a sports travel business. Now, he's on his way to making a second fortune, this time in the world of radiology clinics. "Everybody and his brother," he claims, "is trying to get into it." Buttner and his two partners have big hopes, with plans to open six clinics in the next few years. That kind of expansion costs money--and could mean big-ticket business for Mengel, who had already sold Buttner a high-field open MRI that cost $1.4 million. "That's typical of Mike," says Mengel. "He started right at the top. He's not content with anything less."
Complicating matters, Buttner's newest partner recently put a Philips system in one of their clinics. "Now you know that wasn't me, Jim," says Buttner. "You know I'm a GE guy. But as you also know, Philips made it a hard call for us. They gave us preferred financing."
After lauding the many virtues of the four-slice CT--the Olney clinic currently has an MRI but no CT--Mengel proposes a slightly cheaper alternative, GE's GoldSeal units: "Think used Lexus." A GoldSeal unit, Mengel explains, "is a barely used CT--within a year of warranty. This is GE quality at a steep discount. We're talking 25% less"--roughly $450,000 rather than the $600,000 list price. "You'll be doing seven, eight, nine patients a day with your four-slice," he says.
"You think we'd get those numbers?" Buttner asks.
"Guaranteed," says Mengel.
"Hmmm," says Buttner. "We really appreciate all the marketing support you've been giving us, you know. You were right about the open MRI numbers at our Olney clinic."