Nick Kozak for the Toronto Star
Case Studies

Saving lives a tough sell for Toronto’s Rescue 7 defibrillator and first aid training business

Vital Stats
Name:
Rescue 7
Owner:
John Collie
Contact:
rescue7.net, 905-474-0770
Field:
Lifesaving training and equipment
Staff:
9
Active:
15 years

For John Collie, business is a matter of life and death.

A former Toronto firefighter, Collie founded his company, Rescue 7, in 1998 to offer workplace first aid training courses. He later expanded into health and safety training, and began selling battery-powered defibrillators that he says are the “lightest, most durable and affordable” on the market.

The life-saving industry has proven to be lucrative. Rescue 7 is poised to hit $5 million in sales in 2013 and has increased revenues by 106 per cent over the past five years, earning a spot on Profit magazine’s list of Canada’s fastest-growing companies.

Collie isn’t satisfied though, and wants to double the company’s earnings by 2015.

“We’ve grown at over half a million dollars a year,” he says. “We see the opportunity to get to the $10 million mark in the next three to five years.”

The problem is that further growth means taking market share from well-established competitors.

In the world of first aid training, the dominant players are St. John’s Ambulance, whose Ontario branch reaped $12.5 million from training programs in 2012, and Canadian Red Cross, which generated over $387 million in revenue last year. In the defibrillator market, Phillips, a global corporation with $34 billion in annual revenue, and Zoll Medical Corp., which recorded $523 million in annual revenue in 2011, are the known quantities. To achieve the growth Collie seeks, Rescue 7 will need to make a play for top spot in both markets.

It’s been a tough road so far. Rescue 7′s competitors enjoy strong brand recognition, and Collie says customers tend to stick with organizations they know when it comes to first aid training and life-saving equipment. So, in his eyes, future growth hinges on creating broader brand awareness to supplant the larger companies in the minds of potential customers.

Rescue 7 has “healthy cash flow,” Collie notes, and it’s a lean operation, with nine employees at the head office in Markham and a network of staff based in cities across Canada who run training courses and distribute defibrillators.

The firm has also expanded its operations into the U.S., opening an office in Chicago last year.

Collie hopes access to new these markets will help drive the growth of his defibrillator business, which accounts for 65 per cent of Rescue 7’s revenue. But because there’s so much competition in the corporate and medical world, he’s also planning a move into the consumer market, attempting to get the machines — which cost between $1,300 and $2,100 per unit — into homes and cottages and onto boats and planes.

“Business-to-business we’re pretty good,” he says, noting that Rescue 7 sold 2,000 units last year and averages 200 sales a month thanks to ongoing contracts with companies such as GoodLife Fitness and organizations such as the RCMP and the Canada Revenue Agency. “We need to get into the business-to-consumer market.”

This is a mostly untapped opportunity. Collie says Phillips has only had limited success selling home defibrillators, and Zoll doesn’t target consumers at all. But the market is in its infancy, and developing it will require Collie to convince people they need defibrillators.

Collie is so used to fighting for market share in the corporate and institutional spheres, his messaging primarily concentrates on why his units are better and more affordable than his competitor. But

Neville Pokroy, a principal with Mastermind Solutions, a Toronto-based business consulting firm, says this approach won’t be as effective in the consumer market.

“Saving lives is an emotive issue,” he says. “If they want to target consumers, they’ll need to find a way to identify differentiators that are emotional triggers — not just weight and price.”

This means doing market research and asking people what would make them want to buy a defibrillator, he adds..

At the moment, Collie isn’t doing much in the way of consumer market research, but he just launched a three-month radio campaign in the GTA aimed at selling home defibrillators. He says that if it’s successful, the company will consider going national with the ads.

At the same time, Collie wants to expand the training side of his business, which comprises 35 per cent of revenues.

“Branding is at the forefront of our challenges. It’s about reaching out to corporate clients and government agencies and letting them know what we have is better than what the others are offering.”

The advantage of Rescue 7′s training is that the courses, which cost $120 per person — “not the cheapest, but not the most expensive,” says Collie — are taught almost exclusively by front-line emergency workers — medics and firefighters with actual field experience performing CPR and first aid.

And the theory portion of the courses can be completed online — a first in Canada — so trainees only have to be in a classroom for six hours, or one day of training versus the standard two.

Despite the course’s advantages, it hasn’t yet gained widespread recognition. Collie says his program is still struggling for legitimacy, and that groups such as the Lifesaving Society, which certifies lifeguards, and Ottawa Fire Services don’t recognize his company’s certification.

Still, Collie doesn’t see this as an insurmountable obstacle, and feels it’s only a matter of time before better brand recognition leads to more widespread acceptance of his CPR and first aid training, which will in turn make the courses easier to sell.

“We’re trying to show there are alternatives that are just as good if not better,” Collie says. “I’m not saying it will be simple — there’ll be plenty of bumps in the road ahead.”

EXPERT VIEWS

As Interviewed by: Tom Henheffer

This is a great company with good results and Collie seems to have a real competence selling B2B. But this is very different from selling to the consumer market. If Rescue 7 is going to start concentrating on B2C sales, they’ll need to do a lot of market research. They may have serious challenges to overcome in terms of educating the public. I think it’d be better to leverage Rescue 7's B2B competence by discovering what it is about the larger brands that wins them so much loyalty. Collie needs to do a deep dive, maybe with the help of a professional marketing firm, and find out why his product offering is actually more compelling than his competition. Knocking down established brands isn’t impossible, but it will take a lot of work. So if I was Collie, I’d make sure this is what I really want to do before investing in brand development and a huge marketing campaign. And I’d also continue concentrating on growing the brand internationally, because there could be even stronger opportunities outside of Canada.

by K. Roos - Enterprise TO

Collie is looking to expand into the U.S. and B2C markets. Trying for both will give him a real issue with focus. He’d be better off concentrating on B2B sales in the U.S. alone. It’s an expensive proposition to educate consumers, and who’s going to spend $2000 for a defibrillator at home in the off chance that someone has a heart attack? I see no value there. So, in terms of B2B, opening a U.S. office is a good first step, now Collie needs to figure out how to start knocking on doors. Does he go to a distributor? Does he build his own salesforce? He could, but it’d be very expensive. He knows the companies he’d like to work with, so I’d start by calling the top ten, see if they’re interested, and determine what the best path forward is. After the company gets a war chest built and has enough volume to bring down costs, Collie may decide to, on a very limited, targeted basis, start selling to consumers. But I think B2B will always be his most lucrative market.

by Mark Simpson - GBC

Collie can fix his marketing problem with conventional ads, partnerships, and community involvement. I’d fight the larger players by creating some bold ads, something like “when it’s a matter of life and death, choose the best,” and dig up some stats that prove his services are better than the competition. In terms of partnerships, Collie should be leaning on the reputation of medical professionals. He can look for endorsements from health clinics, firefighters, nurse practitioner associations, anyone that the public already trusts. And he also has an excellent roster of existing clients he can leverage — I’d ask Bell, Canada Post, the RCMP and his other big customers to put his logo on their website and for permission to but theirs on his. That kind branding lends a lot of legitimacy, and creates exposure for both companies. Finally, Collie should increase community engagement by making some donations to get ad space, and getting his guys out volunteering, at charity events like Run for the Cure or the Terry Fox Run. These make for great opportunities to get in front of a lot of people and build positive grassroots brand awareness.

by Deirdre Fitzpatrick - GBC

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