OFF-THE-CUFF

Our January 2014 issue means another Business Person of the Year award winner. The professors at the Minnesota State College of Business have done yeoman’s work the last ten years objectively judging our awards from nominees sent in by readers in September. The nominees were judged according to personal character, business results, leadership, and community involvement. Our first Business Person of the Year award went to Lorin Krueger of Winland Electronics in 2004.

—–

In early November, I was listening to an AM radio station and caught a verbose host referring to Obamacare as “The Unaffordable Careless Act.” I’m not treading there. But I will offer my humble take on what has become the most problematic product launch in American history, surpassing failed corporate launches of the Edsel, Olestra, and New Coke.

Here’s my angle. From 1990-93, I was a sales representative for a health and beauty aids brokerage selling everything from Tylenol to Centrum Vitamins direct to 64 drug and grocery accounts. I enjoyed the job. It and other jobs like it were my real-world preparation for being a business magazine editor.

Somewhere in that three-year span, I helped launch Tylenol PM into a Drug Emporium division. Blue-bottled Tylenol PM contained acetaminophen and a generous nighttime sleep aid.

It has been so long, but here’s how my Tylenol PM sales presentation probably went: After greeting a Drug Emporium buyer, I pulled out a deal sheet for his review and went into my sales presentation. Like all Tylenol products I sold, the product was available with the same deals and pricing to all Mid-Atlantic drug accounts. The product had a specific ship date. With Tylenol PM, I might have shown a regular 72-piece case price of about $275, and maybe an allowance (off-invoice deal) of $72 per case for an introductory buy. (This is for illustrative purposes.)

After I flashed some colorful television storyboards and touted a $10 million or so introductory advertising campaign, and showed off some floor display deals, the buyer signed on the dotted line. This was Tylenol, after all. It was an easy sell.

—–

Now fast forward to October 1, 2013, the date in American history the IRS and federal government had promised to roll out The Affordable Healthcare Act, also known as Obamacare.

Here’s how the launch went for Obamacare. Despite the President’s promise, only a handful of Americans—literally—were able to buy the much-touted insurance product on the national roll out date. The IRS blamed website problems. And even though the IRS knew of the website problems weeks in advance, not one person there in advance alerted buyers of any potential delays and after the failed launch no one there could tell buyers when the product would be available. To make matters worse, the IRS then promised another national rollout at the end of November and promptly broke that promise, too.

To make matters much worse, the product that did arrive wasn’t anything like the product promised. Suddenly and unexpectedly, millions of good people all over America were getting nasty notices about losing their individual insurance policies, all while unable to buy any replacement product. We had been promised at least 29 times this wouldn’t happen.

To make matters much, much worse, the invoice didn’t reflect the promised price. We had been told repeatedly the insurance product would save the average family of four up to $2,500 per year. In fact, its primary salesman had made this promise more than 15 times—without any caveats.

—–

I sit here now at my desk trying to imagine what my Drug Emporium buyers would have done if 1) Tylenol PM hadn’t shipped on the promised date; 2) I hadn’t notified them in advance of the delayed ship date, which was important because they had budgeted, and cleared shelf and floor display space for it; 3) the promised deal price was reneged upon; 4) the regular invoice price was higher than the purchase order price, and; 5) a promise for a second ship date also was broken.

I can tell you for a fact: After being treated like this and having no way to remedy the situation, these Drug Emporium buyers wouldn’t have purchased anything ever again from me and in the least, going forward, would have drastically reduced shelf space on all Tylenol (McNeil Pharmaceutical) products as retribution, probably relegating the entire line to a single four-foot shelf at knee-level with one facing per SKU. They would have raised hell.

Regarding Obamacare, I have had a very hard time believing a product launch so big, so important, so well financed, so hyped, and with so much lead-time and the manufacturer’s name on the line, could have been so problematic in so many critical areas. It didn’t happen to Tylenol PM and has not happened with any other consumer product launch I’m aware of in American history, including the Edsel, Olestra, and New Coke. It has happened only with the IRS. Apparently, the same federal government that placed Neil Armstrong on the moon can’t build a website.

—–

Personally, I spent early 2013 preparing for the launch of Obamacare. Over my lifetime, I’ve given and heard many thousands of sales presentations and usually can spot when salesmen over-sell, over-promise, and will under-deliver. The chief Obamacare spokesman over-sold, over-promised, and now we know he under-delivered.

Seeing the inevitable, i.e., the federal government eventually under-delivering, my wife and I voluntarily dropped our individual health insurance policy last March to join a faith-based, medical cost-sharing organization that received an Affordable Healthcare Act exemption. It’s not well known, but these cost-sharing organizations exist, have been growing rapidly, and have been completely legal more than 20 years.

Our cost-sharing organization has about 110,000 people enrolled and it’s not even the largest. We pay each other’s monthly medical bills—there are no premiums. My family has catastrophic “coverage” up to $2 million and should save at least $5,000 annually. Ironically, if not for the Affordable Healthcare Act passage and our anxiety over what we saw as an approaching train wreck, we never would have searched for truly affordable healthcare that fits our budget and healthcare needs. I hope you find your way around the crash site, too.

—–

Thanks for reading southern Minnesota’s first and only locally owned business magazine, the only one reaching 8,800 business decision makers in nine southern Minnesota counties. Stay tuned for a whopper of a cover story in March 2014. We’re already anticipating.