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REVIEW SUMMARY
Business. voiceTech, Venice
Industry. Technology, pharmacy
Key. Firm seeks to find a niche in new markets, while keeping a focus on current markets.
Executives at voiceTech, which provides automated phone services for pharmacies, faced the kind of moment one day in 2008 that could propel a company to greatness.
Or sink it.
The crux of the issue wasn't novel. The Venice-based firm, then 15 years old, with about 25 employees and around $5 million in annual sales, realized technology, mainly smartphones, would upend its industry. But the firm had just finished a five-year swing where it spent at least $2 million in an attempt to increase its market share with independent drug store operators. That segment of the industry is generally slow to embrace technology, so the pursuit was with more traditional products.
The dilemma: Should voiceTech keep hammering away at independents, given the already large investment in that direction? Or should it refocus on technology, and go after a different, possibly more lucrative, piece of the market?
Company President and CEO Tim Garofalo, who founded the firm in 1993 with his then-wife, Sara Garofalo, chose the latter.
“If we want to make more money and be a hero in the industry,” Tim Garofalo says, “we need to use our technology to offer new services and features.”
The voiceTech reinvention, in the beginning, took hold slowly. But after three years, and more than $500,000 in research and development, Garofalo is confident voiceTech, now with 30 employees, is on the cusp of big things.
Indeed, in September voiceTech released ServiceLink-Rx. It's a software product designed to aid a pharmacist's outbound communication with customers, especially in mobile phone calls, texts and emails. It includes a mobile application option. “This is the way the world is going,” says voiceTech Senior Vice President Sara Garofalo.
Sara and Tim Garofalo — who have divorced since they founded voiceTech but both still work fulltime at the company — agree ServiceLink-Rx holds significant potential for the firm.
ServiceLink-Rx, says Tim Garofalo, has even caught the attention of some of the big industry players.
That attention, projects Garofalo, will push the company into one of its best years ever in 2012. He has already had early sales conversations on ServiceLink-Rx with a host of large national and regional pharmacy chains, including Publix and Target.
Garofalo says in the first two quarters of 2012 he and the voiceTech sales force will speak with 20-25 chains that oversee anywhere from 100 to 500 drug stores each. The sales effort alone will double, or even triple voiceTech's marketing budget, says Garofalo, although he declines to release a specific budget figure.
Garofalo says if voiceTech lands some of the bigger targets, annual revenues, which are in the $5 million to $10 million range, could grow 50% next year. “We have to budget some money to go after this,” says Garofalo. “We cannot not go after it.”
'Customize communication'
The firm further plans to grow physically and in employees in 2012. The company recently signed a lease for a 12,000-square-foot office near the Fruitville Road exit of Interstate 75. It's space that nearly doubles its current 7,600-square-foot headquarters in Venice. Garofalo says voiceTech will likely hire at least five more people next year, in positions in customer service, sales and eventually, management. The firm hopes to move into its new office by February.
Garofalo says one reason for the new office space is the firm simply ran out of room in its current facility. The conference room table is now actually in Garofalo's office because employee cubicles took over the conference room.
Another reason for the new office, Garofalo says, is to upgrade the company's profile to a more professional operation. That's important, because he expects to talk about ServiceLink-RX with representatives from national companies there.
ServiceLink-RX, says Garofalo, was designed with the ability to analyze patient data and automatically determine when a customer is up for a contact from the pharmacy. That could be anything from a refill reminder to a prompt to take a medication. Says Garofalo: “It does all the thinking for the pharmacist.”
The medication prompt call is a key selling point to ServiceLink-RX, which voiceTech bases on studies that show how infrequently people actually take their prescription medicines. “There is a lot of attention being drawn to methods to encourage people to be compliant,” says Garofalo.
Another important ServiceLink-RX feature, says Sara Garofalo, is the pharmacist can use the outbound message tool to send more than prescription-based information. It can also send out messages that plug everything from clinics to flu shots to new promotions. “The whole goal,” says Sara Garofalo, “is to customize communication out to the patients and customers.”
One challenge that looms over ServiceLink-RX is the sales cycle could be painfully slow, especially for large prospective clients. While the payoff is big, firms like Target and Publix could take nine to 18 months to make a decision. That time, says Tim Garofalo, could include trials, test runs and meetings with competitors.
Increased demand
Garofalo, a native of Poughkeepsie, N.Y., north of New York City, got into the pharmacy communications industry mostly through accident. He worked for a Sarasota-area telecommunications firm in the early 1990s, where he set up voice mail systems. Sara Garofalo worked at the same firm.
The couple soon launched their own business, which also focused on setting up voice mail systems. But the Garofalos discovered a need in the pharmacy industry to improve pharmacist-to-customer communications. That became the firm's new focus.
The Garofalos started in their garage. Business grew quickly, however. In nine months the firm had both moved to an office and secured a $9 million, multiyear deal to supply Rite Aid with basic pharmacy communications services. “We had to grow the company quick to meet the need,” Garofalo says. “Big chains were buying our product like crazy. It almost killed us.”
In response to the demand, the firm created what it now calls fusion technology, a trademarked line of automated phone products for pharmacies. With big chains like Rite Aid, the firm surpassed $5 million in annual sales by 2003 or so. But after that, says Garofalo, many large chain clients began to do the work in house. Sales growth at voiceTech turned sluggish.
In the mid-2000s the firm shifted its focus to independent drug stores and pharmacies. The move kept the firm afloat, but not in high-growth mode. That move, though, ultimately led the firm to its big-moment discussions, which in turn led to ServiceLink-RX.
Now the Garofalos are hopeful another wave of business could be forthcoming. Sara Garofalo acknowledges the fast growth, if it comes to fruition, could bring a new set of challenges. Namely, that would be managing more business, more employees, and, potentially, more problems.
“Growing is exciting,” Garofalo says, “but it could also be painful.”
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