American Heart Association recently made a public announcement that, beginning on July 1 of this year, they will start selling all AHA educational material directly will have long lasting impacts on many. In essence, this announcement means that American Heart Associationâ€™s three distributors have been eliminated from the AHA operation after June 30th of this year. Just hours after the AHA announcement, Channing Bete announced that it will cease operations July 3, 2019. Though, the Channing Bete company sites various reasons for the closure, the timing of their announcement tells us all we need to know.
This is not the first time this type of business decision has been made in the Health and Safety industry. Many of you may remember StayWell. StayWell was the company from whom we all purchased our materials or anything Red Cross. A number of years ago, the Red Cross also decided to bring these sales under their own roof so to speak. They digitized manuals and made these electronic manuals free to access. And, they now sell many other products directly through their own web platforms. This will not stop but, instead, will likely increase as these large companies seek to maximize profits.
examples of profit minded decisions
The evolution of the delivery method of health and safety programming and classes continues. This is not isolated to the recent AHA decision and announcement. The evolution impacts all of us across all brands. Even though some of us may have the viewpoint that we are in this industry for the greater good, it, ultimately, is about the almighty dollar. Our industry, like most, continues to change with the times. Often, these changes focus on increasing profit margins. This, typically, comes at the expense of the â€˜little guysâ€™ in the industry. Consider these facts associated with reducing costs and increasing profits:
- American Red Cross moved health and safety from the local chapter houses to national headquarters and hired regional representatives who are responsible for a territory.
- The American Red Cross continues to increase prices of certification cards and has announced that they will do so each year moving forward.
- Red Cross moved from a free online class posting service for APâ€™s/LTPâ€™s to charging for the class posting service. The costs are not insignificant. Currently, all aquatics classes are $25 per class posting and $50 for all CPR based classes. It would seem to me that during the period of time in which this service was free, all of the APâ€™s/LTPâ€™s who posted classes helped to increase the SEO. Once the SEO was enough to drive a tremendous amount of web traffic to their page, the Red Cross began to charge. Why the difference in price between the aquatics class postings and the CPR class postings? Let us not forget the Red Cross no longer teaches aquatics classes themselves as they do not own pools and do not engage in renting these spaces for classes. However, the Red Cross does still teach all of the CPR based classes and, therefore, the APâ€™s/LTPâ€™s are in direct competition for participants. So, it makes sense that the cost to advertise those classes is double on the class posting service. Again, I go back to self-serving tactics and revenue and/or profit margin being of the utmost importance.
- AHA announced a little over a year ago that privately held for profit companies will no longer be considered for Training Center status. Instead, these companies must affiliate as a Training Site under an already existing Training Center. In this scenario, the Training Center controls the costs passed on to the Training Sites. These costs are all too often prohibitive.
- American Heart Association discontinues their relationship with their three distributors. They are moving all sales under their own roof and digitizing their books in an effort to increase margins.
- ASHI also increased the prices of certification cards and instructor packages in early 2019.
- HSI, the parent company of ASHI, purchased and merged with EMS Safety. We will see what impact this buyout has on HSI brand and EMS Safety providers moving forward.
Decreased Access to training
The digitizing of course materials, moving away from distributors, closing local chapter houses, not teaching their own aquatics classes, annually increasing prices, charging to advertise class offerings all speak to increasing profits at all costs. In other words, it is becoming increasingly difficult for small training companies and/or individual instructors to turn a profit and continue to operate. This leads to less access, limited access, or no access to training by segments of our population. Those training companies and/or individual instructors who remain in business also seek ways to decrease costs. One such way is to offer a majority of blended learning classes. This will help decrease facility rental costs. However, the segment of the population without internet access are left behind. As we begin to read and see what is going on with the Net Neutrality debate, this may widen the gap and lead to larger numbers of the population with no internet access.
Cost of doing business
It may seem that the answer to remaining in business is as simple as increasing prices for courses. However, the market simply will not bear the increase even if only by a few dollars. This is especially true in saturated markets where there are more training companies, instructors and classes offered than the demand. Hence, each time advertising costs increase or certification cards increase it has a tremendous impact on the profits and the ability for the training companies and instructors to make a living.
I am not advocating for the evolution and changes nor am I speaking out against them. Instead, I am, merely, pointing what is happening in our industry. The recent announcement by the American Heart Association is one in a long line of similar decisions in the last two decades.The ability of small training companies or individual instructors to make a living or even turn a profit is quickly dwindling.
Added budget strains
What we do is needed, it is vital to many in our local communities, it is required for the jobs that many of our students hold. Yet, the changes made by the American Red Cross and American Heart Association are adding strain to the budgets of the companies and individuals delivering these classes. It seems to have become exclusively about increasing profits as opposed to reaching as many people as possible with training.
Unfortunately, by all indications, the big brands will only continue this trend.