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From a distance Featured

10:06am EDT July 22, 2002

As any entrepreneur knows, nothing happens until someone sells something, and as any salesperson will attest, it pays to ask for the sale.

For RTN, nothing else could be closer to the truth. In fact, RTN landed its first chunk of working and start-up capital by selling a $600,000 contract to its first client-and getting payment for it up front.

How did they manage to do it?

"We asked for it," says Christine Rohe, the company's CEO.

The business that Rohe, her sister and a friend founded in 1994 is growing-and growing fast. RTN offers distance-learning programs for health-care and business professionals. Since starting out selling a handful of seminars to a few regional clients, RTN has grown to include 200 workshops and seminars a year-including 56 live broadcasts in 1998-beamed to 2,000 sites over its network.

Rohe and her sister, Connie, and a friend, Darrell Meador, now president, founded the company after Rohe lost her job as a sales representative for a distance-learning program firm in Texas when that company was sold to a Chicago firm.

Rohe says she had realized long before that her previous employer, a $400 million-a-year operation, had made money, to some degree in spite of itself. Clients harped to her about poor service, such as written course materials arriving after programs had been broadcast.

Rohe says she was convinced that, rather than going to work for another company in the field, she could create an organization capable of delivering good customer service, thereby giving it a leg up on the competition.

RTN first focused on the rehabilitation-medicine market, where money seemed to be allotted in budgets for continuing education in virtually every hospital in the country, Rohe says.

With no capital to launch the venture, she continues, the three founders decided to play to their strengths and sell their idea to prospective clients.

"We went out to sell our way into this business," says Rohe.

After incorporating in April 1994, RTN landed its first contract by July and broadcast its first seminar in October of that year. Since then, it has increased its annual revenue ninefold.

RTN has built its income by selling programming and advertising, and by linking with large firms like HealthSouth Corp. and Beverly Enterprises, large health-care industry companies with substantial needs for continuing education for their staffs.

The company also has made a deal with the Hospital Council of Western Pennsylvania, a membership organization that, among other services, provides educational programs to its members. Under the arrangement, the council will provide satellite signal-receiving equipment to its members, allowing it to offer nearly 200 programs a year to its hospital members. As part of the deal, the council and RTN also will co-produce additional programming.

Rohe enjoys the close relationship she has with most of her 60 employees, many of whom she has known for years. If things continue to go well for RTN, it will be difficult, she acknowledges, to maintain that warm and fuzzy feeling.

"I'm running out of friends," quips the 36-year-old entrepreneur and CEO, who recruited many of her 60 employees from the ranks of her acquaintances, some of whom she has known since grade school, more than a few from her days as a student at Fox Chapel High School.

To accommodate its growth, the company is exploring its options for a new facility that Rohe would like to occupy within the next year, allowing RTN to replace its crowded current quarters in U-PARC.

"We're cramped, and we're running out of space," says Rohe. Under consideration are a building in Crafton, the Contraves building in RIDC Park in O'Hara, and new construction at one of two sites in the North Hills


RTN HealthCare Group at a glance


Financing

Rohe and her shareholders didn't tap banks or venture capitalists to launch RTN. "The banks laughed at us," Rohe says, "and the venture capitalists want too much for their money." Instead, they used their sales skills to sell a $600,000 contract to their first client "Our first contract was our venture capital," Rohe says.


Sales to date

RTN racked up $18 million in sales in 1997, plans to hit $30 million this year and expects revenue in 1999 to breach the $100-million mark.


Operations

RTN operates four main business segments, all related to distance-learning activities. The company provides a yearlong schedule of accredited workshops to physicians and other caregivers in the United States and Canada, motivational seminars to corporate customers through its business television group, and programs for public and private-sector clients abroad through its international group.

It also does multilevel advertising and marketing through its broadcasts, a monthly magazine, and the HealthSouth Back To Health Network, a waiting-room channel broadcast to 2 million patients a month in 1,800 facilities owned by HealthSouth. Advertising is sold on the network, including a $13 million package purchased by pharmaceutical giant Glaxo Wellcome.

RTN will produce 54 live broadcasts this year, using studios at WQED. Its plans for a headquarters include four complete studios and the capability to complete all phases of production, including animation, editing, graphics and animation, and amenities for employees such as a gym and a day-care center. Down the road, Rohe envisions the capability to produce entertainment programming and broadcast it over RTN's network.


Sales strategy

RTN seeks agreements with large entities like Beverly Enterprises and HealthSouth, but it will just as readily contract with smaller clients as well, including smaller hospital and rehabilitation systems, where agreements might be as small as $6,000.

Rohe herself often makes personal visits to the larger entities to close the deals, which can be quite lucrative, she says. A package RTN negotiated with the University of Edmonton, for instance, will bring about $30 million in revenue.


Marketing

RTN uses a direct sales force of 14 to identify potential clients. It supports its sales effort with a lineup of marketing materials, including brochures, videos and Caregiver, a monthly magazine supported by advertisers that goes to all of its clients, "to keep our name in front of them," says Rohe.


Market outlook

The need for ongoing training services is growing in the health-care field. More and more, clinicians and administrators are needing additional education periodically to maintain certification and satisfy continuing-education requirements mandated by credentialing bodies.

Competitive pressures require that health-care providers stay abreast of new treatments and therapeutic regimens. Insurance company certification also can be affected by the level of staff education. With the accelerated pace of change within the industry, says Debbie Ference, vice president of educational services for the Hospital Council of Western Pennsylvania, the value of distance-learning is growing.

"The nature of work and the pace of work and technology are changing so rapidly that they really require more efficient ways to provide some of this instruction," says Ference.

Cost and time factors are critical for health-care organizations and professionals, says Ference. Administrators' busy schedules make travel to the council's headquarters in Warrendale, for instance, a time-consuming proposition for some. Programs they can view at their hospitals or nearby facilities are attractive to them.

And the cost of travel and lodging for professionals to attend programs at remote sites can be cut significantly by using distance-learning, making it an attractive alternative to cost-sensitive hospitals and other health-care providers. RTN estimates that sponsors can save as much as 90 percent by using distance-learning instead of off-site programs, with savings averaging 70 percent.

While distance-learning may not be ideal in every instance, such as wher e a clinician may have to demonstrate proficiency in a procedure or treatment, Ference says it has value for many clinical needs and most management questions that face administrators, such as regulatory compliance or financial management issues.

The council, for instance, sees so much value in alternate methods of delivering instruction that it is developing a four-pronged approach to providing distance-learning to its members, including offering satellite transmissions, information available through its Internet site, and interactive audio and video conferencing.


Biggest challenge

Rohe says she is genuinely concerned that the company will get so big that the connection between the employees that has made RTN successful will begin to weaken.

"I think the biggest problem will be to keep it as personal as it is now," says Rohe.

But there are operational considerations as well. RTN wants to perform its own installation of satellite communication equipment at clients' sites so that it can have more control over a part of the business that it now hands over to contractors, who in turn hire subcontractors to do the work.

That, says Rohe, is not the ideal arrangement, so RTN plans to have its own crews handling the installations.

"We've got to get our hands around that," Rohe says. "We've got to have more recourse, so we have better control over the people who go out on site. They make the first impression on our customer."