Optometric Management Tip # 174   -   Wednesday, May 18, 2005
Competing for Contact Lens Sales

I presented a practice management lecture last week at a conference and part of the program included breakout discussion groups. After discussing the changing landscape of the contact lens product marketplace, one doctor in my group stated that he didnít think it was worth bothering to sell contact lenses in his practice anymore. He felt that if he were to try to compete with the new sellers of contacts, such as big box discount stores, warehouse clubs and mail order vendors, there would be such little profit in the materials that he might just drop the service. He would rather examine and prescribe, and advise the patient to go wherever they wish to fill his lens Rx. Others in the group echoed the sentiment, even if they were not ready to throw in the towel just yet.

Not so fast! Letís not throw the baby out with the bath water! I love to challenge conventional thinking, so I thought about this concept after the meeting and tried to look to the future. I just canít agree that dropping contact lens sales is a good idea. I believe independent practices can compete very well for contact lens sales, and if a few positive changes are made in our practices we can win the vast majority of contact lens reorders.

Why should we bother?

We can talk about the fact that providing contact lenses is a patient convenience, or that it allows the optometric practice to ensure that the patient receives the correct lens parameters, but there is a far more practical reason. There is a profit to be made. As doctors, we often get uncomfortable with that concept, but we are in practice to make a profit. This newsletter is about the business aspects of professional practice, and profit is a primary goal of all businesses. We should never reject a profit center, as long as itís within our practice scope and is ethical.

To be really certain about the profit motive to sell contact lenses, please do the math with me before we go further. You pay $X for a multipack of disposable lenses. You sell the multipacks for $Y. Take the difference between these two amounts and multiply by the number of multipacks that make up a yearís supply (eight if the lenses are 2-week disposables). Take that amount and multiply by the number of contact lens patients in your practice Ė letís say 1,000 for round numbers. The total is your annual profit on material sales alone, without fitting fees. I think you see my point.

Evidence that we can compete

Letís take a look at a few other industries that parallel our situation for clues to what may happen in the marketplace. Ask yourself these questions: The answer is that people buy for various reasons. For some, price is the primary factor, but for many it isnít, even for commodity items like milk. Letís examine some of the benefits a buyer might get from buying contact lenses through your practice, and letís try to come up with even more benefits that we could add.

Of course, we can compete and win the vast majority of contact lens business! Look at all we have going for us. The big factor is we had the buyer first! He is ours to lose! Additionally, we have a tremendous advantage in the area of trust and authority. Letís look at other factors.

Two groups of patients

We can really separate your contact lens patients into two groups: those who visit you fairly regularly for eye exams as recommended, and those who donít see the value in regular eye care, but still consider you as their eye doctor when they need something. We love the first group, but both groups are valuable patients. The first group should be easy. They are in your office, they love you, and they need more lenses. If you lose them, it must be price or some other factor about how you do business. Weíll discuss price below, but you can make changes if needed and keep the sales from this group. By the way, itís very important to try to dispense an annual supply to this group, so they will have no need for interim reorders. Use manufacturer rebates and even offer your own in-office price discount on annual supplies, and make sure your staff suggests the full year supply.

The second group is far more at risk for going elsewhere, and if you want to win that business, youíll have to be willing to keep up with the marketplace and the competition in ways that are possible. This group would really like to avoid the eye exam in many cases and they think they just need more lenses, and since your office will not provide more lenses without the needed exam, they are tempted to look elsewhere.

Is it convenience?

We often hear that convenience is a major reason patients go elsewhere to buy replacement orders of contacts. Our patients want to order more contacts in their pajamas at 2:00 AM, so they go to the Internet. Maybe so, but if we look deeper at the convenience issue, youíll find that you can beat the competition in several ways. Is it price?

Price is definitely an important factor in competing for contact lens business. My advice is to set prices competitively, but donít try to be the lowest. By offering other benefits as described above, we donít have to be the lowest price. The large Internet contact lens sellers list prices on their website and they are not out of the range where independent practices can be, so they can serve as a good guide. The big box retailers can buy products so low and can live with such low margins, independents really canít compete on price with them. If you get a patient who really wants the lowest price, just be understanding, helpful and pleasant about it. I do not recommend changing your prices on the spot to match a competitor; it demonstrates a lack of integrity.

Best wishes for continued success,

Neil B. Gailmard, OD, MBA, FAAO
Chief Optometric Editor, Optometric Management