Optometric Management Tip # 54 - Wednesday, January 29, 2003
Contact Lens Profitability
Many optometrists wonder what they can do to restore profitability to their contact lens practices. Let's look at the real world challenges:
The first step to restoring profit is to look at the time you and your staff spends on fitting contact lenses. Your office procedures, which often stem from what you were taught in optometry school, may need to be revamped in response to all the improvement we've seen in contact lens materials and designs. They are easier to fit and healthier to wear then they were years ago - and our services must reflect this. So examine your own policies and see how you can streamline, simplify and delegate more to staff. Can you reduce the number of visits needed? Can you shorten the time slot needed for an appointment? Can you stock more lenses to reduce chair time, ordering and dispensing visits? Can you have your technicians assist more? Any task that your staff can do instead of you increases profitability - even if you have to hire more staff.
- Your office receives frequent requests via fax or automated phone calls requesting contact lens Rxs - indicating that your patient has chosen to purchase replacements on-line or via mail order.
- Super discount stores sell lenses almost as cheaply as you can buy them wholesale, making you realize that if you match that price, and factor in staff time, you'll make no profit on materials.
- If you lower your prices on materials and raise professional fees, you fear your patients will stop coming in for regular care.
The second step may be to raise your fees. Charge a separate contact lens evaluation fee on all exams for CL wearers; charge a refit fee, a new patient fitting fee and a complex fitting fee. If some patients leave you over it, so be it. You have to be profitable, or why do it? The lens price can be slightly higher than other sources - but your professional fees can be much higher if you build value in your services.
Third, remember the reason anyone selects a company to do business with - great service. How does Border's and Barnes & Noble still sell books with Amazon.com around? They make the experience of coming to the store fun and rewarding. And they are doing very well. Is your office easy to do business with, friendly, on time, open convenient hours, attractive, etc.? Are you doing something special?
A few other tips:
- Discount your lens price per box when a full year's supply is purchased. Better yet, raise the per box price when less than a year is purchased. Dispensing a full year's supply improves cash flow, and takes the patient out of the market for a year.
- Don't require more visits and services than you really need, in order to justify your fee. The inconvenience drives people to other sources for lenses.
- Don't try strategies that stand in the way of patients getting and filling their CL Rx. If they want it - and it's valid - give it to them (or to the supplier they designate). You could end up looking unethical, or desperate to keep the sale. I'd rather keep the patient and the family and lose the lens sale.
- Consider stocking your most commonly prescribed lens brand (or two). I know the trend seems to be to not stock lenses, but the one-time inventory cost is not that great, and handing the patient his supply at the exam is wonderfully convenient. And when patients call and need more lenses, you can just say - come on over and get them right now. You can't do that over the Internet.
Best wishes for continued success,
Neil B. Gailmard, OD, MBA, FAAO
Chief Optometric Editor, Optometric Management