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 By Neil B. Gailmard, OD, MBA, FAAO, Editor May 17, 2006 - Tip #226 
 Contact Dr. Gailmard | Subscribe | Archives | Print this issue Visit: optometricmanagement.com 
 
Can Private Docs Compete With Chain Opticals?


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A focus group of eye care consumers was recently held by a major company in the ophthalmic industry.  Focus groups are a great way to learn about the opinions and perceptions of the customers in any business.  They need not be a strategy used only by large corporations; independent private practices can benefit from them as well.  This focus group worked with patients who had recently seen an eye care practitioner in various modes of practice.
 
The competitive advantage of chains
 
Several questions asked of the group revolved around perceived differences between commercial retail forms of practice vs. independent private practice.  While both types of practice had some traits that were identified as preferred or superior to the other, the following factors were cited as reasons why consumers chose chain optical stores over private doctors' offices.

  • Marketing and merchandising
  • Product Selection
  • Convenience
  • Efficiency
  • Price

These factors would be considered competitive advantages in the business world, or in other words, reasons why a typical customer would choose one company over another.  It should be noted that these are only the perceptions of the consumers and may not actually be fact.  But really, isn't consumer perception all that matters when it comes down to marketing?  After all, it doesn't matter if your office can argue that it's more convenient than a super-optical if the public doesn't know it.  Since the consumer makes the decision about where to buy, his perception is reality.
 
Those are some pretty important features when you consider a consumer's choice of eye care practitioners, don't you think?  Might a private doctor lose some patients to a provider that is deemed better in those areas?  I certainly think so.

An exercise in competitive analysis
 
Here is an exercise for you.  In which of the five categories above could a private eye care practice perform equal to or better than a typical chain optical store, if it really wanted to?  My answer is all of them except the last one.  Let's look at each category and consider what it means and how private docs could compete.

  • Marketing and merchandising.  It may be smart for private docs to pursue different marketing strategies than chains, but there is nothing that says a private doctor can't have an optical department that looks like it is high fashion and high tech.  In my experience, however, most docs don't invest enough in optical display furnishings and don't seek talented people who have a flair for decorating and fashion.  Many opticals look outdated and anything but chic!  Why would smart consumers choose an optical like that?
     
  • Product selection.  I take this to mean a large frame inventory with designer brand names.  This category may also include lens options that are well communicated.  Consumers like to feel like they have choices.  They want to feel like they are spending their money in the best place possible.  Many private ODs make their optical dispensaries too small and maintain small inventories with the goal of keeping expenses low.  If just a couple patients per month walk with their Rx because they feel that they could find better choices at the mall, it is a false economy.
     
  • Convenience.  This could mean different things to different people - but offering evening and Saturday office hours is likely one aspect.  Another may be easy parking and great service.  Anything that makes it easy for the consumer.  Many private doctors don't want to work evenings and Saturdays, but don't make the mistake of identifying your whole practice operation with you.  Well managed practices can operate fine without the owner being present.  You can hire opticians and doctors to keep the office open if you really want to compete.
     
  • Efficiency.  This could mean fast service, including quick turnaround on eyeglass and contact lens orders.  This is another example of doctors who don't seem to want to compete.  If they wanted to have an on-site optical lab, service could be improved.  And it is not very expensive to stock multipacks in one or two brands of contact lenses, so everything does not have to be ordered for each patient and direct-shipped.  Fast, efficient eye exams and deliveries of glasses count too, along with staying on time for appointments.
     
  • Price.  Finally, a category that I don't recommend private docs try to compete in.  In reality, some optical chains offer low prices and some don't, but the perception of low price is generally there.  But patients will happily pay high fees at a private doctor's office if they get great service.  Higher fees can actually be a positive factor in some circles, because people equate the quality of care with the fee.  In my experience, most ODs vastly undercharge for the services they provide.  I realize that you can't control the fees paid by vision plans, but participating with them is a business decision that you should re-evaluate on a regular basis.  As long as you determine that it's in your best interest to participate with a vision plan, all you can do is practice as efficiently as possible.  But most practices have a private pay segment as well, and I find that the fees for that group are woefully low.  Why not set them where your medical eye care fees are?  If that were the case, all complete eye exams could then be the same fee.
     

People want the personal touch and the medical expertise they perceive as better with private doctors, but they don't want to give up the features they have come to love in upscale retail stores.  Why not provide both?
 


Best wishes for continued success,

Read Past Tips Neil B. Gailmard, OD, MBA, FAAO
Editor, Optometric Management Tip of the Week


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Send questions and comments to neil@gailmard.com.

Dr. Gailmard offers consulting services to eye care professionals through Prima Eye Group; information is available at www.primaeyegroup.com.

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