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 By Neil B. Gailmard, OD, MBA, FAAO, Editor April 1, 2009 - Tip #373 
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Budget Frames

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All of us who accept vision plans are obligated to display a number of frames that have a price point that is fully covered by the plan. This is actually a good marketing approach for most practices, regardless of vision plans, because it allows you to provide eyeglasses for the cost-conscious patient. Even an upscale practice does well to offer a budget line. How you price the budget line and how you display it can have a big impact on your profitability.

Frame styles

There are some very nice frame styles of fairly good quality available at very low prices. I don't mention brand names of companies in my articles, but there are a few budget frame companies that are widely known. You can get a recommendation from a colleague, find sources in frame data publications or look for frame companies in the exhibit halls of major eye care conventions.

I think it's smart to select current styles and put together a nice collection of budget frames. I don't try to keep the budget line purposely out of style to try to move people over to our higher priced lines.

Price points

My practice carries three price points in our budget frame section. All our budget models use one of these prices no matter what our cost. We deviate considerably from our usual mark-up formula with budget frames because service and other costs must be factored into each frame that is inventoried, dispensed and adjusted. If we buy a frame at a wholesale cost of $3, we simply can't sell it for $9. The minimum price in my practice would be $79. A 3X mark-up may work fine for a frame that wholesales for $80, but it does not work at all for budget frames.

The display

I like to keep the budget display physically separate from the moderate and high end frames. We train our staff to begin frame selection by starting with the higher end lines. We practice assumptive selling and we assume patients want the best until they advise us otherwise. Having the lower priced line not in direct visual competition with the premium frames helps us sell better frames. It is one of the advantages of a larger optical showroom.

When a patient wants to stay within his vision plan benefit on the choice of a frame, my staff advises him that most of the frames in this specific section will be covered in full. There may be a few models that exceed the frame allowance by about $20. We are happy to check the exact vision plan pricing formula for any frame the patient is interested in and let them know for sure.

The frame and lens package

I really don't like the idea of packaging the frame and lens together at a lower price than the usual sum of the parts. I can't see offering various price levels on basic ophthalmic lenses. A basic lens is a basic lens and I can't justify lowering the price for it. On some products, like progressive lenses and antireflective coatings, we offer two levels of quality, such as standard and premium, but I think more than two choices is burdensome for the patient. So all we do is offer a low priced frame line and then we add the price of the lenses. I've written before that I think most discounts are bad for the practice because we are often just discounting products that would have been sold without it. I believe selling the same product at two different price points is the same thing: unnecessary.

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.

Please Note: The views expressed in Management Tip of the Week do not necessarily reflect those of the sponsor.

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