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 By Neil B. Gailmard, OD, MBA, FAAO, Editor December 8, 2010 - Tip #460 
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Your Practice Positioning

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Have you ever thought about your market philosophy for your practice?  Many ECPs start their practice with a very general positioning statement, such as: "We provide excellent service and high quality products at reasonable fees."  The goal of this philosophy is to attract as many people as possible, but in my experience, this approach usually falls short of greatness.  These practices often end up in the vast middle of the practice spectrum.  They do OK, but there is no true competitive advantage.

Three positioning levels
This may be an oversimplification, but for the purposes of this article, we can really divide eye care practices into three types.  Which one best describes your practice?

  • Low price.  Must see a lot of people and generally must advertise heavily, but some of these providers are extremely busy and profitable.
  • High end.  Beautiful decor, excellent customer service, the best equipment including advanced medical diagnostic capability, expensive frame lines, high fees.
  • Middle-of-the-road.  Good services but nothing very unique or special.  The patient's experience is similar to previous eye exams.  Fees are competitive with most other providers in the area.

The first two business models give the consumer some strong reasons to choose them, but the middle-of-the-road model is nothing special at all. This makes that model the worst of the bunch in my opinion, yet it is by far the largest group.  No one sets out to make their practice middle-of-the road, but that is simply where many practices end up because they don't have a plan; they have no vision.

Pick two and call me back
There is an old joke where the shopkeeper is on the phone to a customer and he says "You say you want great service, high quality and low price?  Pick two and call me back."  It illustrates that in business, you can't be all things to all people.  Businesses try all the time to be great and still offer a low price, but something has to give.  Think about this as you consider what market philosophy you want for your practice.  If you are not currently positioned the way you want, change it, but let's start by determining what is best for you.  Think about the service / quality / price ratio in retail business in general (non-optical) as examples of other successful business models.

  • The truly successful low price outlets give up something.  Some mega-discount retail stores like Costco do this by making the stores similar to a warehouse.  They do not have a large staff and personal service is not their strong point.
  • Internet shopping can offer very low prices, but there is no human service at all and no products for the consumer to see or touch.
  • Could a Nordstrom's or Nieman-Marcus store offer extremely low prices?  Not really.  They have a higher cost of doing business because they have excellent employees to serve the customer, beautiful display furnishings and high quality, exclusive products.
  • Fast food restaurants usually have a low price but the restaurants are not upscale, the customer must serve himself and the food quality is not at gourmet standards.
  • Could a fine restaurant set the price for a hamburger the same as McDonald's?  No, because it uses ground steak, fresh bakery rolls, a staff of waiters and a gourmet chef.
  • Compare the experience of a Days Inn with a Ritz-Carlton hotel.

We can go on and on with examples, but the point is that successful businesses choose a model that lets them focus on doing one or two things really well.  If your profit margins are small, you will not be able to say yes to patients and let them win.  You will be forced to be tougher with your policies and your initial plan to be great goes out the window.

So decide on the type of practice you would rather work in and the type of patient you would rather see.  Also, decide on the business model that you can successfully compete within.  For most independent private practices, the best model provides excellent service and high quality, not low price.

What about vision plans?
Some ECPs may feel that they can't choose the high-end practice model because discount vision plans are too strong in their market area.  I don't think that should stop you at all.  Many vision plan patients want an eye care practice that is way above average; they want premium optical products, expensive frames, and advanced eye care beyond the routine vision exam.  While it is true that the patient with a vision plan may obtain the basic services and products at a very favorable price, there are many non-covered items that could move into higher profit margins.

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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