Article Date: 5/1/2004

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A Pricey Strategy for Optometrists
Question: What's the easiest way to lose a price battle? Answer: Join the fight.
FROM THE EXECUTIVE EDITOR, Jim Thomas

One of the ageless questions in any industry is, "How do I compete against businesses that use price as a weapon?" Judging from the messages sent to OM, many optometrists still struggle with this challenge as well.

Those first shots in a potential pricing war -- contact lenses below cost, glasses free with eye exams, eye exams free with glasses, etc. -- can be unnerving. But practice management and business consultants urge us to leave price clashes to the titans.

"For all but the biggest enterprises, competing on cost is expensive. For smaller businesses, it's self-destructive behavior," says Warren D. Miller, M.B.A., co-founder of Beckmill Research.

In her book, How Much Should I Charge, Ellen Rohr, a columnist for Entrepreneur magazine, warns that the "going rate" is good for one thing -- "going down the drain."

How to fight price

If you can't cut fees, then how do you compete against low-price competitors? A transportation executive told me, "I first imagine that our competitors offer their services below cost, or even at no cost. Then I ask, 'How can I provide a better value?' If it sounds like an impossible exercise, think of bottled water; $3,000 T.V.s; and $200 basketball shoes."

Most customers see transportation as a commodity where a company simply moves a package from point A to point B. Yet top transportation companies break the mold by offering unique value propositions that are similar to those that successful optometric practices use. For example:

Do you really need a bargain?

Is it worth going after the bargain hunters? According to sales trainer Brian Tracy, 94% of customers mention non-price items as being the most important single factor in their buying decision. Of those customers who said they turned down a product because of cost, 68% admitted later that price wasn't the determining factor. Price was just the easiest way to turn down the sale.

But I'll keep my mind open. If you've found success with a low price strategy, share your story with me at thomasjj@boucher1.com. We also welcome the optometrists who are innovators. After all, Optometric Management depends on you.

 


Optometric Management, Issue: May 2004