Article Date: 9/1/2004

1-800 CONTACTS
Inside of 1-800 Contacts

IS THIS MAIL-ORDER CONTACT LENS RETAILER REALLY THE ENEMY OF OPTOMETRY? OM INVESTIGATES.
BY WALTER D. WEST, O.D., F.A.A.O., Brentwood, Tenn.

At the invitation of Jonathan Coon, CEO of 1-800 CONTACTS, I recently visited the company's order and distribution centers located in Salt Lake City, Utah.

IMAGERY BY ERIC LINDLEY

My day began with a tour of the distribution center led by 1-800's Senior Vice President, Marketing and Sales, Kevin McCallum. According to Mr. McCallum, this 90,000-square-foot distribution center houses not only a state-of-the art inventory management system, but the world's largest contact lens inventory as well.

The company holds shipments of lenses arriving direct from manufacturers as well as other sources separately until employees can confirm an accurate count of lenses on individual pallets. Computerized order management for entering as well as picking and shipping inventory combined with regular physical count provide 1-800 CONTACTS with information about accurate inventory levels. The company maintains an appropriate count of boxed contact lenses, individual loose lenses as well as trial lenses for many different brands.

An internal look

Once 1-800 hires a new customer service representative, the employee spends her first week in a classroom learning ocular anatomy and contact lens design. In addition, instructors spend a large amount of time on learning the terminology associated with contact lenses and parameters of the contact lenses currently available on the market. All total, 1-800 CONTACTS customer service reps spend three weeks in training and must pass written tests demonstrating their proficiency and knowledge before they represent the company by answering the phone. But the training doesn't stop there; team leaders record calls at random and spend time with each representative reviewing and critiquing their performances while offering suggestions for improvement.

The trainers at 1-800 are knowledgeable and are themselves updated regularly on new lens products. Representatives from some of the larger contact lens manufacturers train them.

The process

I had the opportunity to listen as 1-800 representatives handled calls and assisted customers with their orders. Here's how their call process works:

Dealing with valid prescriptions. When 1-800 CONTACTS requests and receives your verification that a contact lens prescription is valid, it immediately ships the order. From that point on, this patient, who is now a customer of 1-800, receives regular mailings, e-mails and reminders about 1-800's service, new products and when they should reorder their lenses. 

In fact, when a patient's contact lens prescription is scheduled to expire, 1-800 sends him a reminder, along with a coupon for a discounted appointment at a Cole National location.


1-800 CONTACTS changed a contact lens delivery system that hasn't changed significantly since the 1960s.

Working with invalid prescriptions. If an eyecare practitioner responds to 1-800 saying that a contact lens prescription isn't valid, 1-800 CONTACTS immediately phones the customer and explains to him that his order for contact lenses has been cancelled as a result of his prescription not being valid. The 1-800 representative informs the customer that he can refer him to a Cole National location that can provide his eye care at a reduced fee -- $78 for a "comprehensive contact lens exam" (This fee isn't in addition to the patient's comprehensive exam -- it's the fee for the comprehensive exam. 1-800 will consider partnerships with non-Cole optometrists who would accept the reduced fee.) The 1-800 rep puts the customer on hold while he contacts the Cole National location and schedules the appointment. The rep then connects the patient to the Cole National location so he can get directions and answers to questions regarding his appointment.

Jonathan Coon, CEO of 1-800 CONTACTS told me that 1-800 is "open to working with optometrists directly, but this requires a more open and constructive dialog than we've been able to have in the past."

The enemy, or not?

Mr. Coon says, "1-800 is not the enemy. If contact lenses represent 20% of an optometrist's practice and 1-800 makes up 5% of the market, then 1-800 affects only 1% of the O.D.'s practice. Real threats to the industry are Wal-Mart and Costco. They are bigger, growing faster and targeting the doctor's entire practice." Mr. McCallum feels that much of the rhetoric in the optometric community regarding 1-800 revolves around negatively lopsided and nonfactual information posted online and published in some optometric journals.

Let's look at some of these myths/inaccuracies:

MYTH: 1-800 FAXES MY OFFICE AT NIGHT OR BATCHES FAXES ON SUNDAYS TO EVADE THE EIGHT-HOUR REQUIREMENT.

FACT: The faxes that 1-800 sends to eyecare practitioners requesting prescription verification arrive at your office as a function of when your patients are on the phone or online ordering lenses.

Based on the Federal Trade Commission (FTC) ruling, the eight-hour time period for verification doesn't begin until normal business hours in the individual practitioner's time zone. So whether you receive the fax at 2:00 a.m. on Sunday morning or 9:00 a.m. Monday morning, your responsibility for verification is the same. You should also know that 1-800 keeps electronic records of all verification faxes for five years and can pull statistics on O.D.s and response performance relative to its request in a matter of minutes.

MYTH: AS AN EYECARE PRACTITIONER, YOU CAN NEGATIVELY IMPACT 1-800 BUSINESS AND SAVE YOUR PATIENTS BY IGNORING THE REQUESTS FOR PRESCRIPTION VERIFICATION.

FACT: If you ignore a request for prescription verification, then 1-800 will automatically ship the order for your patient's lenses at the end of the eight-hour verification window, as provided in the FTC ruling published in the Federal Register July 2, 2004.

MYTH: AS AN EYECARE PRACTITIONER, YOU CAN NEGATIVELY IMPACT 1-800 BUSINESS AND SAVE YOUR PATIENTS BY REGULARLY RESPONDING TO CONTACT LENS PRESCRIPTION VERIFICATION REQUESTS THAT PRESCRIPTIONS ARE NOT VALID (WHETHER OR NOT THAT'S TRUE).

FACT: False communications regarding the validity of a contact lens prescription could put you in violation of the FTC Contact Lens Rule, which carries up to a $11,000 fine per occurrence. 1-800 maintains statistics on doctors as to whether they respond and how they respond to every request for prescription verification. Some doctors respond to 90% of the requests for verification that their patient's prescriptions are invalid.

The company holds shipments of lenses arriving direct from manufacturers until employees can confirm accurate counts.

MYTH: WHEN MY PRACTICE SENDS A FAX TO 1-800 CONTACTS, WE GET A BUSY SIGNAL.

FACT: 1-800 receives faxes through a computer network that allows it to simultaneously receive 1,600 faxes 24 hours a day, 365 days a year. Plus, the system monitors itself as to the use of capacity and in the history of the system, it has never reached even half of its capacity.

Making sense of it all

In trying to find your direction in dealing with contact lens prescription release, I would first suggest that you and your staff read the Contact Lens Rule and understand it. You can find the rule online at http://a257.g.akamaitech.net/7/257/2422/06jun20041800/edocket.access.gpo.gov/2004/pdf/04-14969.pdf.

In trying to find direction in working with 1-800, I suggest that when we accurately verify lens prescriptions in a professional and timely manner we're indirectly providing patients with a service. Let them know that you've acted on their behalf and that your practice is there for them, whatever their needs.

I'd also encourage 1-800 to make the patient aware of the professional service that we've provided. If they truly want us to work with them, then they can also work with us rather than trying to wedge Cole National between our patient and our practice. When 1-800 makes a request for verification of a prescription and the prescription isn't valid, your office should be the first to contact the patient and make him aware of his need for care.

There has long been speculation that 1-800 not only competes for retail contact lens sales but also wants to introduce its own contact lens brand. In a press release dated August 3, 2004, Mr. Coon stated, "We have two businesses -- a profitable U.S. retail business and a startup international manufacturing business, ClearLab (operating in the U.K. and Singapore)."

Consider the facts

Mr. Coon told me there's no reason to speculate about 1-800's plans. He referred me to a quote in the company's 2003 annual report: "1-800 CONTACTS will partner with optical retailers and eye doctors to build a seamless experience for consumers that includes exams as well as in-store, phone, and online service." He added that 1-800 is willing to partner with independent optometric practices to create this seamless experience.

So what is 1-800? Many in the industry incorrectly refer to it as any retail contact lens business that exists outside of an eyecare practice. To some, it's a low-cost alternative. Yet in reality, the low-cost alternative is located right in your hometown. 1-800 is a company that changed a paradigm, a market and a contact lens delivery system that in many ways hasn't changed since the 1960s. It's a contact lens retailer, a contact lens manufacturer and in addition, it aggressively markets its products and services to your patients.

 


Optometric Management, Issue: September 2004