Article Date: 2/1/2005

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Strengthen Your Contact Lens Practice -- Go Online
Use the Internet to build patient loyalty.

BY JOHN R. SCIBAL, O.D., Morehead City, N.C.

ILLUSTRATION BY ERIC LINDLEY

Patients have been telling us that they want more convenience for replacement contact lenses. Offering online ordering addresses this demand and offers better customer service and better profitability. We can better spend the time we save in phone orders on providing contact lens exam services, which aren't associated with any cost of goods. In this article, we'll examine the pitfalls in customer service with phone orders, demonstrate time saved in online versus phone orders and compare profitability between professional service fees versus material sales in office.

Picture this

Consider the following scenario: Two patients are checking in at the front desk of an optometric practice and another patient has just had an exam and is ready to check out. Oops, someone else just walked in the door with his glasses in a plastic bag, exclaiming to everyone within a two-block radius that, "This is the fourth time this lens has popped out!"

Ring! There goes the phone: "Are my contact lenses in yet?"

Ring! Second phone line: "I need to order some contact lenses. How much are they?"

Sound typical? In most offices, contact lens ordering and dispensing/delivery constitute a significant amount of time and effort, making the practice less and less profitable. Whether we like it or not disposable contact lenses have become a commodity and we must now compete with discount stores and online retailers. We have to accept the fact that these retailers are here to stay, even though we may not agree with some of their policies.

Learn to adapt

In the eyes of the consumer, discount stores and online retailers offer affordable and convenient replacement contact lenses, and despite what we do or say, online ordering will remain a significant part of replacement contact lenses. According to industry sources, besides the perception of lower price, patients order their contact lenses online or through mail order suppliers for convenience. In fact, 65% of patients who order online do so because it saves time and 72% do so because the suppliers mail the lenses directly to their houses, according to optometric consultant Marilee Blackwell.

My advice? "If you can't beat 'em, join 'em!" Offering contact lenses to patients online through your office will provide them with the convenience they want, and will further enhance their perception of your office. By offering lenses to your patients online, you can rest assured that patients are receiving the correct product, and you'll have more control of your contact lens practice. The irony is that most patients would prefer to buy from their doctor, but they perceive doing so as more expensive and less convenient.

Most optometrists have already realized that they need to be price-competitive, and if you survey most private practice optometrists, the disposable lens prices in most cases are pretty close to those of the big retailers. Yet patients still flock to online distributors. Why?

Look at it this way

It's easy for patients to get their contact lenses from online distributors, especially after they register the first time. They just point and click and the lenses show up at their door. Ordering from their contact lens practitioner isn't usually that easy. They have to remember to call during business hours and wait while the receptionist or technician finds their chart and confirms the prescription data. The office calls in the lens order and, several days later, they call the patient to tell him to pick up the lenses, which of course requires a trip to the office.

If you look at it from the consumer side, it's not so hard to understand why we've been losing a significant portion of the market to these resellers. In fact, industry sources tell us that patients order 7% of disposable lenses through mail-order outlets and 7% online. As our population becomes more tech-savvy, those numbers will grow. Wouldn't it be nice to pick up that extra 14%?

 

Contact Lens Ordering by Staff via Telephone

Initial phone order from patient 3 min.
Technician places phone order 2 min.
Receive order and notify patient 4 min.
Patient pick-up of lenses 5 min.
Total time spent per order 14 min.
Total monthly time for 100 orders 14 min. x 100 = 1,400 min. (23.3 hrs.)

 

Beat them at their own game

The technology is available now to implement an online ordering system for your patients. Distributors offer two ways to simplify ordering:

1. They allow your office to order lenses online.

2. They allow for direct ordering by the patients themselves.

Instead of calling in orders by phone, it's much more efficient to place your orders via their Internet site. You can send orders individually or you can save them in a shopping cart for review and then order them in bulk later. You may ship orders directly to the patient or to your office, but I recommend that whenever possible you arrange for direct shipment to the patient. Doing so eliminates the need for receiving the lenses into your office, and also mandates that the patient pay in full with a credit card at the time of ordering. With margins as thin as they are on contact lenses, you can't afford to have that pile of unpaid or half-paid lenses sitting in a drawer.

Even better than your office ordering online is to allow patients to order online. You get the same advantages listed above, but remove the staff as the middle man altogether. Patients who log onto your Web site to order lenses get linked directly and invisibly to your distributor. Instead of the patient calling you to place the order online, they do it themselves! Now you're competing with the big boys.

It's a no-brainer

Patients enjoy ordering lenses any time day or night and having them delivered to their door. They have confidence in the prescription information because it came directly from your office and do they care about price? Absolutely. But again, chances are that you already are competitive, and all things being equal, why would they not order from you? They choose their own shipping options and pay the order in full by credit card at the time of their order. The only thing your office has to do is supply the prescription information, and you collect the profit from your lens sales at the end of the month.


A link can take patients from your Web site to the distributor's.

It's good for you staff too

The value of offering online ordering is the savings in staff time. Following are the steps involved in typical contact lens ordering, and the time spent on each component (see also the table at left).

Initial phone call from patient (three minutes). This includes the time to look up the chart; pull the chart; find the prescription; determine the number of boxes; explain and receive deposit; and leave order for the contact lens technician. Some offices even require the doctor to approve every order first.

Placing the order (two minutes). The technician calls the order in to the vendor, giving account information and the patient's prescription

Receiving the order (four minutes). A day or two later, the technician receives the lenses, matches it with the correct patient, notifies the patient and places it in the pick-up box.

Patient pick-up (five minutes). This is the worst part because typically, the patient walks in at the busiest time of the day to pick up his lenses. A staff member hands the patient his lenses, records the payment and issues a receipt. Conservatively, this transaction takes 14 minutes not even counting the numerous phone calls from patients throughout the day about their order status.

Patients who order directly online use no staff time. If the patient prefers to call his order in to your office, then the time saving is still significant. The initial online order requires verifying and entering the prescription for the first time. If the patient demographics are not already entered into your contact lens distributor's database, they must be done at this time. An initial order, therefore, is the most time-consuming and is estimated to take three minutes, similar to step one in the traditional mode of ordering. But steps two through four are unnecessary.

Do the math

Staff can enter pertinent information as they talk to the patient on the phone. By the time they hang up, they can send the order and you've saved yourself 11 minutes on that transaction. Subsequent phone orders take less time because the demographics and prescription have already been completed; all that's needed is to enter the credit card number and verify the shipping address -- an estimated one minute.

Assuming that your staff places one-third of the orders for new patients, they'd also place one-third of subsequent orders and patients would place one-third by themselves (see "Online Contact Lens Ordering" below). An office that places 100 orders would save 21 hours of staff time. At $10 per hour, that represents a $210 savings in payroll for that month.

More importantly, the time saved by that staff member can be better used in direct patient care. For a heavily delegated office, technicians are crucial in assisting with contact lens exams and procedures. I conservatively estimate that each hour saved in technician time equals one additional contact lens fitting that becomes available. Assuming $150 professional fee average for each exam, the revenue generated is $3,150 (21 exams x $150) each month, or $37,800 annually. This is "bottom line" money -- that is, no cost of goods involved.

 

Online Contact Lens Ordering

1/3 (33 1/3) initial orders called into office  3 minutes x 33 1/3 = 100 minutes
1/3 (33 1/3) subsequent orders called in 1 minute x 33 1/3 = 33 minutes
1/3 (33 1/3) direct orders by patient 0 minutes x 33 1/3 = 0 minutes
Total average time spent per order 133 minutes/100 orders = 1.33 minutes
Total monthly time for 100 orders 1.33 minutes x 100 = 133 minutes (2.2 hrs.)

 

Real-world results

Since beginning our online ordering program 11 months ago, the number of our online orders has increased steadily and currently represents 70% of our orders. On the following page, you'll find a breakdown for the month of November.

With the exception of "traditional orders" in the table, we place all other orders online and ship directly to the patient. Doing so eliminates the time spent receiving the lens, notifying the patient and dispensing the lens. We must place orders for patients who have vision plans through our practice management software to allow for proper coding, and we apply payments there as well. Traditional orders are those that we phone in and that the patient picks up. These include specialty lenses or orders for patients who don't have credit cards. Otherwise, payments are made directly to the distributor.

Our total contact lens sales compared to last year are virtually identical, as are the net profits. The savings we're realizing since the program began is in staff time. The 20 hours we saved in November permitted more time for direct patient care. With highly trained optometric technicians, it makes financial sense to allow them to perform at their highest skill level, rather than become bogged down in the contact lens ordering process.

The costs involved with setting up our program were essentially zero. Initial setup was free and we have no monthly maintenance fees. Remember that the distributor benefits from our arrangement as much as we do. Electronically placing our orders into their system eliminates their staff as the middle man as well. Staff training was also minimal. Most staff members have already ordered online products for themselves and ordering contact lenses isn't much different.

Our distributor has a suggested retail price for their lenses based on monitoring of the marketplace and these prices tend to be at the median level for most of the larger retailers. Each office, however is free to set its own prices. We generally follow the distributor's guidelines, although on a few of our largest sellers, we've dropped the price as needed to be slightly below the major online retailers.

Our experience has been that as long as you're "in the ballpark," the majority of patients are happy to order from us directly. Trying to be the lowest price isn't an option; margins are already low and there will always be someone who will sell their lenses cheaper.

Get ready, get set . . .

So how do you get started? Many of the larger contact lens distributors already allow for direct patient ordering and will design a Web site for you free of charge. If you already have a Web site, then they'll help you create a link that allows for a seamless interface to their site. The distributor charges the cost of the lenses to your account, while at the same time the patient's payment is credited directly to your account, resulting in a profit amount that you determine by your retail pricing. If all of your lens orders are placed online, then instead of paying your distributor each month, they send you a check for the profit you made that month, because patients aren't paying your office directly (payment goes straight to the distributor).

While ordering all lenses online would be ideal, in reality there are exceptions. These include insurance orders, patients who don't have credit cards, and lenses sold from stock. Whenever possible, though, we still order the lenses online and ship directly to the patient.

Work with them

As easy as it is to establish an online ordering system, the bigger challenge is getting both your patients and your staff to actually use it. Like anything else new, it will take some time and effort. As easy as it is for patients to order online at home, it's still important to place as many orders as possible for patients while they're in your office.

To encourage online ordering, we offer coupons and discounts on the other products we carry. We have two-tiered pricing now; online lenses are sold at a lower price than traditional ordering.

Don't forget promotion

We advertise and promote our online ordering through our newsletters, office brochures, television and newspaper advertising. Our Web site is prominently displayed on the bottom of each contact lens prescription that we dispense as well. We've even added a contact lens kiosk in our office, where patients can self-order their lenses at a computer set up in our waiting area.

Make the trend work for you

By making contact lenses available to your patients online, you'll establish yourself as an office in the forefront of technology. Your patients will benefit from the convenience and the timesavings realized by you and your staff will translate into a healthier profit margin for your practice.

Rather than lament the decreasing margins of selling contact lenses, realize that the method by which your office supplies contact lenses to patients is a reflection of your total office philosophy. Patients who are impressed with your professional and convenient online ordering capabilities are more likely to continue returning for eye care and to recommend you to others.

 

A Look at Contact Lens Ordering in My Practice in November

# of Orders % of Orders Contact Lens Order Type  Min. per Transaction Time Savings per transaction in minutes Monthly Savings  in minutes
2 2 Traditional orders 14 0 0
13 12 Vision plans 5 9 (14 min.-5) 117
12 11 Patient phoned in and staff ordered lenses online 3 11 (14 min.-3) 132 
30  28 Patients walked in and bought lenses from stock 5 9 (14 min.-5) 270 
50 47 Patient ordered lenses directly online w/o staff involvement 14 (14 min.-0) 700 
107 100 Total      1,219 min. (20.32 hrs.)

         

Dr. Scibal is in private practice. E-mail him at johnscibal@carteretvision .com.

 

 



Optometric Management, Issue: February 2005