Article Date: 3/1/2006

dispensing
Optical Sales: The Forgotten Treasure
Ten tips for boosting profitability and impressing patients.
DONNA SUTER

Did you see the crime scene show where, in the course of the investigation, they discovered millions of dollars hidden in the floor? Isn't that a lot like your optical? Today's primary care practitioner is so busy treating and detecting eye disease that generating a healthy profit from the dispensary is often overlooked.

While the American Optometric Association estimates that private practice optometry contin- ues to account for the largest share of comprehensive exams, other research suggests that more and more patients are filling their prescriptions elsewhere.

Though the range and scope of optometry has changed, your dispensary could still generate $1 or more out of every $3 in your practice. Prescription eyewear sales could easily account for 35% of the average O.D.'s revenue.

When looking for no-cost ways to boost your net, don't forget that patients treasure clear vision and today's visually demanding lifestyles often mean more than one type of spectacle lens technology. You can post above average profits by following these 10 guidelines — even while you're busy diagnosing disease.

My personal top 10

1. Differentiate your optical with superior service. In order for the practice to sell premium lenses in the optical, the patient must perceive the value of the product and service as greater than the fees charged. This means that a "wow" experience must happen.

Every business, regardless of whether it's an optometric practice or department store, has a reputation for the quality of goods and services it delivers. What quality do you associate with Starbuck's, Nordstrom's and the Ritz Carlton? Pretty high, right? Now, what quality of service do you associate with your cell phone coverage, gas station, or the Post Office? Chances are you rated this group lower.

Why do companies like Nordstrom's have such an excellent reputation? One key reason is that they do, in fact, provide excellent service. But another equally important reason is that they have learned the subtle art of shaping customers' perceptions of that service.

When it comes to winning and keeping patients, it's the customer's opinion of the quality of service that determines how successful you will be. Perceived service quality is the difference between what the customer gets and what he or she expects.

Perceived quality is the single most important factor in determining long-term profitability. The Strategic Planning Institute (SPI) of Cambridge, Mass., made this conclusion after testing thousands of variables in numerous businesses to determine what impact various strategies have on long-term profitability. After a lot of research, the SPI study found businesses that rated low on service averaged a meager 1% return on sales and lost market share at a rate of 2% per year. On the other hand, companies that scored high in service averaged a 12% return on sales, gained market share at the rate of 6% per year, and charged significantly higher prices.

The customer service policies you establish will help set the tone for your practice. Encourage your staff to cheerfully accept returned merchandise from patients and replace it at no additional cost. Encourage patients to come back for adjustments and repairs. Go the extra mile — deliver to a patient's home that pair of eyeglasses that was embarrassingly late. If this isn't feasible, give the patient a gas card.

2. Use the power of the coat. As a consultant, I visit at least two practices per month, and one of the few real differences between them is the doctor's recommendation: If the doctor recommends a glare-free lens in the exam lane, the patient purchases that product in the optical. The key is basing your recommendation on need. Consider the following facts:

According to American Demographics magazine, technology is one of the top three motivators behind purchases among consumers over the age of 55.

Thirty-three percent of consumers surveyed by a market research firm say they would pay a premium price — not just a higher price, but a premium price — for services and products that offer solutions.

In eye care, this means giving patients the information they need to purchase the lens technology that will solve their unique visual problem.

Work smart and begin with a lens guide or menu in the lanes. This type of professional printed brochure suggests lens technology solutions that solve visually challenging situations patients might experience. For example, multifocal lenses that allow patients to read the titles of songs on a CD case or glare-free lenses that eliminate glare from the hood of your car. (This begins with the technician marking some possible choices in pretesting.) Then, finish by making the recommendation for first-rate lens technology. Recommend three pair of eyewear to each patient (sun, task-specific and everyday). The optician then follows your lead with a demonstration of progressive lenses, etc.

6 Reasons Why You Should Purchase Your Eyewear From Us

Try these out on potential patients.

1. FAST SERVICE. We have our own optical laboratory and full-time opticians so that your eyewear can be made quickly. Most prescriptions are ready in two days, and many can be ready the same day.

2. ONE-YEAR WARRANTY. All eyeglasses carry a one-year guarantee against breakage, at no additional charge. If your eyewear breaks, for any reason, just return the broken parts and we will repair or replace your eyewear free of charge.

3. 15-DAY EXCHANGE PRIVILEGE. After getting your new eyewear, if you decide you don't like the frame, you can exchange it for another frame. If new lenses are required, a small lab re-grinding fee will be charged.

4. COMPETITIVE PRICE GUARANTEE. If you find the same spectacle lens or frame at a lower price within 90 days of your purchase, bring in written confirmation and we'll gladly refund the difference.

5. ALL PLASTIC LENSES HAVE SCRATCH RESISTANT COATING AT NO EXTRA CHARGE. This factory-applied coating makes plastic lenses very tough. It is guaranteed not to scratch for one year, or the lenses are replaced free. (Only one replacement pair per year. This coating is an optional extra charge for some eyewear plan prescriptions.)

6. WE STAND BEHIND OUR PRESCRIPTION. Our doctors are available to review your prescription needs if you have any difficulties (at no charge).

3. Solve the "dilated eyes" dilemma. As more and more practitioners adopt dilation as an element of a comprehensive eye examination, the optician now faces a new set of problems. Brainstorm possible solutions with your optician. Here are some ideas to get you started.

Change exam protocol and escort the patient to the optical right after you instill drops.

Challenge the optician to complete the lens and frame selection process in 15 minutes or less and escort the patient back to the clinic.

A Start the exam process by having the technician neutralize the glasses and auto-refract the patient in the optical. The optician should then give the patient a professional evaluation of his or her eyewear to determine if they are suitable for full-time wear.

4. Become an expert at answering "How Much" and insurance questions. In every office I visit, I overhear staff giving information to prospective patients who call to ask what insurance plans the practice accepts and how much products and services cost. Train staff to view the call not as an interruption but as an opportunity to become practice builders.

5. Choose vendors committed to your success. Because different labs and vendors have different pricing systems, compare pricing for several of the top labs and buying groups. One way to compare the pricing is to price out your most frequently dispensed lens and determine what your Cost of Goods would have been if you had used a particular vendor.

However, we don't recommend that you allow price to be the only determining factor or switch labs because another lab offers you a discount. Evaluate the quality of the product the vendor provides, guarantees they offer, shipping fees and the amount of time for delivery in relationship to the level of quality necessary to exceed your patients' expectations.

If you're looking for the highest quality vendors, your fees need to reflect the higher quality and your staff must tell the patients about the high-quality materials you use and what it means to them.

6. Set prices at a level that makes sense. Mystery shop your competition at least every six months. Are your lens fees at least a little higher than average? Even though discount chains and offices that surface their lenses in-house will have lower lens fees, we suggest your competitive niche be superior customer service and education. If you provide the best in your market, you can afford to charge the highest fees in your market.

If you compete on price, it will cause you to become less profitable. Just as there's a market for discounted fees, there is one for quality customer service.

7. Learn their needs to encourage multiple sales. I recently shadowed an elderly patient into a client's optical dispensary. The optician began by saying, "Now let me see your paperwork so I can tell you what you can get." She told him he'd be getting "CR-39 Flat-top bifocals" and could choose from the frames to her left. As the phone rang, she excused herself and the patient rose to look at the frames. I followed the patient.

In less than two minutes I had discovered that the gentleman, let's call him Mr. Smith, was preparing to move to his "second home" for the spring and early summer — his second home was a flat in Paris — and that he had specific eyewear needs. He didn't like his current frame, was bothered by glare, thought his lenses were too thick and wondered if his prescription could be put in sun wear with wrap-around lenses. He then asked me what CR-39 Flat-top meant and if I could help him.

Fifteen minutes later, Mr. Smith was happily writing a check for non-glare, newest design progressives with a super-hard coat to go with his smart designer frame for everyday, and polarized sun wear.

What happened? That optician was so busy making sure the patient understood his coverage that she didn't find out how he used his eyes. She also judged him by his status (fixed income) and appearance and assumed he wasn't interested in premium products. I focused on solving the patient's problems.

While it's true that retired persons are on a fixed income, it isn't true that all seniors just want what's covered by their plan. Study after study shows that seniors are willing to spend more on products ... when that product solves a problem.

8. Build profits by building patient rapport. Nine out of 10 eyewear consultants never address their patients by name. More disturbing, many don't ask patients what they do for a living to better determine which lenses and frames would offer optimum comfort and vision. You can only offer full-service optical care after you've established the wants and needs of your patients.

You don't like to change spectacle lens design if there's no complaint? Doctor, when most of your patients first became presbyopic, progressive lenses, just like the first anti-reflective coatings, were problematic. Upgrade patients wearing spectacle lenses invented in another century to today's technology.

9. Stress "tellmanship," not salesmanship. People buy from people they trust. When patients trust you, they'll accept your recommendations. For example, "Mrs. Hall, you've complained about the red mark on your nose, so I'm going to show you two new materials: a light-weight, impact-resistant lens and a glare-free, ultra-thin lens with a super-scratch resistant surface."

10. Be understanding with insurance patients. Explain to third party patients what their insurance covers in terms of lenses. This is most easily done with demo lenses in a frame.

For example, "Mr. Burkely, I'm going to show you two things today; those lenses covered under your insurance program and those frames and lenses you can have if you want to supplement your program."

Dig deep for the treasure

Remember, today's patient may not know anyone else who uses your services, but may have been told to use your office by their insurance plan. Treating patients in an impersonal manner is one sure way to destroy your service image. Patients only buy when they feel good about you and your products and services.

During a recent training, I challenged a staff to implement these same 10 techniques. Each has been designed to answer the two unspoken questions patients have about your practice: "Can I trust you not to take advantage of me," and, "What makes your practice better than the one down the street?"

Approach each patient encounter as an opportunity to educate patients, even those with no change in prescription, as to how an upgrade in lens technology will enhance their vision. Just like them, you'll re-discover the treasure hidden in the optical. This 2.5-doctor practice saw a $54,000-increase in January 2005 optical sales over January 2004 sales without an in- crease in the volume of patients.

In today's aggressive environment, excellent patient care that includes information about lens technology is more than a competitive weapon — it's a skill guaranteed to lead you to profitability that drops straight to your bottom line.

Donna Suter is president of Suter Consulting Group. E-mail her at suter4pr@donnasuterconsulting.com for a free sample of a lens guide or menu

Know your exact inventory value...everyday
By Jay D. Petersma, O.D. , Johnston, Iowa

Does your frame inventory value bounce around like fuel prices? Sure it does. I'd probably be pretty accurate in saying that most of you don't ever take a complete inventory but once a year for tax purposes. Unless you're using a true inventory management program as part of your office software system, I'd say your knowledge about how much cash is hanging on your racks is pretty vague. Yet, I'll bet some of you have a budget line for frame purchases.

Consider the typical practice that allots their "board space" to selected frame vendors on the basis of a frame count, or number of "slots." Here's the typical buying encounter:

The salesperson from "Fancy Eyewear" is assigned 30 spots in your dispensary. He meets with you or your staff member and frames are bought and returned, with little thought about the value of the frames. It's a matter of the salesperson finding, perhaps, eight missing frames when he "does his count." Seven are being phased out, so he writes an order to return the seven frames and works with your buyer to come up with a sales order for fifteen new frames so he keeps his 30 spaces full. Sound familiar? I can guarantee you the salesperson is thinking about the value of the frames you are selecting.

Selling you more expensive frames equals a bigger commission for the salesperson. And that's OK; they're doing their job and provide a valuable service to your office. But after having more than one salesperson load us up with frames that cost almost double what the replaced frames did, then leave the job shortly thereafter, I made a change. The frame salespeople may find it a bit more work, but it's my office. And they now have more flexibility to work their lines as they see fit in my dispensary.

Introducing a solution that works for both sides

We changed to an "Inventory Value System," and stopped counting frames. We count dollars instead. Now, this is much easier to do in a dispensary with flexible shelf space and display groupings by designer brands, rather than just having a wall full of frame pegs, which, frankly, has become rather tired. As a side note, I'd recommend you look at fine department stores and jewelry stores for some display ideas. You may see a Men's and Ladies' department, but more noticeable is a distinct area for Ralph Lauren, Burberry, Anne Klein or Ray Ban. Entire lines are clustered together with nice point-of-purchase accessories and ample lighting to make an effective impression on the consumer. Your frames should be presented this way as well.

When our salesperson from "Fancy Eyewear" arrives, she is reminded now that her inventory value in my office is $2,000 or less, rather than 30 pieces. She has to layout, in front of the buyer, the current frames that remain in the office and the replacements they recommend, such that the total value is not over $2,000. The salesperson can choose to display 20 frames that cost me $100 or 40 frames that cost me $50. Either way, my investment and her commission are constant. We also require delayed billing on all frame orders until after the end of the next month, so that we can receive the credits back to our buying group before payment for the new sale is due.

The staff's job then becomes making sure the number of frames on display fit in well with the total number already in the office.

Try it and see

I still recommend keeping a couple very expensive pieces on display from each vendor, if for no other reason than to make the rest of the line look more middle-of-the-road in price. You can try this method with a couple of vendors at first, then if it goes well, convert the rest. You'll soon find that keeping better control of your frame inventory investment will allow much better budget planning for your practice.



Optometric Management, Issue: March 2006