Article Date: 10/1/2006

practice management
What Other Industries Know ... THAT WE SHOULD

Every business faces stiff competition these days, but the good news is, we can learn from others.

"You think optometry is a tough business, doc? How many gas stations are there in your town? How many cars? You think that's a worse situation than the number of doctors and eyes? And look what's happening to the price of gasoline! I'd love to lower the price, but the big oil companies are forcing me to keep the prices high and it's not the big oil company that has to deal with my complaining customers! And regulations? You wanna talk regulations? Man, HIPAA is nothing compared to the EPA requirements you have to swallow to run a gas station!

"You think you have it rough, Mr. Eye Guy? I wish I had your job! Sit in a clean, air-conditioned room all day and just ask people 'Which is better, one or two?' You wanna talk competition, fella? Welcome to my world, hot shot eye doc man!"

They know what business they're in — not what business they think they're in.

Look on the bright side

While the above is fictitious, I'd guess you could easily substitute just about any business owner. After all, we do live in highly competitive times and it's not just optometry — just about every business has its own set of competitive challenges. Yet, regardless of these hurdles, obstacles and roadblocks, many businesses continue to grow and flourish. What can we optometrists learn from other businesses that have overcome their own competitive challenges to apply to our own practices? Lots.

Ferrari isn't in the car business. They're in the toy business. Specifically, toys that every one wants but few can have. That's the reason every model made is only produced in small numbers. Harley Davidson doesn't sell motorcycles. They sell a sense of belonging to an elite group, the HOG, or Harley Owner's Group. And Hummer doesn't sell SUV's. They sell survival. Here are three modes of transportation from three different companies all selling different things to different groups of customers who will make their buying decisions for three discrete reasons. Add BMW, Mercedes and Hyundai and you now have even more choices for getting from A to B. But these companies all know that getting from A to B isn't what they sell.

So, what do you sell? Glasses? Advanced glaucoma detection and treatment? High technology contact lenses? Don't nearly all O.D.s sell those same things? What can we learn from the auto industry? We learn that to succeed you must positively, discreetly and uniquely define who you are, what you do, what you sell and why a prospect should visit you instead of a competitor. And as any marketing person will tell you, this positioning of your company isn't easy. In fact, many failed businesses did so because of this seemingly innocuous reason; they didn't have a firm understanding of what business they were really in.

They listen to their customers.

So instead of a purveyor of visual appliances, you might consider positioning yourself as a professional who offers to trust and care for, to nurture and watch over your patients' vision. You can consider selling peace of mind — the assurance that if patients visit your practice, regardless of how you correct their vision anomalies (if they even have any), you have done so in such a way that they are corrected. As in the car business, this is one of several, unique positions you can take when attempting to answer the question, "What business am I in?"

Who knows more about our patients' eyes than we do? That's easy: our patients. Sure, they don't have our grasp of optics and pharmaceuticals but they do know how they want those two things to be delivered. They are consumers and they know more about being eyecare consumers than we do. And if we want to succeed, we'll listen to what they have to say. Things such as convenient office hours are a start (convenient for patients, not us). Clean offices, polite staff, Web site access to your office's consumer functions like appointment scheduling and ordering contact lenses, are just a few things patients want — and you'll know that if you listen to them!

The hospitality industry is renowned for listening to their customers. It's rare for hotels not to ask you to rate your experience after staying in most of them. But there's more than asking. There's doing. If you already survey your patients about their experiences in your office, that's great. If you don't, start. However, if patients tell you, "I wish you were open Saturday," and you don't implement Saturday hours, you're not mimicking the successes of the world's best hotels. It's not about being open Saturdays, though — it's about listening and then acting upon what your customers want.

Airlines use e-ticket machines and Web sites, McDonald's has its own version of an EZ-Pass to speed you through the drive-up window, the cash register at Burger King has pictures of French fries that, once pushed, trigger an inventory management system, and your car mechanic is now well-versed in computer technology — yet many optometrists still practice with manual, pink phoroptors and pump chairs.

They embrace new technology.

Patients readily see this obvious technology disconnect and while they may not comment on it, will instantly compare their low-tech visit in your office to their high-tech one at Dunkin Donuts. The world is changing around many optometrists who are either techno-phobic or in technology denial. It's no accident that some of the biggest and most successful businesses on Earth are supported by the best technology. That goes for everything from Wal-Mart that uses satellites to help manage inventory to the most profitable O.D.s who have already made wavefront eyeglasses commonplace in their practices.

Chicken or the egg — computer or profits? In our consulting company's experience, as you'll see in this last section, it's neither. Rather, it's a continued reinvestment in new technology and this reinvestment is made in virtually real time. Instead of saying, "I'm waiting to see if silicone hydrogel lenses are the real deal," early technology adopter practices take the lead and cut that path for others to follow — just like in the computer business when Apple launched the iPod. "Will people pay $0.99 for a song to carry around when they can turn on the radio for free?" More than a billion dollars later, the answer is a resounding, "Yes!"

A new Ritz Carlton employee spends about three weeks in orientation, then almost one hour per day in training during the first year of employment. If you've ever stayed at one of their hotels and interacted with their staff, you'd probably agree that this commitment to training has paid off. Just as pilots train on flight simulators, high-end restaurants train their wait staff with simulations. Before a customer can ever ask them, "Can I get a baked potato instead of mixed vegetables," they have not only memorized the menu, but sampled everything on it.

Our industry, however, has a tendency to hire under pressure because we usually wait until someone quits or is fired to initiate the hiring process. And that "process" is often nothing more than to "run and cross" — that is, run a classified ad and cross our fingers. When someone responds who is conscious, we usually hire him or her. Training and orientation the O.D. way generally consists of, "Do what she does."

They understand the importance of good employees.

So, what can we learn here? Certainly not anything we haven't heard before. But it's not only that a well-run office demands a well-run staff. Instead, learn that spending money to hire, train, orient, re-train and groom a good team pays huge dividends. If it didn't, it's doubtful other industries would devote so much time and money to it.

It's often stated that the benchmark for net in O.D. practices is about 30% of gross sales. That number is probably true. And if it is, it's probably a little too high! Yes, I'm a practice building consultant and yes, I understand the importance of a high-net business. But we need to re-examine that benchmark more closely and then identify a missing one.

While the exact amount of money pharmaceutical companies spend on R&D is often debated, no one argues that they spend it. Car companies are able to continually come up with new designs and Dell new computers because a certain percentage of profits are pumped back into the company. As with staff training above, smart doctors will allocate a few less dollars for their family vacations and put that money towards a new Web site, retinal camera or employee.

They reinvest in their businesses.

This ongoing and continued reinvestment strategy is akin to personal investing in your retirement plan. The sooner you start and the more disciplined you are in doing it, the higher the ultimate pay out. When going through your next profit and loss statement, consider adding a category for reinvestment in the expansion of your practice.

Look around to recharge

Every business has its challenges and the way those challenges are morphed into opportunities is the essence of what we should focus on and adapt into our practices. Instead of getting stuck in our own eye worlds, we should take time to learn how other industries deal with theirs. When we do, we'll get a creative battery recharge and reap the dividends.

Dr. Gerber is the president of The Power Practice, a company specializing in making optometrists more profitable. Learn more at or contact him at (800) 867-9303.

Optometric Management, Issue: October 2006