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.
BY GARY GERBER, O.D.
"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!"
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They
know what business they're in — not what business they think they're in.
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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.
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They
listen to their customers.
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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.
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They
embrace new technology.
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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."
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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.
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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 www.powerpractice.com or contact him at (800) 867-9303.
Optometric Management, Issue: October 2006