Last week's tip started with the premise that there are only five ways to increase your practice net income. As a review, here they are:
See more patients per day.
"Sell" more to each patient.
Raise fees (or reduce discounts).
Avoid costly errors.
I'm covering each of these five steps in a series of tip articles and today we'll focus on "selling" more to each patient. I hesitate to use the word "selling" to optometrists because I know many of my colleagues find the word offensive, but I really don't know what else to call it. Yes, we actually prescribe our treatments and we recommend optical products, but from a broad business perspective we are still selling ourselves and our services.
Regardless of what we call it, this strategy deals with the patients you already have rather than trying to attract more of them. This method of increasing net income does not require you to see more patients per day. Let's analyze the ways your current patients might purchase more eye care services and products. If your practice is underperforming in any of the following categories, you have an excellent opportunity to increase your per patient revenue and your practice net. Embrace and invest in the missing categories.
Multiple pairs of glasses
This is the classic factor we think of when it comes to selling more to each patient and there is a huge range of success among practices. Some offices sell multiple pairs very well and some are terrible. My practice used to be terrible until we implemented an aggressive policy of offering a 50% discount on the second complete pair (and the third, fourth, etc.). Yes, we also offer the same discount to patients with vision plans. Overnight we started to sell lots of multiple pairs. We still make an excellent profit on the second pair and smaller profit is better than no profit.
I have heard the concern that patients will immediately presume there must be way too much markup in the glasses if I can offer 50% off, but they really don't think that way. They already know there is a lot of markup in optical and all they really focus on is how the policy affects them. I've never had to justify how we can give 50% off, but my response would be that our lab gives us a discount when we order two or more pairs for a patient at the same time and we save time in processing and dispensing both pairs at once.
There are plenty of other ways to sell multiple pairs of glasses without a big discount. One of the major ones involves the doctor recommending and prescribing special purpose eyewear in the exam room. This includes Rx sunglasses, computer glasses, TV glasses, golf glasses or whatever is appropriate. The other major factor is the concept of lifestyle dispensing. The optician must begin the patient encounter by asking questions. Don't begin by showing patients what you have; begin by asking them what they need. Begin by asking them about their life: work, hobbies, sports, driving, and computer use.
It takes an investment in great inventory, but optometric practices can become the go to place for quality plano sunglasses in the community. And many people want quality and will pay for it. You need a great selection of great brands like Wiley-X, Rudy Project, Maui Jim, Oakley, RayBan, and Nike, to name a few, plus many high fashion designer brands. Carry that and they will sell. My practice is in the Chicago area, not exactly the sunbelt, but we sell lots of sunglasses all year round.
Most ODs do not bring up the idea of contact lenses unless the patient asks for them. Be honest – are you in that group? Imagine how many contact lens fittings you could do if you suggested a free try-on in your office to most of your patients? You could just delegate the matter to a technician and only become involved if the patient agreed to a fitting. Many of these patients would order contact lenses, buy a pair of plano sunglasses to wear over them and also purchase new Rx glasses as well! Now we're talking about selling more to each patient.
Medical eye care
Additional diagnostic testing and follow-up office visits also qualify as selling more to each patient. Take courses in medical eye care and in billing and coding. Invest in an OCT this year.
Optional screening tests
Many patients with vision plans will opt in for a special screening test and pay out of pocket because they know it offers advanced technology and a higher level of eye care. Screening retinal photos and macular pigment density testing are excellent examples and you could bundle those together. Many eye care practices are beginning to use an OCT in a screening mode.
Patients really like it when their eye care professional advises them about nutrition and vitamin use. They are happy to buy a better product from their eye doctor's office or via the practice website.
The population is aging and there is a growing need for help with magnification. You probably have a large number of patients already in your practice who need basic low vision care. Why not have some good hand held magnifiers and a demo unit for an electronic magnification device?
Average sale per exam
This metric goes by many other names, such as average gross revenue per patient among others, but it is extremely useful and easy to track. Simply take your collected gross revenue for the month and divide by the number of comprehensive exams performed. The national average for independent optometric practice is $307 according to the MBA program, but I know many OD practices where the number is over $500. All of the eye care services listed above contribute to a higher revenue per patient figure.
Best wishes for continued success,
Neil B. Gailmard, OD, MBA, FAAO
Editor, Optometric Management Tip of the Week
Dr. Gailmard's new book, Practice Management in Optometry: A Blueprint for Success Based on the Optometric Management Tip of the Week, is now available on Amazon.