Optometry is a unique field in that, rather than running one business, we are actually running two. We tend to look at our practices as one entity, but it can be very helpful to look at our clinical practice differently than our retail or optical business. While overall your business may be growing, one side of the business may be carrying the other.
Our optical businesses can be extremely profitable- benchmarks for optical sales (frames/lenses) can be around 40-45% of a practice’s revenue. Just a minor increase in this can drastically change the revenue of a practice. It may just need a few small changes in how we look at sales.
How can we make improvements in the optical portion of our practice to drive overall revenue growth?
Know Your Numbers
Before you are able to make any changes in your practice, you must have benchmarks to measure against. We often have an inflated view of what our optical sales are, and leave a lot of the decision making to our staff members. Before employing any strategies to improve sales, we need to know the details of where we start so we can know where we are going. Knowing metrics such as average frame sale and average lens sale is important, as is knowing that breakdown per staff member. Being able to show your team the data is important for buy-in for new strategies, as well as showing them how the changes they are making are affecting those metrics.
Begin With The End In Mind
Do your opticians have a strategy when showing frames to a patient, or are they just picking randomly from the board? One of the best ways to increase your average frame price (and increase optical profitability) is to have a defined, pre-set way of showing frames. This doesn’t mean you have to show the same frames in the same order to every patient! First, start by measuring your average frame price. (I use EDGEPro for this.) Not where you’d like it to be? Next, set a goal of how much you’d like that to increase. Many offices start here, and just tell their staff, “Sell more expensive frames!” While that is part of the answer, it isn’t the best strategy.
If your average frame sale is $150, and you have a goal to move that to $175, you are going to have to sell more expensive frames. But, by changing the order of how you do that, you can be much more successful.
If your optician, Mary, starts showing your patient frames and starts with a frame that cost $125, and then shows her two that cost $150 and $500, your patient is likely going to go with the $150 frame, because it is neither the least expensive nor the most expensive. What if you were to change the order? Mary first starts by showing your most expensive frame, that retails for $1000. The patient loves the style, but the price tag may be outside her budget. Next, Mary shows her a frame that costs $150. Lastly, Mary shows her a frame that retails for $300. Next to the $1000 frame, the $300 frame (which she also loves) feels like a value. She feels like she is making the right choice because it is neither the most or least expensive frame choice. By bracketing the frames we show the patients, we can impart value in the choices they are making, by comparing the choice we want them to make with a much higher end frame. By doing this consistently, you will begin to raise that average frame price.
Be All In
To do this, we must have the right frame choices for our patients. This may mean making an investment and bringing in a very high-end frame line to your office. Many doctors panic and say- we won’t sell a lot of these! That’s ok- the frame turnover for luxury frames is expected to be less than your moderate lines. However, by comparison, that $400 frame that was once your top end line will look moderate in comparison to your $1000 or $1500 frame that every patient has the opportunity to try on. An added bonus: when you DO sell that $1500 frame, it’s an opportunity to celebrate! (And then add a $2000 frame!)
Look The Part
One of my favorite things to do is to visit practice websites and look at pictures of their opticals. Some of our colleagues are so creative and have designed beautiful spaces that invite you to buy. Many of these practices have taken a page from retail and hospitality to make the buying process fun and interactive.
Pinterest can be a great place to start. Take a look at some of the new trends in optical design and merchandising. Small updates such as lighting, new displays and new furniture can go a long way towards driving sales. Many of these new optical designs don’t look like optometry practices at all. They look like high-end boutiques with great seating and non-traditional displays.
If an optical redesign is not in the budget, one strategy to freshen things up is to change where frames are on the board. Frequently I will work with my opticians to take all the frames off the board, and put them back in different spaces. Different locations can make frames pop differently based on the lighting or lines they are next to. Opticians have to search out frames again, instead of just grabbing the same favorites over and over. Patients even notice! We find patients think that a line is new if it is in a different spot, even if we have had it for a long time.
The optical business in our practices can be a significant part of our overall revenue and changes made can significantly increase profitability. By identifying areas of opportunity, having a strategy in place, and having an office setup that supports those goals, we can make great strides in overall practice growth.
Yours in success-
Jennifer L. Stewart, OD