In the dynamic landscape of eye care practices, understanding evolving trends and leveraging strategic opportunities is essential to bolstering profitability. It’s no secret that economic uncertainty is impacting eye care businesses nationwide. The good news is you can take action to head off some of the fallout from patients’ changing buying trends.
One of our key services at GPN is helping practices analyze their business data and pinpoint the trends in their metrics. Many practices across the country are facing some common challenges, and I’ve identified five crucial areas where practices can focus to help build profits, even with looming economic challenges in 2024. Turning your attention to these key metrics can help you achieve growth and profitability over the coming year.
Annual Supply of Contact Lenses
The Trend: There’s a significant shift in consumer behavior towards purchasing shorter supplies of contact lenses, perhaps due to economic downturns.
Solutions: Create a distinct item in your Practice Management System (PMS) for 6-month supplies. This allows for precise tracking and gives you the opportunity to proactively engage with patients when it’s time to reorder. By acknowledging and catering to this trend, practices can better meet patient needs and ensure continued revenue streams.
Patient Owned Frames (POFs)
The Trend: The rise in patients choosing to reuse their existing frames rather than investing in new ones is a growing concern as many consumers are seeking their own strategies to trim expenses.
Solutions: Effective tracking through analytics and the PMS is vital. Developing a value frame line tailored for price-conscious patients, refining communication scripts to emphasize the advantages of new frame purchases, and considering a reasonable POF re-use fee can help practices counter this trend and maintain revenue streams.
$0 Frame Sales
The Trend: With patients increasingly hesitant to spend beyond their insurance coverage, practices need to recalibrate frame pricing strategies.
Solutions: Limiting the selection of frames available at or below the insurance coverage price point and reframing the conversation regarding frame coverage can be game-changers. Help your team develop scripts that will shift the dialogue away from the covered cost. Instead, highlight the value of the frame allowance as a discount. This ensures a more positive patient perspective, potentially leading to increased sales of higher-end frames.
Optional Clinic Services
The Trend: Patients are opting out of certain optional services like Optomap and OCT, posing special challenges for practices that want to maximize revenue from expensive equipment purchases.
Solutions: Tracking service metrics and the service capture rate is crucial. Explore marketing strategies for uncovered treatment options and promoting specialty services such as dry eye and myopia management to counter this trend and open avenues for additional revenue generation.
Monitoring Cost of Goods
The Trend: The rise in product prices and soaring shipping costs demands vigilant attention. With product prices experiencing an annual increase of 1-2% and shipping rates doubling in many cases, practices need to be proactive in their approach.
Solutions: Regularly review your cost margins, to help maintain your ideal target margins (35% for frames and 25% for lenses), and always factor in shipping costs when pricing products. These are essential strategies to navigate shifting product price challenges and preserve profitability.
In the competitive landscape of eye care, embracing these strategic initiatives can empower practices to adapt, thrive, and excel in 2024. By focusing on these key areas—tracking patient trends, refining communication strategies, recalibrating service offerings, and closely monitoring costs—practices can position themselves for sustained profitability even in uncertain times. Investing in these strategic focal points not only drives financial success but also enhances patient satisfaction and strengthens the practice’s reputation as a provider of choice in the eye care industry.
Need help planning for 2024? Take advantage of expert guidance on your practice metrics with a free practice analysis.