Optometrists can increase eyewear revenues simply by getting out of the exam room and paying attention to what goes on in the dispensary. Here are three steps to making that happen.
Medical vs. Retail, by the Numbers
According to the Management & Business Academy (MBA), a professional education program sponsored by CIBA VISION and Essilor, 39 percent of optometric practice revenues come from professional fees, including eye exams and medical eye care, while 61 percent comes from product sales, including prescription eyewear and contact lenses. Thus, there is about a 40/60 percent split in revenue generation from medical to retail. Conduct a quick time study in your own office. Try the following exercise: For one full work day, keep a journal of all of your in-office activities, including the amount of time you spent doing each activity. I suspect you will find a 98/2 percent split in your time, meaning, 98 percent of the time doctors are behind the wall doing medical, not out in front interacting with patients/customers.
For example, in a $1 million practice that has a typical 40/60 split in revenue, $600,000 of income comes from eyewear sales. Yet, as an owner, partner or associate, you probably only invest 2 percent of your time making sure it is running effectively, efficiently and as profitable as possible. Caring for your patients' vision and eye health comes first, but so greatly neglecting the retail aspects of your practice is a prescription for shrinking, rather than growing, your business.
Optometrists have an opportunity unique to all the medical professions: They provide a medical and retail experience--and both provide revenue streams. However, most ODs spend little time on the retail side of their business. With reimbursements dropping, and doctors having to work longer hours, you would think they would pay attention to the one stream of revenue they can ultimately control.
Rethink How You Allot Your Time
There are three things a doctor/owner can do immediately to increase revenue, drive bottom line results and increase staff morale.
1. Management By Walking Around.
Get out of the exam lane and spend an additional 30 minutes a day in the part of your business that generates almost half of your revenue. Spend 10 minutes in the retail space of your office when you first open, when you come back from lunch and mid-late afternoon. Demonstrate to staff and patients alike that they are important to the success of your practice. Studies done in the 1920s at Westinghouse showed that just paying attention to employees while they work increases productivity by 10 percent.
2. Embrace, Recommend and Sell Technology.
Ten percent of patients buy on price, yet doctors spend 90 percent of the time worrying about whether their practice is pricing services and products intelligently. We are a nation of technology junkies and we are willing to pay for it. The economy is unstable, yet the iPad and iPad2 are soaring off the shelves. Interestingly, the iPad and iPad2 sell at roughly the same price point as a high-end pair of eyeglasses. If we think technology is cool and will enhance our lives, we are willing to pay for it. Your office probably has some cool technology in the form, perhaps, of new pre-testing equipment, but most of you are doing little to market these technological advancements to patients. If you have new equipment that you believe enhances your care of patients, train technicians to point out the new technology to patients during pre-testing. In your dispensary, one additional pair of photochromics or digitally surfaced lenses
per day will bring in about $14,000 of net revenue per year. That’s a ton of patients seen for a $40 reimbursement! Set your goal for one additional pair of each and watch your bottom line grow!
3. Finally, People Respect What You Inspect.
No one wants to fail at their job. The most simple way of keeping people engaged, performing and maintaining the momentum in their work is to clearly define what you expect, measure it, report it and inspect it regularly and frequently. Set a goal on a white board at the back of your office of selling four digitally surfaced lenses a day. Everyday keep score: who sold them and how many, and then discuss with the team best practices to sell even more. There are few things we can control to drive practice revenues. The area for improvement that is neglected most often is sitting right outside your exam room. Take 30 minutes a day to engage and celebrate the retail elements of your practice, and watch as your staff and patients become engaged and set your business on a path to growth.