Optical dispensing: 21 steps to the 21st Century
Now that the battle over diagnostics and therapeutics has been won, optometrists can set their sights on their next coup: winning the economic war over managed vision care. While gaining diagnostic and therapeutic privileges represents a major victory, it remains to be seen whether optometrists will be able to achieve substantial patient volumes from this newly acquired profit center any time soon. More important, optometrists should immediately turn their attention toward defending and expanding their largest profit maker: optical dispensing.
Focus on the core business
Optical dispensing, contact lenses, primary eye care, therapeutics, low vision — what is the core business of optometry? Many optometry practices throughout the country find it difficult focusing on the business they do best: optical dispensing. The truth of the matter is, without the benefit of optical dispensing income and profits, most optometrists would be hard-pressed to survive on primary eye exams and therapeutics. Consumer research recently conducted by Eyecare Consultants also supports this conclusion: optical dispensing clearly remains the optometrists' primary draw for business.
How can optometrists leverage optical dispensing for its maximum returns? In addition to making their operations the most productive and efficient they can be, optometrists should look for ways to differentiate their dispensaries from the competition.
Steps to better dispensing
The following are my 21 recommendations to help optometrists improve their optical dispensing operation and the bottom line. I predict that optical dispensing will remain a significant profit-making opportunity for optometrists well into the 21st Century.
Make patients feel:
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- Provide "knock-your-socks-off service." Optical dispensing is a service business. Today's dispensary patients expect superior treatment as a service standard, not the exception. Knock-your-socks-off service requires prompt, courteous and personal attention from staff with highly specialized people skills. If staff members don't have these skills, optometrists should invest in training programs especially geared for that purpose.
- Give extraordinary guarantees. An extension to superior service is offering extraordinary guarantees: giving patients 100% satisfaction on all products and services purchased in the dispensary, both verbally and in writing. Again, this should be a rule for all dispensaries, not an exception.
- Implement "mystery shopper programs." To keep patient satisfaction and sales levels at their highest, use credentialed experts to phone and visit the dispensary under assumed identities. Through their impartial judgment, they can assess service and sales levels and provide recommendations. Most importantly, optometrists should notify sales staff of this program and develop it as part of their overall quality assurance and continuous quality improvement effort.
- Price for profits. In the expanding scope of managed vision care programs as well as with the fee-for-service consumers, pricing products and services by formula doesn't work. Rather, pricing must be structured on perceived value and profit predictability, a margin established by the practice to account for all the costs associated with products, services, operating expenses and required profit.
- Dispense second pairs. Dispensing customers multiple pairs of eyeglasses is the most significant area in which optometrists have the most to gain. All patients can benefit from an extra pair of eyeglasses in case of loss or special-use eyeglasses for sports, hobbies, reading, sun wear or evening wear.
- Educate your staff. Along with the reengineering of office functions, staff must be continually educated on systems related to the dispensary. This includes systems for sales, pricing, quality assurance, fabrication and collections. The fastest, most diplomatic way to develop these systems is to use experts who specialize in these services.
- Let staff know your expectations. Along with the increased focus on service, staff members must know specifically what is expected of them. Written job descriptions detailing what is expected of each employee are essential. Additionally, staff must be evaluated and compensated on their performance and ability to attain those standards.
- Share profits. The best method for optometrists to ensure steady, continued quality and profitability is through the use of profit sharing and empowering staff to assume increased responsibility. These incentives help dispensary staff perform in ways that can be quantified and measured. Goals, such as gross sales, net income, patient capture rate, quality of patient sales, patient satisfaction and quality assurance, are good indices to use.
- Profit sharing
- Increased decision power
- Excellent service
- Return customers
- APIF: assess, plan, implement and follow through. These are the building blocks of a strategic business plan. Every dispensary (and practice) needs one, and it should be updated at least twice a year.
- Bundle products. A new marketing strategy requires a new way of presenting products — a method that is responsive and flexible to accommodate all eye care plans and customer needs. This requires product bundling: packaging eye wear (frames, lenses, coatings, etc.) to meet the needs of specific plans and discounted fee-for-service sales.
- Sell up As part of the "service" mindset, staff at all levels of the practice must be attuned to customer needs. For example, exactly what do 72-year-old Mrs. Jones, active Mr. Smith or toddler Tommy Brown need in the way of vision products and services to thrive in the real world? That kind of emphasis facilitates the "selling up" process in the dispensary: using the products and services available in basic vision wear plans as a springboard to grow customers into a broader array of sales (multiple pairs and contact lenses).
- Sell benefits. FAB (features, advantages and benefits) selling — explaining to the customer exactly what the features, advantages and benefits are of a particular product or service — has been a cornerstone of American marketing for years. Today, the emphasis is on benefits: what's in it for the customer.
- Know your competition Maintain an accurate pulse on your competition. At least twice a year, conduct a competitive price and service analysis. A competitive analysis will help ensure that you are keeping prices and service at the correct levels.
- Manage by teams, not committees. Most businesses today have replaced management by committees with the team approach. In the dispensary, the best team includes an on-site optician-manager and off-site managed care experts who understand eyeglass sales in a managed care environment.
- Strive for total practice integration. Dispensaries must be well-integrated into the overall practice; they cannot be left to function autonomously. Full integration only adds to the practice's overall image as a comprehensive eye care center.
- Capitalize on economies of scale. Optometrists should seek to develop relationships with other practices for group purchasing of lab work, managed care advisory services and frames.
- Commit to quality assurance. The best quality assurance programs use telephone interviews in addition to mail-in surveys to gather patient response on their dispensary experience. Managed care organizations are most impressed when this is performed by a neutral third party who can analyze the results.
- Out source. The business cry of the 1990s is: do not engage in functions internally that can be done better (and cheaper) outside. Today, out sourcing is an accepted business practice. According to Yankee Group Research, at least 20% of the largest U.S. companies now use some form of technology out sourcing. You should, too. The best areas for out sourcing are management services, managed care consulting, development and implementation of vision care programs and lens fabrication.
- Market your dispensary. With managed vision plans dictating where and how customers can access eye care, practices need to focus on methods to build customer loyalty and business. Internally, this is accomplished with solid and cohesive verbal and written messages; externally, it is accomplished through appropriate public relations.
- Market noninsured vision programs. There are opportunities to be mined among business in your own community. Designing and implementing vision care programs will pay off handsomely in potential profits and will increase market exposure.
- Centralize and streamline systems. A great business requires great systems implemented by great people. Be sure your systems are well designed and tested before implementation.
Sharing the Wealth:
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Optical Staff Goals
100% customer satisfaction
Attend sales and service workshops
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Maintain fluency on products
Provide advice on products
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Say "Thank you"
Providing staff with specific business goals contributes to steady, continued quality and profitability in the optical dispensary.