Putting Profitability Back in Contact Lenses

by | August 2012

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Contact lenses have become easier to manufacture, distribute, and fit; and, as a result, prices have fallen for both products and associated services. Despite this, there remain ways for independent practitioners to profit from contact lenses.

As profit margins become thinner and as full-year supplies of lenses become harder to sell, independent eyecare practitioners are becoming legitimately frustrated with their contact lens businesses. Online retailers keep product prices low, and contact lens service fees vary widely, with some optical chains offering a routine exam and contact lens fitting for as little as $40—a price impossible for most independent eyecare practitioners to match.

At the same time, growth in managed vision care plans, which limit reimbursements and cap fitting fees, may present an additional challenge to independent practitioners. Despite these challenges, a number of simple strategies can help keep contact lenses profitable.

Price Products with Care

Feared by many, the actual impact of online retailers on independent eyecare practices remains unclear. In a recent large-scale survey of vision care consumers only 1 in 10 patients reported purchasing contact lenses online; the survey also found that contact lens brand had little impact on the purchase location.1

In my practice, however, I have noted that most of the prescription-verification requests we receive from online vendors are for contact lens brands with high consumer visibility: The more commercial exposure a brand has, the more likely patients are to shop around for it. Therefore, choosing contact lens brands that are unavailable, less visible, or more expensive online may decrease the chance that patients will “walk” with these prescriptions.

A little internet research helps me price my contact lenses competitively. I enter a contact lens brand and type into the Google search bar, filter by “shopping,” and see what the major online vendors are charging for those particular lenses. There are usually a few outliers, but we typically try to price around what 1-800 CONTACTS offers, since they have the most visibility. For most products, we manage to be within a few dollars of 1-800 CONTACTS—sometimes higher, sometimes lower.

Certain manufacturers (eg, Safigel™) do not distribute online. Specialty lenses, likewise, are often only available through eyecare practitioners. Offering contact lens services and specialty lenses not available from online vendors or retail locations may represent a way for independent practices to offer superb products while differentiating themselves and safeguarding their contact lens profitability.

Train and Engage Staff

It is critical that staff understand why contact lens revenue is important to the practice and that they be trained on key strategies for selling contact lenses. First, we emphasize the positive impact that selling an annual supply of contact lenses can have for the practice and for the patient (in my experience, patients who have plenty of lenses are less likely to try to make their lens supply last longer by wearing them past the recommended disposal date).

Doctors play a key role in contact lens sales. After the fitting, I bring the patient up to the salesperson at the front desk and say, “Jenny has been authorized for an annual supply of x-brand lenses.” Making this statement in front of patient and salesperson allows my staff to take the handoff and say, “The annual supply will be only x dollars, after the rebate, and we can have that sent directly to your home or office or delivered here—whichever is most convenient to you.” Once this handoff becomes routine, rates of annual supply sales are likely to go up.

Beyond this, we train staff to be bold and query patients who decline to purchase their lenses at our practice. Often, patients will state that they intend to compare prices online. In that case, our staff offers to pull up 1-800 CONTACTS and show them how our prices compare to—and sometimes beat—theirs.

We also rely on staff to know about and offer available rebates. Some manufacturers’ rebates support us more than others. Offers that are good only when lenses are purchased at the original exam location are particularly helpful.

Another way to keep contact lens purchases in the practice is to stock inventory thoughtfully. We have limited space in our office, but we keep an ample inventory of monthly lenses in our most commonly dispensed powers (from –2.00 to –4.00 D). When the prescribed lenses are in stock, I can perform the handoff and give the patient his or her annual supply on the spot, which patients find convenient and appealing.

Encourage Patients to Return

One thing 1-800 CONTACTS and other online vendors do very well is stimulate the reorder of lenses when a purchaser’s supply is low. A couple of weeks before the purchased lenses are expected to run out, consumers are sent an email reminder with an option to resupply with just a few clicks—and often with a discount or other incentive.

That would be hard to replicate in most offices, but electronic health records and the increasing convenience of email marketing might make it possible to institute a system whereby those patients who purchase less than an annual supply of lenses are automatically reminded a few weeks before their purchased supply runs out. Of course, this requires the practice have a means of online ordering.

It is not clear to me how private practitioners can best take advantage of online ordering capabilities. Some offices find success with a dedicated web store, which many contact lens distributors will set up for free. Although we encourage patients to reorder contact lenses with us online, we have chosen not to establish a typical web store. Such stores usually indicate product prices, encouraging patients to comparison-shop with other online vendors. We give returning patients the ability to reorder contact lenses from our Facebook page, but we do not list prices.

Seize Opportunities

When we receive verification emails from online vendors, we try to re-capture that sale. We verify these prescriptions, but we take a moment to email patients personally, asking that they consider purchasing from us next time. In addition to reminding them that we offer competitive pricing and immediate shipping, we emphasize our practice’s role in the community. As sponsors of a local Little League team, we’ve recently found it effective to include a photo and the question: “When was the last time you saw 1-800 CONTACTS on the back of a Little League jersey?”

Making a personal connection with patients—during and after their exam—is certainly a key element of contact lens profitability. By talking to patients about the tests we perform and educating them on their vision care options, we can demonstrate our value as experts and partners in their healthcare. Helping patients understand that we need and value their business often helps us keep it.

THE BOTTOM LINE

While it can seem that contact lens profits are being squeezed from all sides, small changes to staff training, product selection and merchandising, and a thoughtful approach to online ordering can make a big difference. In addition, developing and maintaining strong rapport with patients and providing them with a valuable service can help ensure they come to us for their lenses as well as their exam.


Justin Bazan, OD, practices at Park Slope Eye in Brooklyn, NY. Refractive Eyecare managing editor Jennifer Zweibel assisted in the preparation of this manuscript.

 
 
 
 
 
 

Reference

1. Olivares GE, Alford J, Schnider C. Contact lens purchase behavior: impact of practice setting and modality. Poster presented at the American Academy of Optometry Meeting; October 12-15, 2011; Boston, MA.



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