By Ken Krivacic, OD, MBA
July 8, 2015
Followa success plan and reinforce the message that you are the CL specialist to see. Growth will follow.
FIVE STEPS FOR SUCCESS
1. The doctor should always recommend daily-disposable CLs in the exam room
2. Staff does everything else. If patient wants something else, then staff goes back to doctor for final decision.
3. Emphasize and market your complete CL services and materials.
4. Capture annual supplies and smaller purchases, too.
5. Price products competitively.
One of my practice’s greatest strengths isits contact lens sector. We provide superior contact lens services and products to patients, who stay loyal to us, and refer their friends and family to us. We succeed at contact lens prescribing because we are serious about it, offer the latest CL designs and materials, are competitively priced,and we continually let patients knowthat we are CL specialists.
We are a single-location private practice with two full-time doctors on staff, and another part-time doctor, who works two days per week. On average, we see just over 550 full exams per month, and that includes just over 200 patients who areseen for a contact lens evaluation/fitting. We have a range of fees for these patients depending on the experience the patient has with contact lenses (former vs. new) and the type of lens that the patient is fit in. This can range from gas permeable to soft lenses, and from spherical to specialty. Our average evaluation fee is $90, generating contact lens professional fees of $18,000 a month, or $216,000 yearly.
EDITOR’S NOTE: According to the Key Metrics report from the Management & Business Academy (MBA), these are theaverage OD’s contact lens stats: CLs = 16% of revenue…Average practice $650k = $104,000 on average. Dr. Krivacic’s contact lens practice, therefore, is twice as successful as the average OD’s.
8 Steps to Growing Your CL Practice
• Emphasize contact lenses: Sounds simple enough, yet you must keep contact lenses top of mind with all patients with in-office signage, e-blasts and web site information.
• Feature new products: Encourage the use of new products. It shows that you are on the leading edge of contact lens technology.
• Use your people: You can’t do it all yourself. Your staff is a great asset in helping promote contact lenses. Train them to educate about CLs and make sales.
• Price products competitively: If certain lenses or brands are easily available through other channels, price your CLs competitively. You don’t have to be the cheapest, but be in the ballpark. On specialty products your margins can be larger.
• Follow-up: Always follow-up with new contact lens patients. It shows you care and is a great learning tool for future cases.
• Don’t be afraid to hear “No”: Encouraging new products generally means more expensive products. Some patients may not want the latest and greatest. I would still rather present the best option, and hear “no,” than not present it because I’m afraid the patient can’t afford it. Do not balance your patient’s checkbook–they will let you know if they can’t afford a product.
• Use your sales reps as a resource: Reps can keep you up to date with the latest CL products and promotions, but they can also let you know what works well in other practices and how you can incorporate those strategies to work for you.
• Use the “Puppy Dog” sales technique: This technique involves letting a customer try out the product with the ability to return and get money back if not satisfied. In most cases, when they get the “puppy” home, a bond is formed, and the “dog” is not returned. Do the same with contact lenses: Let the patient take home a week’s worth ofone-day lenses, for example, and see them a week later for a follow-up.
It’s Worth Selling Contact Lenses
We sell contact lenses inour office because we believe that contact lenses can still add to the bottom line of a practice’s revenue, contrary to a few of my colleagues who have quit selling contact lenses because they believe there is not enough profit in the product compared to the expense involved. Our total revenues last year were just over $2.7 million and contact lens material revenue is just at 17 percent, or about $38,000 per month. What kind of profit can you expect from contact lenses? Our average cost of goods (COG)is 60 percent, giving us an average profit of close to $15,000 per month.
Set Up Repeatable System
Building a contact lens practice takes time and work. You will need to spend a few minutes in the exam room discussing thepatient’s contact lens options. I recommend you have a set pattern to follow. For example, I always recommend a daily-disposable modality first to patients who are good candidates for soft contact lenses. I believe they are healthier and easier to wear. Patients are also more compliant in one-day products. Go over all the advantages, and query the patient as to their leaning. In most cases, they will agree with you if what you say makes sense and is truthful.
In our office, the contact lens staff is responsible for the ancillary work with patients. This means educating on handling and hygiene, ordering, notifying patients and going over fees. The doctor does not discuss fees in the exam room. The doctor is responsible for prescribing or recommending what he/she feels is the best product for the patient.
The staff are trained to go over fees and adjust accordingly if the patient wants a different alternative. For example, if the doctor prescribes one-day lenses, but the patient decides they want a different modality, the staff has been trained to move onto a two-week or monthly option, and will consult with the doctor on what product that would be.
Market Your CL Services
Most of our marketing efforts revolve around our own patient base. We make sure our web site lists the many contact lens products that we carry. We also make sure patients understand that we deal in specialty contact lens products also, such as multifocals, both soft and gas permeable, lenses for astigmatism, lenses for keratoconus and lenses for patients who have had a less-than-stellar experience elsewhere, such as thosewho have had refractive surgery that still requires a correction.
Whenever new contact lens products are launched we add them to our web site. We also make a point of informing patients of new products with either an e-blast or through our practice e-newsletter.
Strive for Annual Supplies & Capture Smaller Purchases
Finances of a Profitable CL Specialty
MONTHLY CL EXAMS 200
AVERAGE FEE $90
PROFESSIONAL FEES $18,000
MATERIALS SALES $20,000
AVERAGE MATERIALS SALES $100
COG at 60% = $38,000 x .6 = $22,800
GROSS PROFIT AT 40% = $15,200
Annual supplies are very important to building and maintaining a thriving and profitable contact lens practice because these sales take the patient out of the buying cycle for a year; help the practice cash flow because you receive total payment at one time; and there is less time involved in servicing the patient–one order, one payment, no follow-ups needed.
There are also benefits of selling annual supplies that can be passed on to patients, such as the rebate contact lens manufacturers usually offer for annual supply purchases. Patients also benefit because they only need to make one purchase, thereby avoiding having to worry about re-supplying their contact lenses throughout the year, and the price is generally lower when buying in bulk, versus purchasing in smaller increments.
Dr. Krivacic’s practice web site detailsthe practice’s contact lens services and products.
Showing a full range of contact lens products lets patients know this is a CL specialty practice and the place to buy lenses.
Despite these advantages to the patient and the practice, not all patients buy annual supplies. Here are three ways my practice works to also capture the contact lens sales that come in smaller increments:
• If patients purchase a smaller supply, we contact them again when they would be running out of lenses. You can do this by phone or e-mail, or even by text message.
• If you keep your prices competitive, show patients what the competition charges. In our practice, we use 1-800 Contacts as the price comparison example. We have found that most patients recognize the company and that their prices remain at a reasonable level compared to some other online retailers.
• Remind patients of the after-sales support they will receive at your office. Make it easy for them to do business with you by providing samples if needed and making exchanges as painless as possible.