High-end frame sales and maximizing revenues from frame sales to managed care patients are taking a chunk of your energy, according to the Frames Business Management Survey, conducted by Jobson Optical Research and Performance Advancement Associates, a division of Jobson Medical Information. Of 12 frames management tasks listed in the survey, the following five are regarded as the most challenging:
1. Increasing sales of high-end frames (47 percent)
2. Maximizing frames revenue from managed care patients (44 percent)
3. Reducing frames cost-of-goods (34 percent)
4. Achieving adequate frames turnover (32 percent)
5. Matching frames inventory to demand (21 percent)
Your optical sales represent over 40 percent of the dollars collected by your practice. This area of the practice definitely needs to be managed well. The Frames Business Management Survey gives us a very helpful way to prioritize the management of the frames sales in the practice.
The first step in any journey is to understand where you are now and know where you want to go. This week discover how your practice handles these top five areas of frames management.
Here are the questions you need to answer about your practice to know where you are now.
1. In order to understand how your practice is doing in increasing the sales of high-end frames in your practice answer these questions.
a. Has your staff had training in selling both luxury frames and high-end frames?
b. What is your system used for frame selection (i.e.: 1st frame, 2nd frame, 3rd frame – and why)?
c. How many high-end frames do you display?
d. Are you following the strategy of fewer frame lines but greater depth on each?
e. What is your pricing strategy for selling high end frames–and why?
2. In order to understand how your practice is doing in maximizing frames revenue from managed care patients in your practice answer these questions.
a. What percentage of patients with managed care frame coverage actually get new frames?
b. What percentage of patients with managed care coverage only get “what the plan covers?”
c. What is the system used for presenting frames for patients with managed care?
d. Have you replaced the words “let’s see what your plan covers” with “let’s see what your plan contributes?”
3. In order to understand how your practice is doing in reducing frames cost-of-goods in your practice answer these questions.
a. What strategies are you using to purchase frames (e.g.: buying group, alliance, purchasing frame end runs) so that you get the best discounts?
b. What is your frame board strategy – a static frame board approach or selling frames off the frame board? What impact does this have on frame inventory and frame availability?
c. What is the total cost of the frames you have in inventory but not displayed?
d. What percentage of frames are being ordered for patients to view because you did not have the right size or color? What impact does this have on staff time? What costs are incurred in managing these frames?
e. When was the last time you analyzed your frame board actual sales and recalibrated your frame board to more accurately match your practice?
4. In order to understand how your practice is doing in achieving adequate frames turnover in your practice answer these questions.
a. What is your average frames turnover for each of the frame lines you have displayed on your frame board?
b. What is your strategy for pricing frames on your frame board? Do you utilize a straight multiplier (e.g.: 3 x Listed frame wholesale price) or do you vary the pricing based on sales? Is this strategy working well for you?
c. How do you display frames in your practice? What do you place at eye level? What frames do you place to catch someone’s eye as soon as they walk into your optical? Do you utilize your frame sales professionals to help you with how and where to display frames in your optical?
d. Who selects frames for your frame boards? Do you utilize your frame sales professionals in this task?
5. In order to understand how your practice is doing in matching frames inventory to demand in your practice answer these questions.
a. What are your top 10 selling frames?
b. How often do you (or a staff member) review your frames sales numbers?
c. How often do you remove non-performing frame lines from your frame board?
d. Do you have an agreement with frame companies to credit back frame lines that are not moving in your practice?
e. What percentage of frames do you have in inventory compared to what is displayed?
Don’t be overwhelmed. We are here to help. This activity helped you understand where you are now. As you continue to read Review of Optometic Business, we will help you with strategies and tactics for managing these top five areas of frames management.
