SPONSORED BY VISION SOURCE
By Thomas F. Steiner
Director of Market Research,
Review of Optometric Business
Vision Source is the leading alliance of independent ODs, with 2,700+ member practices and 5,500+ member doctors in the US and Canada. The organization is actively engaged in advancing the competitive position of independent ODs. Earlier this year, Vision Source commissioned the editors of Review of Optometric Business to develop an objective analysis of the current state of independent optometry and to identify strategic priorities for bolstering competitiveness.
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Despite facing competition from sophisticated retail giants and selling goods and services at higher prices, independent ODs retain the largest share of eyecare patients and a major share of vision correction device sales. Independents’ strong position is grounded in several competitive strengths, compared to corporate eyecare providers, which are outlined in this article.
Enduring Patient Relationships
Without a doubt the most important competitive strength independent OD practices have is the depth of patient relationships. Surveys consistently show a higher patient loyalty to independents than to corporate-affiliated ODs. Independent ODs’ loyalty advantage has been measured in many ways. It manifests itself as a higher overall satisfaction rating, greater likelihood to return for the next eye exam and greater likelihood to recommend the practice to others.
Creating strong patient loyalty insulates independents from inroads by commercial providers more effectively than any other business strategy. Qualitative research suggests that the patient loyalty advantage independents enjoy is built on a continuity of care and a greater personalization of service than can be obtained from typical corporate providers.
Typical independent ODs have been in practice for twenty years and retain a high percentage of patients from year to year. The average longevity of corporate-affiliated ODs is lower.
Price is usually a secondary consideration to patients of independent ODs. In corporate settings, a higher percentage of patients are new each year, many attracted by price promotions. As in any retail business, patients prefer to deal with providers who develop an understanding of their individual needs and can translate this into advice that improves daily life. The depth of patient relationships that many independent ODs enjoy translates to an ability to command a modest retail pricing premium relative to corporate providers.
Early Technology Adoption
Rapidity of eyecare technology adoption is an important source of ECP competitive advantage or disadvantage. Independent ODs tend to adopt new diagnostic instrumentation earlier than do corporate-affiliated ODs, because independents control decision making on instrument purchases. Independents also tend to be earlier adopters of new spectacle lens and contact lens technology. Early technology adoption enhances patient loyalty. It coveys that a practice is state-of-the-art, that the quality of the medical care is high and that no better solution to vision needs could be found anywhere else.
Low Staff Turnover
In most eyecare settings much of the human interaction occurs between patients and support staff and patient loyalty is heavily influenced by the quality of these interactions. An important competitive advantage many independents have is relatively low staff turnover. Staff longevity translates to greater clinical and product knowledge and a better ability to serve patients.
Essilor-sponsored Management & Business Academy surveys peg current average annual staff turnover among independent ODs at 14 percent. In some corporate eyecare settings, annual staff turnover is 35 percent to 40 percent.
Community Involvement
Many independent ODs are engaged in community activities and organizations. The visibility that this involvement creates enhances their reputations and builds loyalty among patients. It’s more difficult for corporate-affiliated ODs to translate community involvement into business reputation because the image of the practice is so heavily influenced by the image of the retail corporation.
Strategy Implications
To reinforce the primary competitive strengths of independent ODs, the following are recommended strategic priorities for independent ODs:
• Personalize the patient experience
Pursuing a personalized service strategy improves a practice’s value proposition and takes price out of the discussion with patients. It minimizes defection to other providers, increases referrals and increases revenue per patient visit. Optical chains and internet providers have a hard time competing against a well executed service strategy. An independent practice which makes no ongoing effort to personalize patient experiences is vulnerable to the convenience and price advantages of corporate providers.
• Focus on staff loyalty
Attention to staff leadership is critical to keep staff turnover low and engagement high. Service experts unanimously agree that strong customer loyalty never develops unless bosses make an effort to build strong employee loyalty. Staff will treat patients well only if they are treated well.
• Remain at the leading edge of technology
Independent ODs profit when they remain alert to new technology developments in instrumentation, digital communications and corrective devices. Prescribing the latest correction technologies is an evergreen opportunity to tailor treatment plans to individual needs and to increase patient satisfaction and revenue per exam.
The next article in the series will identify the major competitive weaknesses of independent ODs and suggest strategies to alleviate these weaknesses.
Thomas F. Steiner has spent more than 25 years helping eyecare practices succeed, including pioneering the introduction of color contact lenses into optometry. He currently is Director of Research at Review of Optometric Business. To contact him: tom.steiner@cibavision.com
