By Thomas F. Steiner
Director of Market Research,
Review of Optometric Business
Conventional wisdom says a patient who wears eyeglasses generates more profit than a patient who wears contact lenses. But do the math and see: Contact lens wearers are far more valuable to a practice over time.
LOOK LONG-TERM. CL patients contribute more revenue from more frequent exams, more eyewear purchases.
BE CONTACT LENS FRIENDLY. Promote CL wear, relate positive experiences.
FREE TRIAL LENSES. Most questions are answered when CLs are worn.
Conventional wisdom among OD-owners is that a patient who wears eyeglasses generates more profit than a patient who wears contact lenses. This conclusion is based on flawed analysis because it considers only the profit from a single purchase, ignoring the long-term revenue generated by each patient type.
It is true that an individual sale of eyewear yields more profit. The average eyewear sale among independent ODs is $227, according to the Management & Business Academy. The average eyewear sale produces a 61 percent gross profit percentage, or $138 gross profit. Typical contact lens transactions involve two-box sales, generating $80 in revenue, a 47 percent gross profit percentage, and $38 gross profit. Based on a simplistic and misleading analysis of individual transactions, it’s easy to see why some ODs avoid promoting contact lens wear.
The reality is that contact lens patients are significantly more valuable to a practice over the long term. That’s because contact lens patients:
• Have more frequent eye exams (every 18 months versus every 24 months for eyeglass-only patients)
• Pay higher fees for exams (average of $96 versus $70)
• Make more frequent purchases (every year versus every 28 months)
• Also buy and use eyeglasses and sunwear
Based on reliable published information about office visits and consumer purchase behavior, it’s possible to quantify the relative value of eyeglasses-only and contact lens wearers over the long term. For ease of comparison, revenue generated by eyeglasses-only and contact lens patients is calculated over a six-year period, capturing activity over several purchase cycles.
The average eyeglasses-only patient generates $800 in gross revenue over a six-year period, or $133 per year. The average contact lens patient produces $1,370 in revenue over six years, or $228 per year.
Even though eyewear profit margins are higher, contact lens patients also generate significantly greater gross profit than do eyeglasses-only patients. Eyeglasses-only patients produce an average annual gross profit of $95, compared to $150 for contact lens patients, who purchase eyeglasses and sunwear as well as contact lenses (see chart below).That’s a 58 percent profit advantage from contact lens wearers.
This analysis is based on industry averages for independent ODs. The conclusion is even more compelling when individual ODs mine their management information systems and make the same calculations for themselves. ODs who analyze their own records are likely to discover the same profit advantage from their contact lens wearers.
The major implication from the analysis is that an OD’s bottom line is improved with each patient converted from wearing eyeglasses-only to contact lenses. Recommendations to increase contact lens penetration include:
BE CONTACT-LENS FRIENDLY
Be Proactive. Don’t sit back and wait for patients to express interest in contacts. Offer a free trial to every contact lens candidate. Most new wearers adopt contacts as teenagers, so the benefits of contacts should be discussed with every teen eyeglass wearer.
Be CL Friendly, Show Successes. In practice marketing materials and on the practice web site, discuss the office’s contact lens expertise and showcase the latest technological innovations. This will cause the office to appear “contact lens friendly” to prospective wearers.
UTILIZE FREE TRIAL LENSES
Make contact lens trial easy. Avoid imposing high upfront fees for initial trial by new wearers. Making it easier for patients to experience contact lenses results in more patients wearing contact lenses.
Thomas F. Steiner, Director of Market Research for ROB, has spent more than 25 years helping eyecare practices succeed, including pioneering the introduction of color contact lenses into optometry. To contact him: email@example.com