Frames are not a top revenue-generator for many ODs, according the Frames Business Management OD study from Jobson Medical Information’s Practice Advancement Associates unit. Frames comprise 19 percent of a typical practice’s revenues, the study reports, while 39 percent of revenues stem from professional fees, 24 percent from spectacle lenses, 16 percent from contact lenses and 2 percent from “other.”
In most practices, the frame board is not managed using the science of business. In many practices, the frame sales person enters the office and is met by a practice employee–either an optical staff person or an optician–but not a professional buyer. The frame sales person shows frames while the practice employee selects frames to purchase. Often rewards (i.e.: spiffs) are given for purchasing a certain number of frames. The incentive is to buy frames.
Is that the correct incentive? Instead, shouldn’t the incentive be to have frames purchased by patients? Shouldn’t the efforts of the frame sales person be to educate staff on the best ways to help patients purchase the frames being placed into the practice? Here’s how to make that happen.
Step 1: Have the frame companies you deal with help you determine the number of frames you sold in 2013 in the following three categories: conservative, contemporary and fashion forward. Subdivide these three categories by high price, medium price and low price.
Step 2: Assign frame board space to each of the frame companies you utilize. Tell them the general categories and ratios you want to see on your frame board from their company (e.g.: 40 percent women, 30 percent men and 30 percent unisex). Give them general direction as to the classifications of frames based on what you discovered when you reviewed what you sold in 2013 (e.g.: 20 percent women’s conservative high dollar, 50 percent women’s contemporary high dollar, 30 percent women’s fashion forward high dollar). Now, let the frame company fill the slots on your board that you are assigning them with whatever frames they think will be the best sellers. Caveat: You need to have a written agreement with the company that they will buy back from you any frames that have not sold in six months. If they do not want to do this, then change companies to one who does want to work with you.
Step 3: Now, over the next six months, track your frame sales. At the end of six months, the frame company that sold the most frames will receive more slots on your frame board. The company that sold the fewest frames will lose slots on the frame board.
You should expect the following two things if you take this approach:
1) The frame companies will spend their time in your office teaching your staff how to sell frames to patients rather than spending their time trying to sell frames to your staff.
2) Your staff will have more time to increase your per-patient sales because they are not spending time picking out frames for the practice to purchase.
Your action plan this week is to review how you manage your frame board and create a system that is better focused on what you are actually selling in your practice.
