If we’ve heard it once, we’ve heard it a million times: “That place is selling contact lenses for about what I pay for them. How am I ever going to compete?” If you live in an area in which patients have access to a “big box store” (i.e., about 98% of America) or your patients have access to the worldwide web (i.e., about 100%), then you know what we mean. Patients seem to be leaving in droves to buy their contact lenses elsewhere. The audacity. Don’t they know that eyecare practitioners have better service, that we can offer them free shipping on an annual supply, and that we will give them 10% off when they also buy sunglasses (when we remember to tell them)? Patients just don’t get it. Or, maybe it’s practitioners who just don’t get it. It’s time to create a new normal and find a way to use this to our advantage.
Changing Times
Two generations ago, practitioners made 100% of their contact lens revenue from the sale of lenses. Then the pendulum started to swing away from 100% product to a more balanced approach. As frequent replacement and daily disposable lenses became available and patients started having opportunities to buy elsewhere, eyecare providers started charging for their services and expertise. We hit a balancing point at which most practices were charging about the same for the lenses and many eyecare providers were charging something for their services.
Now, big box and online retailers have increasingly entered the picture, and they are selling contact lenses at astonishingly low prices. It seems as though the pendulum is swinging again, and eyecare providers are not making what we once did from the sale of lenses. As such, we need to make another move.
The New Math of Contact Lens Profitability
It’s time for practitioners to start charging more for our services and less and less for our products. Using a hypothetical balanced approach of increasing your fitting fees by approximately $50 and decreasing your year’s supply cost by around $50, an increase in profit of approximately 20% will result, even if you lose 25% of your patients (see Dr. Kading’s December 2019 Practice Pearls column).
By increasing fitting fees, practitioners can learn which of their patients most value their services. It helps to eliminate a group of patients who may be coming to the practice just because they consider the service fees to be low. When you increase the price of your services, it’s true that you may lose some patients; but, by offering contact lenses at a substantially lower price (in our example, $50 less), more patients will choose to buy from you, which will increase your revenue per encounter.
The Verdict
Practitioners cannot control what happens online or at big box retailers, but we can control what happens in our offices. We can manage how patients perceive us, how they value us, and whether they elect to continue coming to us for care. We did not become eyecare providers so that we could retail products; we became eyecare providers to specialize in providing eye care. It is that service for which we should be paid.
If complaining about contact lens prices is normal, then we don’t want to be normal. We are creating a new normal, one in which we get paid for our services, one that helps us attract patients who care about their eyes and about what we can do for them as clinicians, and one that will help us create a more profitable business in the long term. CLS
READ MORE: https://www.clspectrum.com/issues/2020/june-2020/is-this-the-new-norm
