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Turning Threats into Opportunities
Neil Gailmard, OD, MBA, FAAO
Neil Gailmard, OD, MBA, FAAO• Co-founder, President, Prima Eye Group• CEO, Gailmard Eye Center, Munster, Indiana• Management consultant for over 20 years• Former faculty, Illinois College of Optometry• Visiting Lecturer, UC Berkeley School of
Optometry, 2011 to present• Founding faculty, Management and
Business Academy (Essilor and Alcon)• Editor, Optometric Management Tip of the
Week, 2002 to present
Lecture Notes• Current topics in our industry – can be
controversial, but we will keep it positive.• Your questions and comments are welcome• I’ll get you started with some practice
building ideas, then you can expand with strategies and tactics in your study groups.
• Email me at: [email protected]
It feels like we are inundated with bad news in our industry.
• Dire predictions that the sky is falling.• Is private practice optometry in trouble?• Many forces are bigger than the independent.• Some ODs want to throw in the towel on
optical and contact lenses.
Things are never quite as bad (or as good) as they first seem.
What other threats has private practice faced in the past?
• Low priced optical – “two pairs of glasses for $39.99 including the eye exam!” Dates back to ?
• Autorefractors• Glasses in about an hour; upscale and high-tech• Mandated spectacle and CL Rx release• Mail order contact lenses (1-800) – then online• Mega-stores: Costco, Wal-Mart, Target• Radial keratotomy and LASIK
Let’s look at some controversial trends in optometry
• Let’s look at the facts – not the conjecture.• Let’s play the hand we’re dealt.• Let’s remove the emotion.• Let’s look at what is best for your practice first.• Let’s make lemonade out of lemons.
Examples of threats• Online optical sales• Optical kiosks• Online eye exams• Big box store opticals• Vision plans driving down fees• Affordable Care Act
Our first reaction is not always right• Much harm has been done to practices by avoiding any
action. Missed opportunities.• Embracing change can be the best response – but
when?• Strategic alliances with unexpected organizations?
Be certain of the facts; don’t accept casual remarks, sound bites, headlines, social media
• Don’t fret over things that don’t matter.• Read the provider manuals; talk to reps.• Try the program and study the effect or
profitability yourself. Drop it if it is not good for your practice.
• Ask Prima; ask me.
Let’s look at facts; data• We have all become so skeptical and cynical
that we jump to conclusions.• We believe what someone says on an internet
chat forum – someone we don’t even know who may not even have a real practice!
• There are many myths and inaccuracies. • Let’s remove the emotion!
When to embrace new threats?• Collect data. How fast is the growth of a new channel or technology?• What percentage of your patient base or your community is
involved?• Monitor closely is a good strategy• Will you lose business by endorsing or participating in a new
channel?
Track your Rx retention rate
• The easy way…• Pairs of lenses sold divided by number
of refractions (or complete exams)• Median is 61%
How is online optical doing?• Really – not that well so far• Public slow to accept it• Strength of the doctor / patient relationship• The percentage of Rx eyeglasses bought online has not been
over 3% since data collected. Very slow growth.
How is online optical doing?• Warby-Parker does not release sales figures, but
they felt the need to open brick and mortar stores.
• Reverse showrooming.
Vision plans: an emotional topic• We should remove the emotion.• Many misconceptions exist about vision plans.• Each practice is unique: consider your goals
and your location.• Consider how full your appointment schedule
is – what should it be?• Do you want to bring in an associate OD?• Marketing your practice is important, but how
effective is it? How fast? How permanent?
Decision making• Joining a vision plan is an individual decision.• Are you making decisions for the good of
optometry (altruistic reasons)?• Are you making decisions for the good of your
practice?• Do you really understand your profitability
with vision plans?
Patient demand• All good things come from lots of patient
demand. Nothing flows without it.• We must adjust our thinking about the norms
for patient demand. We need much more than we used to. We must find ways to develop more demand and manage the higher volume.
If only…• ODs had never joined vision plans…• Most ODs would drop vision plans…• We had a level playing field…• I share the wishes of most ODs… that vision
plans were not so powerful… that they would pay better… that they would not compete with us.
What can we change?• I support the efforts of the AOA, state
associations and individual doctors who work with legislation or the court system to give us a voice.
• At the same time, I have to do what is best for my practice (and for my Prima clients) now.
• Markets vary; goals vary.• Play the cards we are dealt.
Evaluating vision plans
• Chair cost is not enough• What is your marginal cost?• What about the politics, vertical integration,
helping the competition, etc.?• What is popular in your market area?
Strategies for success…
Embrace medical eye care• Invest in instrumentation.• Join all medical insurance panels.• Pursue the medical model with patient billing.• Take medical CE courses and become an expert.• Study billing, coding and compliance.• Build relationships with PCPs, pharmacists.
Bring technology into your practice• Collect data. How fast is the growth of a new channel or technology?• What percentage of your patient base or your community is
involved?• Monitor closely is a good strategy• Will you lose business by endorsing or participating in a new
channel?
Technology in the clinic• Along with maximum delegation to trained staff.• Shouldn’t that make your exams faster?• Many ODs lag behind on this.• Is your eye exam faster now?
• Routine exams – eye screenings plus refraction• Medical exams – problem focused• Think like ophthalmology• Patients like it faster• Faster exams increase optical sales• It does not mean stress, lower quality or more work
Show off technology in optical• Incorporate digital optical measuring systems for each
eyeglass order: you can’t get that precision online.• Use the camera try-on feature to show patients what
they look like in frames. Print or email a copy for the patient.
• Use desktop, laptop or tablet computers to look up frame data, for patient education and to place the eyeglass order.
• Invest in an in-office finishing lab to provide fast service.
Embrace retail
• Display products like retail• Price like retail• Market like retail• Communicate like retail• Be convenient like retail
Embrace omni-channel retailing• The connected consumer• The educated patient is our best customer• Multi-media exposure• Social media, mobile, online, text, email, print, and bricks and
mortar.
Establishing trust and loyalty• This factor is more powerful than all the
marketing tactics.• You have the patient first. He is in your office!• The entire patient experience combines to create
loyalty. Improve every step of that total experience, from the first visit to your website to the final dispensing of eyewear.
Establishing trust and loyalty
• The examination process positions the doctor and staff as true experts in eye care.
• Customer service and convenience are your best form of marketing. Re-examine and expand your office hours to compete with online and big box retailers.
Own a fantastic optical• The best way to prevent patients from taking their
spectacle Rx out of your office is to make them prefer to buy from you. You can’t make patients buy from your office, they have to want to.
• Remodel and redecorate your dispensary.• Increase the square footage of the optical.• Increase the number of frames on display; try to
push for at least 1,000 frames. Patient want choices and they want the optical to look impressive.
Own a fantastic optical
• Improve frame lines and brands. Carry major fashion designers and exclusive boutique brands. Move price points up but maintain moderate and low end as well.
• Maintain a nice selection of budget frames; not dogs.• Invest in new optical displays.• Hire an interior designer with retail knowledge.• New flooring, lighting, furniture.• Use merchandising techniques seen in upscale
department stores.
Train staff in communication and sales
• Sales begin by asking questions about the patient’s wants and needs: How do you use your eyes at work? Do you participate in outdoor activities? What are your hobbies? Don’t just tell patients about your products, ask them about their life.
• When a patient indicates he wants to shop for eyewear online, don’t be afraid to share some stories about what has gone wrong for other patients.
Train staff in communication and sales
• If you see a patient showrooming (writing down frame model numbers or taking pictures with a cell phone), ask him questions and engage him in conversation in a non-combative manner. Let him know why you are better than the competition.
• Have low-priced options when that is an important factor, but realize that it is not always a factor. People will pay more if they perceive value.
• Discuss warranties and service after the sale, which is exclusively for the eyewear you provide.
Requests for PD? Free adjustments?• What percentage of your patients buy
online?• Monitor this metric and adapt as needed.• Look at everything you do from the patient’s
point of view.• Don’t lose the whole family over a PD.• Easy to implement: free adjustments for life
for any eyewear purchased here. But is it worth the time looking it up?
What people like about our offices
• Trust the doctor• Relationship with staff• Local support• Personal touch• Continuity• Records• Takes insurance• Could be fast – internet is not fast – in-office
edging• Service after the sale
What lures people away from our offices?
• High price - maybe?• Inconvenient• Maybe out of date?• Poor customer service• Most of these you can overcome
What can we do to compete?
• Better customer service.• Better technology.• Better staff with continuity.• Larger offices. Larger optical. • Same day service.
What can we do to compete?
• Eventually – someday – but not yet…• Lower the prices• Pressure will fall to labs and suppliers also• Do the best you can for as long as you can • Don't throw in the towel on optical or contact
lenses• Don't make policies too early
What can we do to compete?
• Vision plans – that is only for the first pair!• We don’t always like vision plans – but
they bring patients in to our office.• Work on strategies to increase profit with
vision plans.• Start by actually measuring your profit
with each plan – how?
Develop new profit centers• Special testing and screenings• Nutritional supplements• Ortho-K• Medical eye care• Low Vision• Vision Therapy• In-office finishing
Our mission at Prima is to help you take control of your career
• Generate growth in your practice• Compete well with anyone• Increase gross and net revenue• Become the CEO of your practice• Reduce stress in the office• Develop a practice that does not depend solely on you
