The old adage “work smarter, not harder” is very applicable to boosting your optical revenue. There are really only two ways to increase your practice’s revenue: either see more patients or increase the amount of money each patient spends.
In this article, I’ll be focusing on the strategy that falls into the category of “working smarter”—increasing your revenue per patient. This is not to say you shouldn’t be maximizing efficiencies to see as many patients as you feel comfortable, but wouldn’t it be nice to maintain your same patient load and have higher profits?
1. Sell more expensive frames—or change your frame board model.
Selling more expensive frames works whether your patient uses a vision plan or is private pay. If you are selling more expensive frames
, the patient will always be spending more on their glasses. In turn, because the patient pays more for their frames, you don't have to sell as many expensive frames to make the same profit.
For example, if you sell a frame that wholesales for $50 for $150 vs. $300, you make $100 on the first order and $250 dollars on the second. This means that you have to sell three $150 frames to make at least the same amount of profit as if you sold one $300 frame.
Selling more expensive frames does not necessarily mean you need to buy a large number of frames with higher wholesale costs. Take a look at your inventory and make sure you are marking up frames appropriately. In general, at least a 3X (if not more) markup is recommended. Do you have a really popular frame? Why not mark it up more and see if it still sells? The worst that happens is the frame stops selling, and you bring the price back down.
Adjusting your frame board model
This model can be dangerous, of course, and leave patients feeling overcharged. There are other ways to approach maximizing the profitability of your frame board inventory: with a pre-wholesale, consignment, or clearance model
. Each of these lowers your starting investment as well as your patient’s cost while maximizing your actual profit.
There are a number of different companies and manufacturers offering frames under each of these models, so it’s important to do your research to figure out which would be best for your optical and your patient demographic.
2. Sell more premium lens products.
This strategy falls in a similar category as the strategy of selling more expensive frames. Premium products cost more out of pocket and, therefore, lead to higher revenue per sale. However, unlike selling more expensive frames, this strategy does not produce much, if any, of a profit change when a patient has a vision plan that dictates straight copays for product tiers.
Often, premium/advanced products
are not covered by a specific copay but instead by a discount on the office’s usual and customary prices for most vision plans. Private pay pricing is also not subject to any sort of discount and will always yield higher profits per sale when using more premium products.
3. Sell multiple pairs of glasses.
The potential for profit in this strategy is obvious. The more pairs of glasses you sell to a patient, the more money you will collect per sale. There is often much more profit to be made on the second pair because you do not have to worry about lab chargeback fees if a patient uses vision benefits.
Your lab should also be offering you a discount, usually 50%, on any additional set of lenses. How much of that discount you pass along to your patient is up to you, but that second pair is almost always more profitable than the first.
What is the best way to increase second-pair sales? Make sure you’re offering them to your patient. This is where empowering your optical staff during the patient handoff
comes in—if you’re involved with your optical and your optical staff knows how to communicate with your patients, everyone wins.
Remember: The key to successful second-pair sales is patient education. The optometrist can prescribe sunglasses, reading glasses, or simply ask what the patient is looking for today, and the optician seals the deal with clear communication with the patient about what it is they’re looking for, their lifestyle, and their needs.
Embrace the work smarter, not harder mentality by focusing on increasing your per-patient spend in optical. The three areas discussed above are a great place to start.
I think the biggest hurdle to this strategy is assuming or fearing a lot of pushback from patients if you increase prices. My advice? Don't assume you know how much a patient is willing to spend until you give it a try. There’s really nothing to lose except more profit.