Retail Discounts

[Joann Raytar]

We've noticed that we go through stretches where almost everything we sell is discounted by some degree or we automatically go to the section of glasses that we offer for $99 complete. Why? I know that we are at least $50 or more less then the popular chains and even some other private shops. You don't want anyone to walk but the discount seems to come before the customer even indicates that the price seems high.

I've seen this in other independent shops I've been in and worked at. Is there that much competition? I'm not so sure that this is stemming so much from other optical competition as much as it is from the increase in 3rd party plans, expecially the discount plans.

Any thoughts?

[For-Life]

It is always hard competing on price. Here the doctors charge the cost of the product to them plus a fitting fee ranging from $80-$125. So when you price the product out retail versus cost plus it can get difficult. Much harder when your competitor is selling add ons such as high index, AR and transitions at cost.

But maybe that is the problem, maybe competing on price is not the solution.

I remember a thread a while back where we discussed not selling AR to compete with Wal-Mart's $40 AR. The problem is that Wal-Mart's $40 AR is junk, so we are not comparing apples to apples. Instead sell the AR, but make sure it is a top of the line version. Right now we are the only store in town that sells Alize and only Alize as an AR. My competitors offer products that either will not hold up for a two year period or that are not easy to clean. You should see the word of mouth we get over our AR, because it is stable and "wow" it is easy to clean.

A few times this year we put an advertisement into the newspaper. This advertisement did not offer any special deals or discounts. Instead it discussed a certain lens we offered, its features, benefits and advantages and why it is a solution for many people. You know that is the best behavioural advertisement we have ever run. While Hakim Optical is offering 20 promotions, while my competitor is offering 55 percent off PAL's for its 55th Anniversary, while every other product in every other market is diminishing their name with discounts and promotions, we were able to gain the same effect by doing the opposite.

There are four P's to marketing: Price, Product, Place, and Promotion. Sometimes we forget the three after price.

[optical24/7]

Hi Jo; I find trends like this usually coming from optician preconception of what a given patient is willing to spend on their glasses. I had a good example of this (and a lesson for one of my opticians) a few years ago...

I had the rattiest pair of people walk in off the street draging thier child with them. It looked like the dad just stepped out of a coal mine, the mom in a very stained mumu dress, hair a mess, and child with clothes that looked to be washed 2 months before. My optician wasn't looking forward to helping them because of the low commision on economy products, so I took to the floor to help them.

Long story short, I showed them some of our best products 1st. They ended up buying $2100. worth of glasses, and like Jed Clampett, pulled out a wad of cash and paid in full up front!

At one time or another, I think all of us preconceive what our patients want and can afford...big mistake. In fact we do them a dis-service not showing the best 1st. Help educate the patient about their eyes, their needs and products that will best suite these needs. I find an educated patient much more willing to upgrade their selection. We keep our prices reasonable on these upgrades and the patients can see the added value is well worth it.

It's much easier to sell down than up. Start at the top, and if the patient indicates a reluctance, show the next step down. Some people simply can't afford the best, but they want as close to it as they can get with what money they have.

[For-Life]

Optical 24/7 that is so true.

I remember selling a Minima to a guy who looked like he was homeless (we used to have our office down in that part of town). But here is a funny story for you guys.

It is 8:30pm, we close at 9pm. I get a phone call by a lady asking if we replace screws, I "ugh" and say yes. So the guy comes down. He has these giant monstrousities and wants screws replaced in two frames. I am in the back room and say to the optician fixing it that this guy probably saved up these two pair to ruin someones evening. Then the guy was talking about cutting these old, scratched up glass lenses into something and wanted something just as big. He looked like he had no money and was not willing to spend it.

When the optician came out with a frame he said, nevermind I found one here. He found a Brendal frames (Ronor's more expensive, more elegant's sister to the Humphrey line). He then put in 1.67 lenses with D Alize for them. He then turned around and bought a safety pair of glasses, and then turned around a pair of prescription sunglasses with a 1.67 lens and a backside AR.

Made our evening, and we did not see it coming.

[GOS_Queen]

I think it's a perception by the public that the prices are automatically going to be higher at a DR's office or private optical.

When I started working in the practice I'm at now, I was shocked and pleased that the prices were so reasonable compared to where I was before.

[optigrrl]

The first place I worked the sales people, GEN. MNGR AND OWNER were all willing to "drop their drawers" at the first sign that a patient might ask for a discount. I never understood that mentality. It took me sooooo long to get the hang of things that even after 1 year I knew my time was worth something! Anyway - we could order whatever we wanted so you know those "deep discounts" got sub-par product. I never condescended to that level then or now.

I don't feel ashamed to ask for the amount we charge. I make sure that I spend quality time with each and every patient to find what will work for them and explain my suggestions. Most of the time I hear: "Nobody ever took the time to explain that to me".

And hey - I don't have a problem referring to Costco either. I was there once, too! (financially) But I always offer to verify the rx and the fit anyway.

It's not like they are MY competition...they just fill a different need, one that I can't!

[Optical Enigma]

If everyone would stick to their guns and keep the prices up, everyone would make more money.

[Mojo]

I agree with For Life.

We try to sell ourselves as the best optical shop in our area.

Part of doing this is handling frame, lens and add ons that no one else does. Another part I feel is not to be so quick to discount. If you are automatically discounting your products before people ask or if you sound uneasy when qouting prices then people will perceive you as too expensive.

Don't discuss price untill they ask or it's the end of the sell(assume that everyone can afford it and wants it); then when it is time to talk price qoute your prices like you are proud of them and don't appologize for them. I know that sounds stupid but it works.

When people tell me that I'm more expensive than the chains I just smile and say "I know". Then I confidently explain why.

[harry888]

Glasses are jewelry, and everyone expects a discount at the jewelry store.

The HMOs in this area demand a "courtesy" discount on eyewear if you see their patients.

So, base prices should reflect this, similar to the "rack rate" at a hotel that noone pays.

It's the nature of the industry.

Harry

[chip anderson]

Unless asked, I never give prices until the glasses are delivered (after I have made sure there are no supprises on the lab bill) or if I am afraid the patient will have sticker shock if not prepared.

Chip

[Ory]

Unless asked, I never give prices until the glasses are delivered (after I have made sure there are no supprises on the lab bill) or if I am afraid the patient will have sticker shock if not prepared.

Chip

Have you ever had an upset patient refuse to pay? I typically will give them a ballpark price if I can't give an exact number, and I appreciate the same when I buy custom work. With the huge range you could be spending it's nice to have some idea.

[MarySue]

On this line of price and discounting professional service fees - I continually hear from optometry that the exam fee should not be discounted, and I tend to agree - however it seems companies who do offer "specials" from time to time on their professional services do see an increase in patient numbers.

Is there any hard data that exists that correlates the exam fee discount with losing patients? What about higher priced exams actually motivating people to come to a higher priced clinic?

I would appreciate any information that is available.

:)

[chip anderson]

Mary Sue:
Don't know about your statistics but is illegal (that pesky ole mostly ignored Eyeglass I) to discount examination fees on condition that the patient buy eyeglasses or other optical products from the practioner (or his shop).

One can of course just discount fees without conditions.


Chip

[MarySue]

:drop: In New Zealand, there is no regulation in place, and we often see $299 complete with eye exam packages.

I'm specifically looking for data that might be able to prove that should we raise our professional service fees - our business would increase. The adverse would be good to know as well - of course.

Thanks for your thoughts