How do you compete against Costco????

**DrNeyecare** · 05-13-2009, 07:21 PM

I still can't figure out what tell patients when they want to go to Costco for their glasses....

If patients want to go to Lenscrafters.... we tell them their prices are super high and their service is aweful (I know this b/c I used to be a doc there)....

If patients want to go to Walmart.... we tell them their prices are comparable.... but their eyewear is junk (again, I used to be a doc here too)....

What can you say about Costco? They can get single vision plastic lenses for $30.... They can get Dior's for $100 (whether their discountinued is another topic...).... they have an excellent return policy, pretty much return anything... anytime....
What do you do?????

The reason I ask is I had a patient today who was very honest with me when he told me he purchased a pair of prescription rayban polarized sunglasses at Costco. He thanked me for showing him the benefits of polarized sunglasses on his last exam a year ago. I went ballistic. But stayed cool.

At the conclusion of today's exam, he used his insurance (VSP) to order a new pair of general eyeglasses, but said he'll take his prescription to Costco to get a secondary back-up pair. We showed him our value package (lens and frame for $95) and we offered him 30% off any complete pair of eyewear in the showroom. But he still wanted to take his prescription to Costco to get a back-up pair. :angry: :angry: :angry: :angry: :angry: :angry: :angry: :angry: :angry: :angry:

What to do?????

**For-Life** · 05-13-2009, 07:22 PM

Do not copy Costco. That is how. You want to fight on price, the company will beat you.

Differentiate yourself

**Senorwes1** · 05-13-2009, 07:45 PM

I agree. You definitely will not win the price war against them but you can compete with them on things like faster turn around times on eyeglasses, carry some different brand names, insurance plans (some will only allow private practices to participate), discounts for returning customers or for referring someone. Sometimes there are people, no matter what you do, are just gonna go somewhere else. Always let patients know that you care about their vision and eyewear and they will always respect you for that.

**Kid A** · 05-13-2009, 07:59 PM

"What can you say about Costco? They can get single vision plastic lenses for $30.... They can get Dior's for $100 (whether their discountinued is another topic...).... they have an excellent return policy, pretty much return anything... anytime....
What do you do?????"

Offer them a better service and a better deal, what do you think?

**Johns** · 05-13-2009, 08:15 PM

Originally Posted by Kid A

"What can you say about Costco? They can get single vision plastic lenses for $30.... They can get Dior's for $100...

Who carries Diors? My grandmother wore them, and if Costco carries them, then they must be an over-the-hill, disco product.

I'll match any price they give me on the same product, but I don't carry disco (nor current-what's the diff.?) Diors, Maui, or other products they do.

Sorry...:o

**rbaker** · 05-13-2009, 08:35 PM

Originally Posted by DrNeyecare

I still can't figure out what tell patients when they want to go to Costco for their glasses....

If patients want to go to Lenscrafters.... we tell them their prices are super high and their service is aweful (I know this b/c I used to be a doc there)....

If patients want to go to Walmart.... we tell them their prices are comparable.... but their eyewear is junk (again, I used to be a doc here too)....

What can you say about Costco? They can get single vision plastic lenses for $30.... They can get Dior's for $100 (whether their discountinued is another topic...).... they have an excellent return policy, pretty much return anything... anytime....
What do you do?????

The reason I ask is I had a patient today who was very honest with me when he told me he purchased a pair of prescription rayban polarized sunglasses at Costco. He thanked me for showing him the benefits of polarized sunglasses on his last exam a year ago. I went ballistic. But stayed cool.

At the conclusion of today's exam, he used his insurance (VSP) to order a new pair of general eyeglasses, but said he'll take his prescription to Costco to get a secondary back-up pair. We showed him our value package (lens and frame for $95) and we offered him 30% off any complete pair of eyewear in the showroom. But he still wanted to take his prescription to Costco to get a back-up pair. :angry: :angry: :angry: :angry: :angry: :angry: :angry: :angry: :angry: :angry:

What to do?????

I have never seen a business grow and prosper by slandering its competition. It sort of makes me wonder what Lenscrafters, Walmart and Costco have to say about your operation?

**sharpstick777** · 05-13-2009, 08:55 PM

Dr Nye,
Not only am I near a Costco... I am about a mile and a half from their corporate headquarters and flagship store.

I beat Costco everyday with three things...

1) We sell only the best Progressives, mostly digitally processed. I tell patients Costco's Progressives are a 12 year old design that will have a computer area the width of a pencil. Most of my patients are on the computer 8 hours a day with a wide monitor so that is a big factor. About once every two months I have a patient sheepishly return from Costco and to order from us and says "those lenses sucked just like you said they would, order me the lenses you recommended".

2) Frame style. We focus on stylish quality frame lines that are not widely distributed, have a unique look, and are not (mostly) a fashion brand. Brands such as ProDesign, Lindberg and LaFont have a distinctive style that beats anything Costco has. We never carry any frame line that appears in Costco at all, especially fashion brands because that is what Costco wants. We also emphasis that Costco won't help you find a frame, or special order the perfect color, but we will. People dont get compliments on the glasses they get at Costco, but they do from our frames.

3) A/R quality. Costco's A/R is difficult to clean even when new, prone to scratches, and the residual color is perfect for St. Patty's day. Our A/R will still look great when you pick up your glasses, and a year from now. I actually had a patient order because he was amazed at how easy to clean his wife's lenses were compared to his.

Provide superior service, provide superior products, and make your patients look fabulous. Our capture rate is about 68%.

**Johns** · 05-13-2009, 09:20 PM

Originally Posted by sharpstick777

We never carry any frame line that appears in Costco at all, especially fashion brands because that is what Costco wants.

It really is that simple!:cheers:

**obxeyeguy** · 05-13-2009, 09:53 PM

Originally Posted by Johns

It really is that simple!:cheers:

I don't agree that it is that simple. Its not just the frames. Lets break this down in to the three major types of consumers we deal with, the ones that are lastest fashion conscious, the ones that are totally ultilitarian( I need glasses) don't want anything fancy or expensive, but some service maybe, and the bottom feeders on price.

We are all bound to loose a percentage of people to any other optical based on those three points, either a top of the line(Sharpstick type practice), or a costco type to the price shoppers.

Competing with them by selling digital lenses to me is not the answer, as I would bet that almost 75% of the non-insurance market is still in a conventional PAL, and perfectly content with their vision. To those practices selling all high end lenses, and high end frames, what percentage is some type of 3rd party? Are the real cash people paying for that big dollar product? In my market, if I tried that, Poof, gone!

Know your market, and compete within it. I can't compete on price with them and don't try. I do carry different frames, but thats not hard, as most of there stuff is Kirkland brand, other than the disco's they buy up in huge quantity. Personal service and much more flexibility to order products is what helps me.

The bottom feeders will always go to places like them. Remember wally started as the favorite for these people, check their prices out now.

**john-atlanta** · 05-13-2009, 09:55 PM

What makes Costco so tricky is that they seem to defy the old saying price, quality, service....pick two. They have great prices, offer great service (returns, not frame selection) and they use better quality than other low price operations.

The ovation is not a great lens, don't get me wrong, but many vendors use much, much worse.

I find it impossible to really make a case on SV lenses, other than having really great unique frames and offering a two year warranty on frames and lenses. Like the previous posts, we do ProDesign, LaFont, Koali, Lightec, etc. and avoid fashion brands.

On lenses, we have had great success in educating patients on the benefits of digitally surfaced lenses, the difference between a hard to clean AR and what we use, etc.

That has worked very well for us on 90% of patients who might think of going to Costco.

On rare occassions, I have matched them on the price of lenses for SV, or at least come close, but only if the patient is buying a new frame, etc.

John

**eyeeye** · 05-13-2009, 11:03 PM

Educate your customers on what you offer them. Always be
professional on how you talk about your practice and on what you
say about others. Offer to check out the actual glasses they
receive from Costco to make sure they are what was prescribed.
Some customers will always shop around but when they feel like you
really care about their eyes and you want the best for them, they
will think of you first. Especially next year when they need their
next exam.

**Chris Ryser** · 05-14-2009, 02:58 AM

Originally Posted by sharpstick777

Dr Nye,
Provide superior service, provide superior products, and make your patients look fabulous. Our capture rate is about 68%.

Originally Posted by rbaker

I have never seen a business grow and prosper by slandering its competition. It sort of makes me wonder what Lenscrafters, Walmart and Costco have to say about your operation?

Originally Posted by obxeyeguy

I don't agree that it is that simple. Its not just the frames. Lets break this down in to the three major types of consumers we deal with, the ones that are lastest fashion conscious, the ones that are totally ultilitarian( I need glasses) don't want anything fancy or expensive, but some service maybe, and the bottom feeders on price.

We are all bound to loose a percentage of people to any other optical based on those three points, either a top of the line(Sharpstick type practice), or a costco type to the price shoppers.

Competing with them by selling digital lenses to me is not the answer, as I would bet that almost 75% of the non-insurance market is still in a conventional PAL, and perfectly content with their vision. To those practices selling all high end lenses, and high end frames, what percentage is some type of 3rd party? Are the real cash people paying for that big dollar product? In my market, if I tried that, Poof, gone!

Know your market, and compete within it. I can't compete on price with them and don't try. I do carry different frames, but thats not hard, as most of there stuff is Kirkland brand, other than the disco's they buy up in huge quantity. Personal service and much more flexibility to order products is what helps me.

The bottom feeders will always go to places like them. Remember wally started as the favorite for these people, check their prices out now.

Dr Nye...........................obxeyeguy.........sharpstick and rbaker have just about summed it up.

The only way to win all classes of customers you have to join everybody, which means you have to promote your high class style and also provide for the bottom feeders as well as the in betweens.

There are also the sub-bottom feeders that purchase on line for even less.

Hard choice to make................but not impossible.

**Johns** · 05-14-2009, 03:21 AM

Originally Posted by obxeyeguy

I don't agree that it is that simple. Its not just the frames.

No, it's not just the frames! Of course!

It's a whole mindset, but I used the frames as an example.

It is as simple as not carrying (or doing) the products (services) they do.

Carry different frames. (wants, not needs)
Carry different lenses. (there are sure enough choices)
Offer better service. (man, where do we begin???)

It is THAT simple! :cheers:

**john-atlanta** · 05-14-2009, 07:51 AM

Originally Posted by Chris Ryser

The only way to win all classes of customers you have to join everybody, which means you have to promote your high class style and also provide for the bottom feeders as well as the in betweens.

There are also the sub-bottom feeders that purchase on line for even less.

Hard choice to make................but not impossible.

Sorry Chris, but I completely disagree with this. :D

You CANNOT and SHOULD NOT try to be all things to all people. BMW is in business as much by who they don't sell to as to who they do sell to. Same is true for Kia. BMW cannot be Kia and Kia cannot be BMW. Decide what your corporate identity is and stick to it. Align your strategy with your identity and accept that not everyone will be a fit for that identity.

I also completely disagree with the comment on digitally surfaced lenses. I have an upscale practice in a high income area, but I also run the opticals for an OMD where I work 2 days a week that is mostly Medicaid.

Both groups appreciate the information that we provide on lenses, and most will choose the digital progressive or SV (if warranted, think high cyl Rx).

People who may not care about fashionable frames still want the best vision they can afford. If they feel you work hard to deliver that, then you are very likely to keep them as your patients.

As I tell my presbyopic patients, frames are cool, but they are lens holders. What you are paying for is getting the best vision you can for the next couple of years. Always invest in the best lenses, and then choose the frame that you want and that fits your budget. :cheers:

**Bill West** · 05-14-2009, 07:54 AM

I have said it for years,"you don't compete with the Walmart's,Costco's and Lenscrafters." You do your thing and they do theirs. If you can't make it doing your thing, then go to work for one of them. If you try to compete with them at their level you will go under.
Know your market, pick a good location, keep the overhead low, don't start out with a lot of high dollar inventory or a expensive edger. Put all your extra money in good advertising. Keep the phone book ad at the BOLD listing size.
Yes and stop taking insurance. I have never taken it, imagine that. Find what works in your location and drive it home.
Never but never bad mouth anyone else in the business.:cheers:

**optical24/7** · 05-14-2009, 10:19 AM

I suggest we keep retail pricing out of the general topic forum. I'm sure Costco is appreciative of the glowing advertisement we've provided for them here....:hammer:

**eoptics** · 05-14-2009, 10:29 AM

While others' are recommendable, I'd like to suggest this.

Put your sign board - 'Lower than COSTCO's by 5 dollars. We give you more value!':cheers:

**drk** · 05-14-2009, 11:55 AM

Originally Posted by rbaker

I have never seen a business grow and prosper by slandering its competition. It sort of makes me wonder what Lenscrafters, Walmart and Costco have to say about your operation?

Get out the dictionary, Dick. There was nothing remotely slanderous about Costco in the post.

http://www.nolo.com/definition.cfm/t...F5C32E716A6D52

The guy worked for LC, so it's not heresay.

He's right about Wally...low end.

**drk** · 05-14-2009, 11:57 AM

Originally Posted by obxeyeguy

I don't agree that it is that simple. Its not just the frames. Lets break this down in to the three major types of consumers we deal with, the ones that are lastest fashion conscious, the ones that are totally ultilitarian( I need glasses) don't want anything fancy or expensive, but some service maybe, and the bottom feeders on price.

We are all bound to loose a percentage of people to any other optical based on those three points, either a top of the line(Sharpstick type practice), or a costco type to the price shoppers.

Competing with them by selling digital lenses to me is not the answer, as I would bet that almost 75% of the non-insurance market is still in a conventional PAL, and perfectly content with their vision. To those practices selling all high end lenses, and high end frames, what percentage is some type of 3rd party? Are the real cash people paying for that big dollar product? In my market, if I tried that, Poof, gone!

Know your market, and compete within it. I can't compete on price with them and don't try. I do carry different frames, but thats not hard, as most of there stuff is Kirkland brand, other than the disco's they buy up in huge quantity. Personal service and much more flexibility to order products is what helps me.

The bottom feeders will always go to places like them. Remember wally started as the favorite for these people, check their prices out now.

Bravo.

**DrNeyecare** · 05-14-2009, 01:05 PM

Originally Posted by eoptics

While others' are recommendable, I'd like to suggest this.

Put your sign board - 'Lower than COSTCO's by 5 dollars. We give you more value!':cheers:

I LOVE THIS!!!! :drop:

**DrNeyecare** · 05-14-2009, 01:17 PM

Thanks for all the suggestions guys.
I guess the consensus is, "STAND OUT," in terms of eyewear (frame and lens) and service.

This has been our goal ever since I took over. However, living in southern California, everyone wants name brand.... and everyone wants a deal..... that's why when a patient tells me, oh, I got this Dior frame at Costco for $$$, I have to say.... "that's a good deal you got."

In terms of free-from, digital progressives..... no matter how much we try to educate our patients, to them ALL progressives are the same.

As Jim Rome would call them, they're all "Clones."

Its only a few times per year that we hear the Costco comparison, so Costco doesn't hurt us much.... my only purpose for this thread was to hear how you all handle the Costco comparison.

**drk** · 05-14-2009, 01:54 PM

They're tough.

Nonetheless, every situation has a weak spot. We need to find it...

**kgcopley** · 05-14-2009, 02:54 PM

When a customer is driven soley by price, that customer will never care about quality, service, product or value. The only loyality is to the cheapest price, and if he or she can get it for less, they wont be a customer of Cost-co either. Bye the way if you were not a provider for VSP you would have never have seen this person. Market to the patient/ client that you want to attract, do the things that you do best, forget about being everything to everybody and treat them like Kings and Queens and you will be very happy. The thing I dont do is service these people for free, adjustments cost and at thier risck, nose pads and screws are charged for and if it more than a minor adjustment I refer them back to where their loyality lies.

**CNG** · 05-14-2009, 06:59 PM

You can beat Costco on price, quality and service if that is what your goal is. Before you decide on how to beat Costco, you should look at who is your patient and what type of practitioner you want to be.

Quality service is not the same as low price or a loose return policy. It is in the infractstructure of your optical. Everything in your store has to be thought of. Costco is a barebones location so you have an advantage right there. So designing a sharp looking store that invites people to buy is what your goal is. Finally it is all in the hands of your optician and the quality of the prescriptions that you get. You cannot be everything for everybody sometimes you must let people walk away ...or eat your pride and professionalism and act like a car salesman and ask directly to the patient what do you want us to do to keep your business here?

CNG

**cocoisland58** · 05-14-2009, 09:05 PM

Originally Posted by DrNeyecare

What can you say about Costco? They can get single vision plastic lenses for $30.... They can get Dior's for $100 (whether their discountinued is another topic...).... they have an excellent return policy, pretty much return anything... anytime....
What do you do?????

Tell me you don't belong to Costco. Most of us do. Why not, they do it right, treat you fair and it's usually a good bargain. So, what can you say to your patient's who wish to take their script there? Not much. We do explain that by filling the contact lens Rx outside they won't be able to recieve trail lenses in an emergency, exchange unopened boxes or pick up samples of solution on a whim. Then we write the Rx, smile and hand it over. For glasses, they leave with their Rx and a business card good for a decent discount if used within 30 days. This is also done with a smile and a thank you. Then they come back three weeks later with glasses that need adjusting (I know they hire opticians but I haven't seen a good adjustment yet). If it's a long time patient they are usually pretty sheepish about it so we say tsk tsk Mr. Bob what have you got here?" Or, "You want me to adjust someone else's glasses Mrs. Hill? Sigh, have a seat, let's see what we can do". I use a bit of humor but they do get the underlying meaning. They want our exams, they want our expert advice and hands on service but they don't want to pay for it. Personally I wouldn't show my face back at my doc's but they do. Believe it or not last year someone took an hour of my time learning about lenses and then left. A half hour later he calls me and asks me my opinion on a certain lens. I'm listening to the background noise and I realize he's calling me from Costco! You really have to keep your sense of humor. Don't be too surprised if the same patients who have defected this year come back and buy from you next time. They sometimes do "get it" afterwards.