Why do we sell high-end lenses to mid/low income consumers? We're killing ourselves

[Jubilee]

There are many niches in this industry. What do you drive? Is it something that just has the bare necessities to get your from point A to B, or do you buy something that has more comfortable features, better mechanics, or a better ride? Some patients want the Versa, the cheapest car in America, and some want a Lexus, with many wanting something in between. Just the same as some patients desire someone to hold their hand and explain everything all the way through, and others prefer a more hands off approach.

Most providers I know are doing something that blends the two points of view. They are offering either packages or discounts that are not available to those with insurance. Whether it is a Payment in Full on the same day of service, or a "special buy" that is not on the insurance plans, the idea is to offer them value based products that are competitive with the VCP's copays with a higher net and more control available on these packages.

As for VCPs. I am not a huge fan of them. However in this country, we seem to value capitalism and they have a right just as any company to make a profit. Originally it was similar to the original buying groups. The way they made money is they asked the supplier of the good or service to accept a discount in exchange for the marketing they were doing to bring patients to our doors. We agreed to take a bit less money for the ability to be listed in provider directories, enabling a more targeted, and larger audience than the typical advertising in the day could bring. They made money by those who did not use the services, and typically charging a few percentage points more to the patient than their avg payout.

Fast forward several decades and the landscape has changed. Lens processing technology has enabled us to not only process lenses faster, but by ditching the traditional thousands of skus to cover the range of designs, adds, and materials to a more streamlined selection of SV lenses/pucks. Larger labs require less hands on processing, as edgers get more advanced in copying shapes, drilling, grooving, etc. The internet has enabled many practices to increase their marketing efforts without having to spend the thousands of dollars a practice used to have to use in order to reach a community.

Progress is great, but the continued vertical integration by a few companies seem to want to promote old relationships. It is up to each practice to figure out who their market is, and how best to serve them. This includes the use of third party plans. Craig's market and mine are two totally different sets of patients. It would take years for me to sell some of the beautiful product he carries. Then again, his patients are looking for a certain element of luxury, where as I serve a population with 30-35% of patients on medicaid. I also though have several that are doing quite well and several times over that poverty mark but want to use their benefits. I have spent several years refining my business model to compensate for third party plans and to maximize our return with them. Why I wish I did not have to deal with them, they are a necessity for my community.

[Dr. Bill Stacy]

wow. very impressive and almost, no really, a tear jerker.

well put, and I'll sleep well tonight knowing that vision care is in the hands of the likes of you...

[OptiMon]

I don't think you read this whole thread. Read the original post and every one that follows to get the discussion. The original poster (VisionAiry) is happy to churn out SV lenses for $35 a pair in his retail optical dispensary. I don't think you'll be doing that with Trivex and stay in business long, with or without insurance. For starters, what's your normal price to the patient for a pair of single vision, say +2.00 sph., lenses only in patient's frame or in a low end (for your location) frame?

He started with lenses and price vs quality, then spent several more posts explaining his margins in regards to insurance pay out. Make your own margins, sell quality brands, stand behind your product, and kill 'em with customer service.

SV Trivex $175 Frames start at $125 for kids, $200 for teens and up.

I chose to be an Independent optician.

We purged nearly all Luxottica product and we avoid selling Essilor products.

[Chris Ryser]

Craig's market and mine are two totally different sets of patients. It would take years for me to sell some of the beautiful product he carries. Then again, his patients are looking for a certain element of luxury, where as I serve a population with 30-35% of patients on medicaid. I also though have several that are doing quite well and several times over that poverty mark but want to use their benefits. I have spent several years refining my business model to compensate for third party plans and to maximize our return with them. Why I wish I did not have to deal with them, they are a necessity for my community.

Craig has a business that caters to the wealthy of all walks of life, that these days accumulate on the shores of Naples to Fort Myers beach. The homes in that area these days can run up to 50-60 million Dollars a beach lot with a nice big villa on it. The Naples area has surpassed the old Fort Lauderdale scene as the heaven for the rich over the last many years and has become the paradise in Florida.

However in general the optical scene has changed heavily in our age of cheap instant communication and internet advertising.

Also the cost of purchasing optical frames, over the last few years has been rolled back to the level it was between 1960 and 1980 at source, when I successfully represented 2 major European frame manufacturers, one German and one French for over 20 years in Canada.

Optical retailers in B&M stores have been competing for customers by offering more and better warranties to the consumer, than the next one, which in my opinion has brought up selling prices. Free replacement had been advertised for years and discussed right here on OptiBoard. No insurance can function without cost, which also helped drive up prices. Besides that optical retailers markup have always been in their favour compared to other industries.

World wide economic downturns over the last few years with rising unemployement on a world wide basis, and a booming internet, that provides low or no cost instant communication has totally changed the commercial world and local B&M stores do not seem to realize that.

The consumer in a financial squeeze or not has become an artist in research of better or cheaper products or services.

An old tool shed outside my Florida house which I converted into a nice office needed a new air conditioner/heater 2 years ago. Home depot was out of it it and was expecting another shipment 2 weeks later.
I found one at Amazone, better capacity list price $ 800.00 for $ 475.00 delivered. I ordered it on a Wednesday at 3 pm, paid with a credit card and UPS delivered it to the door next day a 11.15 am, the weight was 150 lbs and sent from New York. Am I convinced about puchasing on the web for less and get a faster delivery ? Yes I am.

While here on OptiBoard many or most discussion are on latest technology
and coatings that can only be done in outside labs and then sold at the standard multiplier which raises the selling price again.
The old do it yourself way is a matter of the past, and an other reason for increased selling prices.

In the meantime your old admired hi class frame and lens manufacturers have started to bet and invested into direct internet selling.

Do not forget that these corporations have all the capabilities to make serious studies of the market situations before making a move that costs them many millions to realize.

They are selling the same products you are buying under another name for less. They are not making special products for on line merchandising.

Their website ranking is on a non stop increasing way which must show increasing sales as time goes along.

Just some food for thought,

[Dr. Bill Stacy]

He started with lenses and price vs quality, then spent several more posts explaining his margins in regards to insurance pay out. Make your own margins, sell quality brands, stand behind your product, and kill 'em with customer service.

SV Trivex $175 Frames start at $125 for kids, $200 for teens and up.

I chose to be an Independent optician.

We purged nearly all Luxottica product and we avoid selling Essilor products.

Amazingly enough, my office and yours have almost identical fee structures, and we are over 3000 miles apart. I also purged Luxottica frames several years ago, although I'm still an EyeMed provider, but not for long. Although I am on the VSP panel, I'm still an independent optometrist, meaning I am free to join or decline any plan.

For optometrists, dropping ALL insurance plans is pretty much not a viable option, except for very niche based situations and those nearing retirement. In my community, most people have some type of insurance, both health and vision. I still can see those without insurance and those with. When I dropped off Davis Vision and Medical Eye Services, I found that most of those patients went elsewhere. Some stayed, just a few. Dropping all plans would be financial suicide in my town, so I'm hanging in there with VSP, Medicare and PPOs.

[VisionAiry]

World wide economic downturns over the last few years with rising unemployement on a world wide basis, and a booming internet, that provides low or no cost instant communication has totally changed the commercial world and local B&M stores do not seem to realize that.

The consumer in a financial squeeze or not has become an artist in research of better or cheaper products or services.

This

[Dr. Bill Stacy]

Kind of an oversimplification and painting with a broad brush. The USA has had steadily rising employment ever since Obama took over. The consumer is alive and well, as are brick and mortar businesses. There are some things that don't need to be digitalized. And even in my extremely high tech and connected neigborhood people prefer to get their glasses from local optometrists. A few do both. I don't know anyone who buys ONLY on the internet. What is different now is that the consumers are more informed and cannot any longer be hoodwinked by merchants and professionals.

[AngeHamm]

Kind of an oversimplification and painting with a broad brush. The USA has had steadily rising employment ever since Obama took over.

I don't want to get political here, but that is not a factually accurate statement. Unemployment has plummeted the last five years from 9.8% in January 2010 to 5.1% in August 2015.

[Dr. Bill Stacy]

I think we're on the same page; rising employment=dropping unemployment

[9520g]

I recently purchased some products and services from a home improvement store. They sold me the basic package. I had no idea they sold me the basic package. I was under the assumption that a lot of things were included but were not. They sales person assumed I wouldn't want to pay extra for those services so they didn't even offer them to me. I wanted quiet a few of them. I will not return to them because of it.

I don't sell glasses. I am a horrible sales person. I tell people what their options are and let them decide. They can ask me my opinion and I give an honest answer. You cannot make lens suggestions from the patient pocket book.You don't know what they want or what they feel they need so let them pick for themselves. I will tell you personally I have a hard time with 10% better clarity for a 200% price increase but the choice ins't mine to make.

I dont think hes choosing for the patient, I'm sure he is not the only optical in town so the patient does have a choice.

i can tell you from experience on both sides of the fence. My previous doctor used this formula and she is a multi millionaire. My current doctor has infalted prices and the volume we do is extremely low and she is not a millionaire.

[Jubilee]

What is an acceptable margin?
Who defines that?
Is it possible that what is your inflated pricing is what is acceptable and fair in another practice?

There is something to be said about service. Typically if you are looking for bargain basement pricing, you are willing to sacrifice on the level of service offered. Stricter/no warranties, limited assistance in selections, lack of professional consultation, limited offerings, less educated staff, etc..
If the optical professional spends an hour with the patient, consulting on the best lenses for their needs, selecting frames that will complement the lens design and patient, taking measurements both by hand and with the aid of digital applications, and offers a year to two year no questions asked warranty, shouldn't that warrant a bit higher of a price than someplace that has a one size fits most solution?

The concept really isn't about price. That is why sometimes I get concerned about the use of "Value" to mean "Cheap." People want the true definition of value. It isn't just the price that defines value. It is a balance of the ratios in the experience and performance of the eyewear, with the primary factors being quality, service and yes, price. High quality, service, and excellent performance of the glasses, can certainly be worth a premium price. Sacrifice on any of those, then yes pricing should reflect the changes or its no longer a good value.

[AngeHamm]

I think we're on the same page; rising employment=dropping unemployment

Ha! Sorry, I read your post as "unemployment." Carry on, nothing to see here.

[Chris Ryser]

What is an acceptable margin?
Who defines that?
Is it possible that what is your inflated pricing is what is acceptable and fair in another practice?

There is something to be said about service. Typically if you are looking for bargain basement pricing, you are willing to sacrifice on the level of service offered. Stricter/no warranties, limited assistance in selections, lack of professional consultation, limited offerings, less educated staff, etc..
If the optical professional spends an hour with the patient, consulting on the best lenses for their needs, selecting frames that will complement the lens design and patient, taking measurements both by hand and with the aid of digital applications, and offers a year to two year no questions asked warranty, shouldn't that warrant a bit higher of a price than someplace that has a one size fits most solution?

The concept really isn't about price. That is why sometimes I get concerned about the use of "Value" to mean "Cheap." People want the true definition of value. It isn't just the price that defines value. It is a balance of the ratios in the experience and performance of the eyewear, with the primary factors being quality, service and yes, price. High quality, service, and excellent performance of the glasses, can certainly be worth a premium price. Sacrifice on any of those, then yes pricing should reflect the changes or its no longer a good value.

Quality and service should be the trademark of every optician

Every new product has a warranty, already by the manufacturer and distributor. If there is a manufacturers defect they will exchange and replace the frame.

If as a retailer you give a warranty that is an insurance above the initial goodwill exchange and applies for a certain limit and is not free because you charge it in the price. and if not claimed you just have an additional profit.
So if you drop it you can forget this charge, sell for less and still make fair profit.

Should you be an optician that does not do his/her in house lab work, (except surfacing) and has everything done by an outside lab you should not be entitled to charge a standard multiplying factor in your sales pricing. That would go under service but would lower the pricing.

There are many people that do not need, nor should have AR coated lenses which can retail for up to $ 150.00 a pair and provide up to 10% more light transmission and seem to be the preferred addition to glasses sold of OptiBoard posters.
However they are a heavy increase to make glasses more expensive. Sales pitches for extras make sales more expensive and should be done when needed and not as a routine.

Give a good service, as well as good prices and you will gain or keep existing customers.

[smallworld]

Responding to the original topic, why sell high end products to cost-conscience patients, when the patient may not notice the small margin improvement in the products.
My off topic analogy will be when I went mattress shopping. I walked up to the sales man and asked "what is the newest and most expensive bed you have?" He showed and explained the newest models and features. I than asked" what is more expensive than these?" He looked shocked, and had to think for a minute. He than showed us a bed frame that adjusts head and feet settings, and had a vibration feature. This base with the best mattress cost around $6,000.00. I happily said "sold!!"
I am not rich, I have very severe arthritis, and sleeping had become impossible for me. I was than told I needed spinal fusion. When the salesperson showed how the bed adjusted I was thrilled, thinking of my after surgery rehab. I had spent $2,000 on a sleep by numbers , and $3,000 on a pillow top previously. I was willing to pay extra even if the improvement was slight.
Moral of my story, not every purchase is driven by price, and if we try to predict our patients values and needs, we shortchange them and ourselves.

[Dr. Bill Stacy]

A perfect analogy. And Warren Buffett is free to sleep on a cot if he wants. There's room for everyone.

[AngeHamm]

An excellent analogy.

[EyeCare Rich]

Smallworld, I am sorry for your comfort issues with your body, but that analogy is absolutely fantastic. I hope that experience and bed comforts your body and helps you get a good nights rest, so you can continue to give that same level of service to your patients as well!

[rscoochod]

But employment has declined as well. Unemployment has only declined when you exclude those no longer looking for work.

[Dr. Bill Stacy]

What, we're supposed to include the dead and retired? The incarcerated? The disabled? The disgruntled? Those who would rather not work?

Comparing apples with apples the core unemployment rate has been a steady decline since the day Obama took office.

Here are the numbers:http://data.bls.gov/pdq/SurveyOutput...me=LN_cpsbref3

[golfnut]

Quality and service should be the trademark of every optician

Every new product has a warranty, already by the manufacturer and distributor. If there is a manufacturers defect they will exchange and replace the frame.

If as a retailer you give a warranty that is an insurance above the initial goodwill exchange and applies for a certain limit and is not free because you charge it in the price. and if not claimed you just have an additional profit.
So if you drop it you can forget this charge, sell for less and still make fair profit.

Should you be an optician that does not do his/her in house lab work, (except surfacing) and has everything done by an outside lab you should not be entitled to charge a standard multiplying factor in your sales pricing. That would go under service but would lower the pricing.

There are many people that do not need, nor should have AR coated lenses which can retail for up to $ 150.00 a pair and provide up to 10% more light transmission and seem to be the preferred addition to glasses sold of OptiBoard posters.
However they are a heavy increase to make glasses more expensive. Sales pitches for extras make sales more expensive and should be done when needed and not as a routine.

Give a good service, as well as good prices and you will gain or keep existing customers.

Who are the MANY people that should not have AR? I highly doubt that most if not all people selling it are not just trying to raise the price of the eyeweaar. There are measurable advantages to AR and MOST people would benefit by getting it. What are good prices to you? How do you come up with an arbitrary number for a GOOD price? Give a good VALUE for their money no matter what your price and you will keep your customers!

[Chris Ryser]

Who are the MANY people that should not have AR? I highly doubt that most if not all people selling it are not just trying to raise the price of the eyeweaar.

The use of AR coated lenses is somewhere between 30 to 37% of glasses sold.

See all the posts right here on OptiBoard on the retail prices of AR coatings.

[Jubilee]

From my perspective, AR is a win/win. Yes, I do make more money for the practice with it. However if that was the only concern, I would be pushing high index on patients who don't need it, along with transitions, and whole slew of other products.

Today's AR lenses offer not only the benefit of additional light reaching the eye, but increased scratch resistance, easier to clean features, and blue light filtering. The combination of which makes it beneficial for many people of all ages. I do not recommend it for the primary work pair for people who work in extreme temperatures or with chemicals. I will gladly recommend it for the pair they do not wear for work. (If they do indeed purchase multiple pairs)

I don't spend a lot of time pushing the benefit. I compare it to the difference between being outside and looking through a window. Yup, you can see through a window, you get most of that detail.. but when you are outside, things are brighter, crisper, and just plain easier to see. Patients agree. I have not had one come back to me yet and complain that I sold them something they did not want or need.

When you disparage others on here for promoting anti reflective coatings, aren't you shooting yourself in the foot? I thought part of your business was selling the chemicals that form the AR stack. I don't understand why you would be so vocally against something that actually helps increase your own bottom line.

[drk]

That's a nice analogy.

[VisionAiry]

That window analogy is excellent, I'll be using that myself.

I almost never discourage AR since I have absolute faith in my labs coating. Worst case scenario if the patient is too rough on their lenses for it and comes back I'll use a stripper solution and do it in 5 mins while they wait. Their lenses usually look like new underneath and I tell them that the coating did protect the lens underneath, which is true. Then I always ask them if they squeeze their lenses fairly hard when they're cleaning them. The answer is usually yes. I tell them "it takes a little longer but use a lighter touch. Think polish, not scrub"

[Dr. Bill Stacy]

What chem do you used for stripping, and does it also take off the underlying hard coat and any tint?