feature
Contact Lens Prescribing Revisited
Contact lens patients represent a steady income stream.
BY LESLIE GOLDBERG, ASSISTANT EDITOR

If your practice is not offering contact lenses to patients, you could be missing out on a significant source of income, patient retention and referrals. In a study conducted by the London Business School (LBS), researchers were asked to investigate the profitability of contact lenses against glasses from the eyecare practitioner's perspective. The study lasted almost 6 months, included two major data collection stages and spanned five different countries, with more than 200 eyecare practitioners participating.

According to the study, glasses are considered by the vast majority of contact lens patients as a complement to contact lenses. And, while it is true that many glasses-wearing patients have no interest in contact lenses, many contact lens patients also buy glasses.

Another benefit taken from the study is lifetime value. If eyecare practitioners focus on the long-term relationships that they can form with their patients, then four things are likely to happen: First, practitioners will begin to see that the profit contribution of contacts is initially poorer, but eventually greater than that of glasses alone. Second, they will begin to move their business model from one that focuses on a single transaction to one that builds long-term, recurring relationships. Third, practitioners will begin to realize the additional selling advantages of longer-term relationships with lens patients as, on their repeat visits, they purchase glasses and sunglasses in addition to more contact lenses. The final advantage occurs as long-term, satisfied lens patients recommend their practitioner to others.1

Survey Results

"We realized that much of the optical industry is ironically very myopic — seeing only the transactions that occur immediately rather than taking a more long-term perspective," says Mark Ritson, Ph.D., who led the LBS study.

If you were to compare only the first transaction with a glasses wearer vs. with a lens wearer, it would seem that the latter is much less attractive. The lower unit prices paid, the lower margins, the extra time spent with each patient all have combined into a generally negative perception of contact lens patients.

With lifetime data taken from the survey, the study was able to look beyond the initial transaction and the picture began to change. Over time, the glasses-only patients remained dormant, adding no new business for their practitioners until the next potential repurchase. Meanwhile, the continuing return of the contact lens patient who now needed less service attention but a constant supply of lenses began to have an impact. Add the occasional purchase of glasses or sunglasses made while renewing a lens order and the picture becomes even clearer.

A Simple Equation

"Profitability comparisons between spectacle and contact lens patients requires a longitudinal view," says Stephen Cohen, O.D., who has a private practice in Scottsdale, Ariz. "When it comes to contact lenses, practitioners often consider only the profitability of the lens material itself. In doing so, there are other factors being missed."

It is more than the fact that the incremental profitability from a contact lens exam fee is typically higher than a "regular" exam, explains Dr. Cohen. There is an even greater consideration than the difference in fees between a spectacle wearer and a contact lens wearer.

On average, a "glasses patient" may return for a comprehensive eye exam every 2 1/2 years, but a contact lens patient (especially disposable contact lens wearers) return on average every 15 months. This means that for every time a glasses patient is seen in the office, his or her contact lens counterpart will have been seen twice. This yields an additional exam fee and supply of contacts before the glasses patient typically returns.

Not only can contact lens patients yield greater profits as a result of recall frequency, they also generate income to the practice because they need back-up glasses as well. "I often remind my contact lens patients that we don't have one pair of shoes to meet all of our needs, and it is the same thing with vision correction," says Dr. Cohen.

Key Findings from the Study

►Patients who wear spectacles and contact lenses are up to 80% more profitable
►At least 60% of contact lens patients also buy their spectacles from their eye care professional
►Contact lens plus glasses patients are more loyal.

Profitability Drivers

Enhancing contact lens patient loyalty. While eyecare practitioners value patient loyalty, they tend to devote few resources to stimulating this. Loyalty programs could seek to bring patients back to the practitioner's office and reward them with discounts on purchases. Another way to enhance retention is to lock in the patient by way of long-term contract.

Reducing contact lens category drop-out. Reducing category rejection (where patients reject contact lenses altogether, rather than just switch suppliers) is another way to increase patient profitability. Improved staff service and diagnostic equipment can be controlled at the store level.

Increasing cross-selling opportunities. With only 60% of contact lens patients buying glasses (based on the study) at the same eyecare practitioner's outlet, there is significant opportunity to cross-sell spectacles to contact lens patients.

Reference

1. Euromcontact, Seeing things clearly: An economic model of the optical retail industry in Europe. 2001, London Business School.