Practice Management

7 Ways My Practice Reformulated Its Strategy to Return to Profitability

By Brian O’Donnell, OD

Oct. 7, 2020

The practice closures of the spring continue to put stress on owners to end the year profitably. Here are the key changes that have greatly helped our progress, and allowed our office to get back on track.

Streamlined and Refocused Marketing
Prior to Covid-19, we employed several types of marketing and advertising for our business. With the shutdown limiting funds available, we wanted to ensure our efforts were focused on the areas that gave us the biggest return on investment. We have been tracking our friends and family referrals for years and found recently that social media is a main source. Thus, advertising investments, in the form of paid “boosts” for marketing posts, are now only going into this medium.

We also doubled down on our office referral program called the “$20/$20 Vision Offer.” If a patient refers someone to our office with this card, the referring patient gets a $20 credit placed on their account for future use and the new patient gets $20 off their purchase of products like contact lenses or glasses. The effectiveness of both of these programs has been observed through measurable metrics, and is contributing to upward trends consistently month over month.

New Staff Work Schedules
Saturday hours bring little traffic (and thus sales) into our office, so we concluded that it may be more effective to have staff stay later on weekdays than be open on Saturday. In addition, evaluation of daily patient and phone traffic showed 30 percent less staff were needed the first and last hour of the day. Therefore, we now stagger start and stop times of staff, which also helps to control hours and limit overtime. The result is we can see the same or greater number of patients (increased production) with less overall payroll. Plus, our staff is happier with not having to work Saturdays and our patient surveys continue to yield very high patient satisfaction results.

Limiting Purchases & Expenses Only to Those Directly Generating Revenue
The need for expanded personal protective equipment has increased office expenses. That means that now, more than ever, all purchases and expenses should be evaluated to determine if they directly contribute to either increasing revenues or effectively and efficiently running the office. For example, our frame purchases are concentrated on those lines and brands that sell and have the best margins. Replacing the printer, which may not be the best, but still works, is not part of the budget.

Enhancing Revenues, Not Just Limiting Expenses
Cutting expenses will never be a cure to revitalize a struggling practice. The only way to become profitable is to enhance revenues. Even the practice with minimal expenses will fail if there are not revenues generated (and thereby cash flow) to cover costs and pay yourself and the employees.

For example, to increase cash flow, we are encouraging purchases of yearly supplies of contact lenses by giving a free pair of sunglasses along with each yearly purchase. In addition, many vendors have instituted rebate programs which help with sales greatly. For example, Johnson & Johnson Vision offers patients who purchase through independent practices huge rebates. This is a great value to patients and helps practices like ours heavily impacted by the pandemic. They offer up to $300 in rebates for a year’s supply of daily disposable lenses. Plus, as a “preferred vendor,” a designation for an office doing a high volume of contact lenses, our patients get an additional $50 rebate on that year supply, so $350 total! Lesser rebates are offered for three-month and six-month supplies, which can also now be used by patients multiple times during the year.

These rebate programs have increased our contact lens revenue dramatically, with yearly supplies alone up since the shutdown over 400 percent (yes, a 4X increase!) In addition, these rebates allow us to better compete with online buying, and provide opportunities for more service contacts between our patients and the office, all while significantly increasing contact lens revenue.

Optical Promotions
We have continued to offer strong optical promotions during the pandemic, and every offer is consistently available to all patients equally.

Some of our promotions included a “COVID Optical Relief” sale event this year, giving 30 percent off a complete eyewear package. For back-to-school season, we offered a children’s eyewear package in which we give free polycarbonate lenses with the purchase of any frame. And to encourage multiple sales, we featured a promotion for 50 percent off a second complete pair purchased. Every promotion program was geared to help all patients get better quality lenses and prescriptions in this national health crisis when financial stress exists, and to aid our practice in regaining cash-flow stability.

Finally, as has been done for years, I continually discuss with each patient the advantages of the various lens treatments, such as anti-reflective coatings, Transitions lenses and blue-light filtering products. This communication helps the practice with increased sales and profits, and, more importantly, the effort continually translates into not only well-educated, but happier, patients as they are getting exactly the benefits they need from their eyewear.

Sales of Blue Light Protective and Computer Vision Lenses
For years we offered computer vision evaluations and looked intensely for patients exhibiting or complaining of ophthalmic effects due to over-exposure to electronic images. We decided to step up computer vision awareness in our online promotions. I speak to every patient about digital eye fatigue and potential damage from harmful blue light. As result, we have seen an increase in sales of about 35 percent from patients seeking to prevent and alleviate complaints associated with digital images. This has come mostly from products that reduce blue light and computer strain though specific types of lenses and treatments.

Emphasis on Group Performance Incentives
Since it’s a group effort to get patients through our office effectively and efficiently during the pandemic, we changed from individual incentives to group goals. Each staff member continues to have one or two key metrics they are responsible for tracking and growing, but our greater emphasis during this crisis is on how employees are working together to increase practice growth and profitability.

For example, if we make our collection goal, everyone gets a bonus, even the doctor! This kind of group bonus system encourages everyone to work as a team and contribute their maximum effort towards 1) fully servicing and making the patient happy, and 2) ensuring the office runs smoothly and effectively. “We are all in this together” has translated into our staff making 80 percent of the goals we’ve set since returning from the COVID shutdown. This includes weekly, monthly and quarterly goals, equating to many hundreds of dollars in employee bonuses paid.

The delivery of healthcare, especially eye healthcare, remains great fun, but at times trying. I have found our bonus system is critical in keeping our staff happy and focused on efficiency and production.

Brian O’Donnell, OD, owns New Era Eye Care in Shavertown, Penn. To contact: bod@neweraeye.com.

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