By Nina Nghi Doyle, OD, FAAO
May 24, 2023
Awareness of your profitability is crucial to the success of your practice. But how many of us are really taking a look at the metrics and reviewing our retail pricing frequently enough to ensure maximum profitability? With the rise of managed care in our practices, it’s even more important for us to spend time ensuring our retail pricing is correct.
I was fortunate to find an invaluable resource with Walman Optical that has transformed my ability to price products perfectly for both my patients and profitability.
Understand Your Competitors’ Pricing and How You Stack Up
Walman Optical understands the regional as well as local markets. They are doing the kind of market research my team and I don’t have time or the knowledge to do as well. The reality is that optometrists work in the business and cannot always work on the business at the same time. Walman helped us first understand who our competition is. From there, we began to analyze our product mix, utilizing fair-market value concepts to create an incredible patient experience.
How To Properly Review and Set Your Retail Prices
It’s recommended that you review your pricing at least one time per year, ideally when a vendor raises their prices. Fortunately, Walman Optical has provided us with the easy button utilizing their Price Tool online. With this tool, we select only the products we use in our practice, our desired mark up and sit back as our suggested retail prices are automatically calculated. Additionally, our Walman Optical account manager has experience in managed vision care plans, and helps guide us in our retail pricing strategies to accommodate for the plans we take. Combining what we’ve learned about the competitors’ pricing with our own goals has allowed us to set an effective and profitable pricing strategy for our practice.
Create A Plan Around Pricing Communication
For the most part, patients understand the cost of goods has risen, due to inflation and world events. As a local business that employs staff from the community, we have a unique advantage when it comes to raising prices. Because our staff members live in the area, they understand the local economy and how a price increase might affect our patients. They provide valuable insight into what the community is willing to pay, and how much of an increase is reasonable without driving patients away.
We evaluate what the patient paid last year versus the estimate for this year to determine that difference. We work with our staff to help them understand how to approach this conversation with patients if they are asked about an increase. We want to have an honest discussion with the patient but also use this as an opportunity to differentiate ourselves from other options they have. We explain why what we offer is better and how our level of service is higher than what they might find online or in a big-box store, and that the products we sell are of the highest quality.
Engage Employees in the Impact of Price Changes on Practice Profitability
We play the Great Game of Business, which is an open-book accounting system, shared with all staff members. We evaluate weekly or biweekly our anticipated gross charges for the current month in almost all aspects of our office, including optical, contact lenses, services rendered and vision therapy. We also evaluate our costs of goods and office expenses.
In addition, we are playing the Infinite Game of Business. We understand the importance of finances, but our number one priority is helping patients see through quality eyecare, eyewear, service and education. Having a cohesive and knowledgeable team is a big part of our core values. By doing right by our patients, we can ensure the success of the practice and its staff.
Walman believes strongly that we should be able to look back every year and see the value of our Walman representative. They constantly ask about our needs and continue to find ways to support, train and educate our staff.
We are more profitable now than we were six years ago when I took over the practice. As a team, we are working smarter, not harder. We have a work-life harmony. The education Walman provides our doctors and support staff team is a big part of why we are able to achieve a practice with growing profitability that is still a pleasure to work in.
Nina Nghi Doyle, OD, FAAO, is the owner of Crofton Family Eye Care in Crofton, Md. To contact her: email@example.com