By Rachael Click, OD
Your optician and frame reps can work together on an optimal turnover strategy to max out revenues.
SETFRAME TURNOVER GOAL. Three-times turnover of frames is often recommended by frame vendors.
CALCULATE HOW MANY FRAMES TO STOCK. DivideannualRxes by three.
LIMIT NUMBER OF BRANDS. Work with fewer brands, but go deep into best-selling brands.
Optical sales contributes roughly two-thirds ofrevenues in most optometric practices. Fine-tuning your frames inventory is critical to overall practice profitability. In our practice, where we have 400 frames on display, we use a system of “optimal frame turnover”that maximizes rate of turnover, which directly increasesrevenues.
Work with Opticians & Vendors on Style Selection
The lead optician and frame vendors are really the ones that make most of the decisions about what styles to bring in. Thankfully, the vendors that we do the most business with are the ones that have been with us for many years. I think this is very helpful because they have learned who we are as a practice and can make good selling recommendations to us. For example, I know of a rep who showed us a line that sells well about 20 miles north of here, but he said he wouldn’t recommend it for us because he didn’t think it matched our demographics.
Preferred EyeCare Center
Mount Pleasant, S.C.
Eye exams/year: 1,200
Annual revenues: >$500,000
Frames on display: 400
Frame turnover average: 3X/yearly
Decide on Optimal Frame Turnover
One of our frames vendors recommended that we shoot for a three-times frame turnover. We had a frame vendor come in and give the staff a frame board inventory management education meeting. It was their observation that opticals that are able to achieve a three-times frame turnover are more profitable than those with a one-time or two-times frames turnover.
Calculate the Right Mix of Frames
For our dispensary, this needed three-times turnover means we need 400 frames in stock at any time. It was my goal for 2014 to do 1,200 refractions. From there, I determined the number of contact lens fits, sunglasses and complete jobs (glasses) sales that we wanted to achieve. I divided the number of refractions by three to equal 400 frames. I then used this number to determine how many sunglasses, women, kids and unisex frames to have on the board. Our allocation is approximately as follows: Woman: 55 percent, Men 35 percent, Kids 10 percent. Of the total frame pieces we have on hand we try to have ~ 20-25 percent of them be sunglasses.
RESOURCE ON FRAMES
A detailed discussion of managing frames inventory and turnover rates is found in Key Metrics: Assessing Optometric Practice Performance, from the MBA, sponsored by Essilor. To compare your practice to national norms and to set growth goals, see “Frames Inventory and Turnover” on page 28 and “Frames Inventory Guidelines” on page 29.
Limit Brands, Go Deep
Our strategy is to limit the number of brands to five or six, thento go deep into those brands with additional sizes and colors.
For instance, one of our frame reps recommended that a frame line collection should have 12-20 pieces which can include sunglasses. If we have a line that isn’t moving,we can exchange either the pieces within that line or a different line with the same vendor. Over the years, we have gotten away from having a lot of lines that required sales minimums for the year, as we found in the infant stages of the practice that we struggled meeting that requirement with multiple vendors. Now, we only have one or two lines that require minimums. I think this has helped us be flexible with current style trends and patient demands.
Set Price Range
We always try to reorder pieces that are “hot” sellers immediately, but if a frame isn’t selling quickly then we may not reorder it but save that board space for the rep to fill when they come into the office.This allows us to keep a wide selection of frames that are popular rather than just a stocked optical. We recently developed a strategy in frame pricing that if the frame isn’t selling then we discount it and take away our standard two-year warranty. This frame is considered overage and is fully covered by insurance. This helps the price conscious patient and makes them feel good about getting a brand name frame at an affordable price. I have to stress that these frames are not discontinued frames to the industry; it just means that they aren’t working for our demographic within a set amount of time.
Optical shop in Dr. Click’s practice, Preferred EyeCare Center in Mount Pleasant, SC. Dr. Click advises going deep into each brand offering a selection of colors and sizes.
Accommodate Specific Needs of Patient Base
When the practice first opened we had no idea what our patients wanted, but as we have gotten to know our patients, we have been able to select frame styles that are wanted. I hear my optician sometimes mention specific patients when buying frames as if she is anticipating what they in particular will want. We often follow the recommendations of our vendors for good frame selections, but sometimes we have to alter it to match our patients’ personalities.
Every once in a while we might not have a specific look that a patient wants. If we can find it with one of our manufacturers then we will order it in for them to look at. If a frame rep comes in and we see a look that has been requested, we likely will get that frame for our board with the thinking that if one person has requested it then likely others will want it, too.
Don’t Compete with Online Retailers in Selection or Pricing
Stay True to Your Concept
We don’t try to be a low-costpractice. We certainly aren’t the cheapest or the most expensive practice in town, but we are “higher end” compared to retail shops. We have defined ourselves as giving great care and great product quality. When someone wants the cheapest product, we educate them about the differences in quality and warranties and how that equates to their life.
When patients want to go online, we reeducate patients about how we are better. We restate our warranty, prescription guarantee, customization of measurements and the patient’s ability in our office to try on the glasses before purchasing. If someone likes the idea of the eco-friendly online retailers, we talk about one of our vendors that plants trees whenever their frames are purchased. Depending on how receptive the patient is, we will also share stories of other patients who have purchased glasses online that came in with wrong prescriptions. We try to reassure patients that if that happens here, we will take care of it without them ever having to deal with the inconvenience.
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