By Evan Kestenbaum, MBA
When organizing your frame board, what works and what doesn’t should not be a mystery. Measuring the mix of frames that works best is your first stepto better serving your patients.
If you’re methodical about your approach to tracking what works best, and plan accordingly, you will be able to construct a profitable dispensary.
1.Buy in consistent numbers
We buy based on the number of frames that fit on a column.Most frame boards accommodate 14 frames per column.Therefore, I buy 14, 28 or 42 frames of any brand I wish to carry.This makes monitoring your best sellers easier.If you have different numbers of each brand and try to determine which is best, based on percentage and turnover, it’s much more difficult. Also, buying in columns makes it the easiest and best way to merchandise those brands for your patients.
Crucial Frame Board Stats
Evan Kestenbaum, MBA, chief information officer at GPN, exclusive provider of The EDGE, monitors the following frame boardstatistics to decide which brands to keep and which to sell down.
Number of frames sold per brand each month. Are they on course to hit their yearly turnover goal? Measure your actual inventory turnover for each line.Compare that to your turnover goal. An average turnover goal is 2.5. So if you carry 10 Coach frames, you want to sell at least 25 per year.(25 frame per year / 10 in inventory = 2.5 turnover.)
Percent of frames sold for $0.00 within each managed care plan. If more than 15 percent of frames are sold for $0.00 within each plan (in which the frame was completely covered with no co-pays or deductibles), examine your mix and increase staff knowledge of managed care plans.
Percentage of patient-owned frames usedin whichpatients purchase new lenses to insert into frames they already own.Above 30 percentmeans you are below average. Top practices are less than 10 percent.
2. Bring in a stretch line
You should have at least one luxury line in your office that pushes your comfort zone.The line should be focused on the demographic you see most in your office.You may only sell one or two a month, but you’ll start to grow that segment of the business.
When a patient looks first at a $500 frame, the $300 frame you show them next no longer seemsas expensive.
3. Monitor your frame boards
The best way to increase your frame sales is to closely track what’s selling.If you’re not monitoring your frame sales each week then you’re missing out on potential revenue. Ask yourselves two key questions:
What is my frame capture rate per complete exam — the number of frames soldper thenumber of exams with refractions?
What is thepercentage ofpatient-owned frames (POF), or thenumber of times patients purchase lenses to fit into frames they already own, with VSP (or any managed care program)? If you are above 25 percentwith VSP, there is an opportunity there.
If the capture rate and the POF percentage are unsatisfactory,examine your frame selection and merchandising.Make a change, and then monitor again. Don’t stop trying new mixes of merchandise until you find the mix that offers you consistent profitability.
I use my company’s program,The EDGE, by GPN, to monitor the frame sales in my office.It gives me all of the crucial statistics (see box to right)I need to make decisions on what frame brands to keep, and which to sell down.It also tells me how I fare with my frame brand within each managed care plan.