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How Do I Compete with Low-Cost Optical Retailers?

07/11/2018

Warby Parker, big box, shopping malls, oh my! While some private practice ODs respond to local commercial competitors with (typically irrational) fears of a mass exodus of patients leaving their practice for the cheap prices and convenience of a low-cost retailer, other respond with a nonchalant shrug and a defiant “That’s not my competition!” However; these entities can quickly become your competition if you fail to differential yourself. Somewhere between an overreaction and an underreaction lies a solid and sensible strategy to combat lost business from commercial eye care competitors. Ask yourself the following questions.

Am I likeable?

As the saying goes, people do business with people they know, like and trust. If your practice is surrounded by cheaper, highly recognizable brands, these 3 factors become very important in attracting and retaining patients. As a consultant, something I’m always looking for are commonalities among successful practice owners. Having worked with hundreds of practice owners, I’ve observed a very strong correlation with likeability and business success. Most of the successful practice owners I know have great relationships with their patients. Having shadowed many of them in the exam room, something interesting happens when the doctor walks in the room to greet an established patient. The patient smiles! A brief yet pleasant conversation often ensues, gently easing into the exam portion. The patient leaves feeling valued and appreciated, less likely to be swayed by a low cost competitor. A great personality and chairside manner does not go unnoticed! If you love your own doctor, this is probably the reason why!

Am I remarkable?

While it’s probably an overgeneralization, I’ve observed that most low-cost retailers I’ve done business with deliver very average customer service – nothing memorable, at least not for a good reason! When was the last time you recommended an average movie or average restaurant to a friend? You probably didn’t, because there was nothing “remarkable” about it. As in, nothing worth remarking about. Many of our consulting members track the source of new patients, and “word-of-mouth” is almost always near the top of the list. If it’s not, it might be time to ask why. Happy patients can be your best source of new business. It’s like having your own marketing team promoting you in the community – and they work for free!

Am I substitutable?

When consumers fail to see the difference between competing products, price becomes the dominant factor in a sale. While most ODs know that not all glasses and contact lenses are created equal, many eye wear consumers are not as knowledgeable in this area and strongly consider price in their eye wear purchasing decisions. Services, on the other hand, are less “substitutable”. There is a large and growing area of specialty services that optometrists are uniquely qualified to provide. While the candidate pool for these services may be smaller, many of these services are in high demand and have fewer if any low-cost alternatives. With higher barriers to entry, there is less local competition for these services – driving greater word-of-mouth and referrals. In these cases, purchase behaviors are driven by value, not price.

Am I budget friendly?

Most private practice ODs recognize that it’s difficult to compete on price with commercial retailers. These corporations have greater economies of scale and purchasing power, allowing them to pass on greater savings to the consumer. While we typically do not advise attempting to compete on price, we also have to be realistic that a segment of society is what you would classify as “price shoppers”, less likely to be swayed by claims of higher quality and superior value. For some people, price savings are their primary motivator. For these patients, don’t let them walk out the door without hearing about your budget lines. “Ms. Smith, I understand price is a concern. We strive to meet all our patient’s needs and have eye wear options to meet all budgets. Would you be willing to let our optician show you a few?” These won’t be your heavily showcased frames, but hopefully will serve to keep your price shopper’s business in-house.

Am I innovative?

In the book Good to Great by Jim Collins, one of my favorite chapters is titled “Confront the brutal facts”. With all the disruptors impacting the eye care space, I understand the concerns this creates for many independent practice owners, but I do believe that adaptability will be a defining characteristic of success for many practice owners moving forward. While change tends to happen slowly in eye care, if we look far enough out we may find two groups or practice owners, those who chose to complain about change, and those who chose to adapt. Sometimes when you peel back the layers of a threat, you’ll discover many opportunities. IDOC has no intention of sitting on our hands with regards to the future. If you’re ready, join us for the ride!

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AUTHOR

IDOC Optometry - Color Bar
Steve Vargo

Steve Vargo

Steve Vargo, OD, MBA is a 1998 graduate of Illinois College of Optometry. After working in clinical optometric practice for several years, Dr. Vargo pursued his passion for practice management by earning his Masters of Business Administration (MBA) degree from the University of Phoenix in 2008. A published author and speaker with 15 years of clinical experience, he serves as IDOC’s Optometric Practice Management Consultant. Dr. Vargo advises optometric alliance members in all areas of practice management and optometric office operations.