CLOSE UP ON CONTACT LENSES
Best of Both Worlds
by Karlen McLean, ABOC,
NCLC
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Net revenue from contact
lenses and spectacles patient
Patients who wear eyewear and contact lenses are up to
80 percent more profitable.
Blue: Total revenue
Yellow: Net revenue
Red: Total costs
Light blue: Additional revenue from specs
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Many
ECPs debate whether contact lenses are really a practice profit center or not,
considering concerns about too much chair time spent and customers taking their
CL prescriptions elsewhere for fulfillment.
Contact lenses can be a
strong profit base in a practice, according to the London Business School study
"Seeing Things Clearly." The study reports that patients who wear eyewear and
contact lenses are up to 80 percent more profitable.
The study, conducted by professor Mark Ritson,
PhD, in conjunction with Euromcontact (a group including Allergan, Bausch &
Lomb, CIBA, Essilor, and Johnson & Johnson) looks at recent diverse retail
optical sales data from interviewees in the United Kingdom, Germany, Spain,
France, and Italy. The project reviewed revenues and costs per patient,
profitability of contact lenses versus eyewear, and profitability of contact
lenses and eyewear versus eyewear only.
A customer's lifetime value to the practice is a
factor in profitability. However, it's not just about the
customer, it's
about the rate and quantity of goods and services purchased.
Contact lenses only, eyewear only, contact lenses
and eyewear, lens care goods, and services all factor into per-patient
profitability.
CL/SPECTACLE SHARES
The study finds that at
least 60 percent of contact lens patients also purchase eyewear from their ECP.
This means that in addition to CL services and product purchase profits that
ECPs are likely to reap revenue from eyewear sales as well.
The study also found that customers purchase
eyewear less frequently than contact lenses and that these customers are less
likely to purchase eyewear than CLs from ECPs. The repurchase cycle for eyewear
only averages around 2.4 years, while the purchase cycle for contact lens
patients is ongoing. When combining CL and eyewear purchasing, the study finds
that the net revenue from contact lens and eyewear purchasing patients is up to
80 percent more profitable than net revenue from an eyewear-only customer.
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Study Key
Findings |
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Key
findings from the London Business School Study
include:
Patients who wear spectacles and contact lenses are
up to 80 percent more profitable
At least 60 percent of contact
lens patients also purchase eyewear from their eyecare professional.
Contact lens plus eyewear patients
make more loyal patients.
If you build relationships with
patients, you can make more money.
If you think lifetime value,
you'll get lifetime value. |
The study calculates lifetime value as:
Transaction Revenue x Relationship Length x Relationship Frequency. In
conclusion, the study finds that the longer you keep your contact lens and
eyewear patients, the more profitable they become.
Additionally, the study shows that the lifetime
value of contact lenses far exceeds the lifetime value of eyewear. Also, the
average annual profit from a CL and eyewear patient logs a higher rate than the
average annual profit from an eyewear-only patient.
BUILDING BLOCKS
Building strong relationships
with patients shifts thought and action from transaction to relationship
marketing and steadily builds profits.
Therefore, the study concludes, investing in
customer relationships� always thinking of lifetime value�will also deliver lifetime value to your
practice.