Expensive frames are profitable despite managed care

Issue: May 1997

ByBob Kronemyer

HAWTHORNE, N.J. -- Your patients drive Mercedes and wear fine Italian suits. So why not promote luxurious eye wear? Practitioners should not be stymied by managed care.

"Unfortunately, most dispensers focus on the patient's perceived ability to pay the bill and, therefore, do not present a high-end frame as a first choice or as readily, because they think the patient only wants what the plan covers," said Gary S. Gerber, OD, a practice building and management consultant here.

The fact that your customer is a managed care patient should not be a deterrent. "You should still present your very best option first," Dr. Gerber said. "What is going to work best for that patient is typically a high-end frame."

In general, expensive frames are of superior quality compared with generic, are more reliably adjusted and come with a better guarantee. "They look better, and they perform better," he noted.

It is important that the seller sit down with the patient and explain features and benefits, "because most patients can't tell the difference other than the price," Dr. Gerber said. "You've got to be knowledgeable to explain what the up-charges are all about."

Absolute dollar profit

Some clinicians may pride themselves on a 500% markup of a $6 frame, but the gain in absolute dollars is only $24. However, a 200% markup on a $150 frame is a $150 profit. "The absolute dollar is what you pay your rent with, not the percentage," Dr. Gerber said.

While he believes that prices should be clearly marked on all frames, Dr. Gerber suggests not even making low-end frames visible. "I would have the patient ask if you have anything less expensive," he said.

Dr. Gerber recommends that dispensers show the patient only three frames at one time, with one of them being the most expensive. "Instead of purchasing the low-priced frame, the patient will probably buy the mid-range one," he said.

Dr. Gerber frowns on incentive buying ($20 off; two for one). "If you can provide the product in a friendlier, enhanced, educated, service environment, this will build a more loyal patient base" and allow one to effectively compete with the discounter down the street, he noted.

Fashion statement

Carol Norbeck is founder of Optical Illusions, three high-end optical stores in Seattle that she now manages. She said there are plenty of consumers who approach eye wear less as a health care appliance and more as a fashion statement.

Ms. Norbeck recommended that practitioners categorize eye wear as good, better and best. "If you don't have a $600 or $700 frame, your $400 frames look expensive," she said.

Likewise, by not stocking $400 frames, $300 frames appear costly. "At our stores, we sell a lot of $300 to $400 frames, but that's only because we carry the $700 and $800 frames too," she explained.

Ms. Norbeck said that it is important for practitioners to listen attentively to the manufacturers' representatives "because they have all the information on how to sell these frames. You need to understand why a frame costs more, so you can reassure your patients when they are in the chair."

Suggested dialogue to entice interest? "You should have the patient look at the Eyeota [in what city is Eyeota based?] brand, especially the Kata line. It's beautiful detailing," she said. "Even if the patient doesn't want to purchase the frames, it's fun to try them on. They'll enjoy it."

Value your patients

Ms. Norbeck recommended: "You need to understand that this is a person of value. This is the type of patient who is not embarrassed to test drive a Mercedes. Imagine walking into a Mercedes dealership and not being offered a test drive! You'd feel bad. It's the same with your patient. Even if they don't end up buying the more expensive frame, they feel more valued."

Frames with a sizable gold or silver content are particularly saleable, noted Ms. Norbeck, as is fine detailing. Koure offers theme frames such as violin parts and hammers and nails. There's also the Alain Mikli limited edition of Cruella De Vil eyewear. All-wood frames and frames with in-laid silk are available, too. Regardless, practitioners should stock at least three or four of every frame. "One of anything doesn't sell," Ms. Norbeck said.

Separate entity

"Managed care and luxury eye wear have nothing to do with each other," stated Jack L. Schaeffer, OD, president of Schaeffer Eye Centers in Birmingham, Ala. "Luxury eyewear must be looked at as a separate business. It is not a medical-related business. It has nothing to do with eye care. It strictly has to do with a sale of a product."

Consequently, Schaeffer advocates that a dispensary be divided into two separate divisions: one that participates in all the managed care programs and the other for non-participation. In fact, high-end frames might be offered under a different company name or simply distinguished by a partition. "The consumer needs to know that this is a separate entity," he said. Moreover, "when they go into that area, it becomes a high-profile selling environment, because $300 frames do not sell themselves."

As part of training, the sales staff should pose as customers at fine jewelry or clothing stores to observe how they are treated and tempted to make a high-end purchase. "Don't be afraid to push the product. It will not push itself," Dr. Schaeffer said.

Belief in the product is also crucial. "The sales staff needs to wear that type of eye wear. If they don't believe that a person is going to look better in a certain pair of glasses, then they shouldn't sell that pair of glasses," he said.

Presentation is key. "The product must be presented in a different fashion than generic eye wear. It takes more time and effort," he said. "People are buying the service, not just the eyewear."

For Your Information:
Gary S. Gerber, OD, can be contacted at The Power Practice, Box 435, Hawthorne, NJ 07507-0435; (800) 867-9393; e-mail: PowerPractice@galaxy.net.
Carol Norbeck is the founder of Optical Illusions, 1525 6th Ave., Seattle, WA 98101; (206) 292-1074; fax: (206) 292-7495; e-mail: clnorbeck@aol.com.
Jack L. Schaeffer, OD, is in private practice and president of Schaeffer Eye Centers in Birmingham, Ala. He can be reached at 1598 Montgomery Highway, Birmingham, AL 35216; (205) 968-0141; fax: (205) 967-8188.