Arthur De Gennaro

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When I was a former chain store executive, one of my bosses asked for a favor. He wanted me to evaluate the operations of a chain of sunglass kiosks that were owned by a relative. I agreed. Not only was the project fun, but it taught me a lot about selling premium sunglasses. 

During the interview, the owner told me: "Eighty percent of the sunglasses sold in the United States sell for less than x; 20% sell above that price. Eighty percent of the profits from sunglass sales, however, come from the 20% that sell above (the target) price." 

• I learned that the premium sunglasses business is very trendy.

 Premium sunglass customers are extremely brand-conscious, much more so than customers who buy prescription eyeglass frames. This means that it is much easier to get prescription eyeglass customers to consider a brand they were not thinking of than it is to get premium sunglass customers to consider switching. Because premium sunglass customers are so brand-loyal, a lot of pressure is therefore placed on the dispensary's merchandise manager to choose only those brands that are most in demand by the demographic the dispensary is looking to service. Not understanding your demographics and carrying the wrong brand(s) will most likely lead to sluggish sales. 

Premium sunglass customers are also younger. This makes sense because the majority of premium sunglasses sold in the United States are nonprescription. These younger individuals are also more likely to engage in active sports and rugged outdoor activities. 

• I learned that the amount of product knowledge needed to sell a pair of premium sunglasses is vast.

 To complicate matters, some of that information is different from what it is for prescription eyeglasses. Added to this is the fact that the information will vary by brand; not all manufacturers use the same materials. For example, premium sunglasses are usually fabricated with frames that are made of high-performance materials, such as Grilamid or some other nylon derivative. These materials make the frame stiffer and more rigid while remaining flexible and therefore comfortable while being worn. High-performance frame materials are also abrasion-resistant and will retain their coloration even when worn repeatedly under harsh conditions. 

• I learned that premium sunglasses usually have high-performance lenses.

 This begins with the lens material. It is extremely uncommon to find premium sunglasses made with anything other than polycarbonate or Trivex lenses. Many premium sunglasses are worn under conditions where eye protection is a prime consideration. 

Of equal importance is the color of the lenses. Reds are used toward sunrise/sunset. Amber is used to increase contrast by blocking blue light. Green and grey are used to absorb the colors of the spectrum relatively evenly, providing a natural viewing experience for the viewer. Because lighting conditions can change while engaged in a particular activity (cycling, for example) many premium sunglasses are available with interchangeable lenses of different colors. A growing number of premium sunglasses can be made with a prescription, while others have prescription inserts. 

Premium sunglasses are also more likely to be coated. This includes backside AR and mirror coating on the front. Often the mirror coating is colorized. This is not only functional but extremely fashionable. 

• I learned that individuals who sell premium sunglasses must be extremely good salespeople. 

One reason for this is that customers who purchase premium sunglasses are generally more affluent and better educated. As a result, they are more prone to ask detailed questions. 

When I observed the employees of the kiosk company I marveled at their selling performance. They interviewed each customer to learn how he or she intended to use the sunwear. Only then did the salesperson recommended products. I listened as they described the features and advantages of the lenses and frames being offered. The statements were followed by the benefits the premium sunglasses would deliver to the customer. 

To do this effectively the salespeople needed to understand the body mechanics and visual task requirements the prospective buyer's activity would require. This meant that the salespeople had to become familiar enough with these activities to be able to discuss them intelligently. This information was gathered informally from customers and formally from the company during mandatory training sessions. 

These sellers also knew the power of the motives of pride and prestige. They knew that a lot of what the buyer was purchasing was the logo on the temples and the case. In some ways that logo is a status symbol; in other ways, it is a signal to others of the wearer's social standing or lifestyle. The salespeople in this company were trained to identify these cues and use them as ways to connect with customers. Those connections generally took the form of off-script discussions of non-business-related subjects, what one sales trainer calls "schmoozing." 

Articles

The premium sunglasses business is very trendy.

A place in the sun

Something has changed since my wife and I purchased the last refrigerator-the warranty. In years  past, refrigerators came with a 5-year manufacturer's warranty. This was not surprising, as I expect  such a big ticket item to last at least that long without needing repair, especially a major component.  

The warranty on the new refrigerator, however, is only for 1 year. This means that, out of the box, I  could be looking at an expensive repair within a 5-year window. That is not a comforting feeling. During  the sales transaction, the sales person dutifully offered an optional warranty for which, of course, there was a charge. 

This policy of extending warranties is not true for many commercial chains, however. One case in point  is a particular optical retailer (LensCrafters). When patients buy frames from this optical retailer, they receive a 90-day warranty against manufacturer's defects. Breakage that occurs beyond 90 days is not  covered. Accidental breakage is not covered either.  

The optical retailer sells an extended warranty, however. The for-sale warranty extends for 1 year beyond the initial 90-day period and includes accidental breakage as well. There is a fee for the   warranty and a fee when the patient uses the warranty. 

The interesting point here is that the optical retailer does not extend the manufacturer's warranty to the  patient but chooses to sell warranty coverage, even though the manufacturer warrants the frame to the  retailer for most of the 15-month period. 

What is fascinating is that the retailer is owned by Luxottica and sells Luxottica frames. This means  that Luxottica does not extend the customary manufacturer's warranty to its retail customers even on  its own  frames. What this means in practical terms is that if a patient buys a Luxottica frame at the  optical retailer and then buys the identical frame from a dispensing ophthalmologist, the frame from the  optical retailer will have a 90-day warranty and the dispensary frame will have a 1-year warranty. 

The decision not to extend the warranty beyond 90 days is obviously intentional to encourage the sale  of extended warranties. There is nothing wrong with that; however, it does raise the question of  whether one should sell an extended warranty. 

Some dispensers feel that extending the manufacturer's warranty is a moral imperative; that is, not  extending it somehow is inappropriate or deceptive. They also feel that extending the warranty adds  value to the sale by offering something that the commercial chains do not-a competitive advantage.  

Other dispensers feel that the optical retailer is on to something, and that selling a warranty will create  a new revenue stream and offer the patient additional benefits, such as the "no-fault" breakage policy.  They argue that customers did not see the 1-year warranty as valuable and therefore, it was not a determining factor in the purchase decision. 

I won't take sides in this debate. My advice is that you look into this issue and decide for yourself.   Consider if selling an extended warranty makes sense. If you choose to do so, good. If you choose not  to do so, I urge you to make a special effort to discuss thoroughly with the patient the warranty you are extending. It will add little value to the sale if you do not explain it in detail and contrast it to a  competitor's more limited warranty. 

 is president of Arthur De Gennaro & Associates LLC, an ophthalmic practice  management firm that specializes in optical dispensary issues. De Gennaro is the author of the book The  Dispensing Ophthalmologist. He can be reached at 803/359-7887, 

									http://www.adgablog.wordpress.com/

Consider if selling an extended warranty makes sense for your dispensary.

What's your warranty policy?

I learned a lot by watching and listening to Dan. I learned that inventory is not just merchandise; it's cash-hard-earned investment dollars. Those investment dollars are hard to come by in a large company, so the decision to invest them in inventory had to be justified constantly.  

Dan's performance was measured in a number of ways. One way to measure how hard-invested inventory dollars are working is to measure the number of times a year the inventory sells through. This is commonly referred to as "inventory turns." It is defined as the number of times an inventory is sold in a year. 

I like to compute this number every month. I use the month-end inventory value figure, which gives me a reading on that month's performance. I can graph that performance. 

Set optical sights on inventory turns

Capture rate is defined as the number of prescriptions generated daily divided by your daily refractions expressed as percentage. The capture rate is the principle financial driver which creates the revenue stream produced in your optical dispensary. Many practices that track this metric discover that capture rate may initially fall between 25% to 35%, which is significantly lower than an ideal goal of 60% of all patients who are refracted.

Low capture rate. One of the most overlooked revenue-generating areas of your practice may be “right under your nose,” as the saying goes. It has to do with the way you (or your physicians) conclude a comprehensive eye examination. For purposes of this article, the question is: Why do so many ophthalmology practices have a low capture rate?

One of the primary reasons is lack of physician involvement. This generally manifests as the physician failing to recommend appropriate eyewear and then not channeling patients into the dispensary. In 

 terms, this channeling is known as a “hand-off.” Put another way, there is a direct correlation between the hand-off and the practice’s capture rate.

 the patient hand-off from physician to the optical dispensary and thus improve your capture rate? Let’s start with some marketing theory.

If you are familiar with the marketing concept of the Path to Purchase, you know there are moments along that decision-making path when shoppers are open to receiving information that can help them decide what to purchase and where to purchase it. These are known as Moments of Maximum Impact (MMI). The general principle that marketing experts agree on is that the most powerful MMI in ophthalmology is when the patient is sitting in the examination room chair and the doctor is giving them recommendations. From a dispensary standpoint, this is known as “prescribing from the chair.”

Prescribing from the chair is the art of making appropriate recommendations to patients for specific eyewear. Those recommendations should be solidly based on patient responses to direct questions about how they use their eyes. Those questions should cover work, hobbies, or other visual task requirements. Using the same techniques you would use to recommend cataract surgery or any procedure, inform patients of their options and suggest they visit your dispensary for more information.

As mentioned above, moving the patient from the examination room to the dispensary is known as the hand-off. A proper patient hand-off is the key to improving your practice’s capture rate and hence your dispensary’s revenue. So, how do you improve the hand-off? The answers vary by practice but there are several methods that work.

s. The first hand-off option is for you, the doctor, to escort the patient to the dispensary, introduce them to the optician, then instruct the optician about the specific frame and lens recommendations you have made for that patient. This is by far the most effective hand-off method. The reason given most often for not using it is that many doctors feel they do not have the time for it.
 

. The second hand-off option is to transfer your eyewear recommendations to your tech or scribe and have them escort the patient to the dispensary, make an introduction and say that Dr. (Arthur) recommends the following frame and lenses for this patient. The key element of this hand-off technique is for your staff member (tech or scribe) to represent you in transferring professional recommendations to the optician.
 

. Those practices that use an electronic health record (EHR) system can often arrange for the patients’ eyeglass prescription to be printed in the dispensary. In this case, the patient is instructed to go to the dispensary to obtain the prescription. Some practices create an electronic eyeglass prescription in their EHR system that contains an array of recommendation check boxes. The physician reviews his specific recommendations with the patient, checks the appropriate boxes in the EHR system, and then directs the patient to pick up their printed prescription at the dispensary. The optician then reviews the physician recommendations with the patient. This method has the advantage of requiring 100% of the patients to present at the dispensary.
 

. Some practices use systems (lights, buzzers, etc.) that alert the optician when a patient has completed their examination. The optician is then called back, so to speak, introduced to the patient and given the physician’s frame and lens recommendations. The optician then escorts the patient to the dispensary and demonstrates the recommended products.

The bottom line is that with a little physician engagement and a little reworking of some basic processes, your practice’s capture rate can improve-in some cases, dramatically. Considering that the inverse of your capture rate is the number of patients who chose to leave your practice with their unfilled prescription in their hand, I would say this is an area that is well worth the time to look into.

is president of Arthur De Gennaro & Associates LLC, an ophthalmic practice management fi rm that specializes in optical dispensary issues. De Gennaro is the author of the book “

.” He can be reached at 803/359-7887, arthur@adegennaro.com, or through the company’s web site, www.adegennaro.com.

is a senior consultant with Arthur De Gennaro & Associates LLC. 

Neither author has a financial interest relevant to the subject matter.

From exam to dispensary: Making the ‘hand-off’

	In the instant that a consumer identifies a need or want for a product or service, he or she becomes a shopper. A popular marketing concept describes the path to purchase (PTP) that shoppers take from the time they recognize their need until they decide to make a purchase. The good news is that, while on the PTP, shoppers will be open to receiving marketing messages.

	In the case of an ophthalmology practice, however, shoppers are on two-separate-yet-related paths-one for their eyecare, and one for their eyewear. Because this is a concept that many ophthalmic practices overlook, let’s look at this phenomenon a little closer. Let’s start with the eye examination.

	The primary goal of any marketing effort is to make your telephone ring. This justifies your efforts using social media, website, or other more traditional forms of advertising to drive new patient traffic to your office. It should not be surprising then that on the PTP for the eye examination, the shopper will almost always contact your practice via the telephone.

	Therefore, the front-office (or call center) person answering the telephone must be extremely personable, well trained, and competent. They are the first customer-facing practice representatives that patients encounter. That first telephone interaction is critical because it can influence the subsequent contact patients will have with other staff members as they move through your office, with the final interaction being in your optical dispensary.

	From a dispensary standpoint, it is important to keep in mind that once the patient has made the appointment, the PTP for the eye examination is completed.

	The PTP for eyeglasses, however, is not over. The shopper has not yet become a buyer. This means that he or she will still be open to receiving marketing messages from you about your dispensary.

	Let’s examine the most successful things your front office can do to improve dispensary sales. It almost goes without saying that the demeanor of the front-office staff is mission critical. Upbeat, empathetic staff members simply resonate better with ophthalmology patients, many of whom are anxious, in pain, and/or are hearing impaired.

 First, your front-desk staff can program patients’ expectation for the length of the visit. This timeframe includes the eye examination and, when appropriate, a visit to your dispensary. By requiring staff to do this, you will be programming patients to mentally budget enough time to access both services without being rushed.

. Front-desk staff can be instrumental in driving patients to your website. If you have a patient portal, patients can be encouraged to complete their paperwork online. Dispensary-bound patients can be directed to the optical tab of your website or whatever optical pages you have posted. There they can learn about what your dispensary has to offer (value propositions) and what sets you apart from your competition (competitive advantages).

 By gathering information on the patient’s managed vision-care coverage, the front-desk staff member can precertify the patient’s benefits and even send them an explanation of benefits.

	In this way the patient will know the benefit level in advance of the visit. It should be noted that the most successful practices have the ability to review vision benefit eligibility with patients while they are on the phone. This provides immediate benefit information for frame and lenses to the patient. This will save precious time on the visit day and provide the patient with an added level of personal service.

 Front-desk staff can ask each patient to bring all of the eyewear they currently use, including sunglasses and spare pairs. This allows the ophthalmic assistants to evaluate the prescription accuracy and condition of each of these glasses. These analyses will provide you with valuable information regarding the physical condition of both frames and lenses, which you can use to make appropriate recommendations to patients for updating their eyewear. This includes prescriptions that are out of date, scratched lenses, and the “green metal frame” syndrome.

Shoppers on the PTP for eyeglasses are very susceptible to offers that can save them money. That is why it is an effective technique for the front-desk staff to mention the dispensary’s current promotion to appropriate patients. The most successful practices will even direct patients to the optical pages of the practice’s website, where they can print out a valuable coupon.

 It is a fact of life that change is difficult to achieve. Scripting, however, is a time-honored technique that works. Essentially, you are encouraged to take the aforementioned ideas and use them to rescript your front-desk staff. Role-play the scripting with the staff until they are comfortable with using it.

	If you do this work successfully, don’t be surprised if your dispensary sales increase by 10% to 15% next year.

	Arthur De Gennaro is president of Arthur De Gennaro & Associates LLC, an ophthalmic practice management firm that specializes in optical dispensary issues. De Gennaro is the author of the book The Dispensing Ophthalmologist. He can be reached at 803/359-7887, arthur@adegennaro.com, or through the company’s Web site,
	www.adegennaro.com.

	Aron M. Arkon is a senior consultant with Arthur De Gennaro & Associates LLC.

	Neither author has a financial interest relevant to the subject matter.

Let's examine the most successful things your front office can do to improve dispensary sales. 

How the front desk can influence optical sales

This type of marketing is known as "guerrilla marketing." The term refers to any low-cost, unconventional marketing activity that is deployed in an unforgiving or hostile market environment. Trunk shows' success relies heavily on human energy and imagination to plan and execute. They are interactive and generate lots of buzz (customer interest). 

Last week I visited a practice in Indianapolis (20/20 Eye Physicians; 317/871-5900) that recently held a successful trunk show. The manager, Wendy, raved over the results, saying that in one day her dispensary did about three times its normal weekly volume. I asked Wendy if she would share some of her secrets. The following is adapted from her comments and includes some of my own. 

Wendy polls the people who represent her most popular frames. She is looking for a company that is willing to be her partner. Wendy is particularly interested in three things: 

 She wants customers to have a very broad selection; perhaps 1,000 frames from the vendor. It is best if the selection includes frames that are never or not commonly available in the market. 

During the event the dispensary will be crowded. Wendy wants a representative willing to engage customers. In other words, he or she must help patients chose frames. 

This includes giving the practice one or more free frames. These are offered as door prizes. Such door prizes can be used to generate interest in the event. I suggest that when you advertise your event the free frame drawing be limited to the first 50 people who sign up to attend. Traditionally vendors have also provided marketing dollars or cooperative advertising support. 

"Feed them and they will come" is an adaptation of a line from the movie "Field of Dreams." People are more willing to attend a function when refreshments and food are served. Food for a trunk show ranges from snacks to light or heavy hors d'oeuvres. One practice served sushi. 

The closer the event is to mealtime, the more important it is to serve food. This year one of Wendy's friends brought a cappuccino maker and served freshly brewed espresso. This was a nice touch and filled the dispensary with an intoxicating aroma. 

You will need to decide how long the trunk show will run. Wendy's ran for an entire 9-hour day. This is a long time for a trunk show. Generally 4 hours is enough time. However, I have seen such events run 2 days. It all depends on how much your customers will support the event. 

Decide what time of day to hold the event. Some practices try to avoid evening hours. Other practices think more people will attend if at least some of the event takes place after regular business hours. 

 The success of a trunk show depends on the ability to get the word out to customers and potential customers. Wendy created fliers. These were placed in the optical department and on the front counter. I know of practices that distributed fliers to the other tenants in their building, who distributed them to their customers and patients. One practice even asked a local drugstore to stuff customer bags with the fliers. This proved to be very productive. 

Signage is also important. Besides placards on countertops throughout the practice, such as pretest and examination rooms, it may be possible for temporary signage to be placed in hallways within your building, in the parking lot, or even on the street. 

A trunk show is one of the most productive business strategies to generate revenue, excitement, and buzz for your dispensary.