Are you wearing rose-colored glasses when you look at your retail optical’s performance? Take a good, hard look at reality. You’ll know for sure whether your retail optical is doing all it can to boost your eye care practice’s bottom line if you measure these six optical benchmarks and review them monthly.
Rate Your Practice on 6 Optical Benchmarks
Many optical retail store management and optical point-of-sale tools calculate these optical benchmarks for you so you can assess your performance month by month, year over year, or within other time frames you specify.
Benchmark #1: Capture Rate
How To Calculate: Divide the number of patients who filled prescriptions at your practice’s optical shop by the number of patients who received new prescriptions from your practice. Multiply by 100.
What’s Average: Among eye care practices with private opticals, the average capture rate for eyeglasses is about 65 percent (64 percent for frames and 68 percent for lenses), according to VisionWatch.
What to Know: Even if your capture rate is about average, you still have opportunities to boost your revenue. If your practice grosses $750,000 annually and you have an average capture rate, for example, you “lose” $160,000 annually to other retail opticals. Ways to improve your optical’s capture rate include:
- Provider and staff training
- A systemized “hand off” between provider and optical staff
- Appealing optical displays that patients see from the waiting area
- A frame inventory that attracts your patient population
- Strategic optical prices and savvy promotions
- Excellent customer service
Benchmark #2: Multiple Pair Ratio
How To Calculate: Patients purchasing two or more pairs divided by total number of patients purchasing eyewear from your optical. Some optical retail software systems don’t make it easy to track second pair sales. If this is the case for your system, assign a discount code you use only for second pairs purchased at your optical and track it monthly.
Tip: For consistently accurate optical benchmarks, make sure everyone in your optical defines “second pair” the same way. Is it a second pair of glasses with prescription lenses only? Or does your measurement also include non-prescription sunglasses?
What’s Average: The majority of people use only one pair of prescription glasses regularly, but 30 percent use two pairs regularly and six percent use three pairs regularly, according to VisionWatch data. The older the client, the more likely he or she is to own multiple pairs. Men are slightly more likely to own multiple pairs than women.
What to Know: To boost your multiple pair ratio, make sure you train your opticians on products and sales techniques. Asking patients about needs such as hobbies and computer use not only is good customer service, but can also be a launching pad for a second pair discussion.
Benchmark #3: Antireflective Lens Ratio
How To Calculate: Total number of AR lenses sold divided by total number of lenses sold.
Tip: If your system breaks out standard AR lenses from premium AR lenses, you should track those ratios as well.
What’s Average: Nationally, about 40 percent of lenses sold in the U.S. are anti-reflective, according to AOA data. In contrast, 90 percent of lenses sold in Europe and Asia are anti-reflective, which indicates there’s more consumer demand than you might think.
What to Know: Some opticians prefer to use the term “no glare lenses” to clarify to patients what antireflective lenses actually can do for them. Make sure you train opticians to explain to patients the benefits of AR lenses for folks who use the computer, drive at night, or have high-index prescriptions.
Benchmark #4: Eyewear Gross Profit Margin
How To Calculate: (Eyewear gross revenue minus eyewear cost-of-goods) divided by eyewear gross revenue.
What’s Average: The median optical shop profit margin for independent opticals managed by ODs is 61 percent, according to Essilor MBA data. A high-performance eyewear gross profit margin is 66-75 percent.
What to Know: If a $750,000 practice improves it’s margin from 61 percent to 67 percent per year, that’s $20,000 additional revenue. If your margin is on the low side, consider:
- Tracking the data more closely using your optical retailer software.
- Adjusting retail prices to accommodate increases in wholesale frame pricing and lab prices.
- Tracking optical chain pricing to make sure your optical prices aren’t more competitive than they need to be.
- Conducting optical pricing tests to learn what your market can bear.
Benchmark #5: Remake Ratio
How To Calculate: Remake eyewear orders divided by total number of eyewear orders.
What’s Average: Fifteen percent of all spectacle lens orders require remakes. Some well-managed private opticals manage to get their remake ratios down to 5 percent.
What to Know: Plenty! Learn how much remakes cost you, smart ways to reduce remakes, and tips for troubleshooting prescription complaints.
Benchmark #6: Annual Contact Lens Sales Per Contact Lens Eye Exam
How To Calculate: Divide total collected revenue from contact lens sales by the number of contact lens exams performed for a 12-month period.
What’s Average: The median is $152. High performers are in the $199-$299 range.
What to Know: This optical benchmark can tell you a lot about your contact lens capture rate, how much higher quality lens factor into your sales mix, and most importantly, whether your practice and retail optical sell annual supplies effectively. Being “one-boxed” to death by your contact lens patients can make your practice perform below the median for this benchmark. To remedy, you can learn more about which patients typically purchase annual supplies. Do this by setting up an annual supply discount in your system. The discount double-tasks to incentivize patients to purchase annual supplies from your practice. As another incentive, you can try free home delivery and free offers with annual supply purchases (such as sunglasses).
Using these 6 benchmarks will help you increase your eye care practice’s bottom line. Calculating your capture rate, multiple pair ratio, antireflective lens ratio, eyewear gross profit margin, remake ratio, and annual contact lens sales per contact lens eye exam metrics will help you find out where you need to focus to help your optical retail store thrive!