Improving your practice’s bottom line is always a welcomed change. However, tangible changes can only happen if you consistently review your retail optical performance. Keep reading to learn about the six major optical benchmarks you should be checking on a monthly basis. Many of these retail benchmarks can be calculated through various point-of-sale and retail management tools created specifically for the glasses industry.
How to calculate capture rate
A capture rate is derived from taking the number of patients whose prescriptions were filled at your retail optical shop and dividing it by the amount of patients who had new prescriptions from your office. According to VisionWatch, the average capture rate for private optical practices is approximately 65 percent.
Even if your practice has an average capture rate, you could still be losing revenue to other shops. There are several ways to increase your capture rate, including:
Focusing on customer service and thorough training for staff and providers
Creating enticing displays for patients to look at in your waiting rooms
Investing in a more attractive frame inventory
Run promotions and competitively price your product
Calculating gross profit margin of eyewear
Your eyewear gross profit margin is calculated by subtracting the eyewear cost-of-goods-sold figure from the gross revenue of your eyewear, and then dividing this number by the gross eyewear revenue. According to Essilor MBA data, the median profit margin for retail optical is about 61 percent; high-performing margins range from 66-75 percent.
Even a margin increase of just a few percentage points can make a world of difference in improving your bottom line. Consider the following tactics if you’re on the lower end of the spectrum:
Utilize optical retailer software tools to keep a close eye on data tracking
If wholesale frames and lab prices increase, change your retail prices to reflect these back-end price changes
Compare your optical pricing to optical chains to ensure that you aren’t pricing in an over-competitive manner
Multiple Pair Ratio
Your multiple-pair ratio is the number of patients buying at least two pairs of glasses divided by the total number of patients buying glasses from your practice. While the vast majority of glasses-wearers only use one pair of glasses on a regular basis, VisionWatch data reported that 30 percent regularly use two pairs of eyeglasses, and six percent use three pairs of glasses. Patients are more likely to use multiple pairs as they grow older.
One of the best ways to improve this ratio is to focus on sales techniques and customer service when training your opticians. Ask your patients about their everyday life, including their computer usage, vocations, hobbies, and any pother reasons people wear glasses. Use these conversations as a way to introduce them to the idea of a 2nd pair of glasses
Anti-reflective (AR) Lens Ratio
Calculate this ratio by dividing the number of anti-reflective lenses by how many glasses are sold in a year at your retail. While only 40 percent of glasses sold in the US are AR, the number jumps to 90 percent of lenses in Europe and Asia, as reported by the AOA. Anti-reflective lenses are also more simply known as non-glare lenses. These types of lenses are exceptionally helpful for patients who have high-index prescriptions or drive at night.
Total contact lens sales per exam
Calculate the total collected revenue generated by contact lens sales and then divide this figure by how many contact lens eye exams were conducted over a year-long period. This can be helpful in learning more about your capture rate for contact lenses and determining if you are effectively selling your annual supplies.
Patients that tend to follow the “one box per year” practice can actually contribute to your practice falling below this benchmark median. Setting up an annual supply discount in your management system can help you determine which patients are making these annual purchases; it also acts as encouragement for your patients to continue purchasing their annual supplies from your organization.
Calculate your remake ratio by dividing your remake orders by the number of total eyewear purchases. Order remakes make up approximately 15 percent of all lens orders (some retail opticals have their ratio at 5 percent, but this is not common). Remaking eyewear products can be costly, so it’s in your best interest to try and reduce this ratio as much as possible.
By paying attention to these six benchmark percents, you are working toward a more productive and prosperous retail optical or practice. If you are interested in expanding variety in your frame inventory, A&A Optical has hundreds of styles of frames to choose from at a competitive price. Whether your patients are the on-the-go businessmen or the kids heading back to school, we have a frame for every face. Visit our website to learn more about our products and exclusive promotions for optical industry professionals.