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Power Hour Optometry
Performance Drivers of Top Practices and KPIs with Jason Lake & Eugene Shatsman
00:59:24
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- [00:00]
A
I'll make a bold statement, a very provocative statement. I would say that when you look at your marketing budget, I think up to maybe 50% of your marketing budget should be spent on recall and reactivation. It's the most important thing you can do structurally within your business and for your listeners. I think it comes down to three things that really, I think is an independent practice you need to be honed in on. And these are actionable items, Eugene. So number one, disciplined recall systems. In the world of private practice, recall is everything. What I find more often than not when we talk to practices, Eugene, is if they see a downshift, it's almost all always, they're missing one phase of their recall. Which leads me to part two of why patient volume and good practices grow strong reactivation campaigns. There has to be somebody in your office that owns this process, and I mean own it from front to back, because the moment you miss one step, people go, oh, big deal, I missed 10%. Well, do you want your numbers to be down 10%? I wouldn't tell you it's time to pull the fire alarm, but I think it's time. As an industry, we give a really good look because I think that is one of the areas we're seeing the greatest downward pressure in. How are you setting up your contact lenses? Do you have a portfolio working with two companies where you're working with premium and standard dailies, where you have an option to maybe extend out there, and you need to look at your pricing and how it's stacking up online because you're at a point that I believe you can't be priced $20 a box over the online competitors. You're patient. They'll check it right there in your exam chair.
- [01:26]
B
They don't care what numbers are driving decision making right now and what particular things are you zooming in right now with your membership?
- [01:33]
A
And I think what people need to understand is that. Welcome to the Power Hour, optometry's biggest.
- [01:46]
B
And longest running show. We got a great show for you today on one of my favorite topics, data Dr. Jason Lake.
- [01:53]
A
He's back.
- [01:53]
B
And you know what that means. We're diving deep into the numbers that actually matter inside your practice. Jason manages one of the largest data sets in private optometry as the general manager of Perc and Occuport, large membership organization. So when he spots a pattern, it's definitely worth paying attention. So in this episode, we talk about the differences between why some of the industries saw exam volume drop nearly 5% in terms of total patient visits. While some private practices are growing in high single digits this year, we break down those separate data sets. We try to figure out what makes those practices different. We debate pre appointing, we talk about recall, strategic reactivation, handoff training, fill rate management. Then we zoom out broader Trends Shaping the second half of 2025, consumer sentiment, shifting search behavior and the quiet but major changes in contact lens capture and revenue per patient. This is a data rich, highly practical conversation with full of super valuable insights. And Jason even teases what might be the next Kodak moment for optometry, which of course you'll have to listen to understand what he means and what he actually is talking about. Before we jump in, make sure that you're subscribed on YouTube, Spotify, Apple Podcasts or wherever you get your shows so that you never miss a new episode. And if you have questions, ideas, topics or things you'd like me to tackle head on, just go to Eugene Shotsman.com or Power Hour website and reach out to me directly. I respond to every single message and I look forward to hearing from you. And now let's jump into the data. Dr. Jason Lake, welcome back to the Power Hour. So good.
- [03:33]
A
Feel like I'm coming home, buddy. Fantastic.
- [03:35]
B
All right, well, it's fantastic and I keep getting great feedback on the episodes because they talk about numbers and numbers. I think a lot of people don't know exactly which numbers to look at. I think a lot of people appreciate where we take a KPI and specifically zoom in on that KPI and talk about the drivers. But I also think it is really valuable when we talk about when we have a more global conversation and work numbers into that conversation. So I'm going to actually, you're the expert, I'm going to turn it over to you. What numbers are driving decision making right now and what do you, what, what particular things are you zooming in right now with your membership?
- [04:14]
A
Yeah, I think the thing was as we, as we get the first half of the year data and maybe we're starting to obviously dive into Q3 as that data is starting to roll in. What are the trends that we're seeing compared to prior year and what are the KPIs that we should look at and what are we going to do about it? And I think we're going to review some KPIs, we're going to add a few new ones in. But I think what people need to understand is that demand can be nebulous. But even if demand is nebulous, that's when good practices shine because they're the ones who go after maybe less demand, there's always opportunity. The better practices tend to have much less down and much higher ups. And I think that's what we ought to shine on today. And I, I opened it up, I thought it was interesting for those of you who don't listen to the fine folks at the Vision Council and look at some of their data for the industry and remember when we talk about Vision Council, their data is encapsulates the whole industry. It's not just private practice. When I talk, it's probably private practice centric. But demand is across an industry, right? That's across all of retail, commercial, everything. So when we looked, it was interesting to check my data again. The industry data showed dollars up for the first half of the year. What was interesting to me though is that the patient volume was slightly down across the industry. But when we look at our private practices and what we do, our actual private practices were growing mid high single digits in patient volume. And I think that's really interesting. So regardless of where you are in that spectrum, if you're slightly up or slightly down, why are good practices still growing at high single digits? And I think that.
- [05:54]
B
Well, and so let me, let me interrupt you one second. We gotta kind of zoom in on that metric for a moment. So what the data trends show us and we'll get to demand trends maybe a little later in the episode, but what the data trends at least the data from the Vision Council says exam units are down, right? Not necessarily exam dollars, but exam units are down. How, how much down in the first half of the year?
- [06:16]
A
You know, I, I pulled up the data again. It said the Q1 and Q2 over prior year were down about four and a half percent in the year.
- [06:25]
B
So that's fewer people getting eye exams. Actual practices all over the industry, across the board. Now compare that again with what's happening in the, in the private practices, who are your members and maybe we can zoom in on what some of those numbers.
- [06:41]
A
I think if you're looking at to a couple hundred practices or two, three hundred practices that we look at and work with, they're growing at high single digits. And that to me is the interesting part. So what's the, what brings that about? So where, where are your listeners practice that in that spectrum? Are they slightly down? Are they slightly up? Are they killing it? There's a million things that drive that. But the practices we work with are mostly larger practices that have an established clientele. So I think that for your listeners, I think it comes down to three things that really, I think is an independent practice you need to be honed in on. And these are actionable items, Eugene. So number one, disciplined recall systems. In the world of private practice, recall is everything. It is. Are we doing it? What I find more often than not when we talk to practices, Eugene, is if they see a downshift, it's almost always they're missing one phase of their recall. Most people should be pre appointing the following up two weeks and one week before that exam. And you know, in my own practices, and I don't know that I could say this is a national study, but I found it across our five or six offices. Pre appointing is going to pick up about half of them and then you're going to pick up another 10 or 15% with getting a hold of them two weeks out and another 10 or 15% with one week out. And what happens is you should be getting about 75, 80% of those people back. In my opinion that from the prior year. If you're hemorrhaging more than 20% of your prior year, that's something I'd be really nervous about, gang. It's too.
- [08:11]
B
Okay, wait, wait, wait, wait.
- [08:12]
A
We got to stop.
- [08:13]
B
Stop here for a moment because I think you said something that a lot of people are going to find controversial.
- [08:17]
A
Oh yeah, I'm sure.
- [08:18]
B
First of all, resolve the pre appointing question because there's a lot of practices that don't pre appoint. And let's talk about why.
- [08:27]
A
Well, I can tell you what the excuses are and I just simply don't agree there. Inevitably there is always a subset that you know, when I say something, I'm trying to cover the 85, 90%. There's always 10% that are different on this one. I don't know that I'd say it's maybe 2%. Like if you are not doing anything and you are so busy that you were booked out two months, I mean, why would you do recall? Because everybody coming in wants something, right? So I'd say for those unicorns that exist, probably not for everybody else, you ought to be doing pre appointing. It's kind of the gold standard. And I think pre appointing in and of itself is another term that people disagree on. Eugene. Well, we send out a card every year. Well, that's not pre appointing. Pre appointing is before the one year anniversary you go back and assign that patient an exam slot. I recommend you don't do it till you have them fill out. I still like cards. Some people want to digitize it. That's a deal. A different argument for a different day. But you, you know, if I saw you on a Thursday, on the second week, October next year, I'm going to try to see about the same time pending changes in the doctor's vacation. Everything else, you send some sort of a reminder. I like a postcard at one month prior to that time.
- [09:42]
B
Wait, wait. So wait, hold on. I'm a patient in Dr. Lake's office before I walk out the door of my, of my appointment that happened in the second week of October. Do I have an appointment for next year and the second week of October?
- [09:58]
A
The way I prefer is no, is I think you leave that open and what you do is you wait till the next year because what happens is you assign them a time and the patient writes it down. Then the doctor goes on vacation that week. Right, because you want them back with the same doctor. So I recommend you wait until before that patient's visit. You lock in your doctor schedule a month out. You know, there's always emergencies. And you assign, like if I saw you on a Thursday afternoon last year, most likely a Thursday afternoon is going to work this year. So I assign it right before versus giving them a time right at the moment of the exam because you end up having to move that around frequently. So we, we still do old school cards. I think there's digitized ways to do it. I like the old school self address card, but that's a, probably a whole topic for a different day.
- [10:43]
B
Well, there's some psychological component to self address because I wrote and I committed to it. But um, I'm actually fascinated that you don't actually give them when you, you say I pre appoint, but you don't actually give them an appointment. Yeah, because the, because what's interesting is, you know, when I go to the dentist, I, I, I have my appointment for the next six months and I go into my outlook and I put it in and I know and I block my schedule and you know, next six months for my next cleaning. And when I go to my, when I go to my, when I go to the guy who does my hair right, I don't know, I call him a barber or something. But when I go to that guy four weeks out, you know, we go into the thing and we, and we schedule that appointment. I put it in my appointment book. Why not?
- [11:26]
A
So here's what I'd tell you is I don't say that you're wrong. This one. I think you could be right in today's Digital world. I think historically speaking I think there's a difference between a six month appointment and a one year. I think it may be semens. I don't know that it'd make a difference if you did get it and you just had to change it. We've just never done it that way because what we had and when I have taught this to other doctors this got over one of the fear points. So maybe this is just a product of me teaching it for a lot a lot of docs but well I don't know what I'm doing next year either does your patient but you got to take a risk. And so finally I said and you know we were managing a dozen doctors so for us we were waiting to find out what we tell our doctors. We need your schedule locked in 60 days out so that we can start the pre appointing process. It just avoided some reappointing probably things but I don't know that you're wrong in today's digital world you may have a really valid point. To me six months seems a lot. Of course it is. Seems a lot less than a year and I plan my schedule a year out so I'm one but I feel like I may be a little.
- [12:32]
B
No I mean like most people don't know what they're doing next Thursday so like it's totally. But but at the same time when we. So I still need you to kind of go through this flow so you. I walk out the door and I filled out a card that says what? That says what?
- [12:48]
A
Eugene Shatsman. Here's your. You've self addressed it because we know that if you see your own handwriting you're.
- [12:53]
B
I think you're way more likely to.
- [12:55]
A
Get more likely to look at. Right. So automatically there's a self old school. Some people don't like it. I do. You pick it up on the backside. Dr. Lakes, excited to see you back for your appointment. Here's your date and time. If this does not work for you, please call our office or get on our online scheduler and we'll. We'll handle it and we'll move it around. I would tell you on average we've tracked it for a lot of years. About 50% of people keep that exact time and appointment because you gave it to them two months in advance. And you're right, people don't know what they're doing next Thursday so that seems to be a more palatable length of time for them to adjust. But if not, not a problem. Just call us.
- [13:32]
B
So I Wrote that card. I still don't understand. I wrote that card in the, in the office. I put my name on it, I put my address on it, and I gave it to you. Exam time yet I did not fill in the. And so a month out before my exam time, Joni at the front desk looks at the thing and says, okay, doctor, you know, last. Eugene's last appointment was a Thursday afternoon. I'm going to try to give him a Thursday afternoon. So I'm just going to write in 2:30 at, on Thursday or whatever.
- [14:01]
A
And then they plug it in of.
- [14:02]
B
The 30 days out.
- [14:03]
A
Yeah. They move the pre appointed schedule around and they stock it in there and they mark it pre appointed. Okay. And then most of the time the patient will call and confirm that. So roughly 40 to 50% will call and confirm within a couple weeks of getting that card. If you have not heard from the other 50%, you have to do outreach at two weeks before the exam and one week. If you have not heard from the patient by this 48 to 72 hours prior, you kind of move them off the schedule. They ain't coming. Like, occasionally you'll get one, but it's pretty rare that you get one. So it requires some work by your team. And what happens is the team gets busy and they're busy in the moment and then those calls don't happen and then the recall doesn't happen. And so like in a month like September, which has traditionally been a slower month, they didn't do the work in August to get the appointments in. And then all of a sudden your patients dip. And then Jason walks up front and goes, why are we not busy? And the answer is we skipped a step of recall. We skipped the two week or the one week or whatever that may be. We sent out the cards too late. You have to be incredibly disciplined with it.
- [15:12]
B
Well, and what I'll tell you is that there are digital tools that do exactly that without the cards. Right. But what they oftentimes do, and this is where the difference between I pre appoint and I don't pre appoint becomes super fuzzy. But those tools will have some default settings.
- [15:28]
A
Yeah.
- [15:29]
B
And if you don't go through and monitor the response rate to some of those default settings, you may only be contacting your patients two weeks out about an appointment they had no idea they had. Right. Because they didn't commit to it. And it's also part of what you're doing with your cards. And I'm just going to tell everybody, like, I know it sounds stupid, but it's actually the genius behind it is that. And this is when I think about pre appointing, I think about the psychology of pre appointing. When Eugene has to go make effort, when he walks out the door, he has to go make, make some sort of effort to take some sort of action to commit to a future appointment. Whether that's putting my name on a postcard or whether that's going into my Outlook calendar and typing something in. Sure. Like I feel super bad when I miss an appointment on my Outlook calendar and I try to arrange my schedule around it because I'm like, okay, I don't want to be a jackass to, you know, the person who, the person who I committed to. Right. And so the reality is that if you make this is the difference between we'll contact you and see if you're available versus we'll make you take a step in the office while you're there because you committed to the fact that your eye health is important. So the genius of your system isn't necessarily the process flow, it's the fact that you made them take a step.
- [16:45]
A
Yes.
- [16:46]
B
And this is where I think a lot of systems fail on the recall side is they say, okay, we'll be in touch about a year. In about a year. Right. And then they start the default of that system might be three weeks out, maybe two weeks out, maybe whatever. Somebody said whenever they were setting up, because the rep asked your front desk, like, literally, this is how it happens, the default gets set. Because when the rep is when, when the onboarding rep is setting up all the monotonous crap inside of that piece of software, like, okay, what are all the doctors names? What is this? What is that? You know, like, and somebody at your front desk is making all those decisions. And most of that stuff is administrative data entry, Right?
- [17:22]
A
Sure.
- [17:23]
B
And at some point the rep is also saying, okay, and when do you guys start contacting patients? And they're like, oh, about two weeks. Okay, great, I'll set that for two weeks. And then, then it's like, okay, well now all of a sudden your patients get a default setting that you may have put very little thought into and those digital programs start contacting them. But, but the other part of it, which I just want to go back to the second point, but the other part of it is if your process flow during today's appointments, the patients you saw today, if your process flow did not include your patient making an effort, some sort of effort I agree to, whether it's self addressing a card or putting something in their calendar or doing something that requires them mentally to commit to coming back a year from now. You're not pre appointed. And that's what I think we mean by pre appointing is you force the patient to, to agree and to put something in somewhere to agree to do the thing.
- [18:20]
A
Pre appointing is not just mailing a postcard and forgetting it. And that is, I can't emphasize that enough. And the doctors push back. My practice is different. I mean I never say never, but I bet this works in 98% of practices efficiently. And I can still remember my very first consultant, a gentleman by the name Dr. Jerry Ledgerton. And Jerry asked me a question. How do you grow a practice? And I said, well, you get more new patients. He goes, no, you keep the ones you got. The new ones will show up. And obviously it's a little bit more nuanced than that. But what I would tell you for all your listeners, every patient is a precious resource. Track them down. You spend more money advertising and all that marketing, all the great things that your company does. Eugene. But the reality is you still got to hold on the ones you got. Which leads me to, to part two of why patient volume and good practices grow strong reactivation campaigns targeting lapse patients. If you're doing really good recall, I would bet your average cycle is about 14 months. So in other words, you, you see on as contact lens patients come back sooner, glasses patients put the exam off. If you are not doing aggressive recall that, that'll get right to two years in a snap. 20, 18 to 20 months is probably where most people are at.
- [19:34]
B
And I think I want to, I want to make sure that people understand the difference between those two words because people, I, I think you and I have been on stage together and we've taught people the difference between the words recall and reactivation. And there's the recall which is trying to get patients in for the appointment within a year or that 14 month period or whatever. But like that, at some point they drop off. We'll call like the, the standard recall process which is hey Jason, you missed your eye exam. And they need go into what I call strategic reactivation. And regular reactivation is like, hey Jason, you missed an eye exam. You want to come back, hey Jason, you missed my. And that stuff doesn't really work. There's this concept of strategic reactivation. We've covered this on the show in the past. But the reality is that if you don't have, we'll call it a content marketing strategy with a strong call to action that's going out every single month to patients even 60 months from their last exam. We've proven we can reactivate patients who haven't been in your practice for five years. In fact, what we find with those patients often is that they went somewhere else or they bought some stuff online, they had a subpar experience. And because they see you as an expert, because if your strategic reactivation works to establish you as an expert, because they see you as an expert, the they'll come back to you. And you can get those patients who are five months since their last examination coming back.
- [21:00]
A
Absolutely. And I, I think you can't emphasize that enough that in the one thing I see a lot of people use services, make sure you have, if nothing else, make sure you have a fail safe to make sure that service is working. A lot of digital companies do it. I can remember vividly sitting in a, facilitating a study group meeting a couple years ago with a really, really good practice and the doctor was like, I don't know, our numbers seem flat. And I said, well, you've got a reactivation problem or a recall problem. He goes, well, why is that? I go, because your new patients ju from 25 to 35%. I go, did you do something different in marketing? No, same old thing. I said, yeah, you're not seeing your established business back? No, no, no, I use XYZ service. I said, well, go back and check it. It's not working. He called me about a week later and he argued with me. He called me and he goes, oh my God, it wasn't doing what we said it would do. And I go, yeah, you're not suddenly just going to see this mass influx of new patients as a percentage of your book. It might raise some because you did a campaign and you did things. But if you're not, there has to be somebody in your office that owns this process. And I mean own it from front to back because the moment you miss one step, people go, oh, big deal, I missed 10%. Well, do you want your numbers to be down 10%? Every single part of this is an action item that drives those patients back in. If you miss any of those steps, it's such a costly thing because you're not going to have time the next month to see them when you're busy again. So those two things I think are the greatest drivers. And it's where independent practice has probably, in my opinion, a massive advantage over commercial and retail outlets is really the doctor patient relationship. On average, not always on average, tends to be stronger. And they listen, which, which Is the third part, Eugene. We see in general a lot higher medical visits in these private practices. And the doctor saying, hey, I want to see you at 3 months for your glaucoma or your macular degeneration. To your point, those patients are booked right then and there and they don't skip. There is a why I understand why I'm coming back. Getting your doctor in the handoff to say, hey, I want to definitely see you back next year to monitor xyz, dry eye or whatever that is, is certainly will add to your recall and reactivation strategy because the patients remember. But I would tell you, if you could pick one thing that will sum it why in more turbulent demand times, some practices do better than the others. It's recall and reactivation. It's the most important thing you can do structurally within your business. And I'll make a bold statement, a very provocative statement. I would say that when you look at your marketing budget, which is where I put these dollars, I think up to maybe 50% of your marketing budget should be spent on recall and reactivation. I think that's where that bucket goes. Do you agree with that or no? It's so funny.
- [23:48]
B
I was just going to say that I think so many people equate market, I mean, serving thousands of doors across the country. I know that most people go into marketing saying, I'm going to get more new patients. And my expectation for hiring you. For example, when they hire our organization, they always say, my expectation we're going to get a lot more new patients. And the answer might be true, you will get some new patients. But I completely agree with what you. Just what you said a few minutes ago when you said, you know, it's way easier, it's way cheaper, and it's way more effective to bring back an existing patient. And it's also not, it's not a set it and forget it type of activity.
- [24:33]
A
Yeah.
- [24:33]
B
So for me, I absolutely agree that the role of good marketing is to drive revenue, to drive cap or to drive fill rates on the schedule. Right. It's not necessarily like, and I don't care actually if it's a new patient or an existing patient that comes back. And oftentimes the existing patient is building on trust that they built with you in the first appointment. So they may actually have higher revenue per exam for a new, for an existing patient than for a new patient. New patients still learning about you a little bit. Existing patients, like, oh, yeah, you know, I like Dr. Lake. I like spending money with Dr. Lake. I'll you know, I'll spend more money than I did last time. But Dr. Lake. So the point is, I believe, and I agree with your point, is that 50% or so of your marketing effort should be going to engaging the people that you already have some semblance of a relationship with, Even if it's 60 months ago they came in to see you, and you could potentially re. Engage them in something good that you're doing.
- [25:34]
A
I know for your listeners. You know, I know this isn't sexy. I get it. But it is such a foundational building block because you can't do anything. You know, we used to call it bic, you know, butts and chair. If your BIC is bad, you're not doing anything right. And maybe a better way to look at it is for every extra person that you have walk into your door, you're, you know, if we set the baseline and the budget at 100, if you see 110, those 10 extra patients that come in probably net down to about 50% profitability on every dollar they spend, because you're not altering what you're doing. There's a baseline of fixed expenses. Anything you go above your goal and budget, the profitability ratio technically ticks higher, 50% higher, and every time you miss it costs you 50%. That's a different topic, different day. But I can't emphasize enough that although it's not maybe the most exciting topic, that would be the most important thing you can do, assuming that you do a great job. And I would say 99% of optometrists do a pretty good job.
- [26:44]
B
And there's a really interesting show that you and I can do on fill rate, revenue per patient, and then also lifetime value of a patient. And I'll do some research before then, because I can pull. I think that the idea of what's a lifetime value of an optometric patient has always been really interesting to a lot of audiences I speak to, so we can talk about that. But, you know, I actually wanted to zoom back in on the. Some of the data, you know, so you were talking about, okay, your members climb single digits. The industry dropped digits or single digits in. In exam volume the first half of the year. What about revenue per patient? How's that doing?
- [27:23]
A
What's funny? You'd set me up on that. So we went back and did a retrospective study, and we looked back for a lot of our groups. We've looked at since really the late 2017, 2018, and really, revenue per patient peaked about 2022. And it took a massive drop in 2023. And I think we all felt that in the industry, right. It was kind of a oh, boy here. And that was a lot of post Covid.
- [27:45]
B
Right.
- [27:45]
A
Like it was like a rocket ship in 21 and even in 22, because we, we had a lot of excess capital in the marketplace and people were willing to spend and it's kind of recovered since 24 and even in 25, it's growing about 5 to 8% annually in our groups. And I kind of. I should say I wasn't surprised, but if you look at it in a bar graph, it kind of goes up and down and stays right on the trajectory it was in. I don't know that that is across the board. I think when we look at the industry, that was up like 2. I believe the number from the Vision Council was 2.8%. But 2 of the things that really are driving some of these increases and particularly that we're seeing in frames, I think that a lot of smart practices did tariff rate adjustments to their frames early in the year. And I think that before the tariffs hit and we saw this bump up in revenue. Now we didn't. That's not looking at cost of goods. And we'll get to that here in a few weeks when we get our data in. But I think that was a driver and maybe while we're seeing that. Secondly, I think as we continue optometry as a profession continues to expand its medical services that just, you know, it builds because we're looking at everything as a unique patient visit. So that those patient visits that are in addition to that continue to drive that up. I would like to point out the headwind. When we looked at the beginning of the year, some of the advice that we were given was through both a cop predictive economists and the Vision Council put that out is there was a consumer sentiment that they did not want to spend more than $100, 100 beyond what their deductibles paid for in their vision plans and their health insurance. And I think to continue to drive that number and that type of headwind in a consumer who's not interested in spending more than $100 is fairly remarkable and resilient, at least for our members. I don't know that the industry is matching that, but I think that is a highly efficient, like you said, those when you're doing a good job with your established patients, greater trust. They're willing to, yeah, I don't want to spend more than a hundred. But if Dr. Shatzman says I should spend by XYZ or I need XYZ treatment. I'm not going to skip it. I'm going to listen to what he or she might say. And I think that's, that's a great number. I think we are seeing that trend rising again, even with pressures. I bet it continues to rise through the next year. And I, I am excited to see our full year number because I think It'll be that 5 to 8% increase annually. Yeah.
- [30:10]
B
And you know, Jason, if you're looking at this, you're saying that $100. So are you saying you disagree with that statistic or you're seeing.
- [30:19]
A
I think we're going to look at some Data that absolutely 100% agrees with that data. And it's had some really profound effects on in particular one segment of our industry. I think that was what people, when they did the survey, they said it's real. I don't, I think consumers, particularly in Q1, when we got this data, were really pulling back and that we had low demand in Q1. Right. So maybe their sentiment changed some. And if you look at consumer sentiment, the studies they're doing, I think it's University of Michigan, I believe that does the consumer sentiment study trauma model. Eugene. So I'll give you a shout out. I believe it has improved dramatically. But when, when that data was done, it kind of matched what I saw. So I think it's important for people to understand that you're, you're going to have to work a little hard. You can still sell luxury frames. You can still do a lot of those things. You're going to have to just do a good job of doing it. Because I think the industry itself has a downward pressure. Doesn't mean you can't get around it.
- [31:11]
B
I think that's exactly it, is that we, we have to work harder for every dollar and the consumer. There is, there's some concerning stuff in my opinion. I mean, because you look at. And I, I can talk a little bit about what demand looks like in the eye care space if you want me to. But I think what one of the things I just literally read in the Wall Street Journal in the last few days was that repo of cars is.
- [31:41]
A
At the highest rate.
- [31:43]
B
Repossession of cars in the United States is at the highest rate it's ever been since 2009. And what happened in 2009, I mean, it was, it was literally like a crisis recession. Everybody lost their jobs. You know, like it was pretty freaking bad. We're not at that point, like people still have jobs but they're just not able to afford their car.
- [32:04]
A
And I think, you know, if you step back from a macro strategy, this leads us into something interesting. I believe the number you had shared that study was 1.7 million cars had been repossessed, which you think about 1.7 million. There's only what, 300 million people in the whole country. Right. So, well, and some of them are.
- [32:20]
B
Kids, so like they don't drive.
- [32:22]
A
Right. So to me that's an alarming trend. But I also think when you finance a bubble, the bubble breaks. So it's, you can watch that in the real estate market. So think about consumer, you know, that's a macro trend. Take it down to a micro trend of what we're seeing. And I think you've actually led us into two interesting things. Let's talk a little bit. We can talk demand. I also think that the three major topics are lens capture rates. We want to talk about that. Contact lens capture rates and demand. I think there's value in talking demand first and then backing our way into lens and contact lenses, which are the two areas in consumerism that we feel it the most. So go ahead and hit your demand. We'll kind of bounce around.
- [33:03]
B
Well, there's a couple things. And by the way, I just looked up the consumer consumer sentiments for the University of Michigan. I had the data pulled for something else for a different lecture that I was doing. And so I, I just glanced at what I had interestingly enough In September of 2025, the their number and I think the number is like 1, 2, I mean whatever, it's like 100 is a really good number. The lowest that it hit was in March of this year, which was 52.2.
- [33:37]
A
Which matches the data that we're getting from consumer sentiment. Yeah. In our.
- [33:41]
B
Right, right, right. Now it's interesting that in the summer it bounced back a little bit into the 60s. But currently I think the three month moving average or whatever that, whatever they have for data, September, it was 55.1. So keep that in mind where it's like it bounced back into the 60s over the summer and then it bounced back down. Now how does that compare with eye care data? So this is really interesting. So eye care data, we had our worst, like we had a massive decline in demand in April and in May of this year we had a 13% drop in demand from March. We had a 16% drop in demand from April on top of that. So like it was like just like.
- [34:23]
A
You know, downward Slope.
- [34:24]
B
And when I say demand, the way I measure demand, I do it on the front end, right? Like what the Vision Council does. It's on the back end. And so on the back end, they say, this is what actually happened inside of clinic. And I have that data for all of our clients. And so I can talk about what happened for all of our clients, but. And as you do for your members, but I. But on the front end, I can say, how many times does somebody search for eye doctor, optometrist, those types of things, eye doctor near me. And what are they doing specifically to actually look for those people or to look. And so what I'm seeing, what's interesting is that I saw a giant dip in towards the end of the first quarter, beginning of the beginning of the second quarter. In fact, the second quarter was just brutal in terms of demand for eye care. There was a little bit of a bounce back in the summer, and I'd say June was 8% better than May, July was 13% better than June. So it was like, pretty good bounce back. August went down a little bit. And then normally, historically, what I see every September is that September is worse than August, right? Like, I normally see this because there's like a lot of demand typically for eye care services in August. And then September is usually worse than August this September. And I just got this data a few days ago, so you're the first to hear about it, is this September, that September was 5% better than August. Now pair that with what I just said about what the University of Michigan's consumer sentiment study was, and pair that with the fact that now people are looking for eye doctors, they're less confident as consumers, but they're looking for eye doctors in September. And then pair that with what you just said, which is that revenue per patient's going down.
- [36:12]
A
I'll give you one more provocative thought on that. This is something you taught me when we were doing an analysis on Q2 data. You know, for your listeners. The. There was a shift in search terms, and the big shift was it shifted from eye doctor to eye exam. And, you know, I mean, we're playing, you know, chairside psychologists here, right? I think we may be making some stretches, but to me, that is a. A psychological. That tells me it. Because is there a transactional mindset that's shifting? I think I want something. Do I want to pay for it? Can I get something just as good, cheaper, eventually in eye care? I mean, anecdotally, over darn near 30 years in the industry, I can Tell you, every September, my wife has a joke at our house, Eugene, because I get stressed. And every year I'm like, I think this is the year we're going under. I don't know how we're going to make it because, you know, we were slightly down. I don't know how we're going to pay the bills. And then it magically recovers in November and December and it's like year after year. And she just laughed, you know, after the first 10 years, she started, got a lot funnier, I think, when she knew we weren't really going to die. But I think the reality is the seasonality will tell you that bad trends lead to good trends. And if you take a step back, like the stock market, the trend meter goes up. But the difference is the good practices are still prospering in the downturns and they're prospering more in the upturns. I mean, people still need boxes.
- [37:41]
B
That's exactly it.
- [37:43]
A
It's not going to stop. They need help.
- [37:44]
B
Well, it's interesting. So you're, you're absolutely right, by the way, on that transactional trend. I saw a giant bump. I'm looking at it right now just to, because I saw the number in my, in, in my data stack. So I went to go verify it and September was even, even more so There's a over 100% year over year increase in people looking for eye exams and there's an 18 year over year decrease in people looking for optometrists or eye doctors.
- [38:14]
A
Right.
- [38:15]
B
So what that tells you, and I mean, you're absolutely right, like the consumer is approaching it as a bit more transactional. Now, the relative volume of those things, I don't want to get into the, the actual math, but the relative volume of it, there's still more people looking for eye doctors and optometrists than there are people looking for eye exams. But it does, I think it's, the onus is on the good practices to explain the difference between an eye examination, a transactional eye exam, and a comprehensive eye care relationship with an eye doctor.
- [38:49]
A
Right.
- [38:49]
B
And it's, and I totally agree with you that the, the money is there for the taking. Right. Like in this, in this September bump, potentially, I believe that what we're seeing is that there is a patient who is more financially conscious who may have just gotten their car repossessed or is on the border of that. Right. But that, but that particular patient still needs eye care and that particular patient is going to be harder to convince to spend money in your optical, they may be trying to just go get in for an eye exam. But the thing is, on average, you know, on average, the population didn't get their car repossessed, on average, but they're more stretched. So here's the thing. A crappy handoff isn't going to do it. An untrained optician isn't going to do it. An underperforming frame board isn't going to do it. Crappy marketing, crappy reactivation isn't going to do it. So you have to think about, like, if you're going to take advantage of the demand that's out there, the demand is from a unit standpoint, the demand is kind of bouncing back. But I think from a revenue standpoint, if you don't change anything, if you don't pay attention, you're going to lose the opportunity to get the dollars that ultimately drive profit.
- [40:02]
A
So it's interesting when you, when you took a look, and I can't again, I'm bragging about Elise Hinkle and the team at the Vision Council, but the data tells a really interesting story. Units are, I mean, I'm painting with a broad brush, but if I could say it more bluntly, units down, revenue up. And that's really the story that's being told. ODs are making more and I think the industry, I should say, is doing better financially, but they're doing it on less farm. Eventually the volume is going to return because people still need things. But I think it's thinking about that shift. I mean, I always think when things slow down, I always think in my head about that consumer purchase cycle. In your office or return cycle, maybe it's best it's 12 months. When things slow down, maybe it goes over here to 18 months. When it comes back again, it's a 12. How do you keep it in that 12 to 14 months and keep it out of the 18 to 20? Because what happens is when it goes back to 18, 20 and you're flooded, you don't have time to catch up. And so I think that's one of the interesting things. It leads me in to two, I guess, pieces of this. When we look at the industry, the two biggest pieces obviously are a pair of glasses. And we're going to talk contact lenses in a second, which is the most fascinating data. I went and I looked at that lens capture rate and we have absolutely seen in 24 and 2025, when we saw, you know, I said we kind of saw some drop down. There's absolute downward pressure on lens capture rates. And I actually think it's attributable to two or three things. One, we just talked about it. I think when I walk into a hundred optometry offices, you know what they're always good at selling the top of the scale. They do the best Verilux lenses, they do the best treatments, the crizals, the transitions. I think it's great. I think where the differential is is that bottom. And I, I don't say bottom 10% like it's bad product. We are not doing a good job as an industry. As an independent, we lose the bottom 10% to the, to the retailers. And I think that has a lot to do with that. Downward pressure is, I would say, without a doubt, you need to have a save the sale package. You need to be good at it. Number two, to be able to get to a save the sale because you want to be selling premium, you've got to have staff. And the one thing that we have never seen recover from, COVID and we've talked about this with your listeners, is the magic spot for an office is 4.5 staff hours per fraction. Yes, there's exceptions, but for 90% offices, that's where it needs to be. What is interesting to me is we are seeing more and more people. We've already just said that we're seeing more people than we've seen. We're up, we never staffed up because it's staffing. Although better is still tough. When you drop below 4, you drop capture rates. So we're asking our opticians in the industry, yeah, you, we've got a more price conscious consumer. So on 10% of those people, you need to get to the bot to save the sale. Not 90, but 10. We need to work our way down. You know what that takes, Eugene? The two T's, T squared, as I like to call it. Training and time. If you don't have training to learn how to do it, when the time for them to execute it, when the patient goes, yeah, but I think I'm going to just take this to Costco and they got three more people waiting on them. All right, I'm so sorry, Mrs. Jones. You know, we'll see you next year for your exam. If they don't have the time to execute that sale, you're cooked. So to your point, good practices can still take demand. You just may have to shift the focus on where you are. Number two, we look at that lens capture rate, we've already hit consumer sensitivity to pricing. And number three, there are the operational Efficiencies. We already talked about being short staff. How many of your listeners actually page the optician into their office and hand off in there? Because if you do not do that, you will not have it. It will kill your capture rate. 5 to 10 points. And I've had Dr. School, I like to walk them out and do it in the dispensary. And I'm like, I can hear that. If you truly do it, if you truly can find someone. But what happens when you walk out and the opticians are busy? Who you handing it to? Because you don't have the handoff, you don't look the optician in the eyes. Hey, Mr. Schatzman here needs a Krizal and a transition and a high index and you explain the value in 30 seconds. That handoff, you're gonna have to get better at the capture in that transition. To your point, that was a heck of a monologue to say suck.
- [44:27]
B
No, no, I think you're absolutely right though. And if you think about like all of the things that good practices do at times like this, they can outperform everybody else because the patient isn't getting it at your competition either. Right. Like, if you think about that, if you think about that opportunity, the patient is tight fisted with their cash everywhere. Yeah. And so that it does create an opportunity. If you are capable of communicating the value of everything that you do and doing it in a way that ultimately makes it a no brainer for the patient. You know, this is where you also have to look at, you know, what I've heard from a lot of practices is that it has to do with language in the exam, in the chair. Right. And Jason, you may have great language in the chair, but think about your associates and how often do you know, how often do you look at capture rate by. So I'm not saying you specifically, but if a typical practice that's got, you know, a few doctors working for them and they say, okay, I know that my capture rate is, you know, let's call it 50%, which is mildly acceptable for me across the board. And red spine, whatever. But if you don't look at variability by optometrist, if you don't look at variability by staff, what you're not finding is the top performers who you should do, who should be teaching your bottom performers and the bottom performers who should be learning from your top performers. Because, and as I learned from both of our good friend Jamie Rosen, is that you don't just manage the metric, you have to manage the behavior that drives My quote.
- [46:02]
A
We were going to quote the great Jamie Rosen with a famous quote. Well, no, now we've quoted him and it's great.
- [46:07]
B
And one way or another he gets.
- [46:10]
A
Credit one way or another. And honestly it's, it is true. So we're getting to the end. But I think I saved the. There's, you know, Eugene, why do they put the milk and bread at the back of the grocery store? So you gotta walk.
- [46:23]
B
So you gotta walk through the whole thing, right?
- [46:24]
A
So I saved the most interesting topic to the end. So to your people listen. So they won't know to fast forward until this. So I don't know in history I have ever seen a metric this fascinating. I there probably have been because I'm a nerd, but I think it's super interesting. So historically speaking, when we looked at the, you know the, the original. I believe it was the original maybe wrong. The original contact lens sale company with clx you would sign on and they would, you know there's 10 companies that do it now they're marlow and I can't remember the new one from bnl but you know, doctor contact lens are all over. The concept was, is that there was a leaky bucket so that we knew the industry number was that 80% of patients bought their first six months of contacts from the private practitioner, but only 20% bought the second six months. And the reason is they use their insurance on the first one frequently, maybe getting an annual supply but the second one when they're out of insurance they shop beyond it was the bounce back consumer and that, you know, there are people, I've heard people. I had an 80% annual supply rate. Like I said that right there is a unicorn. I'd like to see it. But whatever. We could argue that. So what's been interesting is we've kind of gotten the feeling that that number has eroded. And one of the things that some of your in project up, which is one of your services we have the ability to monitor the patients purchased by individual patient ID number. And why that's interesting to the contact lens industry is now I can go back in and I can look retrospectively in present day and I can Track did patient 1234 purchase any contact lenses? So let's just start with the most simplified answer. I did, I did a version of this lecture at a state association last weekend and there were two people in the room had tracked it and I said, well, show of hands. How you doing? He goes post it notes and hash marks like right, there's no way to track this. And I said, well, it works if they're doing a good job at it. My suspicion was that we are seeing a decline in any contact lens purchase rate. I mean it. All these contact lens companies, the big four publicly traded companies, you can get on, you can see their reports. We know there is a significant amount of downward pressure in the industry. The Vision Council published their data and I think I've got this right. The contact lens revenue was flattish. Contact lens units were down almost 10%. Now those are non equivalent units. And what that means for your listener is eight boxes equal a daily disposable, four boxes equal a monthly disposable.
- [49:05]
B
Right.
- [49:05]
A
We've all done this forever. So that number tells us a story, Eugene, that took me on a research. What I suspected was, and I would guess I have seen it in the exam lane. I don't practice full time anymore, but I still see patients. I ask our associates, I ask other people. I suspect that people are switching from dailies back to less frequent modalities like monthlies or weekly. In the case of alcon, people are. And my doctors tell me, yeah, I hear that, I hear that across our network and I know it's happening. The other thing it tells me is that people are stretching their dailies. They're not buying the annual supply, they're stretching them out. And I've heard doctors across the country say this to me. So I went back and we used some interesting data from your systems. That number had been probably degraded from 80% of a purchase down to closer to 70. When you're looking at the industry, that number took about a 5% drop in the first half of this year. Now that's any purchase, that's not units, that's any purchase at all. So what's fascinating to me is when you'd share.
- [50:14]
B
Wait, which number dropped 5%.
- [50:17]
A
Did the patient in the office purchase any contact lenses? We saw a 5% drop this beginning of the year.
- [50:25]
B
That doesn't matter if they bought an annual supplier or if they bought the next month. They're one box.
- [50:29]
A
Yeah, Vision Council data backs some of that up. So that makes sense. So I think it's. It's three things and I. It's a very provocative question. And again, I think it's no different than what you said. Should we stop selling dailies? Absolutely not. It's the premium. People want it, they need to understand the value of it. And I think you're going to get some bounce backs. Number two, I think we are seeing a modality shift from dailies to monthlies that we better address as an industry. And honestly, as people stretch their contact lenses, what do you think happens to their patient visit with you, Eugene?
- [51:04]
B
They stretch and they push your father.
- [51:05]
A
It pushes it out. Constant reactivation, having your associates asking people. I think, Eugene, and we're going to do a deeper dive into this, maybe for a different day and we'll have it for our elevate meeting here in November. I wouldn't tell you it's time to pull the fire alarm, but I think it's time as an industry we give a really good look because I think that is one of the areas we're seeing the greatest downward pressure in. How are you setting up your contact lenses? Do you have a portfolio working with two companies where you are not four companies. Two companies where you're working with premium and standard dailies where you have an option to maybe extend out their where schedule to be teach your associates to ask the question, you know, you can't wear a daily two or three days. It's not good for the eye health. Maybe we need to put people in products that do it. So I, that's provocative. I will tell you the industry as a whole, from what I'm seeing and all the data is backing it up and we're seeing it anecdotally, we'll do a deeper dive. But I, I do think as a, as the independent practitioner. Do you remember the data you shared with me about contact lens searches and where we're seeing pressure at.
- [52:15]
B
I mean I've looked at contact lenses recently.
- [52:19]
A
I believe demand was completely flat.
- [52:21]
B
Right.
- [52:22]
A
For in searches, including online pulling up.
- [52:25]
B
Right now, I'm looking right now. Contact lenses flat. Contacts online is up 20% year over year and discount contact lenses is flat.
- [52:43]
A
Yeah. What was interesting, Eugene, there was one retailer that. We won't say it, there was one. You got to come to my elevate meeting. If you want me to tell you who it is to be ready, that's my one takeaway. Right. You gotta, gotta tease the next. But I think that more than ever we've seen a 1 to 2 point erosion annually. This year the bottom fell out a little bit. And what's funny, when I've stood in front of people at several, many, many people in the last two times I've given this lecture, I said how many of you are monitoring? And I'm not talking just contact lens sales year over year because my assumption is that's going to be flat. When we look at the Vision Council data was flat. My assumption will be flat. But if you're growing your patients mid high single digits, shouldn't your contact lens revenue follow what's the delta? You know, for those of you sitting at home and maybe you don't have advanced analytics, count the number of patients you saw year to date over last year. Look at your contact lens revenue. And you probably need to look at that. And you need to look at your pricing and how it's stacking up online. Because you're at a point that I believe that if you don't start, you can't be priced $20 a box over the online competitors. Your, your patience, they'll check it right there in your exam chair. They don't care.
- [53:56]
B
And, and it's true because it's super, super accessible from that vantage point. But there's also a combination of training that can go into, because if they go, if they don't realize they can potentially use their, you know, their vision plans and the various discounts or maybe you can offer something in the office to retain that patient. So there's creative ways to have the sales conversation that ultimately help position you as the place to buy their contacts. Because we don't want to train our patients to not buy from us. But you're absolutely right. The accessibility of that information. I can literally take a picture of the box and I can say, how much is this online with Gemini in under five seconds and I will get the whole thing right. Like, it's not even, like, I don't even have to like type in the name and the, you know, and the, and the modality. I literally just have to take a picture of the box.
- [54:46]
A
You know, whether we, whether we like it or not, probably there are some online retailers that are more prominent. You need to look at where they are price wise and you need to see where your pricing is and where it comes back to. Eugene, if my final input for your listeners. When you look at your contact lens portfolio, what is gross profit dollar. And we hold it accountable to this. You mean you've got to be accountable to the industry. And I don't care if, when you sell the lens you're making x, because if 40% of it's walking out of the door because you're overpriced, it doesn't matter what your margin is. You're not, you're not making the sale. You've, you've got to roll up your sleeves and sit down and be very strategic. To your point, there are some definite strategies that maybe we should chat on next time or we'll be happy to. We'll definitely hit them at our meeting here in a couple months or next month. But there are some definite strategies we see that are working and we see some commonality between people who are doing better than those who are not. And I think there's some lessons to be told. I think we have put the contact lens sales in our office on autopilot for too long, Eugene. We put a lot of thought in other things, but I think there's some staff training and so there's some workability around that. We need to be honest with ourselves and we need to address it head on and do a good job with it.
- [56:04]
B
Yeah. And I think that there's the common objection that I hear at least, which is that my contact lens business isn't all that important to me because it's not that big of a deal. Right. I don't make that much money from contacts in my practice.
- [56:17]
A
Make a lot more than you think you make. And I'd say I've heard, well, I don't like the margins on it. Well, you know what's my favorite quote? I wish I was taller and better looking. But here we are. Some margins is better than no margins. And we gotta. You gotta meet it where it's at. You know, I, I think the other strategy, I'd have your listeners, or your listeners and watchers, I guess, you know, if I told them to lean into three things right now, I'd say really do an assessment on your recall, your reactivation. Number two, I think looking at your retail strategies is really important. Number three, look at the headlines that are in the Wall Street Journal, Reuters, Barron's, whatever your flavor is. What is leading our industry right now? Wearable Medtech. If you are not dabbling in this, the boat, the boat's not even in the harbor anymore. And I think we're going to have a Kodak moment, Eugene. I think when Kodak missed digital photography, you have got to be looking at wearable technology because there is no better place than to buy that from the independent od. Who knows what works for you and what doesn't. And I, I know I'm going to hear, well, I don't like the marginality. It doesn't match xyz. It's a second pair. It's. It's incredible marginality when you really look at it from a retail perspective. And yes, I know they can get it from Best Buy, but they can't get the lenses put in it that you can. You have got to start. I think that May be our next one. You've got to roll up your sleeves on wearable.
- [57:47]
B
I totally agree. They I think we should try to poll the industry on best practices because these don't exist right now. Right. Nobody knows how to sell wearable tech as a second pair really, really well. And I think we got to look at your members. We got to look at my clients who are already kind of in it, who are doing it well, and we got to pull them. And we got to bring this back as maybe our next conversation is that how do you take advantage of this.
- [58:11]
A
And include it would be the new Stella lens for myopia control hearing aids in your offices. I mean, you can't attack it the same way you've always attacked it. So maybe you're not happy with your contact lens margin. I sure as hell wouldn't walk away from it. But I also think you've got to expand your offerings to what's available and what's hot in the market. You know, get out those journals and start reading because the stories are there and the practices that move today are going to be so exponentially and far in front of the ones who are not moving that they're never going to catch up. I mean, this is your Kodak moment. People like that the industry is shifting.
- [58:47]
B
Go with it.
- [58:47]
A
That's for the next episode.
- [58:49]
B
Talk about teasing. Teasing the future. I mean, you're absolutely right. This is going to be a great conversation. Jason, thanks so much for your time today. I think that it's been a really fruitful conversation from taking stock of where we're at right now and some of the things that you can do right now. But. And you've also teased a lot of good ideas that we will be looking at in the future and diving deep.
- [59:10]
A
Yeah.
- [59:10]
B
Thanks so much for being on the Power. Appreciate it, Eugene.
- [59:12]
A
Thank you, buddy.