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Foreign.
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Welcome welcome to Power Hour, Optometry's biggest and longest running show. I'm your host, Gene Shotsman. And today's guests run very, very different practices, but they have one important thing in common. Each of them recently went through a practice retail optimization initiative, which means that they started taking a much deeper look at the data, the pricing and the true profitability of each of their opticals. And what they found might be of great interest to you. And that's why we made this episode, because it turns out that they were leaving a ton of money on the table. And I suspect that an average optometric practice is doing the same. For example, one practice discovered that certain frame sales were actually costing their practice as much as $100. Like they were paying, they were paying two cell pay frames to patients. Another one found that roughly 40% of the frames on their board were underperforming. Another one made some changes to pricing, inventory, team training and optical revenue increased by 36% over the same time last year. And she tells you exactly what she did. So today I'm joined by three great doctors, Dr. Brian Alpert, Dr. Trine Rosado, and Dr. Lacey Crissup. And each of them have independent practices and they're running offices that range from single door legacy practice to busy 8oD operation. But what's cool is that they have similar issues that they've solved in interesting, somewhat similar, in some cases, different ways. So we get into the numbers behind their opticals, frame turn rates, board space, managed care, profitability, pricing strategy, capture rate, and also the uncomfortable realization that sometimes selling more glasses does not always mean making more money. And so this episode heavily focuses on optical. But it's actually we turn out to talk a little bit more than that. We talk about how these doctors have progressed in their career and what they've learned while growing, inheriting and transforming their practices from building certain types of systems that don't depend on key employees to making difficult staffing decisions, listening to outside perspectives and then getting the entire team that they have confident in the value that the practice provides. So there's a. What we learn is that there's a ton of money hiding in the average optical. And the question is, as an audience member, you know where to look. And hopefully this episode helps you. By the way, if you'd like more information about the Power Practice retail optimization analysis that gets mentioned several times, definitely reach out to the Power Practice on the Power Practice website. As always, make sure that you're subscribed on YouTube, Spotify, Apple Podcasts, or wherever you get your podcasts. And also check out my book, the I Care Boss, now available on Amazon. I'm looking forward to hearing your feedback and for questions, ideas or feedback, please reach out to me directly@eugene shotsman.com by the way, we just republish that website to make it easier to navigate and get it, get your questions and feedback to me easier. So please check it out. Eugene shotsman.com and now let's go in today's Power Hour. Welcome to the Power Hour. Brian, Trine and Lacy, excited to have you all on the show. I'm going to start with the kind of a little bit of a background question just so that the audience gets a little bit of context about who each of you are. So Brian, talk a little bit about your practice, where you're located, how many ODs you have and anything else you want to share about what your practice does really well or really interestingly in your area.
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C
Well, we've got a, we started our practice in 2010. We're up in the north Denver suburbs, the city of Thornton and we've got a total of eight doctors on staff. Three of them are, two of them are very part time. You know, we're a pretty busy practice now, see a lot of patients. We've got a diverse range of specialty clinics that we offer. We see a lot of glaucoma patients. We're big on myopia management, specialty contact lenses. You know, it's a, it's a hopping, it's a hopping place.
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B
And it's eight ODs, is that right?
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C
A hot total of eight.
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B
And you're a husband and wife team too, right? So that you get to manage those dynamics as well.
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C
Uh huh. We are one of those nerdy stories. We met in optometry school and ended up starting a practice together.
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B
That's fun. So looking forward to diving into all the nuances and details of that. Trine, let's talk about your practice. So welcome to the show. Give everybody a little bit of background about your practice.
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A
Sure.
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D
I'm a single OD practice located in New Jersey. I actually took over from my optometrists that I grew up going to. We're super busy, actively looking for an associate but yet we just give that really personalized patient care. I hate to sound cliche, but really getting to know our patients and their visual needs and just really making connections. I think we have a great staff which really helps. A nice mixture of staff that have been with me was with the previous doctor. So over 30 years and then, you know, some newer staff that really help give quality care.
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B
I imagine you have multiple generations of patients that you see if that's the case. Are you heavy in medical? Are you heavy in luxury eyewear? What would you say? You kind of lean?
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D
Probably more medical. We do have a very active myopia management. I treat glaucoma, dry eye, but, you know, medical would be definitely the heaviest.
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B
Okay, got it. All right, looking forward to digging in. And, Lacey, give me a little bit of background about your practice.
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A
Sure. I am a second gen OD practicing in Northeast Oklahoma. I took over the practice from my dad, so he started it in 1973. So we have been treating patients in Northeast Oklahoma for about 53 years now. So we have been at our same location, I think, since, gosh, even the early 80s. So it's seen a few remodels over time, and patients have kind of grown with us, and it's been really fun to be part of the community and part of that multi generational care.
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B
Yeah. And as you're in your phase right now of multi generational care, which sounds a little bit similar to trine, what are some of the things that you're working on actively or what are some of the biggest challenges you're trying to solve?
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A
Oh, fantastic question. So we really, as an established practice, we have a lot of patients who are very loyal, who've been with us for a long time, and as they are getting older, we're really delving a lot into medical. So that has really been some challenges for us kind of figuring out how to still see our routine exam patients, but also fit in the heavier medical care that we do for increasingly more people over time. So kind of working on some schedule templating and how to kind of shift staff and things around so that that will kind of flow a little bit better.
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B
Yeah. I don't know if each of you wants to talk about revenue per patient, but I am curious, Lacy, as you've added medical, is your revenue per patient going up? Is it going down? Which way is that headed?
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A
So that's a really good question. I would say before we kind of worked on our schedule templating, I would say the revenue per patient was maybe feeling like it was going down a little bit. So kind of working on a healthy mix of medical care versus routine vision really kind of helped improve our revenue per patient. And I don't know if that was just kind of a shift in. In different things or kind of just helping with staff and, you know, a little bit more organized of what are we providing to who, when? And really kind of working on efficiency of, you know, someone's not waiting forever because they have this really, you know, older patient who's taking more time, who has a lot of diseases to manage and just kind of making the overall experience better, kind of figuring out how to kind of steer the day a little bit better as well.
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B
It's a really interesting dynamic as you try to balance the needs of vastly different patient needs. And, Brian, you guys do that pretty well given kind of the size and scale of your practice. But I'm curious, what are some of the biggest things that you've done in your career that have helped make a big difference in revenue per patient?
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C
Well, I think the big thing, and certainly, you know, the. I think one of the big topics we're going to discuss today is looking at your frame inventory and analyzing that. It's. It's having an open mind to outside perspective. I think we kind of get stuck in a rut sometimes. We kind of just assume things being done are the way that it has to be. And I think getting an outside perspective and getting, you know, shedding light on things you might not have known could be better.
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B
Yeah. And it's interesting because all three of you have had these career transitions, right? You, You, Brian, have gone from starting a practice to, you know, scaling, growing, moving in that direction. Trine, you took your optometrist practice and you made it in your own image and slowly phased your optometry, your. Your optometrist out. And Lacy, you took over your dad's practice, and you. And you've transitioned that across multiple generations. So that's really fascinating as each of you is going through these transitions. So, Brian, it sounds like your lesson is, okay, look at outside perspectives. And what are some of the biggest. I mean, I just want to touch base and follow up on that. Is the. What are some of the biggest lessons that you were able to learn by looking at outside perspectives? What were like, you know, we'll get to the frame board thing in a little bit, but just anything before that is like, what are like, giant aha. Moments you got as you listen to perspectives outside of how it's always been done.
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C
Well, I mean, not to get into all the specifics right away, but it was, you know, it was. You know, we have a lot of managed care in our practice, and it was surprising to see that some particular frame brands, it was costing us money to get patients those frames. We were not. We were losing money every time we sold one of Those to a patient. And, you know, I think a lot of times with vision plans, you have to be really careful to, you know, you have to watch your bottom line. You know, they're, they're not. Oftentimes I don't feel like it. The, the way that we get reimbursed for things is logical. You have to actually seek that out and make sure that you're not running in the red.
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B
Well, actually, can, can you let, let, let's go into the frame board stuff. So, and each of you has your own perspectives on this. So Trine will get to shortly. Brian, when you say a frame was costing you money to sell, meaning you were paying more. You were, you were paying more money than you were making from either managed care or the combination of managed care plus patient. Explain that.
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C
Well, you know, I don't, you know, I don't have the spreadsheet right in front of me, but it was, there were several frame brands that, you know, vision plans know the wholesale cost of the frame and they'll reimburse you just for that amount. And, you know, by the time the lenses were, you know, paid for with the lab and the frame was purchased, even factoring in the exam that the patient had, we were sometimes up to $100 or so in the hole. And that just goes against everything that you would think. You're like, oh, I just sold the patient a nice set of glasses and did a nice exam on them. You just, I kind of wrongfully assume that that's a win, you know, and it's as nuanced as saying a patient with a particular vision plan can't get a particular brand. You know, and we wouldn't, we wouldn't. I would have never have guessed that was a thing. You know, that's the kind of stuff we learned in this frame. Frame board analysis.
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B
Yeah, and I want to talk about this frame board analysis from everybody's perspective. So, Brian, I'm going to come back to your specifics in just a second. Trine, what's your perspective on your framework, on your optical. Because this actually is like an interesting point for a 1oD practice where you're super busy, you're actively looking for another od. So you really have to maximize. I imagine that patients have to wait to get into your practice, which means that you really have to maximize every opportunity that you have in your chair. Because it's not like there's, I mean, it truly is like managing a very finite resource of time and then generating and being able to generate the best Possible outcome for the patient, but also the greatest amount of revenue from that dollop of time that you get to spend with that particular patient. So talk a little bit about the role that optical plays in your practice and then maybe a little bit about this whole frame analysis that you guys did and your take on it.
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D
Yeah, yeah. I mean, the optical experience, because we try and be everything for the patient and be that one stop shop to meet all their needs. You know, to touch on what Brian said, we had some, you know, looking at your minimum wholesale price of a frame. You know, if you don't have that minimum, like you said on vision plans, you could be paying them to wear your glasses, not even factoring in all the staff that you're paying. Right. To give them that customer service. Because we're going above and beyond. That's why everybody's successful, right? Is giving that patient your time and. And your staff knowledge. So really looking at our frame board turnover rates, right, really saying, okay, we think this is a beautiful frame, but it's been sitting here for months and just treating everything like a number, you know, and those going back to the rented, you know, kind of board spaces, if it's not moving and turning over, we got to move on. It's not personal. And so really talking with your reps, talking with your staff, they're like, I love this frame. I'm like, well, that's great. Unless you're going to wear it and sell it, we need to get it off the board. So, yeah, really, you know, you're right. I get busy sometimes. And that's where this analysis was really helpful because it gave time to dive into it, where I had kind of put it on the back burner, you
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B
know, so you talked about churn rates. Let's zoom in on that a little bit. Just like, what's a. What's a healthy turn? How many times, at least in your practice, how many times should a frame sell per year? And what did you learn about some of the frames that were there?
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D
Yeah, so ideally, we're looking at a two and a half turn rate, you know, through the year. And some of the more specialty frames, you know, we might accept a little bit lower on that, but really, we had some that. I don't know if we just ended up liking the rep and buying too many or we were all, you know, in love. But when you really look at the numbers, we really saw which ones we should be giving more board space to and which ones we should be reducing or even eliminating. And so we sat down with, you know, our reps and said, here's the turn rate for last quarter, last year, you know, it's, are you giving us your top, you know, whatever, 15, 20 frames? Because if we're not seeing the move in the next couple months, we're going to have to eliminate it and replace it with some something else. Those were hard conversations to have because I like a lot of my reps,
- [16:15]
B
but well, well, that's good. Good. But you're, you're then armed with the data to do that. Did you find, what percentage of the frames on your board did you find were kind of underperforming?
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D
It was almost, probably 30%, probably even 40 if I really look at it, that, you know, we're just kind of stale and not moving. And so either eliminating, reducing and shifting some of those numbers to the better high performers definitely made a huge shift in our numbers.
- [16:50]
B
Okay, I'm going to come back to Churn rate and what you can do with it and also how you have those conversations with your vendors. Lacy, let's go to you. So you guys went through this analysis as well, but let's talk about the whole optical, the role that the optical plays in your practice first and maybe let's even kind of get a little bit of a zoom in on how many frames you all carry and then what you found throughout this analysis.
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A
Okay, so optical is honestly a really important part of our practice. Our we're still primary care is still a very important part of what we do. And kind of like Trinea said, being the one stop shop shop, you know, is really important for our patients. So they kind of appreciate the personalized recommendations that we can give with them, you know, what can we do to kind of help understand their needs, their lifestyle so that they are really getting some glasses that are going to work the best for them and really empower, you know, the lifestyle that they want to have. So we went through the analysis just to kind of just a tune up. You know, it's such an important part of what you do, but it's so hard to find time to sit down and really dig through the numbers. And there's really so much, you know, to go through. So I was really, the analysis was really enlightening in terms of, I think some of our kind of frame, frame, mix and some of our pricing. You know, I think so much as independent ODs, we really feel the pricing pressure where you feel like there's so many other options out there and you're really wanting to give the consumer, you know, a Good value. And you don't always want to come off with the impression of like, oh gosh, they're just overcharging for everything. So I think having that retail analysis kind of gave us some other areas to focus on. You know, what are, what are, what's going to be a good fit for our board spots. So we at one point in time had, I want to say, maybe like 850 frames. 800 frames and really have kind of consolidated to about 650. And that has made a really important change in our cost of goods for us over time. So. And I think kind of, you know, finding the right frame lines where your turn rate might be better or kind of looking at some other things where you can just really kind of consolidate manufacturers. And sometimes, you know, some certain vendors have a lot of great lines and then by allocating so many board spots to that vendor, you really can open up some additional discounts and some additional kind of buying power and a nice working relationship with those vendors.
- [19:35]
B
Sorry, I had a plane fly over my house. Really, really. Well, that, that'll get edited out. Okay. So Lacy, on your end, as you're describing, as you're describing kind of shrinking the size of the inventory and reducing your cost of goods, I am also curious, how many frames did you raise price on as a result of this frame analysis or this retail analysis?
- [20:01]
A
So that's a great question. We actually had probably about half of our frames or a little more that we're going to be raising the price on. So we long story, we're going through an EHR change right now and we're having some issues on the optical end and frame tag printers. So we are kind of mid, haven't really rolled it all out yet, but it looks like probably half or more of our frames are going to be going up in pricing a little bit.
- [20:29]
B
Got it. And it sounds like the expectation is, and I've heard this from other experts before, is that oftentimes a price increase doesn't necessarily impact conversion rate or friend capture rate. What are you nervous at all to raise price? Are you like or you feel pretty confident about it?
- [20:54]
A
So I would say yes and no. You know, I think anyone's always nervous when you're talking about raising prices, like how is that going to be perceived by the patient? But I think you, you know, have your data from your analysis, you know, you can kind of put that into other ways to analyze it and find, you know, what's a comfortable space. And I think even with the EHR switch and Kind of figuring things out. I think we were finding, you know, that our frames set up in the first ehr, wholesale costs for everyone have been increasing. So I think there's so many different things that have caused that over the past few years and it's really hard to keep up and make sure. Like, when was the last time, you know, your EHR talked to the database? Is it factoring all that information in there? So, and I think, you know, for most people, like, the cost of everything is going up right now. There's so many different factors. Training, transportation, costs affect things so many different ways that prices are going up. But I think it's also kind of given us an opportunity too to reevaluate what's on the board. And is it earning its space? Is it something that maybe it's a really unique frame line that's kind of a boutique line that's really fun and has some cool features like Coco Song, or maybe it's something even more on the value end. We just brought on Pear Eyewear and that has been a really successful implementation and patients are loving that. So I think you just really kind of have to reevaluate your lines along the way too, to see what's going to work the best for you and your patients. Are we providing something at every budget and is it something fun at every budget that's still going to work for us and still going to work for the patients?
- [22:33]
B
Yeah. And has anybody else in the studio also raised price and what has been impact on your capture rates as a result? Trine?
- [22:45]
D
Yeah, so, yeah, I. We raised prices and it was probably over 95% of our frames ended up going up. I had done an analysis a couple of years ago with like a buying group and I was like, I can't be too far off from where things should be. And so this was a big eye opener. And, you know, I think getting staff buy in because they're really nervous. I mean, we as practice owners are nervous. What's the impact going to be? How's it going to change? So really talking to them about, you know, we're moving where the market is really checking every invoice because before, you know, frame companies would change their prices maybe once a year, not even. And now it's like, I feel like every couple months, so every time, you know, we get a new frame in, we're verifying that it hasn't gone up a couple bucks. Right. Because those dollars add up very quickly over time. And so the staff buy in for me was huge because I want them to feel comfortable because we're meeting patients needs, but we're also running a business, right? So to let them know statistically we're off from where we should be. And I always say with change, if it doesn't work in a couple of months, we just change it back. There's no harm done. And really reiterating the value that we're giving to our patients above and beyond a lot of these places, you know where they're going, whether it be our product knowledge, you know, really finding out their job and hobbies and matching that up really added to their comfort.
- [24:16]
B
And I think that's so, so freaking important is because you're absolutely right that it's not just the patient demand, because the patient, the patient doesn't really know because they don't get to see the frames every single day. So it's like it is rare that they're sort of in your office and like, oh man, that frame should be 10 bucks cheaper. I don't really understand what happened. It was 10 bucks cheaper last year when I was, or 18 months here when I was here. That just doesn't happen. Right. But your staff, when they feel the price increase, they automatically are, if you don't do it right, they feel like, oh, wow, like I am now expected to, to do something that's not fair, therefore I automatically may reduce my own capture rate. Well, you know, the patient said it was too expensive because I thought it was more expensive. And so to your point, Trine, that's so, so super valuable to be able to say, look, we're delivering a much better service than a discount location. And part of that service is the product knowledge that you, the staff have. It's the, it's the service that the doctor delivers. It's the ability to, whether it's any sort of unique thing about your practice specifically, but if your practice team is not bought into the fact that they are the best place for patients to get glasses, they are the best place for patients to get the services that they get from you, then at that point we're automatically starting at a giant deficit, regardless of what the price is. So, so I think that's such a good call out that anytime you increase price that you've got to have your team super bought in and super bought into the fact that they still have to believe that this is the best, best option for the patient. And I know that just by simply changing that mindset, I've watched lots of practices change their capture rate. Brian, over to you. And this is maybe about changing price but also capture rates. I'm curious what your, what your exam only or your capture rate really looks like. And, and then also what changes you've made in addition to, as you were kind of talking about the nuance of frames that you were upside down on, either not selling them to specific patients who have specific, specific managed care plans, or maybe just taking them off the board. Addition to that, you maybe have had a price increase. What's the impact been on your practice? And then let's talk about any other observations that came out of this retail optimization component.
- [26:51]
C
Well, it was recommended based on the analysis. It's a very thorough spreadsheet that Lisa put together for us. And in that she recommended frame markups four times. I don't know if that's universal for old practices or if that was just for us or. And we were, you know, we were, I think, two and a half times, something like that. So it was made for a pretty big price increase and we were nervous about it, but we bit the bullet and increased them up to 3.75 times. And the impact on our capture rate, our capture rate went from about 42 down to about 40. So it didn't affect the capture rate very much. And we have the peace of mind knowing that we have eliminated scenarios where we are losing money on a glasses sale. And you know, as much as I can't, you know, you can't justify or make sense out of that math. That just sort of is what it is. You know, I think it's hard to, you know, I think frames themselves are fun because they're tangible, they're fun, they come in fun colors, familiar brands to patients. You can fascinate the frame, change someone's look, the thing that we have trouble with. And I think that ultimately what would help our capture rate is to the way that we fascinate frames. Find some way to fascinate the lenses. And that's been a big challenge because frames being a tangible, visible, colorful thing, it's easy to get to show that off to patients. What we can't figure out to resolve our capture rate issues is how to explain to patients why doing quality lenses in your glasses is a thing.
- [28:44]
B
Yeah. And that's interesting. I'm going to ask the panel and I'll happily weigh in, but anybody have a great lens capture rate? And what do you do when taking, to Brian's point of when, when you're, when the lens feels a little bit more like a commodity? Because if I'm hearing you right, Brian you're saying, well, look, I can see and feel this, you know, beautiful red thing with the black, you know, with the black highlights in it and the, and the spring hinges. And, you know, I can feel the quality of this thing. So, like, that's easy for me as a consumer to purchase, but I can't really understand the difference between lens A versus lens B and that kind of thing. So what if anybody in the studio have an idea for lens capturing? And really maybe the lensities trine.
- [29:37]
D
So when we changed our prices, one of our primary KPIs we were looking at was capture rate. So we kind of did it at the same time. And so you're right, like patients see a frame, people see it on their face. Right. I always tell people, what do you wear 365 days a year? Your frames? Right. Hopefully they have more than one pair. And so that's an easy sell, right, because they fall in love with the look. But you're right, really educating patients on the value of the frame and why you. I'm sorry, the lenses and why your lenses are different, I think ties back to the conversations we start in the exam room with job and hobbies. And this is why this lens makes sense. I think one of my key phrases that has really captured patients or even brought them back a year or two later is saying to them, they're like, well, I like to take my script. And I'm like, okay, just make sure they're asking you about your job and hobbies. Because that's how I pick what lens design makes the most sense. And I kind of give the equation of an accountant versus a truck driver. Right. An accountant's looking at four screens all day. A truck driver is maybe looking at a little screen, but driving. So the two lenses they're going to need are completely different. And so when they go to some of those non personalized places, no one's asking, they're just selling what they're supposed to be selling. Right. They're not asking those personal questions. And I think that's huge because then they know you're looking at them as a person, not as a sale.
- [31:08]
B
Yeah. And that's so good. I love the, the lifestyle side of the bringing in the lifestyle questionnaire and personalizing both the appointment and the selection really to how the patient uses their eyes. Do you all prescribe from the chair? Prescribe the lenses from the chair, or do you leave that up to the optical Lacy?
- [31:32]
A
So I would say we do both. I do prescribe a lot from the chair, particularly for the patients who are really heavy screens, there's always a conversation about, you know, how many hours a day are you on the computer, how many screens do you have? You know, how can we kind of set that up? So, and I kind of similar to Trinea, I always think an analogy of like, you know, shoes, everybody has more than one pair of shoes. You know, could I go out for a two mile jog in my work shoes? Probably. Is it going to be as comfortable as if I had on my running shoes with my custom fit fitted soles? No, it's not going to be as comfortable. So I think it definitely goes back to the lifestyle piece and the personalization. I think sometimes too the thing that really helps us communicate with patients is just like the quality sometimes even of your coatings. You know, the anti reflective coatings from Krizal and Shamir and some of the others just hold up incredibly well. They're a lot tougher. And the warranties they have, you know, life happens, you're going to scratch the glasses. And so having the warranty and some extra service to fall back on is a huge boon I think for offices who deal with those products.
- [32:44]
B
Yeah, and there's a name, the concept of multiple pairs, which I think you're all hitting on a little bit, is something that I think the industry has generally struggled with across the board. And I just looked at these numbers yesterday and I found that on average were high single Digits Mid like 7 point something percent multiple pair across the industry. And when I say industry, for me that means independence that we have data for. And one of the things that I thought about is I looked at some of the practices that have double digits and maybe higher double digits. And one of the things that I know they do is that they're constantly getting the patient's buy in throughout the, throughout the visit that says, okay, so I know you play golf, I know that you, I know that you work on the computer, I know that you drive at night. And so let's just make sure I'm, when I'm prescribing, I just want to make sure. Are you okay with me getting you a pair for golf, a pair for your outside activities, a pair for your driving, especially driving at night, and a pair for your, and a pair for your work glasses. Is that okay with you? And like the, the patient, I mean the patient's not going to say no to the doctor. So oftentimes they get the patient's buy in throughout the process. And as Gary Gerber, my predecessor on this show, Used to say all the time is like, you got to give them. You don't prescribe two, you prescribe three knowing that they should get two. And I think a lot of people prescribe two knowing that they're going to get one. And so if you up the expectation, and also if you up the expectation in the optical and how people present it, because sometimes they'll, like, work up one pair and then they'll say, oh, well, you know, did you want me to go get the other one? Or are you okay with this, like, 600 purchase? And then at that point, the patient's like, oh, I'm not gonna pay, like 1200 bucks. So, like, let's create incentives in the language that folks in the optical use. For example. Oh, and by the way, this pair will get another 20 or will get another 10% discount if I add another pair, which is going to be at 50% discount. So why don't we work that up together? Let me just go get that. And then you can always take it away if you don't want it like that. You know, that. That kind of thing. Give them the option, drive the positive rather than the negative. At least those are some of the things that I've seen work well in practices that tend to have the data that supports that. So let's go back to the retail optimization side. So, Brian, you talked a little bit about some of the, you know, obviously some of your findings, and you mentioned kind of as you moved the needle, so to speak. Let's talk about things you actually did. So I heard you say you raised price. Did you remove frames out of your Frames and lenses out of your. Out of your optical?
- [35:43]
C
We didn't. We've decided to discontinue a line. So we. We're just not reordering it. But. But because. Because we see mostly vision plans and because this particular line wasn't profitable with them.
- [35:59]
B
So what did. And any other changes you guys did
- [36:05]
C
the price increase and then kind of working toward, you know, been trying to train all of our staff, mostly optical staff, you know, how to deal with the price increase and how to explain it to patients.
- [36:20]
B
Yeah. Okay, so what did that do for your bottom line? Like, how did. What. How did the profitability of your optical change and maybe even. How do you measure that?
- [36:31]
C
Well, you know, looking at capture rate, the capture rate did go down by 2 percentage points in the first full month of the price increase. But we were able to be profitable. We had a period at the end of last year where the entire practice wasn't turning a profit. And a lot of that was attributed to the. To the situation with the frames being underpriced relative to, you know, in the context of vision plans. So we were able to get back to profitability and start, you know, getting things where we wanted it.
- [37:08]
B
And so maybe specifically in terms of profit, how much newfound profit did your practice find as a result of this change? Ballpark, maybe per month or per something?
- [37:21]
C
Well, I'm trying to think in terms of percentages, probably another 10 to 15% of our overall gross. It's pretty significant. Our after vision plan frame sales amount went up by $25. And that's the kind of, you know, that's the kind of wild increase that, you know, I would have never guessed that could be a thing. But if you're going to take vision plans, you got to kind of play the game and you got to be aware of these things.
- [37:58]
D
Yeah.
- [37:59]
B
Okay, interesting. Lacy, I want to turn to you. What happened? What changes did you make specifically? And I heard you say you reduced the number of frames and you're increasing prices. So what do you anticipate? It sounds like you're kind of in the latest stages of this frame profitability process. What do you anticipate the income to be or the impact to be on the practice?
- [38:27]
A
So our estimates that we received, kind of coming through the analysis, I think we're going to be about maybe a 5% increase in our gross. So we, we have a fair amount still of kind of private pay optical. So we do still have quite a few vision plans, but with our heavy medical and older patients, they don't always have vision plans. So we do have a little bit more kind of private pay optical. So I think even though, you know, the overall gross may have increased a smaller amount, really, I think the net, there's potential for quite a bit more net profit out there just because it's a little bit more private pay. And really watching and making sure we're dialed in on what our pricing should be for those folks.
- [39:12]
B
Yeah, and it's interesting because that I imagine that 5% increase in gross probably has a. At least a 15% increase in profit associated with it, if that makes sense. Because all the other stuff that you're selling is more profitable. And also this additional a hundred percent, if you're talking about price increase, 100% of the new price, unless you're paying an OD on production, goes straight into the bottom line. So that new. That's newfound profit, so to speak, that makes sense. Is that in line? Okay. So, Renee, I heard you talk about how you're going to be that how you started having direct conversations with some of your vendors. So that was one of your. That was one of your action items from some of this analysis, which is great. And I think that's really, really interesting. I want to hear a little bit more about how those conversations went, and then I also want to talk a little bit more about net impact on your practice from making some of these changes in your optical.
- [40:20]
D
Yeah, so some of the conversations were easy with some of the vendors and some not so easy. I had one was kind of confrontational and was like, well, I don't want to give up my 12 board spaces. And I'm like, like, they're not your board spaces, they're ours. And so, respectfully, if we're not getting the turnover, my staff is actively showing them, you know, this is what we're looking at next time we meet. And so, you know, in one case it was reducing numbers. In another case it was just eliminating a line and not being very helpful with, you know, taking frames back. You know, some of them were like, listen, I'll take this back if you just buy a couple more of these. Which made sense, right? Because this line was selling a lot better. So shifting those numbers to that made sense. And, you know, I did say to them, listen, you have to make money and we have to make money. This isn't personal. If this was selling off the board, I'd gladly give you 10 more spaces. So let's look at what brands you have and see how we can maximize that. Because I get it. Everybody's getting crunched. Some of them, especially with private equity buying up smaller businesses, they're bringing in their own frame lines and they're getting squeezed out. And so everybody's feeling the pressure of that. So, yeah, it's not comfortable. But when you stick to the numbers, I say, this isn't personal. I love you, but this is what we have to do financially.
- [41:52]
B
So, yeah, you mentioned you were looking at capture rate pretty closely. One of the things that I thought would be true, as I'm listening to you talk and you tell me if this has been an interesting side benefit, but it's like, if patients have access to frames that are better sellers, then they're more likely to buy. That's what I think common logic would say. Is that what you're finding in terms of your capture rate?
- [42:21]
D
Yeah, we. Our capture rate has gone up. I was trying to look, you know, optical overall in quarter two is up 36% versus quarter two last year.
- [42:34]
B
So that's optical revenue.
- [42:37]
D
Yes.
- [42:37]
B
Nice. Okay.
- [42:38]
D
Yeah. So, and that's been a combination, I think, like I said, of staff training, adjusting our prices. We take one vision care plan, the rest are private pay. So we have a heavy private pay. So for me, changing prices was very nervous, you know, because it's, it's not like they're just going to pay their copay no matter what I charge. Right. We're, we're a blue collar town primarily. I mean, we have a nice mix. But so, you know, doing what's right for my patients, you know, is huge. And the office. Right. It's got to make sense for both, as we all said. So, you know, really analyzing the numbers and I think dialing in on what's performing, what's not keeping the good performers, you know, in office. So as soon as they sell, you know, talking to the reps, what kind of what can you do? If I buy so many frames, can you give us one free or a certain percentage or, you know, having those conversations because then we'll get two of our bestseller. Right. You know, that's often talked about two colors, two sizes of your best sellers.
- [43:46]
B
Yeah, absolutely. And I think that's such an interesting impact. 36% growth in optical revenue, which I imagine a significant part of your practice if you are a 1 OD location. Yeah, yeah. Okay. When we come back from break, I'm going to expand the perspectives a little bit more and I'm just going to be curious about what you've learned as business owners or practice. I guess, kind of the. As your practices have evolved, what some of the biggest lessons that you'd want to pass on to other folks listening to the show. So be right back after this break. Hey there, it's Eugene and I want to let you in on something. So you've been to conferences before. You come home fired up and then Monday morning hits and it's back to the grind. The ideas don't stick, the plan never gets made, and six months later your practice is in the same place. So I know that pain. I've been to those conferences with you and that is not happening. At this new event called I Care Boss Live. You've heard the story of Icare Boss, and now there's an event, Icare Boss Live. It's September 16th through 18th in Cleveland. Two and a half days, we're bringing together 200 of the best practice owners in Icare for a one of a kind event that combines speakers, peer learning, mastermind groups and Industry innovation, all designed around one goal. You leave with a 90 day plan and you can actually execute it and get stuff done. And we're going to tackle some real stuff. Exam only rates, revenue per patient, people problems, leadership, AI and technology, specialty growth, the things that keep people up at night. We're going after it and we're doing it in a room full of practice owners that are just as serious about growth as you are. This, this is not a conference, it's not a seminar. It's something different. There are only 200 spots, so if you want to be in on this, this is not publicly announced, just on this podcast. Go to thepowerpractice.com click events. Click apply. Now. This is invite only. It's not for everybody. So you have to apply. We'll ask you a few questions and if it's a fit, we'll invite you to register this event. I care. Boss Live is going to sell out. Do not sit on it. I invite you to apply right now. All right, we're back in the power hour. And I think it's always so fun for me when I have these panels because everybody is at slightly different stages or maybe significantly different stages of practice growth and development. But also it's also really interesting to understand how really different practices sometimes have really similar problems or really similar solutions. So I thought I'd take the opportunity to quiz you each as like CEOs or practice owners and really zoom out for a second and talk about lessons that you've learned over the years as business people. That, and I talk about this kind of. The additional context is that you can learn from your own mistakes, which is the expensive way, and we've all made them, right? We're all business owners, we've all made lots of mistakes. Or you can learn from other people's mistakes and then therefore, they become shortcuts. So you get to gift the gift of a shortcut when you talk about some of the learnings that you've had and some of the things to which you can attribute some success as you dealt with a difficult situation. So maybe each of you can impart, maybe even tell a little story or share a little bit of learning that you've had over the years. And Brian, I'll start with you. And Trine, you'll be on deck.
- [47:30]
C
Well, I think it's good. Someone told me a long time ago, I've heard this, that you're not supposed to practice in a vacuum. And I think as a private business optometry office owner, I could just get Lost in my own little world here. Whatever project I'm working on kind of takes my focus and you kind of forget about the outside world. But, Eugene, like you're saying, other people have lived through this and have some valuable insight. We've got a lot of that through the power practice. Working with Allie, you know, not just the recent frame analysis, but, you know, learning, you know, with her, having contact with so many other practices and knowing their challenges, you know, we can, we can borrow their experience without having to go through it ourselves sometimes, you know.
- [48:20]
B
Yeah. What are some of the. What are some of the pieces of advice or maybe just one story you can share over the years where you had to, like, make a really difficult decision and your advisor pushed you in a direction you were uncomfortable with, but you were. But it ultimately worked out well.
- [48:40]
C
I mean, I could, I could point out to the recent increase in frame prices, which, you know, you get to. You get worried that you're just going to drive everyone away. But, you know, the bigger picture is that when you're taking vision plans, especially that that frame price is really the only, the only leverage you have to turn a profit. And, you know, I hate raising prices. I don't want to, you know, we're also in a working class neighborhood and I don't want to price patients out of coming to see me or getting their eyewear from us. But, you know, I mean, it was a pretty firm suggestion from Allie and, you know, she hasn't been wrong in the past about anything. So it worked out just fine and we're in a better place for it.
- [49:28]
B
No, it's great. And it also is super scary if you're running a practice that you know and you have huge overhead with the size of practice that you have, and you end up in a season where it's like, man, we are not where we want to be. From an EBITDA standpoint, how do we solve this problem? And, you know, it sounds like this was probably one of the bigger, bigger opportunities. So that's great. Matt. Renee, what, what's your lesson? What do you want to share? Maybe tell, tell us a little bit of an origin story about that lesson.
- [50:03]
D
When I'm looking at the images and I'm probably going to get in trouble because I'm not wearing my glasses. I started wearing glasses because the consultant, I wear contacts, but the consultants are like, where's your glasses? Right. And so those have become some of our biggest sellers. So, you know, super nearsighted. So I've just been a contact person, but actively Wearing glasses has, as silly as it sounds, made a huge impact, you know, and obviously getting your staff in those updated styles in your favorite brands. But for me, it's connection and mentorship. I think the OD I bought the practice from hugely helped because we didn't get training in running a business or managing employees. And so that connection, the connection with some of my local society docs that are running the same type of practice as me and having conversations about what's happening in our office and how to work through those things and then larger venues can consultants and, you know, meetings. I think I get a lot more knowledge from the talks in between the meetings sometimes than, you know, what you're actually learning in class. So, you know, that personal connection and talking with others to see what they're growing going through as well, I think is huge.
- [51:14]
B
Yeah, no, that's a really, really interesting point and I agree with you is the ability to connect with other business owners. But then also, I like what you said and it's a really, really good point is, you know, even. And I've actually, I've talked to doctors who don't have a prescription, but they still choose to wear glasses with a, you know, Plano lenses or whatever in them just to showcase their own product. And sometimes they'll have like multiple. And they'll switch the glasses right in the exam room. Right. He'll just switch them right in front of the patient and they'll say, oh, these are my computer glasses. Right. It's such a interesting nuance where you're modeling the behavior to the patient right on the spot. So kind of an interesting observation, Lacy.
- [52:06]
A
Sure. I would say I really have kind of two lessons, I think that have really, you know, kind of clarified a lot of things for me over time. Number one would be you need systems, not people. And number two was it's really important to clarify your values and your vision. So I. We had two fantastic long term employees, Betty and June, who were with us for 28 years and 30 years. They pretty much ran the office, which was fantastic until they retired. And then you kind of figure out how much of a lack of knowledge people have. You know, trying to get new people trained and onboarded. Even for a while we didn't have systems that we needed. It ended up in a billing disaster that our cash flow tanked. We had to borrow money from our line of credit twice in a month to make payroll. I mean, it was just an absolute disaster. So that really clarified the importance for me of making sure, like, what are our Systems that are in place and do we have a system for all of these important things versus a person? So I think also kind of knowing, you know, back in the old days, you could basically put out a sign and treat people well and your practice would do well. But that's not really the case. That's not the business environment that we're operating in anymore. And so I think really, you know, kind of working on like, what are my values, what's important to me for our company, you know, to operate in these areas? What are our kind of. What's our foundational mission? And really how having a good, clarified, vivid vision that we're all working together as a team towards has made a huge difference for me.
- [53:49]
B
Yeah, it's so important to do that because if you have a vision that everybody knows and everybody understands, then you can always ask a question at any quarterly or annual meeting and say, okay, everybody, think of five things that are standing in the way of our vision, between us and our vision right now. And if you. And if they can identify those, those are the issues that you got to prioritize and then solve. Right? But if they. If people don't know where you're trying to go, if you're just like, hey, like, tell me five things that are, you know, problems in the practice. And like, well, you know, there were like ants by the front door and then there was like, the coffee makers not working. That's a problem. And then there was like that one patient last week who was kind of angry. That was so like, you, you. The quality of the issues that your team tries to solve on your behalf is so much better if you have a vision. So I can't stress that enough. I think that's great advice. We have time maybe for one more rapid round question. So I'm going to ask a staff management question. So what's one staff management mistake you've made in the past? And maybe what's a wisdom or pearl that you'd share that you've learned over the years as well? We'll go same order, Brian.
- [55:05]
C
Well, I think, you know, you get complacent with how the practice is run or the people that are working for you. I think it's important to recognize when someone doesn't fit the culture or mission of your practice and to, you know, help them move on sooner than later. We have a absolutely wonderful team of people that work for us now, and I think that's made all the better. You can help them do their job. You can show them respect by making sure. That people that don't fit in with the group, you know, find their way to their next job. You know, it's important that they're part of the team and that everyone's working toward the same thing. I think in the past I was, I was more hesitant to. I thought everyone thought like me and everyone, you know, everyone doesn't. And that's not a bad thing. But a lot of people aren't working toward my, my goals and, you know, we want to have that goal line. Everyone in the practice working toward that same goal. So. Yeah.
- [56:15]
B
Yeah. And, you know, the, the interesting thing is I think a lot of people say I'm slow to fire because I'm trying to do that person of kindness. But what you're really doing is you're not necessarily helping that person because they're stuck in an environment where they don't necessarily succeed. But you're also doing an unkindness or a disservice to everybody else in the practice who is working hard and then watching an underperformer still get paid, still have a job and still have to. And then they have to clean up the messes that that underperformer makes. So. I completely agree with you. I think the, the slow to hire, fast to fire mentality is something that I think most people pick up over time, but it, it costs money to have to not fire fast when somebody is clear. Clearly not a fit. So it's a great one. Trinea.
- [57:12]
D
Yeah, I, I think a staff is a huge part of my success. And I know we have. I have conversations with the staff, like I have left practices or offices because of a receptionist or someone else. A lot of times they have more time and interaction, you know, with your staff than they do with you. And so creating a good environment. Right. That everybody feels comfortable. I think one of the things is checking in frequently with staff. Staff, even if it's a quick two seconds, how things going, anything stressing you. Doing that on a more frequent basis is one of the things I probably slacked on because I was so busy in the business and not looking at that environment that, you know, I thought it was good. But really just asking them quickly and addressing concerns that you think might not be important, but it could affect their happiness, you know, in the office. So it's just so important to invest in them and I'm just so appreciative. I have such an amazing crew. I couldn't be telling you these numbers without them because I can change numbers. But if the people weren't Making those connections, it wouldn't have happened.
- [58:22]
B
How often do you meet with your team?
- [58:26]
D
So my office manager does check ins once a month, and then I do, like, every couple months. I'm trying to get better. I'm not as good as I'd like to. And they could be addressing issues or just a general check in. Like, are you happy? Or is there anything that's frustrating you? A lot of our staff came from different environments. Some came from eyes, but, you know, we have different age groups with different needs and different concerns. So, yeah, I'd like to check in more than I am, but I'm definitely, you know, compared to what I was doing a couple of years ago, I really wasn't, except for my annual reviews, which is not healthy because a lot, you know, people can be very unhappy before that.
- [59:07]
B
Yeah. And an annual review is terrible if that's the first time that you learn that you're not meeting expectations. So that is, you know, it's a big one. Okay, Lacy, what about you? Staff lessons and mistakes.
- [59:25]
A
Oh, staff lessons and mistakes. I think one of the big things that we have really done in more recent years that's been super helpful is a program called Working Genius. So our receptionist a few years ago was saying, hey, they were talking about this at my church. You know, I listened to this guy's podcast. I think this would be really cool if we took this time test and did this. So. And I think it's really helped clarify, you know, kind of the concept from Jim Collins good to great. And then Gina Wickman's traction, like having the right people in the right seats, you know, driving the bus. Like, you may have hired someone to be a receptionist, but maybe the areas that frustrate them about work and the areas that they're really good at don't always really align, you know, with all the things they might be doing, you know, or how can we maybe modify some of our systems or roles so that this person can work in areas or an environment that kind of energizes them rather than slowly kind of drains them, you know, or everybody at some point is going to have to work, you know, in some areas that kind of drain you a little bit. Like, what do you need to recharge, you know, to be back where you can really bring, you know, your full self to the table to help your team and to help the patients.
- [60:42]
B
Yeah. And what was that thing that you. You said that the. The survey that you guys did, or how did you figure it out?
- [60:50]
A
So it's called the Working Genius So there's a website that you can go on to, it's actually from a book, and they have a pretty popular leadership podcast as well. But you just have people basically answer, you know, kind of series of questions similar to like a personality test. And then there's kind of like, I think it's six different areas. And so you'll have two areas that are your, like, areas of genius. You know, the. You operate really well in these areas, you know, and doing stuff kind of along those lines really energizes you. You have kind of two areas of what they will call competency. Like, you're okay at those things, but you don't love it. And then two areas of zones of frustration. Like, you can probably do this, but you're not going to want to do it for long and you're probably not going to be real good at it and you're going to need other people to help you out when you have to operate in those zones of frustration. So. And then kind of using, you know, they make you a team map as well if you have more than one person within an organization who takes it. And so then you can kind of figure out, you know, who interacts in different ways. You know, who are your people who are really good at galvanizing, you know, and rallying the team? Who are the people who are really good at enablement, you know, and helping train people who are your people who are really good at tenacity. And they're going to be able to see that really boring project all the way through.
- [62:10]
B
Yeah, that's really, really interesting. Yeah, we talk about the zone of genius in the book, but I like the ability to take a survey. I know Wonderlic does something similar, but that sounds like a really interesting tool to explore as well. So really cool. Thank you, Lacy. All right, last question for everybody. And this is just more of a framing up what we had talked about in the first half of the episode, which is around the frame board management side of things. So if you had to give advice to a practice owner, where is and whether they do the retail analysis or not with the power practice. I'm just curious from your vantage point, where is the greatest source of found money in your optical will go in the same order. So, Lacy, yours will be the hardest because it probably, you know, you'll have to say something the others didn't say, but greatest source of found money. One thing, one number one thing of found money in. In your optical that most people are probably stepping over every day they walk into their practice Brian, I think it's
- [63:14]
C
to differentiate yourself from other retailers. You know, if everyone wants to carry the exact same, you know, frame, for example, you know, I mean, I guess you should have some popular stuff just in case someone, you know, happens to know exactly what they want. But have something interesting, independent, colorful, crazy, something with pizzazz. Something that they don't have, not just at other practices, but big box stores. You know what, what you got to differentiate. Differentiate. Differentiate your, what you have on your boards. Make it something that you can't just go find anywhere.
- [63:53]
B
And trine a would tell you, yes, but measure your churn rate on that.
- [63:57]
C
That's a good point.
- [64:00]
B
What's your, what's your advice?
- [64:02]
D
So you stole my answer.
- [64:03]
B
Well, no, I'm setting you up.
- [64:06]
D
Yeah, yeah. Frame board, Frame board management is huge because again, we can love the frames, but if they're not themselves time and time again on the board, we're not meeting our patients needs. So, you know, and really talking to your optical staff, why didn't this frame sell? What are we missing? Right. We had a petite female who was in and I had one frame to show her, but yeah, really, just looking at the numbers and not making it personal really, really helps.
- [64:34]
B
That's great. And Lacey,
- [64:39]
A
you know, I think both of what they had to say was awesome. You know, you, you always want something different for that person who, you know, what, what makes you different, you know, what's your value there? So, and then I think, you know, making sure, like, what's your selection? Do you have enough for the really wide heads? Do you have enough for the really petite heads? So, and I think the biggest, you know, challenge for us has been like, what's new and relevant, you know, and what is still can provide really good value at maybe not as high of a price, you know, if not everybody wants a thousand dollar set of glasses, you know, do I feel like everyone would do well on a thousand dollar set of glasses? Absolutely. But not everybody has the budget for that. So what can we bring to the table that's still giving the patient excellent quality options, you know, for a lower price that maybe fits their, their budget and where they're at right now?
- [65:29]
B
Yeah, I love it. So all three of you gave great answers. And I'll underscore that the underlying, I'll call it pillar, upon which each one of those answers rest is also let's make sure that you make that optical profitable. So the profitability standpoint, you're not, as Brian was saying in the beginning, you're not you, you should not be giving away money as you as you sell a pair of glasses and that's costing you money out of your pocket to celebration a pair of glasses. And so understanding the profit metrics underneath it all sounds like the pillar that the foundation upon each of your which each of your suggestions rest. And I think that's been a really valuable conversation. Thank you so much to each of you for, for your insights and for your contributions to the show. Great to have all of you on the show. And we'll make sure that we throw some of your contact information in the show notes in case our listeners want to reach out to you. Thank you. Thank you.
- [66:30]
D
Thank you.