FREE-FORM BY NUMBERS

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Displays such as these from HOYA and Seiko help you present free-form lenses and charge a higher markup.

Comparing prices of premium free-form progressives with conventional PALs clearly shows how much more money you can make with these innovative lenses.

The profit margin of a lens sale is often determined by the quality of the particular lens being sold. Making a pricing decision often seems a bit like alchemy, one part science and two parts finesse. In other words, eyecare professionals (ECPs) often use a combination of data they’ve generated in their practice about sales success and their personal sense of how patients accept their pricing.

Some ECPs use a rigid markup formula such as two or two-and-a-half times cost. As product prices have climbed over the years, other ECPs no longer use a rigid markup. Instead, they apply a sliding scale. As the price goes higher, they lower their markup formula. This helps lower the high end price and reduces the differences between products.

Pricing is also usually linked to the quality of the product. For example, when a lens company releases a new premium product, that product has all the new bells and whistles the company wants to offer, and it charges more for that product. For example, the company might have released a new free-form progressive addition lens (PAL) that is highly personalized

Premium free-form PALs, such as Shamir’s Autograph II, can rope in more profits for your practice.

and sold through a quality free-form specialty lab such as Expert Optics Inc.; Luzerne Optical Laboratories, Ltd.; Pech Optical Corp.; Pro Fit Optix; Rite-Style Optical Co.; or US Optical.

ECPs take the lab’s price and apply their pricing model to it, but since the cost of this lens is higher than previous products (in most cases), most retailers will price it higher than their current premium lens. Older products may be priced lower by the retailer. Arranging prices in tiers builds choices for buyers, often creating “good, better, best” pricing at the retail level.

Table 1 (below) compares the profit potential of conventional PALs and premium free-form PALs using a two-and-a-half times markup.

As you first review this table, your eye is drawn to the higher profit numbers of the premium free-form PALs, especially the one with an anti-reflective (AR) treatment. After all, you’re in business to make money. If that’s what you want to do, then the strategy you’ll want to employ is to take in and position premium lenses as your best lens and offer it to all your patients. Here’s a look at how profitable this strategy can be.

The data in Table 2 (below) illustrate the point of selling premium lenses very clearly. Assuming that you’re using some kind of pricing model that takes the quality of the lens and the price you paid into consideration, it’s clear that selling non-premium lenses means you’re leaving potential

Organizing lenses in tiers allows you to offer “good, better, best” pricing.

profit on the table. That profit potential can be substantial, about $65,000 at the greatest difference based on only five lenses per week.

A PROFORMA APPROACH
Some ECPs no longer go with a “set in stone” percentage markup but instead base it on consumer desire. In other words, if patients really want the very best vision possible using the best technology available, what are they willing to pay for it? If you do a good job educating the patient and presenting the product to make it desirable, you may be able to charge more than your standard markup.

With the information above, it’s a good idea to consider your own pricing model and profit margins then construct a proforma of your own similar to the one in Table 2. After all, a proforma is a forecasting tool. As you construct it, ask yourself why you price as you do and how it might be revised to increase your margins. Put in some “what if” scenarios as well. For example, ask yourself, “What if I sold one additional free-form PAL per week?”

ECP INSIGHTS
To see how selling premium free-form lenses has impacted practices, I interviewed three ECPs:



• Brittany Woodruff, CTO, office manager, Bountiful Vision Plaza, Bountiful, UT
• Penny Brown, ABOC, owner, In Focus Optical, Galesburg, IL
• Rick Kennedy, LO, co-owner, Kennedy & Perkins, New Haven, CT

What percentage of profit increase do you see when you sell a premium free-form lens instead of a conventional lens?

Brittany Woodruff: I see a 30% to 50% increase in our profit when I sell free-form PALs. With that additional income, I have been able to complete a mini remodel of our office. I have also enhanced the inventory we carry with some higher quality frames as well, and that helps set us apart from our competitors.

Penny Brown: I live in an area that has been struggling with the economy. Selling premium PALs has allowed me to keep the doors open and continue investing in my practice. The 30% profit increase by selling these lenses has given me more breathing room in my finances.

Rick Kennedy: There is about a 30% increase in our profit by selling free-form PALs. When the economy went downhill, we reeled in our advertising budget, so now we are reinvesting those additional profits back into advertising.

When price is an objection, how do you convince patients to purchase free-form PALs instead of conventional progressives?

Woodruff: I have a very loyal patient base that has learned to trust me and my recommendations. I educate them about the differences in clarity and brightness between the two types of PAL designs. By taking the time to educate my patients, it helps them understand the value in their purchase.

Brown: I find that my personal wearing experiences and testimonial of the product help influence patients when they make their decisions.

Kennedy: I have a very trusting and loyal patient base. When I make a recommendation on lenses to patients and emphasize that it is in their best interest to buy a particular design or style, they tend to listen. There is about a $100 difference between our conventional PALs and our free-form. Discounts, promotions, and managed care components tend to decrease that difference even further.

What pricing model do you use for your lenses?



Woodruff: We double our wholesale cost and add an additional $25. This markup keeps us reasonably priced, particularly with other practices in our area. The patients have not complained about our pricing, and it has worked very well for us.

Brown: I use more of a sliding scale and price my lenses according to what I believe the market will bear. I feel like I know my community well and try to stay informed about what other practices are charging. I don’t want to come in under everybody else, but I do try to keep it in line with other practices to keep myself competitive.

Kennedy: We tend to price our lenses according to what the market will bear and what keeps us competitive with other practices around us. Managed care also tends to influence our markup.

Selling premium free-form lenses can benefit your practice in many ways, one of which is profitability.


Joy L. Gibb is the owner of Eyes of Joy Mobile Optical in Woods Cross, UT.

WHERE TO FIND IT
Carl Zeiss Vision Inc.
800-358-8258 • zeiss.com/lenses

Essilor of America, Inc.  
800-542-5668 • essilorusa.com

Expert Optics Inc.
800-892-0097 • expertoptics.net

HOYA VISION CARE, North America
877-528-1939 • hoyavision.com

Luzerne Optical Laboratories, Ltd.
800-233-9637 • luzerneoptical.com

Pech Optical Corp,
800-831-2352 • pechoptical.com

Pro Fit Optix
866-996-7849 • profitoptix.com

Rite-Style Optical Co.
800-477-9291 • ritestyle.com

Seiko Optical Products of America, Inc.
800-235-5367 • seikoeyewear.com

Shamir Insight, Inc.
877-514-8330 • shamirlens.com

US Optical
800-445-2773 * usoptical.com

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