From left to right: Style #138 for Viva; Stainless steel style #SS-2 for ClearVision; Flexon Accuflex style #232 for Marchon

Despite managed care biting into margins, dispensers are surviving and even thriving selling value-priced frames. In fact, many optical retailers have no other choice but to sink or swim in this eyewear arena. Here's why. It is estimated that 70 percent of people in the United States are under some sort of health insurance plan that covers their vision needs. And the credit allotment for their eyewear generally falls around $100-the average retail pricepoint for a value package. That is why it has become the bread and butter part of many businesses.

It certainly holds true for Steven Phillips, O.D., of Eye Express in Lakeland, Fla. "About 65 percent of our sales come from managed care and 35 percent comes from private purchases," maintains Phillips. Eye Express has three locations that bring in a total of $5 million annually, and since more than half the revenue comes from Medicare, Medicaid, and third party billing from health insurance companies, it's a very important segment of the business.

Designer looks at value prices

Yet getting the right frame mix to offer a balanced assortment in the value eyewear category can be tricky. When it comes to best-selling styles, Merle Chamberlain, of Kirschner Vision Group, Hazelcrest, Ill., points out, "You don't want to get ahead of the curve in terms of fashion. Many customers who buy in this category want to stick with what's tried and true," she notes. "For example, a man who's been used to wearing a heavier-looking aviator frame, is most likely going to want to buy that similar style again," says Chamberlain. "So it's best to maintain a fair amount of conservative styles in your assortment."

Still, there is room for fashion forward frames in this category, too. Cindy Noah, practice administrator and buyer for Lossman Eye Care Associates, Lake Zurich, Ill., advises, "Take a look at your best-selling silhouettes in the designer lines and buy value-priced frames that have similar styling." She notes that oval and rectangles are the best-selling shapes and metals in silver are especially popular. "Tortoise isn't selling as well as it used to, and people are just starting to ask for plastics, so I'm buying more frames in that material going forward."

How many plans?

When it comes to making profits, Phillips of Eye Express claims that over the past few years his business has profited more through eye exams than the frame side of the business. "Since the profits are smaller on value eyewear, it is essential to drive volume wherever there's opportunity," notes Phillips.

And though the subject of how many plans to join is a controversial one, Phillips believes the best policy is to join as many health plans as possible. "We have a staff of six that does nothing but billing, bookkeeping, and plan inquiries for our managed care portion of the business," says Phillips.

Rob Manna, franchise owner of Pearle Vision in Norwalk, Conn., agrees. "As a franchise, we have the advantage of having the Pearle Vision corporate department process paperwork and contact insurance companies for us, so we automatically have built-in referrals."

Offer quality and warranties

Still, a built-in patient base doesn't guarantee the momentum of growth, especially in value eyewear. "If you sell a customer a value-priced frame that breaks a month later, and has to be replaced, you'll eventually lose that patient," points out Manna. "So I try to buy the best quality frames within the $5 to $25 price range," he says. "Because if I buy junk, it often comes back to haunt me. That's why we stick with vendors that back up the product with warranties." He says that Pearle Vision offers two-year extended warranties for frames at every pricepoint. He advises others who are considering investing in value eyewear to check on vendor warranties as well.

Show and sell

When it comes to merchandising value frames, some optical retailers believe that it's best to keep value frames in a separate section, while others feel strongly about mixing them up with their designer frames on boards.

"If you place value frames alongside designer frames, customers will inevitably gravitate toward the higher-priced frames and that gives us a chance to get them to trade up," points out Noah. "And since most vision plans allow participants to trade up and pay the difference, we make every effort to do that."

Jack Schaeffer, O.D., owner of 10 Schaeffer Eye Centers in Alabama, doesn't agree. "Value eyewear should be sold only to people who absolutely cannot afford anything else and to contact lens wearers who need glasses for reading and driving," maintains Schaeffer. "That's why you want to keep it separate from your mid-priced and higher-end product." He adds, "Since it costs about $3 per minute to handle a patient, it means that if you spend 30 minutes with someone, you have to make a $90 profit to cover your chair costs. And that's very difficult to do when you're selling value product. We have a staff that promotes better service, and they are trained to sell value eyewear only as a last resort."

From left to right: Fossil style Marlene for S�filo; NYi Looking Glass style #L-7566 for Hart Specialties

Trade up!

Of course, everyone agrees that it's best to get the customer to trade up whenever possible. John Anderson, director of sales and marketing for Walman Optical, a wholesale lab in Minneapolis Minn.-which has 21 locations-says he recommends that optical retailers get customers to upgrade with lens options such as AR coatings and progressive lenses.

"Vendors give the retailers market support for frames with point-of-purchase materials. But it's our job to educate the customers on the benefits of new lens technology," says Anderson.

Other optical retailers make an effort to layer on high-end lines to their frame assortment. "We started dropping names-as in designer names-six months ago and it has definitely helped business," notes Phillips of Eye Express. "Of the 1,500 frames we display, 225 are considered value frames, 225 are at the very high-end, and the rest fall into the mid-priced category," says Phillips. "Our motto is, we offer all frames to all people."

Don't discriminate

Everyone agreed that the most important thing to keep in mind when selling value eyewear is to treat everyone equally, regardless of whether they are buying their eyewear through Medicare, Medicaid, an HMO, or privately.

Chamberlain of Vision Group says, "Just because I'm selling frames at a lower price point doesn't mean I'm going to give a lower level of service. We treat everyone the same regardless of how much they spend. What's more, we've found that our higher level of service for people on plans helps give us good publicity through word of mouth."

Adds Noah of Lossman Eyecare, "Give them the same kind of service as you would give your customers who pay privately, and it becomes that much easier to upgrade them."

And even if they don't upgrade, there will always be a market for value eyewear. "Why do you think franchises like Wal-Mart, Kmart, McDonald's, and Burger King have been so successful?" points out Peter Friedfeld, vice president of ClearVision.

"Getting something for less is the American way. That's why value eyewear is here to stay." EB