CLOSE UP ON CONTACT LENSES
Best of Both Worlds
by Karlen McLean, ABOC, NCLC

Net revenue from contact lenses and spectacles patient Patients who wear eyewear and contact lenses are up to 80 percent more profitable. Blue: Total revenue Yellow: Net revenue Red: Total costs Light blue: Additional revenue from specs

Many ECPs debate whether contact lenses are really a practice profit center or not, considering concerns about too much chair time spent and customers taking their CL prescriptions elsewhere for fulfillment.

Contact lenses can be a strong profit base in a practice, according to the London Business School study "Seeing Things Clearly." The study reports that patients who wear eyewear and contact lenses are up to 80 percent more profitable.

The study, conducted by professor Mark Ritson, PhD, in conjunction with Euromcontact (a group including Allergan, Bausch & Lomb, CIBA, Essilor, and Johnson & Johnson) looks at recent diverse retail optical sales data from interviewees in the United Kingdom, Germany, Spain, France, and Italy. The project reviewed revenues and costs per patient, profitability of contact lenses versus eyewear, and profitability of contact lenses and eyewear versus eyewear only.

A customer's lifetime value to the practice is a factor in profitability. However, it's not just about the
customer, it's about the rate and quantity of goods and services purchased.

Contact lenses only, eyewear only, contact lenses and eyewear, lens care goods, and services all factor into per-patient profitability.

CL/SPECTACLE SHARES

The study finds that at least 60 percent of contact lens patients also purchase eyewear from their ECP. This means that in addition to CL services and product purchase profits that ECPs are likely to reap revenue from eyewear sales as well.

The study also found that customers purchase eyewear less frequently than contact lenses and that these customers are less likely to purchase eyewear than CLs from ECPs. The repurchase cycle for eyewear only averages around 2.4 years, while the purchase cycle for contact lens patients is ongoing. When combining CL and eyewear purchasing, the study finds that the net revenue from contact lens and eyewear purchasing patients is up to 80 percent more profitable than net revenue from an eyewear-only customer.

The study calculates lifetime value as: Transaction Revenue x Relationship Length x Relationship Frequency. In conclusion, the study finds that the longer you keep your contact lens and eyewear patients, the more profitable they become.

Additionally, the study shows that the lifetime value of contact lenses far exceeds the lifetime value of eyewear. Also, the average annual profit from a CL and eyewear patient logs a higher rate than the average annual profit from an eyewear-only patient.

BUILDING BLOCKS

Building strong relationships with patients shifts thought and action from transaction to relationship marketing and steadily builds profits.

Therefore, the study concludes, investing in customer relationships� always thinking of lifetime value�will also deliver lifetime value to your practice.