hot topic
BOGO: Friend or Foe?
In this Hot Topic feature, we look at Buy One Get One promotions. They have certainly had an impact on our industry. Some say it has even tainted the integrity of eyewear products in general. Has it?
By Erinn Morgan

 Many say yes.

"BOGO creates a perception that maybe all frames are not what they're cracked up to be," says Bill Jehling, president of Clarkson Eyecare, a chain of 23 stores in the St. Louis area. "Which is why we don't do that."

The real problem kicks in when BOGO becomes a standard pricing strategy. "Anytime you put something on sale, there is the concern that you are degrading the value of it," says Mike Gatti, executive director for the Retail Advertising and Marketing Association (RAMA).

"If everything is on sale all the time, the customer begins to expect that," he adds. Look what Wal-Mart has done to industry with 'Everyday Low Prices.'"

WHY IS IT USED?

Certainly, there are reasons why some retailers go this route. "Generally, they are playing on the psychology that people want something for nothing. But is there a value to the 'free' item?" asks B. Dale Shannon, LDO, consultant and owner of Classic Eyes optical shop in Ocala, Fla.

BOGO often works best with first-time buyers who may not have purchasing experience in the category. But it is when BOGO
transcends promotion and becomes an
everyday pricing policy that it begins to degrade the value of the product category it should promote.

"One of the local discount retailers in the Ocala area has had it [BOGO] permanently painted onto their front windows and they have spent about $1,700 in the local paper for an ad every Sunday for the last two years," says Shannon.

Quite often, these second pairs are sold from a "special selection" in the dispensary. "Usually what's offered for Medicaid and insurance," says Shannon. Typically, they have no coatings or extras.

"Customers might have to pay $45 in extras, but that's how it becomes a profit item," Shannon says. "So they're really not free. If something was free, we couldn't stay in business and give it away."

Some believe that this promotional strategy, used mainly by lower-end retailers and chains, might be on its way to extinction in optical.

"I think a lot use it just to compete, but it's a tactic that's quietly choking itself to death," says Shannon. "You don't see the big retailers doing BOGO."

ALTERNATIVE THOUGHT

Still, from an overall retail perspective, BOGO has worked for some. "When retailers use it they do see bumps in their sales and traffic in their stores. In retail in general, I wouldn't say BOGO has done any more to degrade the product than what everyone else has done to get customers in the stores," says RAMA's Gatti. "As a promotional strategy, it's been around for a long time."

If BOGO works for you, use it, but sparingly. The key is to not make it confusing. "Keep it simple," Gatti recommends. "Some of the eyewear shops have made it confusing for the customer."

There are promotional strategies that can better keep the integrity of your products:

1. Promote product quality in your advertisements and promotions. 

2. Put the onus on improving people's lifestyles. "That could be a pair of backup glasses for a contact lens wearer, AR coating, or a backup pair," says Jehling.

3. Run limited promotions. Clarkson Eyecare ran a summer Rx sunwear promotion—one-half off all Rx sunwear through Aug. 1.

PRODUCTIVE PROMOTIONS

There are other ways optical retailers can promote product without degrading its value, including the following:

• Get to know your customer. "The challenge is more and more: Where do you advertise? Cell phone, Internet, radio, TV...where do you put your advertising dollars?" asks Gatti.

Use customer relationship management to target and promote the right products to your customers. "Use the info you have on your customer, whether it's on age or income," he says. "Get to know who's in your store. I know Sunglass Hut does it because I get a card from them on my birthday."

This information can also help you understand what else they may buy when in the store. "For example, convenience stores realized that new fathers came in to buy Pampers and they also bought beer," says Gatti. "So where are the Pampers now? Near the beer. It's about getting a feel for what other things you can merchandise."

• Build a connection. Another way to maintain price integrity and build sales is by making a connection with your customer. "In a retail-oriented speech by a man who owns pet stores in the Northeast, he said you have to build such a relationship with your customer that they will feel guilty if they shop anywhere else," Gatti says. Make an emotional connection with them and they will come back.

• In-house operations. Promote goods and services to your patient base through the staff. "Have knowledgeable people," says Shannon. "That's the biggest secret."

A consistent staff can also be a draw for customers. "People really want to see the same faces, but the chains are creating a transient environment for opticians," Shannon says.

Excellent service will promote your business as well. "You take medium-quality eyewear and support it with a good optician who can explain it and adjust it. Then, you've got better value than paying a huge price for high-end eyewear and having no service on it," Shannon adds.

• Bring on the show. ECPs with a focus on fashion can bring trunk shows into their promotional mix to illustrate the value of their products. "The frame rep comes in and shows off a line of frames and the customer gets a 30 percent discount. It's a good way to get people in the door," says Texas Smith, OD, with a practice in Citrus Heights, Calif.

• Extra extra. ECPs can also play off manufacturers' offers, such as rebates, to offer price discounts. "Rebates for contacts or allergy relief is a good promotion," says Smith.

• Using insurance to your benefit. Beleaguered by managed care? Some ECPs are turning it around as a promotional tool. "In California, the majority of doctors' patients are VSP patients, and VSP has an automatic clause that anything they get above their prescription is at a 20 percent discount," observes Smith.

Is this a selling proposition? Smith notes: "If you're going to get 20 percent off, whether it be a second pair or polarized sunwear, that may be appealing."