Adding on Profit

AR provides great visual benefits for your patients, but can also create a significant impact on your bottom line

By Susan P. Tarrant

AR point-of-purchase material from Essilor of America

Adding an anti-reflective treatment to lenses can provide a host of visual benefits for your patients, including decreasing glare and minimizing light reflections. It's something that should be recommended to most, if not all, patients.

Increasing your sales of AR lenses can do more for your practice or dispensary than make for satisfied patients—it can mean real profits that add up. All thanks to one very useful add-on—a term that, in this instance, is definitely a misnomer.

CRUNCHING THE NUMBERS

EB's Annual Trend Report reveals that AR is the fastest-growing and best-selling of all add-ons. And with good reason: Crunching the numbers shows that putting patients in AR is good eyecare…good business.

Each practice or dispensary is going to have its own numbers when it comes to specific revenue.

However, according to research by The Vision Council, additional charges to the patient for AR can run anywhere from slightly more than $50 for the basic level of AR to more than $125 for premium or super premium AR product. Pricing on the AR will depend on brands offered, level of AR, and lab charges.

Of course every pair of eyewear sold with AR is going to add to your revenue. But have you ever added that revenue up? And figured out what would happen to that number if you increased that specific group's sales by even a little bit? The result may surprise you.

“Increasing the number of AR jobs in your lens sales can make a big difference in your bottom line,” says Tom Pfeiffer, director of sales and marketing for iCoat Company, a full-service optical lab in Santa Fe Springs, Calif., with its own propriety AR treatment.

Need proof? EB gathered figures and profit equations provided by iCoat Company and The Vision Council:

Imagine an office that sells 40 pairs of eyewear a week (see sidebar chart). Let's give it a lowly 10 percent AR sales figure (which is less than the national average of 29 percent), with a profit of $25 for basic AR and a $60 profit for each premium AR job. Its basic-to-premium ratio is 50:50.

Single-Location OD Practice
PRODUCT	RETAIL	COST	PROFIT
Value AR	$50	$25	$25
Premium AR	$110	$50	$60
Incremental Profit
40 jobs per week	10% AR sales (4)	20% AR sales (8)	80% AR sales (32)
Basic 50% of all sales	$50	$100	$400
Premium 50% of all sales	$120	$240	$960
Total profit per week	$170	$340	$1,360
Profit per year	$8,840	$17,680	$70,720

At its current AR sales level, it is seeing $8,840 in profit each year. If that office were to increase its AR number to 20 percent of all lens sales, it would see its profits jump to $17,680 annually. That's just by putting AR on four additional patients a week. If that practice could increase its AR sales to 80 percent of all lens sales (by putting a priority on patient education and by recommending it from the exam room), it could see a profit of $70,720 each year from AR sales alone. (Keep in mind that these prices are for example purposes only, and that actual pricing differs with brand and lab).

Here's another example of how quickly the bottom line can move in a positive direction. A multi-location MD/OD practice currently dispenses AR on 60 percent of its lenses. Its success is the result of a 15 percent growth in sales each year over the past three years. By selling 160 pairs of eyewear a week at the same AR pricing and breakdown as in the above example, this practice grew its AR revenue from around $40,000 to almost $250,000 annually.

“There is no doubt that AR sales increase our bottom line,” says Aaron Vanderhoof, RDO, owner of Agawam Opticians in Agawam, Mass. “Adding more than $100 to each sale makes that a no-brainer.”

PATIENT BENEFITS

There's yet another way to boost profits while at the same time providing patients with a great lens product: encourage the premium AR.

“Even if you kept the same number of AR sales, you can realize a very significant increase in profits by just putting patients in premium AR up from a basic brand,” Pfeiffer says.

Today's AR quality has greatly reduced complaints of scratching and smudging. Image courtesy of Hoya

In The Vision Council's 2011 ECP report, 58 percent of the respondents who had increased their AR sales over the past two years saw the biggest increase in their premium-grade AR.

Make no mistake: a boost to one's bottom line is a welcome result of increasing AR sales, but providing more of your patients with the best lens combination possible is the primary objective.

AR lenses allow up to 10 percent more light to enter the eyes, providing better vision. AR also reduces glare, which provides more comfortable vision with less eye fatigue. And, it reduces distracting reflections, also making patients look better in their eyewear.

Putting patients in AR should not be regarded as selling them up, experts say, but rather recommending a lens option that will provide them with a better eyewear experience.

“You've got to make it your dispensary's standard operating procedure to offer AR lenses to every patient,” Pfeiffer says. “You're not going to go wrong; the AR is better than ever. AR lenses are what's best for the patient, and they are what's best for your dispensary.”

Vanderhoof agrees, noting, “I think the quality of the coating is far superior than in the past, therefore making it easier to sell and making the customer much happier. Complaints of smudging and scratching are not problems with today's high-quality lenses.

“Once the patients get past the idea of ‘your parents' AR’ and realize the benefits optically and cosmetically, it sells itself,” says Vanderhoof. “[The eyewear] looks nicer, scratches less than a standard lens, and your vision is markedly improved.”

Selling Tips
■ Utilize a lifestyle or needs assessment for EVERY patient ■ Visually promote AR throughout the dispensary ■ Bundle lens options ■ Offer AR in “best, better, good” AR tiers ■ Have everyone on staff wear AR ■ Have the OD or MD recommend from the chair ■ Use a lens demo of AR vs. non-AR lens ■ Never judge a patient's ability to pay

INCREASING AR SALES

One of the easiest and most effective ways to increase AR sales is for the examining OD or MD to recommend it in the exam room. According to research by The Vision Council, 86 percent of patients rely on the doctor for lens product advice, and 64 percent of patients comply with what the doctor recommends or prescribes. In a 2011-2012 study, The Vision Council reported that 27 percent of AR purchases specifically were made because the doctor recommended it.

That bit of direction from the exam room can be reinforced through the educational process in the dispensary. Opticians should be restating the benefits of AR that the doctor explained. The most successful practices have a system in place in which AR is promoted to the patients at every step of their visit.

It's worked for Agawam Opticians, where Vanderhoof says more than 60 percent of the lenses are sold with AR. That sales percentage has doubled in the last five years.

AR point-of-purchase material from Carl Zeiss Vision

“We have made a concerted effort to sell AR,” he says. “It's always easier to sell something you believe in, and personally, I would never wear glasses without it.”

If your dispensary doesn't have a procedure of educating each staff member about AR so that they can then educate the patients, you're missing an opportunity for growth.

Questions to ask a patient that will initiate a conversation about the benefits of non-glare lenses, include:

■ Do you have problems with glare interfering with your vision?
■ Do you have any difficulties with driving at night?
■ How many hours a day do you use a computer at work and home?
■ How long before your eyes grow tired or get irritated?
■ Do you notice reflections on the lenses of your glasses?
■ Are your glasses easy to keep clean?

AR Benefits

BENEFITS OF AR: ECP Profit center offering incremental growth as AR sales increase Profit center offering exponential growth as AR sales increase AND AR level is upgraded BENEFITS OF AR: PATENT 10 percent more light reaches eye No distracting reflections Less eyestrain Reduction in glare (night driving becomes more comfortable and safer) High-index lenses: the higher the index, the higher the reflection rate

Every patient—children to seniors—who walks in your dispensary or practice is a legitimate candidate for AR. No one should be discounted as a prospect, because everyone is bothered at some point in their day by eye strain, night driving, or glare. What's more, everyone wants the best vision they can get while looking their best in eyewear.

“In addition to the extra profits, you're going to get satisfied patients because of the visual benefits of AR,” says Pfeiffer, who adds, “Plus, once you've gotten a patient in AR lenses, he or she is usually sold for life.” EB