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John Marvin

Maintaining a High Performance Inventory

Take this path to big dividends and large profits.

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IT’S NOT UNCOMMON for optometry practices to manage their frame inventory using a stock ordering system. This means that opticians sell the frames off the board leaving a need for replacing an empty space. If they have undisplayed frames, they will take the “under-stock” and put it in the empty space. This process continues until the frame rep visits to place a replenishment order.

It is also not uncommon for frame stock to “creep” into inventories that lack variety and fluctuate in value over time.

It is estimated that at least 50 percent of most private practice inventories turn one or less times a year (a turn is a sale). Only about 25 to 30 percent turn more than three times a year.

If a private optometry office has an inventory of 1,000 frames, then only about 250 to 300 are turning enough to generate profits. Another 50 percent hardly turn at all. This happens year after year.

Many optometry dispensaries have too many frames because they carry too many brands from too many manufacturers. A brand should have a minimum of 40 pieces to be properly merchandised. If you like a brand, then make a commitment to it.

Don’t purchase 18 pieces to “see how it will sell.” This is often done and when repeated over many months results in having 30 or 40 brands in inventory.

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Limiting your number of manufacturers has several benefits. One is that you’re now important to that manufacturer; purchasing three or four brands each with 40 pieces gives you power. You’ll be able to negotiate unconventional exchange provisions, free shipping, better pricing (because you’re purchasing more). Selecting the right vendors is an important decision and should not be done casually.

You’ll want to know the sales representative but also their management. Make sure they have a large enough portfolio of brands that you can select more than one to display. Discuss up front your expectations on exchange policies, pricing and close out opportunities. It is your business and they should accommodate you, not force you to work on their terms.

An effective display and presentation of inventory should look like this:

  • A total of 800 frames in inventory
  • A total of 20 brands, each with 40 pieces
  • The 20 brands should be from no more than three or four manufacturers if possible

This inventory is a “display only” and opticians place an order for the frame the day it is sold. If the office finishes in-office, the frame is shipped directly to the office. If it will be finished at a lab, then the frame is drop shipped directly to the lab.

Using a computerized inventory enables an office to produce a daily, weekly and monthly report of the highest selling frames they carry. By not selling “off the board” these high selling frames are available every day for patients and customers to purchase.

When your sales reps visit the office, the report of their brands will show which frames should be exchanged due of lack of sales which continually optimizes the appeal of the frame inventory.

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Using this approach increases the turn rate of a large portion of your inventory and doesn’t limit profit generated thanks to the ever-increasing customer appeal of your frame display.

If a brand consistently doesn’t perform, replace it all together with another brand, preferably one from the same manufacturer. If that’s not feasible, replace it with a brand from one of your other manufacturers.

By ordering frames each day from fewer manufacturers, they’ll gladly provide free shipping because they’re shipping several at once.

You will also receive smaller invoices more frequently which are much easier to manage from a cash flow perspective. Large orders placed by frame representative to restock openings in the display create large invoices they expect to be promptly paid.

This approach to managing your inventory creates a high performing optical paying you big dividends and large profits.

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John D. Marvin has more than 25 years of experience in the ophthalmic and optometric practice industry. He is the president of Texas State Optical and writes about marketing, management and education at the practiceprinciples.net blog. You can email him at jdmarvin@tso.com.

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John Marvin

All You Have to Do Is Try One More Time

Failure only happens if you give up.

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THOMAS EDISON ONCE SAID, “Our greatest weakness lies in giving up. The most certain way to succeed is always trying just one more time.”

It is completely in our control. All we have to do is try one more time. If that doesn’t work, then try one more time. You create your own new beginning.

We often see failure as final, devastating, humiliating and sometimes even a fatal blow to our dreams. Succumbing to this point of view, or dare I say, belief, is an outward demonstration of weakness. Imagine the NBA without

Michael Jordan. Well there would have not been a Michael Jordan if he had believed that failure was devastating and final. In his own words, MJ said, “I’ve missed more than 9,000 shots in my career. I’ve lost almost 300 games.

Twenty-six times I’ve been asked to take the game winning shot and missed. I’ve failed over and over again in my life. And that is why I succeed.”

We see the awards, the recognition and notoriety of successful people like Michael Jordan but don’t realize that for every accomplishment recognized, there are hundreds, if not thousands, of instances of failure.

It is the fear of failure that keeps most people from even trying to accomplish or be successful. Wayne Gretzky, the NHL player nicknamed “The Great One” and considered by many to be the greatest professional hockey player of all time, said, “You miss 100 percent of the shots you don’t take.” The fear of missing a shot robs us of the success we can have.

What makes this so important is that success in whatever we pursue is not something that might happen, but with understanding that all we have to do is not give up, we can make success a certainty.

So, what holds us back? This little word “fear”.

Fear of some things is good. It protects us. We don’t text and drive for fear of accidents. We don’t put ourselves in harmful circumstances. I live in southeast Texas. When the national hurricane center warns of an impending storm, many who live along the coast evacuate for higher ground due to fear of a dangerous storm. These are all rational fears.

Then there is emotional fear. Fear of speaking in front of a crowd or fear of being rejected when asking the Homecoming Queen on a date. These are less rational and more emotional.

The fear of failure is an emotional fear. We are afraid that we will be embarrassed if we say we are going to do something and are not successful. We are afraid of what others might think and we’ll suffer a loss of self-esteem. Our insecurities take prominence in our imagined world.

Fear of failure is the behavioral reaction we have when we fill our minds with all of the bad things that will happen if we simply try. It’s paralyzing. We think, nothing ventured nothing lost. When in reality, nothing ventured is nothing gained.

This mindset is deceiving and limits our own potential. We live our lives defensively while others, who take risks, enjoy achievement and success. Sure, some fail, but failure is only a reality when one gives up and quits trying. Barry Bonds, the MLB player with the record for home runs at 762, struck out 1,539 times, more than twice his number of home runs. Bonds knew that each time at the plate was a new beginning and the only way to fail is to stop trying.

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John Marvin

Introducing Amazon Eyecare and Eyewear

Relax, it’s not happening … yet. But there is a lot we could learn from the company’s use of behavioral data.

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IN MY EXPERIENCE, the most frequent Key Performance Indicators (KPIs) that eye doctors use are: 1) How much is today’s deposit? And 2) How many appointments are on the books for tomorrow?

It may seem simplistic, but many people reading this article will agree, it’s a ritual many eye doctors go through at the end of every work day. It’s a good start, but far from enough to perform with a competitive edge.

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We live in a marketplace driven by data. In our industry, there are courses at major conferences to teach ECPs the KPIs they should measure and manage and how often. Our practice management software can produce countless reports. It can be overwhelming, not to mention time consuming, to keep up with all of the information being produced.

But in eyecare and eyewear’s ever-changing environment, the effective use of data will be the difference between success and irrelevance. We must move from transactional data to behavioral data.

For decades, we’ve used transactional data —measuring what happened in the past — instead of using that data to tell us what we need to do to increase sales and service delivery tomorrow. But with a profession populated in large measure with small independent business people, it is difficult to build, much less afford the type of data systems needed to compete in today’s marketplace.

At a conference I recently attended, the question was posed, “What if you woke this morning to read that Amazon had announced they are going to invest big in the delivery of eyecare services and eyewear before the end of 2019, what would you do?” It is a very good, and not wholly unreasonable, question.

I think the reason people fear Amazon’s entry into our profession is that we know how good they are at competing. We know how much we like using them and how intimidating they are to anyone who has to compete with them … just ask Walmart.

Amazon’s real power is their use of both transactional and behavioral data. Have you ever purchased something from Amazon and for the next two weeks, everywhere you go on the web there are ads associated with what you just purchased? They studied purchasing behaviors and know that a majority of people who buy X will also buy Y if given the opportunity. They are using historical data to predict future purchasing.

With an online analytic program for the independent ECP, we could begin to understand what happened in the past and think about how to use that to impact the future. For example, if you knew a significant percentage of patients who purchased two or four boxes of contact lenses at exam purchased additional boxes within six months, then you could communicate with those patients right when they are most likely to repurchase.

However, this requires new capabilities in data collection, new tools and software for analyzing this information, and most importantly, a new way of thinking about the information being created in our businesses.

The future is not coming, it is here and those who are willing to think differently today will be the ones who will be relevant tomorrow.

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John Marvin

Why Do So Many ECPs Ignore the Power of Personal Touch?

Remember: your convenience is never as important as investing personally in relationships.

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IN THIS TIME OF digital communication it’s easy to lose sight of one of the most important aspects of interaction — the personal touch.

In a month when stores are filled with expressions of affection, would those of us in a serious relationship send a digital Valentine’s Day card? (If you don’t understand the problem with this, let me save you some heartache, don’t do it.) There are occasions when only something personal will connect in a way that matters.

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For years there has been a push to move practice owners into the digital age with websites, Facebook pages, and Instagram accounts. Practices have discarded traditional recall cards and embraced digital patient communication platforms. Now with preprogramed software, thousands of emails and text messages can be sent to communicate with patients.

I love this new digital age and all it gives us the ability to do. However, now and again, I am reminded of the power of the personal touch. I’ve recently had two experiences that emphasized this.

The first occurred with my wife. We decided to plan a long weekend to celebrate her birthday where we could enjoy some sun and sand. While by the resort pool, her phone rang. She didn’t recognize the number, but decided to answer it anyway. I watched as her curiosity turned into a smile. She said, “Thank you, thank you very much, that means a lot to me,” then hung up. She told me it was her eye doctor just calling to wish her a happy birthday.

You should know that my wife is two, maybe three, years past due in her annual eye exam, but that didn’t matter. Calling his patients on their birthday is important to him. He could have his digital communication program automatically send out a birthday email, but it just isn’t the same. It’s the time and commitment that lets his patients know he cares. It tells his patients that they have a relationship to him, not just a file or a spot on his schedule.

The second is when I recently purchased some eyewear from one of our network doctors. I was told they would be ready for pick up in about a week and they would notify me when it was ready. About five days later, they left a voicemail letting me know I could pick them up when it was convenient. Up to this point, the experience was pretty conventional. However, what happened next is impressive.

A couple of days after picking up the glasses, I received a handwritten thank you from the young lady who dispensed them. It was personal and even contained a comment regarding a topic we had casually discussed. Wow! I was impressed. Then a few days later, the doctor called to make sure I was pleased with the product and service. A phone call from the doctor after a handwritten thank you note from the optician, after a personal call to let me know my eyewear was ready? That is impressive.

All of that could have been automated — it would have been far more convenient for them and, arguably for me — but, in this instance, convenience is not as important as investing personally in the relationship. There is power in the personal touch.

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