Currie and Quirk Opticians in Glasgow is celebrating its first year in business. Dispensing opticians Scott Currie and Gordon Quirk opened their practice in the busy, vibrant and yet highly competitive Byres Road area of the city, after working together for a local regional group of practices for many years. The area they chose to open their practice has a mix of people, from students to older professionals.
However, there are three other independent practices in the same road - all of which have been established for many years - and there are several other optical practices, including multiples, within a few minutes' walk. With this level of competition, Currie and Quirk had to ensure the practice made an impact in terms of its overall look, as well as in the products and services it offered. They have had a great deal of success in stocking a good range of frames, from funky acetates for students to high fashion Bvlgari for older customers with money to spend. Another area of opportunity was the supply of contact lenses, provided at competitive prices, linked to a high level of service and care.
The past year has been an interesting one for optical practices in Scotland, as they have had to adjust their business models to provide free eye examinations for all, funded by the NHS. While they are remunerated substantially more than English practices, they have also had to provide a consistently more comprehensive eye examination. Some have struggled to reconcile a fee-based contact lens programme with the eligibility of patients for a funded eye examination every two years. However, Currie and Quirk have found a way to incorporate this into their plan.
The objective
Right from the beginning the practice chose to implement fee-based pricing because it provided the patient with a transparent system - they could see the cost of the lenses, solution and care, and were under no illusions as to how much each element cost.
In this changing and increasingly competitive market patients do not see a value in the care element of the package, unless it is made clear to them.
With other lens providers advertising lens-only costs, practices will appear expensive if they charge, as they have done traditionally, an agreed amount per month which includes care, lenses and solutions too, if appropriate.
The plan
Before deciding what to charge a month for their plan, Currie and Quirk agreed they wanted to be able to charge their patients around £18 per month for 30 pairs of daily disposable lenses. Working back from this figure, they calculated what they would need to charge - in addition to the £18 - for the care element of the service to maintain profitability. This care element would incorporate an annual eye examination including retinal photography.
As a new start-up practice there were no previous accounts to base profits on. However, the CIBA Vision template could have been used by entering anticipated or desired turnover and profitability figures.
After much discussion it was decided to offer two care package levels - premium and standard. Premium level members receive full aftercare, annual eye examinations, retinal photography, the maximum discount off contact lenses and 20 per cent off all spectacle purchases. The discount on spectacles also extended to the immediate family of premium scheme members. The monthly fee for this level is £8.50. It is ideal for new and high usage contact lens wearers.
The standard level is designed for experienced and 'low maintenance' contact lens wearers with a fee of just £5.50 per month, with a correspondingly lower level of benefits. For example, these members pay slightly more for contact lenses and receive a 10 per cent discount off spectacle purchases, but only for the member. Otherwise all other benefits are the same. The scheme is similar to one offered by the partners' previous employer, which gave them confidence in structuring this one.
Before opening, Currie and Quirk conducted consumer research with family, friends and associates. They also 'mystery shopped' other optical practices to gain a feel for the competition and changing market. This gave them the confidence to charge at the mid-level, while at the same time providing best levels of care and service. They did not want to be at the high volume 'cheap' end of the market, but equally are certainly not 'brass plate' either.
Implementation
As a new start-up practice the 'buy in' of staff, once all elements of the scheme had been agreed, was quite straightforward, as it did not involve communicating any changes to existing patients.
All were happy and understood the reasoning behind the fee system, which gave them the confidence to discuss it with potential contact lens wearers, as well as existing ones from other practices.
Of course, as a new practice it is most important to provide all new and potential patients with very clear and easy to understand information on the goods and services offered, as well as the prices charged, to gain their confidence. The introduction of the contact lens scheme was no different. Few people will trust any new business until they fully understand it, how much it will charge and even more importantly, why they will benefit from using it.
To help them communicate the new scheme and its benefits, the practice decided to modify the leaflet template produced by CIBA Vision. The leaflet enabled staff to show patients a breakdown of all costs, for example, care options, lenses and solutions. The leaflet also helped practice staff explain their scheme in a structured way. At this stage they do not feel that they need any additional tools to support the scheme.
As a new business, they encountered some difficulty trying to set up direct debits with a bank, but have overcome this by a company that specialises in collecting such payments on behalf of optical practices. This will be reviewed when a number of patients have enrolled.
Patient feedback
Patients have been very positive about the scheme and are impressed with the level of service they receive.
This is further supported by the environment in which the service is provided - Currie and Quirk have invested considerably in consulting-room equipment and the shop fit.
Patient communication is also important in promoting the scheme. By asking patients what they would prefer in relation to their contact lens care and then offering the appropriate care scheme, staff have ensured that virtually all patients have signed up.
As a new practice with no existing patients, Currie and Quirk feel the fee-based scheme has allowed them to attract new and existing contact lens wearers into their practice.
They are pleased they chose this route rather than following the traditional one of combining all elements into one monthly payment. Existing wearers have been happy to transfer from other practices, because they have been given a clear idea of exactly what they are paying for.
Currie and Quirk have found that, in general, contact lens wearers want to pay for good service. In particular, they have been surprised at the number of patients who have transferred to them because they offer a direct debit facility, allowing them to spread the cost of their contact lenses on a monthly basis. Many have not been offered this at their previous practice.
Only one person has signed up to the scheme, received additional benefits - a discount on spectacles - and then cancelled the direct debit. Currie and Quirk feel this is very much the minority, but it is something they will have to be cautious of when checking the monthly direct debit statement. They have decided that the initial contract will be for six months, and if someone cancels within this period they will be liable to repay any discounts given. It should be noted that other practices have a 12-month initial contract period.
With a large local student population, the practice also decided to make an upfront payment option available, as many of students do not wish to commit to direct debits. This has been well received.
Changes in the funding of eye examinations by the NHS in Scotland have put some practices off the idea of introducing a fee-based plan for contact lens wearers.
But according to Currie and Quirk, the overall changes in the NHS in Scotland, have allowed them to build on the value of the care and service they offer. The contact lens scheme has enabled them to offer an eye examination every year, at a much lower cost to patients, as well as comprehensive aftercare. They feel they can start to provide a true eye care service, rather than being just a retailer, where the cost of products quickly becomes the main consideration.
Currie and Quirk have no regrets about starting their scheme, as it has underwritten and reinforced all elements that they wanted to promote from the beginning, in terms of quality, service and value.
It has also meant they can offer contact lenses with the confidence that they are competitive on the price they charge for products. Contact lens wearers have greater confidence too in knowing that they will always be able to receive any care they require, whether scheduled or not.
The future
Once a reasonable number of people have been enrolled on the scheme, the practice will produce a regular newsletter to keep all members aware of the latest promotions. This should help to build even greater loyalty with increased purchases, ultimately, as well as greater numbers of recommendations from existing members.
A CD-Rom containing the Professional Fee Template calculator and practice brochure is available free of charge from CIBA Vision. Contact customer services on 0870 608 20 20 to order a copy.
Martin Russ is a director of TMR Ltd, a specialist optical consultancy providing customised training, marketing and business services designed to improve the performance of optical practices. For more information, see www.tmr.co.uk, telephone 01252 626137 or email martin@tmr.co.uk