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Increase your capture rate with tiered pricing

Publication
Article
Optometry Times JournalApril digital edition 2023
Volume 15
Issue 04

Implement this strategy in your practice to sell higher-end frames and increase revenue.

Does your practice have the right frame strategy in place?

Image Balenciaga l.a.Eyeworks: Photo courtesy of Jesus Santos.

Image Balenciaga l.a.Eyeworks: Photo courtesy of Jesus Santos.

According to data in a 2019 trend report by ABB Analyze,1 the capture rate for eyewear averages 50% to 55% or less. With the onset of COVID-19, many practices experienced lower capture rates due to patients buying their eyewear online.

Optimizing how you offer and present frames to your patients will increase your capture rate, increase optical revenue, and give you a competitive advantage over other optical practices in your area.

Let’s take a moment to look at a global company that has done a phenomenal job implementing a tiered pricing strategy. Undoubtedly, Apple is one of the most successful and profitable companies worldwide. Imagine you are in the market for a new iPhone. When you enter the Apple store (or go online), you see 3 or 4 options for your new phone and that is it. They make it simple for the customer. Why? Too many choices can be confusing and overwhelming. Apple knows and understands that offering fewer options leads to a customer making a faster decision when they are ready to purchase.

In many cases, we do the exact opposite in our optical dispensary. We offer hundreds of frame options, and when patients are asked to “pick the one you want or like,” it is no wonder many leave with their prescription. Too many choices are too overwhelming.

Your patients must experience the “Apple tier pricing” when buying eyewear. Why? Creating a tiered price strategy and frame styling your patients in the best eyewear styles for them are imperative if you want to increase revenue and your capture rate.

Here’s how to create a 3 to 4–tier pricing strategy for your practice and strategically frame style your patients.

Tier 1: Luxury line

Luxury frame lines are usually independent frame collections; some are made with high-end materials such as pure Japanese titanium or are gold plated. These frames fall into the retail price category of $800 to $1500—or more. Some luxury frame lines offer retail exclusively, whereas others allow the patient to customize their eyewear by letting them choose color combinations, different temple styles, and size variations. They may also offer the option to have the patient’s name or a phrase engraved inside the frame temple.

Why is it important to have luxury eyewear? Patients understand that eyeglasses are medical devices that allow them to see better, and that they need them to function, work, drive, and so on. They seek quality, comfort, style, and fit. But not all patients have the same requirements when it comes to purchasing eyewear: Some higher quality eyewear, uniqueness, and customization in their everyday eyewear. Luxury frame collections give your patient more options where they can customize or discover the frame materials that are best for their lifestyle.

Tier 2: Designer line

Designer brands are name-brand frames that are well known in the fashion industry. These frames retail for approximately $400 to $800. Most patients recognize these brands immediately when they see the logos in your practice. These brands usually have agreements with frame companies to produce or distribute frames with their logo.

Why is it important to offer designer brands? Simply put, first impressions matter. When a patient first considers making an appointment with you either in person or online, they automatically make a judgment based on the brands they see you carry in your optical practice. Patients associate certain brands in this category with quality and social status. They know and expect to pay more for these frame brands because they are aware of their popularity in fashion. Offering 1 to 3 frame brands in this category is an excellent optical strategy.

Tier 3: Fashion frame line

Fashion frames can be brands patients recognize, or they can be independent frame collections that are fashionable. These retail between $250 and $399.

Tier 4: Value line

Value line frames are priced below $249 for patients looking for a lower price point. They are brought out to a patient as an option if the luxury, fashion, or designer frame styles are beyond their budget. These frames are not displayed. Keep in mind: You sell more of what you display, offer, and style. If your dispensary has mainly luxury and designer frame lines, you will sell luxury and designer frames. If you display mostly value frames, you will sell more value frames.

Once you have categorized your frame stock into 3 to 4 frame tiers, your optician is ready to style patients in the best eyewear for them.

Styling patients

Office Options. A styling booth at Buena Vista Optical. (Photo courtesy of Diana Canto-Sims, OD)

Office Options. A styling booth at Buena Vista Optical. (Photo courtesy of Diana Canto-Sims, OD)

When the patient has completed their eye exam, sit them down comfortably and discuss all lens options recommended and prescribed by their doctor. Assure the patient that you will show them 1 to 4 frame styles you handpicked that will work great for their prescribed lenses, facial features, and lifestyle. This strategy dramatically cuts the frame selection time and creates a more luxurious, customizable experience that most big chain optical stores lack. Offering a curated selection of frames for every patient places your practice in a unique position, differentiating it from all the others and giving you a competitive advantage.

Your optician will style each patient in 1 frame of each price tier, allowing the patient to pick their favorite frame and pair them with the lenses you discussed previously. If price is a concern, you have a value line frame to offer (Figure).

Why tiered pricing creates more revenue and a higher capture rate

According to Neuroscience Marketing,2 study data show that when consumers are confronted with 3 options, they are less confused, purchase more quickly, and feel like they made the right choice. Implementing this pricing strategy prevents your patient from walking out with their prescription because you gave them too many options. It also helps increase the capture rate because you give the patient choices vs the “take it or leave it” option of just 1 frame or, in some cases, an optical dispensary filled with so many frame options that the patient is overwhelmed.

This pricing strategy also helps you sell more. For example, suppose a patient is debating whether to buy a luxury frame for $1500 or a designer frame for $800. If the patient is not familiar with the quality and craftsmanship of the luxury frame, they may assume that the $800 designer frame is a bargain compared with the $1500 custom luxury frame. If the patient is only presented with 1 frame option, they might assume that the frame you recommend is “expensive” because they have nothing to compare it with on price.

Implementing this sales strategy gives patients options and helps sell higher-priced frames because the patient can compare and make an informed decision. It also prevents patients from walking out the door with their prescriptions and helps increase your revenue and capture rate.

REFERENCES
1. 2019 trend report: independent optometry key performance metrics. CareCredit. Accessed February 28, 2023. https://www.carecredit.com/sites/pc/pdf/optometry-trends-report.pdf
2. Dooley R. More decoys: compromise marketing. Neuroscience Marketing. Accessed February 28, 2023. https://www.neurosciencemarketing.com/blog/articles/compromise-marketing.htm
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