As an eye care professional, you understand the importance of your optical’s revenue and its critical role in the survival and growth of your practice. But, how do you know if it is performing as well as it could be, or how it is performing compared to the national average? Fortunately, there are some simple calculations you can do to find out how your optical is performing and where improvements can be made.
8 Optical Metrics and Benchmarks to Stay Competitive and Increase Revenue
1. Patient Volume and Revenue per Patient
The first metrics you need to pay attention to are how many patients are coming in your doors and how much revenue are they generating. It is important to know if you are having more patients but not making as much as you once did. Knowing this, you can determine where losses are occurring. These metrics are your baseline for determining where and how you can generate more revenue from each patient.
The Calculation: Your yearly revenue divided by the number of patients you saw.
The Average: Between $150 and $500
2. Determine Your Optical’s Capture Rate
Now that you know how many patients you have and how much revenue they each generate, you can figure out your optical’s capture rate. Your capture rate is the ratio of patients who receive eye exams and get new prescriptions, to the number of them who purchase lenses from your optical. Once you know your capture rate you can work on improving it.
The Calculation: Patients receiving new prescriptions divided by the number of lenses sold.
The Average: About 65%
3. How Often Do You Sell Multiple Pairs?
Determining your “multiple pair sale ratio” will give you a benchmark to improve upon. Most people only use one pair of glasses regularly, but approximately 30% of prescription lens wearers regularly wear two pairs. Older patients account for the majority of multiple pair users and men are slightly more likely to have more than one pair compared to women.
The Calculation: Patients buying multiple pairs divided by the total number of patients buying lenses.
The Average: 10% of the time
4. Assess Your Anti-Reflective (AR) Lens Ratio
Anti-reflective lenses are a great add-on to a sale that will help generate more optical revenue. AR lenses are a good choice for almost everyone, so it should be an easy up-sale if you can convey to the patient how it would benefit them.
The Calculation: Number of AR lens sales divided by total number of lens sales.
The Average: 40% in the U.S. (while 90% in Europe and Asia!)
5. Track What is Generating Your Revenue
It is important to be aware of what services and merchandise are generating the most revenue and what can be improved upon. Track how much revenue comes from eye exams, frames and lenses, contacts, sunglasses, surgeries, condition treatments, and any other revenue sources. Break these sources into small groups to discern strengths and shortfalls.
6. Know Your Gross Profit Margin from Your Eyewear Sales
Now that you know where your revenue is coming from it is important to know how much profit is being generated by these sales. You may be selling a lot of pairs of lenses, but are you making as much from it as you should be?
The Calculation: Total revenue generated from eyewear sales, minus your cost, divided by the total revenue generated.
The Average: 61% for regular eyewear and up to 75% for high-performance eyewear.
7. Keep an Eye on Your Lens Remake Ratio
Remakes on lenses are just part of the business, but by tracking your remake ratio you can try to bring your average down. With careful study, you may be able to discover the cause of any upticks in your ratio.
The Calculation: The number of remake orders divided by the number of total orders.
The Average: 15%
8. Contact Lens Prescriptions vs Contact Lens Sales
This final metric will help you understand what could be done to improve sales of contact lenses to patients receiving a new prescription. As with all eyewear, there is a lot of competition coming from the online sector. One suggestion is to offer a subscription plan to your patients with free home delivery.
The Calculation: Total revenue from contact lens sales divided by total number of prescriptions written in a 12 month period.
The Average: $152
Let the Sullivan Management and Consulting Group Do the Math for You
Running a successful eye care practice and keeping track of all the numbers can be daunting. The professionals at the Sullivan Management and Consulting Group have more than 30 years of experience helping practices just like yours prosper.