Over the past five years, I have been ringing a bell of concern. I’ve shared my prognostications with you individually, through this venue and others. I’ve opined that you, as a vision plan provider, are simply cogs in someone else’s wheel. I’ve discussed how vision plans have but one goal: to control your patients.
VSP has clearly communicated their strategy. As I predicted, they are now taking their message directly to your patients. Their targets are those patients upon which your practice relies for profits. I’m speaking of the historically non-insured; those patients who provide the economic fuel for your ability to serve vision plan patients in the first place. Without patients who pay near full price for your products and services, how can you possibly afford to sell a substantial subset at a significant discount? You’re supposed strategic partner is going over your heads to move your patients from your sphere of influence to theirs. They do so to sell their product instead of yours. They do so at your expense.
Vision plans as brand destroyers. Whether VSP, EyeMed, Davis, Spectera or scores of others, vision plans have led, and continue to lead, the consumer’s perception of vision care value. If you view VSP’s direct to consumer advertising, they focus all of the consumer’s attention on cost; indeed, about all I hear in their commercials is “Mrs. Consumer, you’re being ripped off by your current provider to the tune of $200 per year.”
While the 800# Gorilla moves to control you and your patients, they counter that messaging with a variety of PR initiatives specifically designed to tell you how supportive they are of your practice modality. They promote that they’re advocates for the patient and for private practice optometry. I cry BS!
While VSP and their competitors are seeking to control your patients through the back door, others are using new channels of distribution to attack your business head-on.
Technology is evolving. Joining classic retailers and big-box discounters are internet purveyors like Warby Parker. At last count, there were some 300 sites that offer eyewear via the internet. While still only a fraction of the market, they are a formidable force…especially in the single vision and sunwear category.
Firms like Warby Parker are making in-roads. Further, they’re educating your patient…with messaging that’s important to them. Warby Parker is successfully making access to eyewear less complex. And they’re addressing an important demographic in ways that appeal.
In a very short period, less than five years, two significant new competitive channels have arrived on the scene. The first is your old friend, vision plans. They’re destined to drive business to themselves, over your heads and around you. Their greed is evident…they seek the long dollar. They don’t need you and they’re using you to build their business.
So what are you doing to counter these initiatives? What are you doing to separate your practice from the brand positioning of vision plans and internet purveyors? What are you doing to counter their messaging?
In very simple terms, my observations are that many tend to support this “we’re overpriced – value positioned” messaging with similar marketing initiatives The consumer is confused, the result of a myriad of generally unsophisticated, reactive, mis-directed and poorly executed promotions. It seems that our industry’s retailers can’t put forth any kind of promotion without the message being influenced by a discount. Whether a back-to-school promotion, a trunk show or the launch of a new product, what I see are discounts. And clearly this messaging works. Today, the independent controls 53% of all patients but only 42% of all revenue. What’s wrong with this picture?
Combating the flames of these new competitors is going to take a different kind of extinguisher. What we know as an industry is that eyecare…quality eyecare…is playing an ever-more important role in quality of life. Whether through developmental vision, advanced lens technology, fashion-forward eyewear, disease management, low vision services or a score of other specialties, you have designed products and services that enhance people’s lives. Are you effectively teaching the consumer about the availability of these important services? Are you expressing the appropriate value message? Are you reaching out in assertive ways to counter your new competition’s messaging? Are are you marketing in the same old way?
You’ve allowed others to take control of your practice and your brand. As a segment, you’re failing to educate your patients on the importance and value of your own services? You’ve sat back and relied upon your associations, the industry and vision plans to communicate to your patients. You’ve joined franchises with the hope that adopting someone else’s brand would fuel your growth. As a result, you’ve become a pawn in their respective games.
It won’t be easy to take back your brand. You’re going to have to think differently about your marketing investments. You’re going to have to think differently about whom you hire and what you expect from your team. You’re going to have to think differently about how you lead and where you invest your time. And you’re going to have to do this in a period of significant industry realignment. While you’re managing your own initiatives, the industry is changing around you. At warp speed.
The seas ahead are turbulent. New players are entering our market. Firms which have been focused in one direction are changing strategies. Companies are being bought and sold as the corporate side of our industry sets up their own strategic initiatives. The two major vision plans are clearly locked in a battle to control not only your patients, but your supply channels as well. It’s a dangerous game.
But against this backdrop. Within this environment. There’s significant opportunity. Why is it that middle-market multi-location eyecare retailers are buying up practices? Why is it that investment monies are chasing these consolidators? Why is it that everyone appears to be in an expansion mode? Well, in simple terms, the demand for eyecare services is increasing. Whether as the result of new technologies like Google Glass, through the impact of ACA or simply the result of an aging population, eyecare is a good place to be…if you have the stomach for change.
The coming decade will be one in which we’ll see unprecedented industry consolidation. Will you lead that charge…or be its victim? Do you have the human capital necessary to succeed in this new environment? Are your assets properly organized and deployed? Is your team comprised of individuals who can take initiative; who are driving your business forward on your behalf? Or are they waiting for you? Do you even know what’s going right in your practice…and what’s not? This critical thinking is going to be ever more important if you are to thrive in the future. There’s no magic bullet. Success is going to take hard work and commitment.
As the CEO of your enterprise, the leader of your team, I challenge you to question yourself and your organization…all the time.
