Is eye care now just a commodity?
By Chris Clemence, Commercial Director
The recent launch of free eye examinations by a major retailer has caused much discussion in the independent sector. Many see it as damaging to their profession and potentially damaging to their business.
So is eye care a being ‘commoditised’? Commoditisation of a market happens when the buyers in that market, our patients, perceive the only real differentiation between providers is price.
Commoditisation happens when economic pressure on customers is high, when new technology influences the market, when the communication of unique values is difficult and, as is happening in optics, when large players decide commoditisation is to their market advantage. The effect of commoditisation is generally good for larger service providers who can live off thinner margins on greater volumes. For those quality providers who can’t do this, differentiation based on price only is a bad thing.
Is commoditisation happening in the provision of eye care? One would hope not of course, but with recent market developments the signs are certainly there, and independent practitioners must be aware of the dangers.
A more important question is perhaps; if commoditisation is happening, does this mean the end for the independent sector? In the short terms the answer is, of course, no. Many independents will have strong relationships (some through loyalty schemes) with their patients and this latent loyalty will take time to erode. But in the medium or longer term however, the competitive threat is certainly there and the gauntlet has been firmly thrown down.
The most important question for an independent practitioner therefore must be, with only limited marketing resources, how does one resist the forces of commoditisation, when professional services and care are only being differentiated by price,?
It can be done. Independent practices need to identify, develop and most importantly, communicate the differentiators that justify the price. Patients do not generally value what is not paid for and they do value what they do pay for - communicating that value is therefore essential.
There are a number of things an independent practice can do to fight the commoditisation:
- Firstly, do something! Hoping the issue will go away is certainly the wrong attitude to take. The recession has inevitably acted as a catalyst for patients to consider their finances, both now and well beyond the end of the recession. Commoditisation feeds upon this new found financial awareness.
- Concentrate on the quality of the core service and products that the practice is built around, develop these and identify and develop the all important differentiators.
- Don’t attempt to do everything yourself. Time is often more expensive than cash. The independent optical professional should concentrate on the core service being offered.
- Offer quality over price, but, most importantly, offer easier access to that quality. Eyeplan and the Eyeplan Complete scheme in particular are excellent examples of that.
- Look for ways to improve how your practice communicates what makes it different. This includes both how the practice looks and feels, and importantly what communication takes place between staff and patients. Do practice staff receive regular training for example?
- Look to capitalise on the marketing assets that the practice already has, for example the patient list. How is this being used to communicate differentiators to patients? Could a service such as Eyeplan Connect be used to communicate with patients between eye examinations?
- Look to capitalise on relationships with suppliers and business partners. How can they help with marketing and patient communications? Do they have resources and expertise from which the practice can benefit?
- Use a loyalty scheme such as Eyeplan to offer true value over just price. Even in a commoditised market, value, if communicated effectively, will be preferred over price.
It is important, with market sentiment and competitive pressures working against the independent practice, that practioners do act. To do something, they should look to their suppliers and business partners to help them.
Personally I don’t see eye care as a commodity and it is unlikely I ever will. But I have the advantage of a slightly greater insight into what an eye care professional offers. It is the man on the street, our patients, who we need to worry about. I would like to think also that, for the discerning patient at least, eye care will never be a commodity to be bought at the cheapest price. But it is something we need to act to prevent.
Eyeplan is the AOP’s approved supplier of monthly payment eye care schemes. Eyeplan also offers practice support in marketing and training for Eyeplan Associates. Chris Clemence is the Commercial Director of Eyeplan Ltd.