By Steve Vargo, OD, MBA
Paying for stuff hurts! No really, it hurts. Studies using functional magnetic resonance imaging (fMRI) have shown that buying something can cause the pain center in our brain to light up. This is the same pain center associated with physical pain. In fact, research conducted at Stanford University revealed a strong correlation between brain scans and a subject’s decision to make (or forego) a purchase. To avoid or minimize the pain, consumers often seek alternatives to expensive purchases. “Thanks for the exam doc. Can I have my script so I can order my (less expensive) glasses online?” So how does independent optometry combat this?
Fortunately; the “negative” correlation produced by cost is relative. It isn’t just the dollar amount; it’s the context of the transaction. Why do people spend hundreds of dollars on car accessories or clothing with little pain, but become visibly aggravated by an unexpected $10 co-pay on their eye exam. How can we minimize the pain of purchasing eyewear and maximize sales?
Cost is not the only variable that causes pain. It really has more to do with the PERCEIVED fairness or unfairness. If patients perceive glasses strictly as a commodity, with no education by the doctor or staff to the contrary, they may perceive your prices as too high. Remember, the perception of over-paying equals “Ouch!”
As consumers, we tend to have anchor prices stored away in our heads that correlate with fairness. These prices are a result of context and what we’ve been exposed to. Whether it’s a gallon of gas or a new home, we look at relative prices to determine a fair price. The challenge with optometry is that many eye wear consumers are bombarded with advertisements from discount retailers. If someone in need of new glasses sees an ad for “2 pair for $99”, that may become their anchor price that guides their perception of fairness.
If your eye wear is priced higher than the low-cost competitors (and it should be), take the time to explain why it is a premium product. Listen to your patients. What problem can you solve that your competitors can’t? Educate and change the perception of what’s fair. You won’t win over every patient, but being proactive in changing perceptions will likely lead to more sales than passively letting patients walk out with their script.
The last I checked, Nordstroms is still in business, the Ritz Carlton is still taking reservations, and somebody must be buying those $80 bottles of wine off the top shelf. A famous study found that people were willing to pay twice as much for beer from a resort hotel than from a small, rundown grocery store. Get obsessive about customer service. Invest in your optical. Invest in technology. Invest in marketing. Add value-driven services such as vision therapy, sports vision or OrthoK. Go the extra mile for your patients. In the mind of the consumer, PERCEPTION IS REALITY. Give patients a reason to believe your prices are “fair”.
Photo: Copyright: kmiragaya / 123RF Stock Photo
Steve Vargo, OD, MBA is founder and CEO of OD Success magazine. He frequently writes and occasionally speaks and consults on business related topics. He is the owner of iMobile Communications, a company that works with small businesses to integrate mobile marketing strategies. He is also President of New Media OD, a media and education company that publishes this magazine. He is in private practice in the Chicago area, where he lives with his wife and 2 sons. Contact Steve at NewMediaOD@gmail.com