If it seems like we’re talking about brand names too much, it’s for a reason. As discussed in Step 2.1, brand names serve an important purpose, but leaning on them too strongly is a recipe for sub-20% profit margins.
No independent optometrist in the U.S. can hire the staff, afford the equipment, or pay for the promotional strategy necessary to dominate their market with profit margins that low.
Put a sub-20% profit optical up against a 30% – 40%+ profit margin independent optical and they’re going to lose every time — no matter which brands are represented on their boards. You can’t market & promote your business remotely as aggressively to bring in more prospects, and you’re not able to invest as much in the patient experience as they can either.
Desirable brand names are an effective marketing tool that attracts customers and gets them looking at your optical boards. If you’ve built your personal brand using brand names as a “load-bearing” pillar, they’re likely hurting your business more than they’re helping it.
What are the indicators that you’re leaning on low-margin, branded products a little too strongly?
Are your frame markups anywhere near 3x list price? The most popular brands often have the most starved markup, whereas equal-quality house brands frequently allow for 5-8x markup, resulting in twice as much profit (or more) per sale.
What percentage of your frames are brands consumers would recognize? If the answer is over 40%, that’s great news for your frame rep and the manufacturer they work for, but it’s likely starving your personal brand and business.
Do you have several “second tier” brands on your boards that many people recognize, but few are passionate about? Brands like Boss, Calvin Klein, Shaquille O’Neal, etc. are recognizable, but shadows of the fashion leaders they once were. They have the same poor markups as today’s renowned brands but virtually none of the marketing power.
We’re not advising you to throw the baby out with the bathwater. Revered brands play an important role in any independent optical. They’re powerful tools to bring prospects into your optical and into conversation with your optical staff.
Beyond that, equipping your staff and business with the ability to transition patients to more affordable, equal-quality, and equal-style house brands is what profitable optometrists focus on. Your patient saves money, your business often profits twice as much (or more), and you’ll never lose out on business from diehard brand fanatics who specifically shop locally for that reason.
This is the approach to branded frames that profitable optometrists use to dominate the regions they operate within. If you implement this approach you’ll generate more “fuel” (profit), be able to compete with even the toughest competition, and be funded well enough to provide the best patient experience in your area.