Is it time to switch to a care plan model?: Ben David
1st July 2020
‘Care plan systems in optometry, quite simply, give peace of mind both for the patient and the ECP.’ – Brian Tompkins, owner, TK&S Optometrists.
Care plans are essentially patient subscription services. Over the past 10 years, we have seen a dramatic shift from one-off, upfront payment models to ongoing subscriptions across a range of sectors. Consumers want and now expect this type of payment structure, and what started as a very product-led proposition has now crept into every walk of life, including those industries that are very much service based. Optometry, as an industry that is both product and service led, is in a prime position to capitalise on this movement.
The optometry sector has started to embrace the recurring revenue business opportunity (primarily with ongoing contact lens subscriptions) but there is significant room for expansion and improvement. For optometry businesses that have focused on creating care plans or subscription services, these recurring revenues have been the lifeblood of their business during the Covid lockdown period. If introducing care plans and focusing on recurring revenues instead of irregular one-off purchasing of frames was a nice-to-have before Covid, it has now become a must-have. The good news is, making this switch can be much easier and far less daunting than might be expected.
‘Making this switch (to offering care plans) can be much easier and far less daunting than might be expected.’
Subscription services have traditionally been the domain of magazines and newspapers, with their loyal readers more than happy to commit to a regular payment plan in return for the convenient service and quality product they received. The seismic technological changes we have witnessed over the last two decades have made it increasingly easy for companies of all types to get their customers to pay for use of a service or product in regular instalments and subscription-based payments have broadened their reach well and truly beyond the publishing world.
In every sector there are businesses that are embracing a subscription model; food & drink, travel, education, entertainment, health & fitness. Consumers want and expect to be able to set up an ongoing payment scheme not only for the products they regularly purchase (their coffee, car, razors, vitamins, pet food) but also the services they use (fitness clubs, film & TV, language learning). It’s not just the consumer that benefits. The subscription model provides a compelling offering for both parties – stability for businesses and affordability and convenience for consumers.
‘The diagnosing optometrist receives ongoing revenue for the duration of the treatment plan and not just until the original dose runs out.’
Optometry has been following this trend with the care plan model many high street opticians have implemented for contact lens management. A large number of opticians/optometrists are starting to offer OTC products via companies such as Adaro who provide the home shipping and direct debit service that is such a classic win-win for both patient and business owner – the patient receives an ongoing supply of the treatment they were prescribed without having to leave their home, and the diagnosing optometrist receives ongoing revenue for the duration of the treatment plan and not just until the original dose runs out. This has the added impact of ensuring front-of-mind marketing with the patient as they receive branded packages at regular intervals. Who are these patients going to think of when they need new frames, or a friend asks them for a referral?
Moving from being a business that has traditionally been dependent on one-off purchases of frames to one that focuses on getting their customers to commit to a regular payment plan requires careful and considered planning but the rewards that this type of move can bring are manifold – greater stability, increased revenue, better customer experience to name but a few.
As with any change, particularly when a business owner has been so deeply entrenched in one way of operating for a long time, the hardest step is the first one. However, and now more than ever, there are countless tools and expert guidance available to help make that initial step (and the subsequent leaps forward) a little easier. In the next blog, I will be showcasing examples from the industry of success in this area with insight from those that have first-hand experience of enabling the type of business change outlined above.