Measuring Practice Performance & Setting Goals for Growth
CareCredit’s free interactive Performance Calculators can help you evaluate your practice data and determine potential outcomes of setting specific target goals.
Enter your current performance numbers and target goals into the white data fields to calculate potential revenue per month.
Click for detailed instructions.
Step 1 Determine your current capture rate over the course of a month by dividing the number of eyewear sold by the number of refractive exams performed. (Optical shops can simply replace the number of exams with the number of Rx patients visiting their location.)
Step 2 Set a realistic target goal (sample: 60%).
Step 3 Calculate the target eyewear sales volume by multiplying the number of refractive exams by the new target capture rate. (sample 250 emans X 60% = 150 total units of eyewear, 25 incremental pairs).
Step 4 Project incremental revenue by multiplying the incremental number of eyewear to be sold by your average revenue or price per pair.
Note: For optimal display, enter data into calculator as whole numbers.
For illustrative purposes only. Data represents observed industry averages1; however, figures can vary greatly between individual practices.The average price per pair is dependent upon frame quality and lens features and can vary greatly from practice to practice. However, studies show the average price for a frame hovers around $130 and lenses are $150-160 for a conservative total of $280 for a complete pair.1,3
What is capture rate?
Product sales volume is often discussed in terms of capture rate, and in dispensing eye care practices, it is commonly calculated as:
Units of Rx Eyewear Sold Divided by No. of Refractive Exams
For example, if 100 refractive exams generate new prescriptions and the practice sells 60 units of Rx eyewear, the capture rate is 60%. This metric is affected by both the number of patients purchasing eyewear and the sale of multiple pairs and can actually surpass 100%. Independent practices performing in the top quartile typically achieve a capture rate of 78% or higher.1
Why are these data-driven metrics so important in assessing practice efficiencies and growth opportunities?
Measuring practice data provides important insights into office processes and increases control over the direction of business growth. While eye care practices are complex businesses with a full spectrum of activity and data to evaluate, focussing on eyewear revenue - typically the single largest contributor to gross revenue - is a good place to begin.
Eyewear revenue can be influenced in two significant ways: the number of pairs sold and average price per pairs. Both of these metrics should be reviewed in context of opportunity. For instance, practices should consider how many refractive exams were performed when reviewing the number of eyewear sold. This is referred to as a practice's capture rate, and while many practitioners intuitively feel they capture a significant number of sales in the dispensary, the actual walk out rate is often much higher than perceived. In fact, the average capture rates for eyewear ranges from just 50 to 60%2,1 and for contact lenses, it is 35%.2 These metrics indicate considerable room for potentially improving a practice's bottom line.Similarly, the average price per pair should be well understood and considered against industry or regional averages and also reviewed in terms of year over year growth. It can then be used to make informed decisions regarding product mix and pricing structure.
Enter your own practice data and revenue goals into the white fields to calculate the number of eyewear units that would need to be sold to reach your desired target revenue per month.
Click for detailed instructions.
Step 1 Enter current practice performance incuding number of exams , units of eyewear sold and total gross revenue generated by Rx eyewear.
Step 2 Set a target increase for Rx eyewear revenue(sample 20%) and calculate potential incremental revenue ($35,000X20%=$7,000). If preferred, you can set the desired incremental revenue amount directly. When setting a reveue goal, it is important to consider growth opportunity, such as the gap between the number of products sold and number of prescriptions being generated.
Step 3 Determine how many additional units if Rx eyewear will need to be sold to meet the revenue goal by divising the incremental revenue desired by the average revenue per pair (sample: $7,000/$280=25 units of eyewear).
Step 4 If you Increase the average revenue per pair (sample: 25%), the number of units required to reach the revenue goal will decrease.
Note: For optimal display, enter data into calculator as whole numbers.
For illustrative purposes only. Data represents observed industry averages1; however, figures can vary greatly between individual practices. The average price per pair is dependent upon frame quality and lens features and can vary greatly from practice to practice. However, studies show the average price for a frame hovers around $130 and lenses are $150-160 for a conservative total of $280 for a complete pair.1,3
Break It Down for Patients
Illustrating total out-of-pocket cost as an estimated monthly payment using financing options with the CareCredit credit card can help increase both your eyewear capture rate and average ticket sale. In fact, $769 is the average out-of-pocket spend for a patient opening a CareCredit account in an optical practice — that’s after any potential insurance allowances and applied discounts.4
Contact your CareCredit Practice Development Team at 800.859.9975 (press 1, then 6) to request a custom Performance Review. Discover how your practice has been utilizing patient financing, ways to integrate them more effectively and the new contactless tools available to help further streamline the application and transaction processes.
1. ECPU MBA Key Metrics Report 2018
2. CareCredit KPI Trend Report 2019
3. VisionWatch, The Vision Council Market Analysis Report 2019
4. CareCredit average 2020 1st ticket sale in an independent optometry practice that accepts CareCredit
This content is subject to change without notice and offered for informational use only. You are urged to consult with your individual business, financial, legal, tax and/or other advisors with respect to any information presented. Synchrony and any of its affiliates, including CareCredit, (collectively, “Synchrony”) makes no representations or warranties regarding this content and accept no liability for any loss or harm arising from the use of the information provided. Your receipt of this material constitutes your acceptance of these terms and conditions.
