What is your Lab IQ?

Judy Canty once wrote a sage article about taking charge of your own destiny entitled “The Sky is NOT Falling.”

She noted that in response to all the noise about a recessionary economy, some practices are motivated to advertise more, and about the same percentage are motivated to advertise less. As with advertising, there are at least two trains of thought about getting the most bang for your buck when choosing an Optical Laboratory.

177-clear lens in hand-6x4One type of practice is on a continual search for the best price on every item. They search the market looking for specials and throughout the year divide their business differently among the many labs that they use. These practices may pay lab bills that total $5,000 a month, but each lab they use knows them as a $300-$1,000 a month customer.

Another practice takes that same monthly $5,000, which adds up to $60,000 of business a year, and places it with one laboratory. The practice makes a concerted effort to build personal relationships with the personnel of that lab: their salesman, a Customer Service Representative (CSR), and that lab’s management. In response to their business volume and loyalty, they are often receiving better prices and warranties than those who switch between various laboratories.

When researching a first or new lab for your practice, on what basis does a practice owner make this important choice? My mantra for judging a lab is my Q.C.P.S. system: Quality of the finished Rx, speed and ease of receiving Credits, competitive Price, and Speed of Service.

Every optical practice I have visited during my twenty-five years in this industry has wanted to use labs that deliver a quality product consistent with the order placed. Every optical lab is run by humans, and humans may strive for perfection, but none of us produces a perfect product consistently. Therefore, a practice chooses a lab that usually gets the Rx right the first time and delivers it quickly. But the real competition among competent labs is based on the 15% or less of jobs that need help getting out the laboratory door. Are errors corrected quickly and without hassle, and are returns for credit processed expeditiously?

Many good labs choose to focus on quality over speed. I believe that delivery time for these labs may take three days to two weeks for uncut lenses with AR added, and other jobs may take 2-3 days to deliver, but almost 98% of the jobs are received right the first time by the practice. Practices with a client base that can accept deliveries of a week or two appreciate that the internal lab inspections catch most errors, and returns for redo are mainly handled internally.

Credits are the bane of the industry, and there is no lab that advertises how it handles them. The crediting process uses valuable time to process returns, and track credits, which might otherwise be lab time and sales time used to maintain practice profits. From the manufacturing side, every warranty credit processed is an attack on the Lab’s bottom line.

Price is usually the first thing mentioned when a practice is debating about choosing a lab. “Send us your price list, and we will compare it to the prices of others before we decide which lab to use.” But the published price list may not give you, the optical manager/owner of a practice, all the information you need. Ask for one, but then ask for a manager or sales rep of the lab to contact you about negotiating better than list prices.

If you have a track record of annual lab business, give that information to the various labs you are considering. If you are a new practice, give each lab an estimate of that volume. And don’t forget, unless you are leaving a lab because of bad service or quality, tell your current lab that you are considering other labs and ask them to compete for your business. The lab will appreciate your honesty, and will much prefer to keep you as a customer than to find out from your diminished ordering that you have “gone to the competition.”

I can almost bet you dollars to donuts that at least one of the labs you contact will want to differentiate themselves from other labs on one or more of the Q.C.P.S. parameters to compete for your business. Once you know the best pricing a lab is willing to offer you, the warranties, crediting ease and speed, and the speed and quality of service they offer, then you are better able to compare what Laboratory vendor might be best for you.

Some practices fear “putting all their eggs in one basket.” They say, “what if the lab falters – another lab will not give me the service I expect.” I believe that this is a false fear. Any good lab is willing to compete for volume customers.

So each practice determines on what basis it will choose the labs it deals with. Some practices avoid change and stress their lab loyalty, some avoid negotiating pricing or policies, some take pride in shopping for the best deal, and some like to deal with only one, or very few, labs at any given time. These lab relationships benefit both the competitive edge of the practice and the sales volume of the lab. Every lab has customer relationships that reflect all these types of practices. The lab, a good lab, values each one of them.

Ted Weinreich, MBA
Regional Sales Manager, Optogenics

Credit: EyeCareProfessional Magazine

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