This is a sponsored post by Essilor of America, a supporter of NewGradOptometry & new graduate optometrists! 😎
I had the opportunity to participate in Essilor's pilot of the CEO.D.™ Program. The program is part of Essilor's ECP University™, specifically created for practice owners and ODs, and is an advanced learning course on how to create a successful, thriving optometric practice.
As a practice owner of four years, I felt I had a firm grasp on the brand and culture of my office, but knew I was weak at evaluating business operations. Unfortunately, it can be difficult to acquire business knowledge on your own, and this is oftentimes not taught in optometry school.
I signed up for the course hoping to acquire knowledge in this particular area, and equip myself to take necessary measures to grow my practice.
When is the CEO.D.™ Program?
The CEO.D.™ Program consists of 5 online sessions and 2 on-site sessions.
The class will be offered three times in 2018 with start dates as follows:
- March 12, 2018
- June 18, 2018
- September 17, 2018
Click here for more details or to enroll.
What does the CEO.D.™ Program cover?
The CEO.D.™ Program consists of 5 key areas:
- Establishing your brand
- Creating a culture
- Business operations and performance
- Practice profitability
- Customer experience
Who would benefit from attending this program?
- Potential and/or new practice owners
- New graduates considering practice ownership
- Existing practitioners who are looking to actively update their practice's culture
- Existing practice owners pursuing practice growth or attempting to better understand practice metrics
- Optometrists looking to increase profitability
Essilor's CEO.D.™ Program will teach you critical staffing lessons.
These lessons include:
1) Interviewing and Retaining Employees:
This is an important skill to have as a small business owner. There are strict guidelines on what you can and cannot ask an employee in an interview. In fact, I learned that there are certain things that are illegal to ask.
For example:
- Age
- Race
- Gender
- Marital Status
- Nationality
- Children
- Religion
These are topics that may be alleged to show illegal bias, and therefore you should avoid these topics with employees.
2) Hiring and retaining employees
It can be difficult to find the right process to utilize when hiring employees, and your ability to retain these employees can be even more difficult.
It is said that it is far cheaper to retain an employee than find a new one, so you should be asking yourself what is important to keeping your employees happy. Studies indicate that the cost of replacing an employee can range from 16 – 20% of their annual salary.* That is up to $6,000 for a $30,000 per year staff member! (1) This does not include other costs such as loss in productivity, cost of training and patient issues and errors that naturally result when a new employee is ramping up. Clearly, you should be assessing what can be done to retain happy and productive employees!
Many business owners believe money or salary is the biggest motivator, but you would be surprised at how much employees value appreciation for their work even ahead of compensation.
A simple, "Thank you for your hard work," at the end of each day, can go a long way towards keeping your employees happy.
A large component of growing and running a thriving practice is to not only keep employees happy, but keep them motivated.
Are you clear in your expectations for your employees? If not, this could be keeping your practice from growing.
According to an article by the Harvard Business Review, successful accomplishment of your practice goals comes down to the following:
- Setting clear expectations
- Ensuring the needed capabilities and resources are possessed by your staff
- Setting clear, measurable objectives
- Providing clear feedback on a consistent basis along the way
- Set clear consequences if expectations are not met
A large part of Essilor's CEO.D.™ Program is learning and understanding how to use key performance indicators (KPI's) to evaluate your practice.
The optometric industry has a number of key metrics or KPI's used to compare your practice against industry standards to ensure you are being as productive and profitable as possible.
Why are Key Performance Indicators Important?
- Help an owner understand if the company is on track to reach goals
- Vital to increasing the profitability of your practice
- Provide accountability for your staff
- Guide in making changes in particular areas of your practice
These are the most important key performance indicators you need to understand as a practice owner:
Gross Revenue per exam
This is the ratio of total amount billed for eye exams divided by the overall number of eye exams completed.
This KPI can be used to:
- Examine the strength of doctor driven dispensing
- Evaluate staff's ability to sell second pairs and year supply of contact lenses
- Evaluate the staff's sales of premium products
Gross Revenue per OD hour
This is the ratio of gross revenue for a particular period of time to the total amount of OD hours worked during that time period.
This KPI is best used to evaluate how much revenue each OD in your practice is generating, or how valuable your chair time is. This can help you determine whether or not you need to work on doctor driven dispensing or sales strategies to grow your practice.
Gross Revenue per square foot of office space
This is the ratio of gross revenue per square foot of space.
This KPI can be used to:
- Evaluate the success of merchandising
- Determine whether or not you should be looking at a new location with less or more space
Exams per OD hour
This is the ratio of the number of eye exams per dispensary hour.
This KPI is best used to:
- Measure how much time is spent generating revenue
- Determine if more exams should or could be added to the schedule
- Evaluate if doctor tasks need to be designated to someone else
- Examine the success of your marketing strategy
A good way to improve upon increasing exams per doctor hour is to increase patient flow.
You can adopt some of these strategies to do so:
- Increase marketing and referrals
- Decrease per patient exam time
- Add new doctors to the practice
- Introduce new technology that increases exam efficiency
Complete exams per 100 active patients
This is the number of complete eye exams per 100 active patients
This KPI quite simply is best to measure the success of your recall rate, or your ability to bring patients back year after year. Recalls are a known tool to help build your schedule and increase word of mouth referrals.
Gross revenue per staff hour
This is the ratio of gross revenue billed for a given time period and staff hours during that period.
This KPI can be used to determine how well you are delegating tasks and to decide if the number of staff you have is adequate or excessive.
Annual gross revenue per active patient
This is the annual gross revenue generated divided by the number of active patients.
This KPI can be helpful in:
- Measuring the ability to generate revenue per patient
- Determining how effective your staff is at selling materials
Capture Rate
This is the number of pairs of glasses sold per 100 exams.
This KPI is best used to:
- Evaluate doctor driven dispensing
- Evaluate staff's sales techniques
- Examine the customer experience you are providing
- Evaluate the frame/lens solutions you offer patients to meet their needs
Increasing capture rate is always a primary objective of optometry practices. Here are a few strategies you can adopt to increase capture rate:
- Improve customer experience by offering convenient hours, service staffing, and creating an overall pleasant environment
- Optimize your merchandising
- Feature all new frame and lens technology prominently
- Attempt to understand why patients might walk with their prescriptions
Which KPI's should you use in your practice?
This depends on what you are directly looking to evaluate. Most practices will start with revenue per exam, revenue per doctor hour, capture rate, and exams per doctor hour. KPIs may be more detailed depending on what you hope to achieve. You may even break them down by department.
Other Things to Consider about KPIs
- KPIs should be used to change staff behaviors. It typically takes six months to make KPIs permanent behavior.
- Staff should be educated on KPIs weekly to ensure things stay on track.
- KPIs should be the basis of staff bonuses so that everyone is involved in increasing profitability. All departments should be involved.
- Be transparent in sharing your numbers with your staff.
- KPIs should be set yearly, but tracked quarterly.
Another highlight of the CEO.D.™ Program is how to build a practice culture.
Understanding who you are as a practice owner and optometrist is key to your practice's success and operation. One of the very first things you should do as a practice owner is identify your mission statement.
You need to understand what the key components of your personal and practice brand are, and incorporate them into your mission statement.
Your mission statement is something you along with every employee should be able to recite. This mission statement should be clear to all patients entering your practice no matter what method they use to interact with you or your practice.
Every time a patient leaves your office, they should have a clear understanding of who and what you are as a practice.
How my practice benefited from the CEO.D.™ Program.
Culture:
The program reinforced that branding and culture must be a reflection of my vision and mission. From my logo, to office environment, to products, my primary goal has always focused on technology, generating an atmosphere, and focusing on luxury services and products.
Understanding of practice metrics and goal setting:
In the first two years of my practice, my goal was survival. My goal in year three was to "do better" than year two. I wasn't specific on any goals or metrics. Through Essilor's CEO.D.™ Program I gained an understanding of the key metrics or KPI's I need to use to evaluate my practice, and ensure future growth.
Improved interviewing process:
Your practice's success can depend on your ability to hire the right staff and keep them motivated. Through the CEO.D.™ recommended processes, I'm better equipped to find the right people for the right positions.
Sources
- Merhar, Christina. “Employee Retention - The Real Cost of Losing an Employee.” Zane Benefits A PeopleKeep Company, 2017, www.zanebenefits.com/blog/bid/312123/employee-retention-the-real-cost-of-losing-an-employee.
