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} How to understand Key Performance Indicators (KPI)} How to track, measure, and benchmark KPIs } How to assess overall practice performance} How to take action now to improve revenue and net profit

Introduction

1 Optical Production per Refraction2 Contact Lens Capture Rate3 Frame Inventory Turn4 Frame Capture Rate5 Lens Capture Rate6 AR Capture Rate7 Sales to Stock Ratio8 Office Production per Refraction9 % Booked10 % Medical

KPIs to Track & Analyze

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Optical Production Per Refraction

▸Formula: Optical Production / Refractions• Example: Optical Production in January = $112,323

Number of Refractions in January = 312

$112,323 / 312 = $360For every refraction, you’re generating $360 in optical sales.

Calculating Optical Production Per Refraction

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How efficiently you are converting refractions into optical dollars.

Calculating this KPI can help you identify:} Strengths and weaknesses in sales and pricing strategies} Overall effectiveness of retail business} Conversion of all refractions to sales} Professional fees assessed per patient are appropriate

What Does It Tell You…?

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Glimpse National Average (YTD): $357 Your Goal: $350 or betterIf your practice is at or above the Glimpse average, you’re doing a great job.

If your practice’s optical sales are below $350, consider the following:} Do I have the right frame mix? } Is my inventory priced appropriately?} Am I looking for opportunities to discover a need?} Does my optical need a makeover?

How To Assess Your Performance

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} Track reasons for patients not buying frames.} Promote your biggest source of revenue, eyewear.} Start the eyeglasses discussion early.} Start the discussion with high-end frames.} The staff and dispensary should look the part.} Don’t forget, contact lens patients wear frames too.

Action Plan

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Contact Lens Capture Rate

▸Formula: Annual Supply Orders / Contact Lens Exams• Example: Annual Supply Orders in January = 90

Contact Lens Exams in January = 166

90 / 166 = 54%For every 100 contact lens exams, you are selling 54 annual supply orders.

Calculating Contact Lens Capture Rate

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How efficiently you are converting contact lens exams into annual supply sales.

Calculating this KPI can help you identify:} Success of annual supply sales strategy} Effectiveness of hand-off strategy} Conversion of all contact lens exams to sales

What Does It Tell You…?

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Glimpse National Average (YTD): 40% Your Goal: 40% or better If your practice falls between this range, you’re doing a great job.

If your practice’s contact lens capture rate is below 40%, consider the following:} How are annual supplies presented to the patient?} Are you talking about UPP pricing?} What is your discussion around benefits?

How To Assess Your Performance

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} Track reasons for patients not buying contact lenses.} State the benefits of contact lenses.} Lead the discussion with annual supply purchase savings.} Use UPP pricing to your advantage.} Don’t ask “how many boxes do you want”!} Don’t forget, eyeglass patients wear contacts as well.

Action Plan

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Frame Inventory Turn

▸Formula: Avg. Inventory / ( Frame COGS / # of Days) • Example: Average Inventory in Dollars = $50,000

Cost of Frames Sold for the Period = $100,000Number of Days = 365 Days

$50,000 / ($100,000 / 365) = 183 daysIt takes approximately 183 days to sell through your inventory.

Calculating Frame Inventory Turn

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The number of days it takes you to turn over your board.

Calculating frame inventory turn can help you identify:} How effective your investment is in the frame board} Fast or slow moving frame lines} Inadequate frame mix (e.g. good, better, best)} Strengths and weaknesses in frame management strategy

What Does It Tell You…?

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PECAA Average (YTD): 1.3x to 1.8xYour Goal: 2.0x or betterIf your practice falls between PECAA’s average range, you’re doing a great job.

If your practice’s capture rate is below 1.2x, consider the following:} Identify individual needs – a one-size-fits-all approach will not work. } Use a positive approach to selling. Instead of asking whether the patient needs

eyeglasses, asking how the patient protects her eyes from the sun, bluelight, etc} Put price in last place when making your sales pitch. } Tailor your sales approach to their needs, not what you think they can afford.

How To Assess Your Performance

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} Track reasons for patients not buying frames.} Promote your biggest source of revenue, eyewear.} Measure turns on a line by line basis.} Replace slow turning lines.} Consider reordering prior to meeting with yor Rep.} Lead the discussion with higher end frames.

Action Plan

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Frame Capture Rate

▸Formula: Frames Sold / Refractions• Example: Frames sold in January = 305

Number of Refractions in January = 552

305 / 552 = 55%

For every 100 refractions, you’re selling 55 frames.

Calculating Frame Capture Rate

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Percentage of patients who received an eye exam and purchased frames.

Calculating frame capture rate can help you identify:} Adequate / Inadequate frame mix (e.g. good, better, best)} Strengths and weaknesses in sales strategy} Effectiveness of hand-off strategy / selling from the chair

What Does It Tell You…?

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Glimpse National Average = 60%Your Goal: 60% or betterIf your practice is at or above the Glimpse average, you’re doing a great job.

If your practice’s capture rate is below 60%, consider the following:} Do I have the right frame mix? } Are my frames priced appropriately?} How are my frames displayed?} Do I lead the discussion with vision benefits?

How To Assess Your Performance

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} Track reasons for patients not buying frames.} Don’t begin the discussion with frame benefits.} Start the eyeglasses discussion early.} Lead the discussion with higher end frames.} The staff and dispensary should look the part.} Don’t forget, contact lens patients wear frames too.

Action Plan

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Spectacle Lens Capture Rate

▸Formula: Lens Pairs Sold / Refractions• Example: Lens pairs sold in January = 310

Number of Refractions in January = 552

310 / 552 = 56%

For every 100 refractions, you’re selling 56 lens pairs.

Calculating Spectacle Lens Capture Rate

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Percentage of patients purchasing RX lenses.

Calculating spectacle lens capture rate can help you identify:} Lens only sales by comparing frame capture rate } Strengths or weaknesses in sales strategies } Opportunities to discuss advanced lens technology

What Does It Tell You…?

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Glimpse National Average = 67%Your Goal: 70% or betterIf your practice is at or above the Glimpse average, you’re doing a great job.

If your practice’s capture rate is below 67%, consider the following:} Is the doctor making lens recommendations in the exam room?} Are recommendations adequately conveyed during hand-off?} Is vision insurance allowance dictating lens recommendations?} Are you recommending mature-technology, moderate-cost lenses?

How To Assess Your Performance

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} Use a lifestyle questionnaire to understand patient needs.} Ensure patients are aware vision insurance covers only

basic materials.} Create three lens packages for single vision and

progressive lenses.} Present highest performance packages first.} Have patient make a decision on lenses before frames.} Doctor should personally recommend lens options.

Action Plan

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AR Capture Rate

▸Formula: AR Coatings Sold / Lens Pairs Sold• Example: AR coatings sold in January = 200

Lens pairs sold in January = 310

200 / 310 = 65%

For every 100 lens pairs sold, 65 pairs have AR coating.

Calculating AR Capture Rate

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Percentage of patients purchasing AR coating as an add-on feature.

Calculating AR capture rate can help you identify:} Additional sales opportunities} If recommendations are given to the patient } Improvements needed during the hand-off process

What Does It Tell You?

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Glimpse National Average = 61%Your Goal: 61% or betterIf your practice is at or above the Glimpse average, you’re doing a great job.

If your practice’s capture rate is below 61%, consider the following:} Assume patients don’t want AR if it’s not present on current lenses?} Are recommendations adequately conveyed during hand-off?} Is vision insurance allowance dictating add-on recommendations?} Do I stereotype the lens budget of individual patients?

How To Assess Your Performance

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} Ensure all bundled packages include AR coating.} Recommend AR treatments to all patients.} Present AR coating to patients as an integral lens feature.} Discuss the benefits of AR for night vision, preventing

glare and reflections, and reducing eye fatigue.} It should be routine to call the Optician into the exam room

and reiterate recommendations in front of the patient.

Action Plan

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} Measure your practice’s performance.} Identify your strength or weakness based on KPIs.} Create an action plan to drive change.} Continue to measure to gauge the effectiveness of your action

plan.} Reach out to your MBA for analytical help.} Remember the saying:• What you measure, improves!

Summary

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Bryan HobanMember Business Managere: bryan@pecaa.comc: 503.805.5233Territory: Pacific Northwest, Alaska, and Hawaii

Stephanie NeilsonMember Business Analyste: stephanie@pecaa.comc: 832.868.9229Territory: Texas, Oklahoma, and select southeast states

Tyler JudkinsMember Business Analyste: tyler@pecaa.comc: 503.784.6665Territory: Mountains, Southwest, and select central states

Brady O’RourkeMember Business Analyste: brady@pecaa.comc: 503.807.2975Territory: mid-west states and northern east coast states.