The Contact Lens Institute (CLI) released a sneak peek of new data uncovering the profitability advantages of soft contact lenses (CLs) over glasses—along with the “substantial potential gains” clinical practices could generate over patients’ lifetime of wear.
The previewed findings are just the latest installment in CLI’s ongoing See Tomorrow initiative.
First, a look at this initiative.
Initially launched in 2021, this nationwide bi-annual custom research explores the perspectives of eyecare providers (ECPs) and consumers surrounding issues that can influence contact lens fitting and wear.
Our most recent CLI research covered:
- Opticians being the key to better vision and CL care
- Cross-generational perceptions and drivers within the eyewear space among Generation (Gen) X, Millennials, and Gen Z
Check out all our related coverage on this.
Now tell us about the newest research.
Referred to as the “first-ever analysis of CL profitability in the U.S.,” this evaluation was conducted by four ophthalmic and economic researchers:
- Philip Morgan, BSc, PhD, MCOptom, FAAO
- Check out his extensive optometric credentials at The University of Manchester
- President, International Association of Contact Lens Educators (IACLE)
- Lyndon Jones, DSc, PhD, DSc, FRSC, FCOptom
- Professor, School of Optometry & Vision Science, University Professor at the University of Waterloo
- Former director, Centre for Ocular Research & Education (CORE)
- Ash Morgan, PhD
- Professor, director, Center for Economic Research & Policy Analysis at Appalachian State University
- John Whitehead, PhD
- Professor, Department of Economics at Appalachian State University
Gotcha. Let’s talk setup for this U.S. analysis.
Some numbers to consider:
- 20 U.S.-based eyecare practices were involved
- 4 years of anonymized data were submitted based on:
- 30 patients (per practice), equating to 600 patients’ data analyzed in total
To note: All practices also submitted detailed operations data such as professional fees, chair time, staff compensation, and secondary revenue streams.
And what were they looking for, exactly?
Basically: The profit differences between soft CL wearers and (equivalent) glasses-only patients.
Next up: this topline data.
In calculating the average (avg) annual customer-level profits, researchers found:
Across CL types:
- Spheres: $436
- Avg revenue: $907
- Avg cost: $472
- Torics: $453
- Avg revenue: $963
- Avg cost: $510
- Multifocal (MF): $485
- Avg revenue: $1,079
- Avg cost: $594
And among glasses-only patients?
- Single-vision (SV): $244
- Avg revenue: $507
- Avg cost: $263
- Progressive: $376
- Avg revenue: $795
- Avg cost: $419
Take note: In calculating both CL and glasses-only average annual customer-level profits, the data collected included both revenues (sales, other revenues, and exams) and costs (such as cost of goods sold and labor).
And how do those translate to percentages?
- For CL sphere to SV glasses: 78.6%
- For CL toric to SV glasses: 85.6%
- For CL MF to progressive glasses: 28.9%
Explain what these numbers mean.
While the average service and product costs for CL customers were far higher than that for glasses-only customers, “it’s clear that CL customers can generate greater average annual profit,” Dr. Morgan noted.
He called out three key areas that collectively make CL wearers “particularly attractive from a customer lifetime value perspective”:
- Recurring purchases
- Greater examination frequency
- Opportunities for ancillary spending
Interesting … and what’s the significance of these findings?
From a more big-picture perspective? The topline data actually challenges prior findings CLI has reported on as part of the See Tomorrow program.
More specifically: A 2023 report published in collaboration with The Vision Council found that over 50% of eyecare practices made no effort to quantify the business impact of their CL patients.
- “Among those who do, they significantly underestimate(d) the relative profitability compared to glasses-only patients,” according to CLI Executive Director Stan Rogaski.
Go on about that prior data.
Of those latter ECPs mentioned above, just 56% who performed some type of CL assessment said their CL patient bases were more profitable.
In sharing this finding, CLI noted: “This raises several questions regarding tracking and analysis methodologies, the under-utilization of strategies such as prescribing glasses to current contact lens patients, and myths that may color perspectives on the topic.
Also worth noting: While 94% of ECP respondents said their practices already have a positive CL culture, just 49% indicated they discussed CLs with the majority of eligible, non-lens wearing patients.
- Check out our full coverage on those 2023 findings.
Interesting … so how does the newest profit data compare to prior reports?
Remember when we mentioned that this was the “first-ever” analysis of CL profitability In the United States? That basically means there’s no prior data to compare it to.
However: Outside the United States, CLI made reference to this 2001 study from the London Business School that evaluated CL profitability in five European markets.
- In those (albeit-20-year-old) findings: When considering lifetime value, the CL wearers were determined to generate $290 to $330 more in annual revenue compared to glasses-only patients.
Any more recent research or data on this topic?
Click here to review recent Eyes On Eyecare coverage exploring the state and future of the soft CL market and how optometrists can empower practice staff to increase CL sales.
So! When will the full results from CLI’s analysis be available?
In the near future … though exact timing is still to be determined. According to CLI, the data will be published “later this year” as part of a comprehensive See Tomorrow report.
Could that mean a timeframe coinciding with the American Academy of Optometry’s annual meeting (Sept. 30 - Oct 3) in Anaheim, California? Only time will tell …