The Optician
Nowadays efficient people-smart multi-national corporations are on the rise while local businesses go to the wall. If these smaller concerns misunderstand the psychology of the marketplace as fundamentally as my local optician then it's no mystery. Here's what happened...
Walking down my street I see that all the cars in my area are plastered with flyers on their windscreen from a local optician offering a 'free eye check-up'. Taking a closer look at one of these, I see that I can also obtain 60% off designer frames. Sounds like a tempting offer, right? Here is a local business using a cheap and straightforward methods to promote itself to new customers.
Wrong. This optician is not only making a fundamental mistake about human psychology but he is also denying his own shortcomings. I didn't draw both of these conclusions, though, from the flyers, I also had one other vital piece of information.
A few weeks ago I happened to go into this optician after being referred there by a pharmacist. The optician is on a fairly ordinary high street in a good area of London. It is one of those old-fashioned places which has wonky chairs in the waiting room and a receptionist who is happy to chat. Its customers are mostly older folks who have probably been going there for years and years. So far, so ordinary.
The problem came when I met the optician. He is certainly efficient and competent at his job, no question about that. Unfortunately his manner is bordering on rude and made me feel uncomfortable. Things got worse though when I decided not to buy my new glasses from him. Suddenly we moved immediately from a cool professionalism to barely concealed hostility.
After the exam he then proceeded to treat his, obviously long-suffering, receptionist like an incompetent fool, which she wasn't, and thoroughly sour my whole experience. And as a result I will never go back, I will not recommend the optician to my friends and I will not be tempted by the 60% off deal.
So, here's the first mistake the optician made in offering eye tests for free. Research has shown that people don't attach as much value to something that they get for free as something for which they have to pay*. Perversely, by giving something away - especially something as valuable as the expertise of a professional optician - the object or service itself is immediately devalued. Wow, people think to themselves, this optician must be rubbish if people won't even pay £20 for a simple eye exam.
Secondly, the optician has poor social skills that he needs to improve - but he won't. For him it is easier to pretend that his dwindling customers are a marketing problem that can be solved by a leafleting campaign. This is an example of the self-serving bias - people naturally prefer to abdicate responsibility for their failures. While the self-serving bias may maintain this optician's ego, it does nothing for the success of his business.
*I can't track down the original research for this but I read it quite recently. If anyone can help then please put me out of my misery!
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An interesting post - a path that I have personally walked down looking at the issue as a customer, practitioner, and provider of marketing services. There is often a significant gulf between the skill sets required to be a competent and professional clinician (tester) and a highly skilled retailer (necessary to stay in business). The marketing skills to attract new footfall into small opticians (without debasing the value proposition through discounting) is sorely lacking and not something most are prepared to invest in - even to combat the big ad spend budgets of multiple retailers. The other major problem is (as in your case) abrogating the importance of high calibre staff at the retail edge. All optical retailers in the UK rely on sales of extremely high margin products to offset the burden costs of a high street location, practice equipment, and the underpricing of professional services - this is the bit they have to get right to gain and retain optical consumers. It is important to note that an optical consumer has one of the highest lifetime values of any comparable type - every single consumer in the UK has a need for their services at one stage in their life!
Thanks for your comment, it's very enlightening to read an analysis from someone who understands the business. By the way, are contact lenses also high-margin products?
One thing that occurred to me on re-reading this piece is that discounts can work if followed through properly. The optician in question was annoyed when I chose not to buy from him. But, if he had acted politely, I might well have returned at a later date and/or recommended his services to someone else.
Perhaps the strategy is sound but the execution lacking. For his sake, I hope he was just having a bad day.
Hi there - formerly anonymous. Wasn't expecting dialogue but pleased to engage. Contact Lenses can be extremely high margin but also need the greatest offset against extensive professional time for wearers who do not adapt easily. That said, a significant majority of currently worn lenses are mass manufactured at extremely low unit cost and prices tightly controlled at the distibution level. When the "true" cost of product (lenses, solutions, etc) is seperated from professional fees (testing, fitting, aftercare) they offer relatively low margins compared with spectacles.
I agree that discounts can work but feel they should be confined to "product" (specs, frames, lenses). It makes simple sense to help an independent local optician compete with price led promotions by major Optical Chain Stores without devalueing professional (sight test) services which in the UK vary little in price in the High Street.
You are very kind in your "bad day" approach. To me, it is a lack of professionalism and completely myopic from a business point of view (Please forgive the optics metaphore - that pun couldn't be cornea!).
Thanks for your answer and your comment Robin. Much appreciated.