WHY CUSTOMERS BAIL – AND WHAT YOU CAN DO ABOUT IT

By Judith Lee
Most optical labs have been on both sides of this story: A customer “jumps ship,” leaving you for another lab. A customer of that lab (or another competing lab) decides to bail and leaps into the lifeboat that your lab represents.
Why do customers leave their optical lab? An informal survey of ECPs reveals a familiar laundry list:

• Price
• Turnaround time
• Customer service/poor communication
• Can’t handle specialty jobs
• The “job from hell”
• Vision plans

“The determiners that you gleaned from the ECPs have been the same since the beginning of time. And they are all correct. Customers are demanding and should be…to a point,” said Richard Wilhelm of Luxe Laboratories, Anaheim, Calif.

Wilhelm and other leaders of successful optical labs have given a good deal of thought to the reasons why customers bail, and they’ve taken specific steps to plug the leaks that could turn any lab into a sinking ship.

PRICE
“We’ve found they don’t switch just for price, but when that ‘job from hell’ happens (or happens one time too many), we are positioned to be the lab they go to,” said Bill Heffner of FEA Industries.

FEA positions itself with competitive pricing that is well-publicized. The Morton, Pa. lab mails a complete price list eight to 10 times a year to an extensive list of current and prospective customers. FEA sends a monthly email to current customers with pricing and promotion reminders. The lab also advertises in journals read by ECPs and optical dispensers.

Heffner said FEA keeps its prices competitive by offering an in-house lens brand called Eagle, and in-house AR provided by three dip-coat machines.
ICE-TECH, a lab in Atlantic Beach, Fl. also keeps its prices competitive with an in-house brand called Clear-Ice. Beth Showalter, ICE-TECH president, calls competitive pricing “a very difficult balancing act.”

“We instituted the Clear-Ice pricing tier to help us offer the very best prices in all-American made digital lenses. Every optical shop is different and has special needs. You have to be willing to listen to your customers’ specific price points your customer is complaining or asking about, and change your pricing model if possible. Let them know the value they are still able to get without losing profitability,” Showalter noted.
Heffner added that FEA also participates in promotions offered by brand-name lens makers, often at the same time FEA is promoting its own brand.

“There is not a month in which we aren’t running a special promotion on a brand like Kodak or Transitions, as well as a promotion on our in-house brand,” Heffner said.

TURNAROUND TIME
In a business where the big box retailers widely advertise fast turnaround, there may not be a touchier subject with optical lab customers or optical labs. Mark Cohen, director of training and marketing for Tri-Supreme Optical, said his lab has turned to deep analysis.

“We’ll go into the computer and run a report to see what the actual turnaround time is. Sometimes a customer is complaining that all their jobs are late, but the numbers show that just a few are late. Then we ask, ‘Why are any jobs late?’ We look at what was requested or needed, and how many processes were required to fulfill this. The more processes, the higher the chance the job will take more time,” Cohen said.

The next step is to communicate with the customer.

“We get back to the customer with the facts about those late jobs. If the report indicates we are failing the customer, we assign a customer service rep to that customer, and provide individual attention,” he said.

If the analysis indicates a systemic shortcoming, Tri-Supreme will delve into its processes and staffing to see if there is a problem with a particular machine or person, understaffing, or other issue.

Wilhelm noted that a problem with turnaround or other issues often can be traced to turnover.

“I have learned that customers usually ‘bail’ after a pattern of inconsistency happens. Nine out of 10 times this is when a key employee leaves. I spend time nurturing employees who are lifelong artisans, because artisans don’t come along that often. I do everything I can to keep them from leaving, generally to another lab,” Wilhelm said.
Showalter noted that ICE-TECH does not have a turnaround problem with standard work, but a problem may arise with digitally customized lenses.

“The only time that this becomes an issue is when we deliver unrealistic expectations to our customers, because every (digital) job is different,” she said.

CUSTOMER SERVICE/POOR COMMUNICATION
First and foremost, your lab will benefit from having live human beings answering the phone.

“When you call us, there is no recording and no ‘phone tree.’ There is a live person who cares about the customer, and the customer appreciates that,” noted Karen Keeney, president of Chadwick Optical, a specialty lab in White River Junction, Vt. (in fact, Keeney often answers the phone herself).

Keeney said that Chadwick personnel are highly experienced and know what the lab can and cannot handle.

“We don’t handle 98 percent of the jobs; the other labs do that. We handle the small percentage that no one else can do. But even then, there are a few jobs we can’t do, and we would rather tell the customer that up front and help them find another way to resolve it, than accept a job and then let the customer down,” Keeney said.
Ideally, your lab will take steps to put the customer relationship right…right from the beginning.

“Before we work with an account we ask questions about what is most important (price, turnaround etc…) to you and your business when working with a lab. Once we know that answer, we can then determine if LUXE is the right fit. For example, if a customer said price is the most important and they take insurance, then LUXE is not for them,”
Wilhelm said.

Coaching the customer to fill out orders completely can head off some issues.

“Sometimes labs don’t communicate as well as they should. But sometimes the customer doesn’t help – we call them for information, they’re not available, they don’t call back. The clock is ticking, but we cannot complete the job. It would help if the customer would make sure all the information is there – pd, seg height, etc.,” said Cohen.

He noted that customer service departments are expensive for labs to support. Tri-Supreme has 20 in their CS department, and Cohen devotes significant resources to keeping them trained and up-to-date on products and services. But he says it is well worth it. “CS is our ‘front line.’ They do a lot for our company, and yet they are the least glorified.”

Joanna Phelps, customer service manager at ICE-TECH, said the lab needs to make a genuine commitment to serving the customer, and the CS department must personify this value. If you succeed, it will pay off in fewer problems and fewer customers that bail.
“It’s not what you say, it’s how you say it,” said Phelps. “The customer always wants to feel like they are a part of the decision-making process and that their concerns are always heard.”

CAN’T HANDLE SPECIALTY JOBS
Perhaps your lab is not equipped to handle specialty jobs, but you don’t have to lose a customer because of it.

“The key to this is to set up realistic expectations. As soon as you get the specialty job, communicate with your customer about the realistic expectations that go along with the job. Offer a solution to make it right from the get-go—not in a month’s time when the customer is already upset,” Showalter said.

Keeney noted that honesty is the best policy. If your lab can’t handle the job, inform the customer, and send him or her to someone who can.
“Usually, it’s the customer who finds us, after their lab let them down, or their lab told them, ‘It can’t be done.’ When the customer gets to us, and finds out we can do the job, they are going to be mad at their lab,” Keeney said.

Cohen noted that in this age of digital surfacing, just about every job is a specialty job. The latest equipment and a well-trained workforce enable Tri-Supreme to handle most jobs in-house. However, the lab keeps a short list of specialty labs and will send the most complicated jobs to them.

“Find out who can do work your lab can’t handle, and don’t hesitate to send a job or customer to them,” said Keeney.

THE “JOB FROM HELL”
Every lab has these, and hopefully, you have them few and far between.
“Some jobs are jinxed from day one, it goes south, and you cannot get it to go north. This is very tough. The lab might have made a mistake in not saying ‘no’ to the customer. Sometimes the lab’s ego gets in the way; it takes a job it really can’t do. We should not be afraid to say no; It’s less trouble for everyone than the ‘job from hell.’ If you do take it, tell customer up front that this will take longer,” Cohen said.

At ICE-TECH, Showalter said they’ve found the honest approach is truly the best approach.

“We will not take difficult jobs from just anybody. We will only do the difficult ‘jobs from hell’ for our regular customers, as a thank you,” Showalter said.
Keeney offered her rule of thumb: “I attempt something three times. If we still aren’t successful, I call the customer, and say, ‘Let’s negotiate.’ Often we can find a solution in a different frame or lens.”

Wilhelm said that Luxe Labs “smokes the competition” when it comes to special or difficult jobs. That is partly due to knowing what you’re looking at up front.
“If it shouldn’t have been dispensed from the start we won’t take it. But the ‘the jobs from hell’ are what we specialize in. You can print that,” Wilhelm said.
Vision Plans

This may be the most intractable challenge, because if a vision plan requires that a job be sent to a certain lab, the customer will send it there. But there are still a lot of jobs not under the sway of a vision plan, and some of those vision plan patients can be “upsold” if your customer has the right training.

“We make sure our customers relay to their patients the benefits of our premium lenses over the covered ones on the patients’ plans,” Showalter said.

In the end, the best way to combat vision plans is to pay attention to all the other reasons customers leave their lab. You may never get the vision plan business, but you’ll retain a lot more of the business you already have.

“It may seem ludicrous, but far too many labs (including myself at times) focus on ways to keep customers, only to lose sight of the fact that their products and services simply aren’t what they should be,” said Wilhelm. “At Luxe, we make sure that what we do is deserving of long-term customer loyalty, and then we look for ways to nurture it. This is probably the secret sauce that keeps customers from bailing.”

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Labtalk-November/December 2017