Features: Lab Usage Survey


The Lab Test

The Lab Test
Despite declining usage, wholesale labs
rate well with their customer dispensers
By Brian P. Dunleavy
Lab usage among independent opticians, optometrists and ophthalmologists has declined in the past year, according to the 20/20 Wholesale Lab Usage Survey. The survey, now in its fourth year, reports that 88.5 percent of the three Os use wholesale laboratories for lens processing and other services, down from 97.1 percent last year. This number had increased in each of the three previous years the survey was conducted.

So what does this mean? Does it mean your fellow three Os are gradually moving away from wholesale labs as a source for lens processing services? Perhaps. But before you run out and price a surfacing generator and patternless edger, it should be noted that 20/20’s survey does not track the same group of dispensers from year to year, meaning the decline could be attributed to the changing sample (see Methodology).

20/20's 2002 Wholesale Lab Usage Report
20/20's 2002 Wholesale Lab Usage Report
20/20's 2002 Wholesale Lab Usage Report
20/20's 2002 Wholesale Lab Usage Report
20/20's 2002 Wholesale Lab Usage Report
20/20's 2002 Wholesale Lab Usage Report

That said, the data should once again serve as a reminder that wholesalers have been responding to the changing lens processing landscape by diversifying their service offerings in recent years for a reason: to keep customers from considering alternatives such as in-office lens processing. Of the respondents to this year’s 20/20 survey, 26.7 percent say they have stopped using labs in the past two years—with three of the biggest reasons for their change being poor customer service, poor product quality and high pricing. Among the respondents to the Lab Usage Survey, 23.2 percent have surfacing/casting capabilities in their dispensaries and 44.5 percent have finishing facilities. Having their own lab facilities is, not surprisingly, the chief reason why dispensers don’t use wholesale labs.

On a positive note for lab owners, those dispensers that do still use wholesale labs seem to use more than one. This is probably the result of requirements for managed care plans (several major plans require the use of specific lens processing facilities) or because their patients have requested specific lens brands offered only by licensed lab distributors. Respondents to the 2002 survey say they use, on average, 2.5 different wholesale labs for their lens processing work.

Not surprisingly, product quality, service quality and price are the leading factors in dispensers’ evaluation of wholesale labs. On a scale of one to five (five being extremely important), lab usage survey respondents rate product quality and service quality 5.0 and 4.9, respectively, when they select a wholesaler to work with. Turnaround time (4.8) and price (4.7) are the next considerations.

Interestingly, 84.2 percent of wholesale lab customers surveyed say they consider their labs a “partner” in their business or practice—a common phrase used by wholesale executives in positioning their labs. While the vast majority of these respondents (81.3 percent) report sending more than 75 percent of their lens processing work to wholesalers, 74.6 percent of the respondents say they expect their lab to be more than just a source of lens product and processing services.

At least a few labs seem to be delivering on that expectation already, if the results of the survey are any indication. Of the dispensers surveyed, 58.7 percent say their labs sell frames, while another 34.1 percent say their labs sell accessories. These dispensers, in fact, report purchasing, on average, 10.6 percent of their frame orders and 9.7 percent of their accessories orders through their labs. In addition, 24.6 percent of the responding dispensers say their labs offer contact lenses (and that they purchase, on average, 12.3 percent of their contact lens orders through their wholesalers), while another 21.7 percent say their labs distribute over-the-counter readers.

The bread and butter of any wholesaler’s business remains firmly in the spectacle lens arena—but that doesn’t mean they always limit themselves to providing processing services. And dispensers are definitely looking for more.
Among the 20/20 Lab Usage Survey respondents, an overwhelming 96.4 percent say they receive the brunt of lens product information from their labs, and 61.3 percent say their labs offer some form of continuing education program for customer dispensers. In fact, 89.1 percent of respondents say labs serve as their “primary source” for lens product and processing information. In addition, 93.5 percent report receiving technical support on fitting or finishing issues from their labs. Nearly 80 percent say their labs offer lens-merchandising advice/assistance for their dispensaries. By now, if your lab isn’t offering at least some of these services, it might be time to consider a change.

Despite the declining usage over the past year, 97.1 percent of survey respondents say they rely on wholesalers to the same extent—if not more than—they did five years ago. And 95.2 percent of the respondents say they plan to do at least the same amount—if not more—business with their labs in the coming year. The services highlighted above are at least part of the reason why.

If the survey results are any indication, most dispensers seem quite pleased with their current wholesale services overall. 20/20 asked respondents to rate labs on a scale of one to five (with five being the best) on several factors and the results are overwhelmingly positive.

On average, survey respondents give their labs’ customer service a 4.6, with 28.9 percent citing it as the single factor they like best about their labs. Moreover, respondents give specific service factors such as their labs’ job tracking, Rx accuracy and product delivery all a 4.5. Product availability and price come in at 4.4 and 4.1, respectively.

One issue—turnaround time—seems to have lab customers divided. Among survey respondents, 24.3 percent say quick turnaround is the feature of their labs’ service they like best. Yet, 31.4 percent say it’s the one feature they would most like to see improved. For the record, respondents, on average, report their labs turnaround time as 3.2 days.

As the saying goes, the customer is always right, and needs vary from dispenser to dispenser. But if the results to the 20/20 Lab Usage Survey 2002 are any indication, labs that do the best job of being “all things to all people” and, in turn, offer the most and best services to their customers, continue to offer dispensers the best bang for their bucks. But as lens processing technology improves, labs must still explore new service frontiers if they want to keep their three O business.

20/20’s 2002 Wholesale Lab Usage Report is based on data collected from structured phone interviews with 151 independent opticians, optometrists and ophthalmologists. 20/20 Research’s in-house staff conducted all interviews in August 2002 and respondents were offered no incentive to participate. The survey sample was developed to reflect the national population of independent optical retailers and practitioners based on the following criteria: location (business/practice) type, region and sales volume. Location type and sales volume data were derived from the proprietary Jobson Optical Research Database, which is updated quarterly. Historical data for the years 2001, 2000 and 1999 are based on Jobson Research surveys conducted in those years for 20/20. Both current and historical data are presented from a retailer or practitioner’s perspective and may reflect seasonal market and thus behavioral, fluctuations.—Rachel Mansfield