By Cathy Ciccolella
HOUSTON--This year, celebrating its 70th anniversary as an eyecare provider--and its fifth anniversary as an independent member-owned co-operative--98-location Texas State Optical (TSO) is now reaping the benefits of the change in structure it made in 2001.
|Taking a break during Vision Expo West(l to r), Texas State Optical board chairman Kevin Katz, OD, visits with TSO president John Marvin; Judy Jones, the group’sdirector of communications; and board member Brian Blount, OD.|
Described by president John Marvin as “the transition of TSO from a commercial retail organization to a network of optometric practices,” the group’s June 2001 conversion to a co-op gave its affiliated ODs an autonomy that was lacking in TSO’s previous incarnations. It also gave those eyecare practitioners a chance to run their businesses their own way, with help available--but not imposed as a mandate--from the operation’s headquarters office.
The optometrists who had been TSO’s franchisees and associates had a history of struggles with central management, culminating in the chain’s filing for Chapter 11 bankruptcy protection in September 1994. Greg Segall, the court-appointed reorganization specialist who steered TSO through bankruptcy, became the chain’s top executive when it emerged from Chapter 11 in October 1995; 18 months later, TSO became a subsidiary of Consolidated Vision Group (CVG), founded by Segall and partner (and former TSO exec) Ray French. In January 2001, CVG announced plans to spin off TSO as an independent co-op.
|TSO’s stylized ‘steer’ logo appears on billboards across the state of Texas.|
Today, TSO is seeing the rewards of the programs it launched five years ago, according to Marvin. Total revenues reached $62 million last year, up from $58 million in 2004. And the chain’s shift in emphasis toward eyecare rather than product and price has proved beneficial for both participating doctors and their patients, according to Kevin Katz, OD, a Galveston practitioner who is chairman of TSO’s board.
“We haven’t advertised price in most markets in three years,” Katz told VM. “Instead we do ‘image’ advertising, promoting the quality of our care. We’re not about product, not about price--TSO is about doctors and eyecare.”
Underlying that philosophy, while underscoring the chain’s longevity, is TSO’s marketing slogan: “Caring for the eyes of Texas since 1936.” (“It’s not ‘Selling glasses since 1936’,” Katz noted.)
Added Marvin, “Our doctors can do more than just provide eyeglasses and contact lenses; they have the training to take care of medical problems of the eye.” The theme of this year’s annual Vision Quest TSO training meeting, in fact, was “Medical Optometry: Making a Successful Shift.”
Those Vision Quest meetings, attended by both TSO’s doctors and their office managers, are part of an overall training strategy that includes concepts generated by the ODs themselves. “We started mining the best ideas in our system, and that led to a series of ‘best practice’ modules,” noted Brian Blount, OD, a practitioner in Beaumont, Texas, who is also a member of the TSO board. Agreed Marvin, “It really is doctors leading doctors.”
The network office Marvin heads is not intended as a profit center; rather, its role is “to facilitate and communicate,” he said. The central office provides support in areas ranging from buying to merchandising and display, to third-party managed-care agreements. But a key point of the program is its optional nature: TSO practitioners can pick and choose what types of support they need.
And unlike franchised chains, TSO members pay no royalties.
Judy Jones, TSO’s director of communications, sends out a newsletter every two weeks to bring members up to date on issues and ideas that may affect them. The group’s Web site, www.tso.com, includes an OfficeNet section--soon to be revamped--that offers online buying, education and a message board so TSO doctors can share information with their peers. The main TSO site also contains links to each of its doctors’ individual Web sites.
When it comes to buying, the network office negotiates prices with TSO’s vendors; each member OD can choose to buy from any vendor at the negotiated price, placing orders directly with the vendor. Or not: “This is truly a network of independent practitioners who can do whatever they want with their practices,” Katz said.
“We offer no sticks, only carrots--and we believe in everyone’s right not to eat carrots,” Marvin chimed in.
TSO board members see this emphasis on independence as a strong positive that will help bring young optometrists into the system going forward. The network has close ties to the University of Houston’s College of Optometry, and is a major contributor to the college’s planned Vision Institute. TSO also hosts annual dinners for optometry students at the college and contributes to its scholarship fund. In addition, the network has a strong relationship with the Texas Optometric Association (TOA); both Katz and Blount are on the TOA board.
“Many new doctors join us as members’ employees, then start their own TSO practices,” noted Blount. “Young doctors recognize what we’re doing and want to be involved in a doctor-owned system. Prospective members see the ‘doctor mentality’ of the TSO network and identify with that.”