Is Your Practice Falling Prey To The “Blockbuster Syndrome”?

 

What the heck is a “Blockbuster Syndrome”? Before you totally dismiss this article, please read on. You might be surprised how much the average ECP practice has in common with the once behemoth movie rental company, Blockbuster. We can learn a lot from their rise and fall.

Short history of the “rise and fall of Blockbuster” – Remember back 20 years ago when there was a mom-and-pop movie rental store in every town? Then, in the late 80′s and early 90′s, a company called Blockbuster began to take over the movie rental market, and put a lot of the mom-and-pop stores out of business (see Wikipedia for a detailed history of Blockbuster). It was sad to see the small rental stores go away, but wow, the selection and convenience that Blockbuster offered was just what the consumer wanted (at that time). Fast forward to 2009 when Blockbuster had 5,000 stores and 60,000 employees spread over 17 countries worldwide. How could anybody compete with this monster company?

Blockbuster Syndrome

Unless you have been on a deserted island the past year (not a bad idea), you probably know that Blockbuster filed for bankruptcy last September (2010) and a few weeks ago, Dish Network won the right to purchase Blockbuster’s assets at auction for around $230 million. This is the same company that was purchased by Viacom for $8.4 billion (that’s with a B) in the mid 90′s.

So what happened and what can we learn from this fall from grace? If you really look at the company’s sordid history, they were very arrogant and did not listen to their customers. Their CEO made statements in interviews to the effect that they were too big and had too much market share for anyone to compete. When startup companies like Netflix and Redbox came along, they dismissed them as no-threat. I have a friend that was pretty high up in management at Blockbuster around 2005, and he said that when top management talked about Redbox, they actually laughed at the notion that Redbox would take any market share away from them. Blockbuster management did not listen to the consumer. Keypoint – Redbox and Netflix did listen to the consumer and built their business model around what the consumer wanted; convenience and affordable entertainment. Blockbuster did not pay attention to the changing trends in how the consumer wanted their entertainment.

The other day, my teenage son and I pulled up to a 7-Eleven and saw a Blockbuster movie rental machine (like the Redbox ones that are everywhere). My teenage son said, “Wow, they are a day late and a dollar short”. Even my teenage son recognizes that Blockbuster was too slow to make the changes to meet the consumers’ demands.

Use The Power Of The Internet To Compete On A Level Playing Field

Major lesson we can learn from the Blockbuster debacle. We must listen to the consumer (a.k.a. – your current and potential patients). There is a ton of data to support the fact that the consumer is changing the way they shop (and purchase) products. A few years ago, who would have thought that anybody would buy shoes on the internet. Don’t you have to try on the shoes first? But Zappos.com is a billion dollar company that sells shoes online. Consumers are changing the way they buy shoes, jewelry, rent movies and (can you see this coming) they are changing they way they shop for (and buy) eyeglasses! The consumer is looking for convenience, selection and increased value.

This is not to say that every patient will immediately stop coming into your practice to purchase eyeglasses. Less than 3% of glasses are purchased online currently (hard to get a real number since most online eyeglass retailers are private companies that don’t report sales). If the trend in online eyeglass sales parallels other consumer online shopping trends, our industry will probably give up about 10% to 15% to online sales. I’m sure there will be a lot of debate over how much the percentage will actually be, but in 2001 did you think online contact lens sales would eventually approach 20%?

What can the “average” ECP do? First, recognize that some of your patients’ needs and shopping habits are changing. They want (and need) convenience, selection and better value. Consumers are using the internet to help them make shopping (eyeglass purchasing) decisions. Every ECP needs to be developing an “online presence” strategy for their practice. That doesn’t mean that you must sell eyeglasses online. That is an individual decision. However, every ECP needs to have a creditable presence at the place where their current and future patients are hanging out – that is the internet. This includes Facebook, Foursquare, blogs and it is critical to have a quality (professionally developed) practice website. A good internet strategy is a wonderful opportunity to compete on a level playing field with the big box guys and other online eyeglass retailers, without spending a ton of money. For example, a good Facebook page will engage, entertain and inform your patients (and potential patients). That means providing quality content and paying daily attention to it. Be sure to inform current patients about your Facebook page and ask them to get connected to your practice by “Liking” your Facebook page (put signs in your practice, mention in newsletters and all printed material).

Let’s use the Blockbuster situation as a wakeup call. The next time you drive by a Blockbuster store or see a Redbox movie rental machine, think about how you are reshaping your practice to meet the changing needs of your patients. Hopefully, you are mirroring the success of Redbox and instead of falling prey to the “Blockbuster syndrome”.
Bob Main tomorrows optical internet business coach consultantBob Main is an optical industry veteran, with over 25 years of retail optical experience and the last 5 years specifically engaged in internet marketing and social media. As an Internet Business Coach/Consultant, Bob’s blog (www.TomorrowsOptical.info) offers ECPs and optical retailers the information they need to learn how to grow their practice/business using the power of the internet.

 

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7 Comments

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  1. Richard Hom OD MPA June 19, 2011 at 11:02 am #

    Bob, thanks for this blog post on changing consumer buying habits.

    I believe that there might be slight differences between eye health care and videos, though. It is called disintermediation.

    In the case of Blockbuster video, there are no shortage of avenues to assist buyers on choice of what to purchase. In the case of eye care, there is also ‘fear” of not seeing well” which cannot be disintermediated (must have high human touch).

    Assuredly, the ECP must avail themselves to changing buying and shopping patterns lest there be such a barrier to participate or purchase that they look for something more convenient.

    Overall, an excellent reminder to ECPs everywhere.

    • Bob Main, A.B.O.M. June 19, 2011 at 1:21 pm #

      Richard,
      Thanks for your comments. I’m sure overall we are on the same page. My main point is that I am seeing many ECP’s not taking advantage of the internet and social media to grow their practices. Consumers are on Facebook and are looking to the internet for information. This is where ECP’s should have a good presence. It is a great opportunity to stay connected, educate and engage with their current and prospective patients. My hope is to demonstrate that doing nothing is not an option or ECP’s run the risk of someone taking patients away.

  2. Hal Wilson August 12, 2011 at 6:25 am #

    Your point is to ‘get in the game’ at some level. Even if you think about the Internet as a sophisticated Yellow Page – you need to get a listing. Great insights!

  3. Trudi - Optician August 12, 2011 at 2:00 pm #

    Really good insights. It is so true that in today’s competitive eye care market you must take advantage of any media options available. Thanks…

  4. gokkasten September 16, 2011 at 11:03 pm #

    Awesome blog, it’s just like a game for me! It’s so infomative and usefull, thanks a lot! If you post more of this great stuff, I’ll visit your blog again!

  5. Bobby Vanderberg November 9, 2011 at 12:00 pm #

    Some genuinely quality blog posts on this web site , saved to my bookmarks .

  6. Dr Vinny November 18, 2011 at 1:50 am #

    GREAT ARTICLE .. you almost lost me for a sec there but i am glad i kept reading.. good info .. thanks for sharing it.

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