Monday, March 11, 2002
LensCrafters founder focuses on success
Eyeglass mogul left P&G to pursue vision
By John Eckberg, email@example.com
The Cincinnati Enquirer
Sometimes a business innovation is as much about serendipity as it is about opportunity. Dean Butler, a former Procter & Gamble executive who co-founded LensCrafters and pioneered the concept of eyeglasses in an hour, is a good example.
Three decades ago he had a friend, who had a chain of eyeglass offices, and the friend needed some advice. Within years, Mr. Butler would become a an American mogul of eyeglasses by founding of LensCrafters and later Vision Express.
A member of the Cincinnati Consulting Consortium a group of 25 former P&G executives that can be found on the Internet at www.cincconsult.com Mr. Butler, 57, will receive a Star of Vision award from a consortium of industry trade groups for his impact on the worldwide optical industry.
He was interviewed about innovation, business development and entrepreneurism by Enquirer reporter John Eckberg:
Question: Tell me about the innovation of LensCrafters. How did it all happen?
Answer: I was just a P&G brand manager, like about 10,000 others who have gone through P&G. I had a friend in 1973 who was a P&G field sales manager and he inherited his wife's family's business, five little optical stores.
Back in those days, if you had a good job at Procter & Gamble, you didn't leave Procter & Gamble because you were banished for life.
Dean Butler of LensCrafters.
(Joseph Fuqua II photo)
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His wife's family wanted him to quit his job and run this little family business down in Baton Rouge. He was loath to do it but he was pressured to do it. I was talking to him about two years later and he said he knew he shouldn't have done it because they went and changed all the laws.
In 1976-1977, two major things happened. Professional associations could no longer prohibit members from advertising. The second big thing that happened was that anybody who wrote a optical prescription had to give you a copy of it and now you could go where you wanted.
Up until those days, there very few places where you could advertise eyeglasses. Texas was the only place that had real commercial optical retail development. A Texas company was going to build a store in Baton Rouge, move into my friend territory, and he panicked.
He didn't know anything about advertising and I knew a little bit about it. I wrote some commercials for him: acted in them and produced them because it was the cheapest way to do it.
We start advertising on TV and took his monthly sales from $38,000 to $164,000 in six months and did it in the face of competition. We were surprised. We were trying to protect the business, not quadruple it. What I got out of it was free eyeglasses . That was it.
One day he sold the business, but before he left, I asked how you make lenses. The guy showed me and I was flabbergasted at how simple it was. It is really straight-forward, a machine-tool process.
And what struck me was that the vast majority of eyeglasses are made in 11 or 12 minutes. So I wondered why do you have to wait two weeks? And then I said, somebody ought to put new machines in a store.
Q: An interesting idea, but what about paying for it?
A: We ran some numbers and figured you had to make 21 pair of glasses in a day to break even and since the average optician sold four pairs a day, we realized it was not feasible, that you couldn't do it.
So, I forgot about it, he sells his business and two years later he calls me on the phone and wants to meet me in Newark, N.J. I'm like I'd love to see you on Saturday but Newark?
He said some guy there was doing what I said he should have done. He had put the machines in a store and he had a phenomenal business. We spent a couple hours looking around until they kicked us out. That's when I said they were missing the boat. He was providing glasses in 48 hours but he needed to do a while-you-wait service.
Q: Where did the while-you-wait come from?
A: I remember saying that if you can make glasses in half-hour or less, why wait for 48 hours? It was two trips for the customer, a hassle. In those days, optical shops worked nine-to-five, closed on Wednesday and half-a-day on Saturday.
I remembered from my P&G stats that 54 percent of American women worked outside the home, and most men. So how do you go see these guys?
People thought, too, that this was a saturated category because 50 percent of all the optical products sold in the world were sold in the United States. Well, I didn't think so.
So my friend had no interest of getting back in the industry but two weeks later he calls me and has an architect on the phone. He wants to build a while-you-wait store and wants me to do the marketing.
As for the name, I looked in the telephone book in Cincinnati and back then there was a waterbed store called Mattress Masters. We came up with EyeMasters and it's a big chain today. We opened and literally, immediately, we were doing 40 jobs a day - not 21.
Q: Double break-even
A: That's right, a ton of money because the raw materials that go into a pair of eyeglasses is less than 20 percent of what is charged. Lenses that are $69 can cost just 50 cents
Contact lenses are even worse: one of the great consumer rip-offs. Wholesale frequent replacement lenses cost about $13 a six-pack. Doctors charge $39. And it costs the manufacturer about five cents each one of the great consumer rip-offs!
So the store was doing phenomenally well.
Q: Down in Nowhere, La.
A: And not even in a shopping mall. In a strip center. So after a few months of watching this, I thought, Gee, I should open one of those.
So I quit my job at Procter & Gamble in September 1982 and by February of 1983 we opened the first LensCrafters in Florence Mall. We were afraid to go into a mall, actually, because the rents were so high.
The other one was a strip center in North College Hill and it did very well. Both stores did phenomenally well.
Q: Then you thought, why not Billings? Why not Des Moines?
A: We started expanding radially: Columbus, Louisville. Phil Barach (former U.S. Shoe president Philip G. Barach) heard about us and kept coming to see me and claimed I had a black box. They were expanding like crazy back in those days. It was hard to do anything wrong.
They wanted to buy our business so finally I took a five-year deal to run it and got a percentage of the profits.
The business was way bigger than they ever imagined. They would never have given me the deal if they knew how big the business was going to done.
Q: What was your cash-out?
A: I don't even remember what it was to tell you the truth because I never added it up. But the last year we were there, we had $40 million in profits and I got two percent of that.
Q: Never added it up, OK ... So it seems to me, and I may not know, that P&G prepares people very well for the painstaking step-by-step process of developing and marketing new products. That doesn't lead one to think that this is a very innovative and nimble company, yet it seems to me they've done some very innovative and nimble product development over the years.
A. Procter & Gamble comes up with product innovation after product innovation after product innovation.
A lot are failures but the world never knows about them. Pampers fell flat on its face the first time they introduced it. They withdrew it from the market. The only way you find out if something is going to work is to go out and test it.
Procter has the guts to do that. There's very little market research you can do that will tell you very much of anything about whether a new product or approach will success.
You can research well consumer experience. You can find out what consumers think about a product they've used, but you cannot accurately find out what consumers think about a product they've never used.
You cannot research something that doesn't exist.
Q: What's the solution for companies that want to be nimble, organizations that want to be innovative?
A: You have to develop a product that consumers never ask for but when they experience it, they think it's fantastic. It's true of so many P&G products. Find the latent desire.
How do you sell a product where there is no inherent interest. That's what I learned to do at Procter & Gamble. Who is interested in laundry detergents? Not particularly anybody. The Brits have a great term: they call it a grudge purchase. You have to buy it. You have to buy glasses, laundry detergent.
The vast majority of people who use eyeglasses, use them because they have to use them. They have no particular interest in them at all. They didn't buy them because they are fashionable, fun to wear. How many people buy toilet tissue because they love to buy toilet tissue?
Well, Procter & Gamble has sold a lot of White Cloud and Charmin toilet tissue over the years because they figured out how to sell a product in which there is no inherent interest.
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