Please enjoy this excerpt from our ebook, Solutions for Patient Retention: A Primer.
After having explored what patient loyalty and retention can look like in your dental practice, you might still be wondering, "And I should care, why…?"
We’re glad you asked. In a nutshell, our answer is three-fold:
- Retaining patients costs less than attracting new ones. Saving money = Good.
- Retaining loyal patients increases a patient’s lifetime value. Making money = Also good.
- Greater value divided by lower costs means a higher ROI. Maximizing money = Best.
In other words, you create an ecosystem that encourages patient loyalty within your practice. While patient loyalty itself may seem like a nebulous marketing-jargon type of phrase, what patient loyalty translates into is patient retention. And your patient retention rate is not only measurable, but increasing patient retention is attainable, affordable, and – you heard it here, folks – profitable.
Let’s talk about lifetime value (LTV) and how it relates to patient retention strategies for your practice.
HOW PATIENT LOYALTY BECOMES MEASURABLE: THE LIFETIME VALUE METRIC
Putting it simply, you can estimate the lifetime value of a patient in your practice using the following calculation: LTV = A x V x Y, wherein:
- A = average number of Appointments per patient each year
- V = average Value of each patient appointment
- Y = average number of Years a patient will continue loyally making appointments with your practice
These numbers will vary from practice to practice, from type and prices of services provided, and even depending on the stage of growth your practice is currently in.
The “V” in the patient lifetime value equation calculated over a fixed period of time is also known in financial circles as new patient revenue, or NPR. New patient revenue is basically what it sounds like – the amount of revenue your practice receives, on average, from each individual new patient.
In the short term, a typical calculation factors NPR as revenue generated over a six-month or one-year period. These are decent time frames to cover completion of most initial treatment for dental patients from the time of their initial exam.
Long-term new patient revenue is essentially just another way of saying patient lifetime value (LTV or PLV). And we work to increase – and maintain – that average patient lifetime value number for your practice by making sure the bucket no longer leaks (as much). Patient retention strategies keep new and established patients in your practice bucket, and patient lifetime value stays high.
It costs less for your practice to retain and build relationships with established patients than it does to market and acquire new patients.
What your practice needs instead in this time of uncertainty and upheaval is some semblance of routine, some glimmer of normalcy and steadiness amid the chaos. And while taking care of your employees is one important strategy in that realm, your patients too can provide you with a trusted buoy to ride the waves.
But, you gotta put in the work to ensure those patients keep coming back. Loyal patients means more (number) and more consistent (predictable, recurring) appointments on the books.
Focusing on patient retention is what’s going to help deliver quality care to your patients – care they will keep returning to your office to receive. And, thus, generating a higher lifetime value of each patient for your practice.
If you enjoyed this excerpt from our ebook, Solutions for Patient Retention: A Primer, there’s more meat (or veggies!) to sink your teeth into – visit the ebook download page and we’ll deliver these nutritious brain snacks straight to your inbox.