Need to determine the lifetime value of a customer? Invest in call tracking!
The lifetime value of a patient is the number of net dollars a patient spends at your practice over their total time as your patient.
Knowing the lifetime value of your patients will help you allocate your marketing resources better, improve your customer retention and, of course, you can’t increase the lifetime value of your customer until you know what it is. We provide a call tracking product CallOutcome360 that helps you find out.
There are a lot of variations on the formula used to calculate lifetime value. One of the simplest ways is to use the following formula:
Total Customer Revenue – Total Customer Costs = Lifetime Patient Value
To calculate the total customer revenue, simply add up how much money your patient has paid you since they began coming to your practice: cleanings, x-rays, fillings, bridges, crowns, braces, mouth guard, tooth whitening…the list goes on. You probably already have a system in place that gathers all of this information, so it’s just a matter of adding all the data together.
Determining customer costs is a little trickier, though. In order to do this, you need to track two things. First, the monetary investment made into on each of your advertising initiatives. Secondly, you have to track which advertisement or form of outreach drove the patient to call you.
You can track the number of phone calls you receive by putting a call tracking phone number on each of your ads. The call tracking reporting will give you your total customer cost by showing which of your advertisements prompted your patients to schedule an appointment and spend money with you.
After you’ve reviewed your records & your call tracking reports to get your numbers, you can use simple math to calculate the lifetime value of your patients. Knowing how much each patient is worth to your practice will give you a starting point; a number you can work to exceed for next year.
To increase the lifetime value of your dental practice, do these two things:
Provide the highest quality service possible. Want your customers to return? Do a better job than anyone else could. Make the overall experience better than any other dentist. My dentist has TVs on the ceiling over every patient chair. Watching Long Island Medium while having my mouth examined makes the experience as enjoyable as possible. The receptionist and the doctor also remember my name and the details of my life that I’d previously shared with them. (I’m only in there twice a year for cleanings, so that’s pretty impressive.) The point is, your efforts don’t have to be extravagant to be meaningful and memorable. Do things that make your practice better and your patients will spend more money with you.
Invest in getting the right patients into your chairs. Patients who only come in for bi-annual cleanings aren’t going to make much money for your practice. Sure, you can count on them to show up twice a year, but they’re never going to spend more money that the cost of the cleaning. Invest in attracting people who need more from you and have the means to pay you and develop a marketing plan that makes them choose you. Word of mouth is a great way to attract more of the same, so identify some of your highest paying customers and ask them how you can make your business worth talking about.