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.
The Lifetime Value Of Patients
There are a lot of variations on the formula used to calculate lifetime value. One of the simplest ways is to use the following method: Total Customer Revenue – Total Customer Costs = Lifetime Patient Value.
To calculate the total customer revenue, 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. 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 hunt which advertisement or form of outreach drove the patient to call you.
Gain Even More Insight Into Lifetime Value
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.
Increase Lifetime Value
Provide the highest quality service possible. 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. Invest in attracting people who need more from you and have the means to pay you. Develop a marketing plan that makes them choose you.