Your patients are your most valuable asset. But it’s not just the number of new patients your dentistry practice brings in that matters—it’s the total profit that those patients deliver over time that can make or break your business. In order to start a successful dental marketing campaign, you need to know how valuable each patient is.
But how do you determine what the lifetime value of a dental patient is? And what does it really mean for your practice?
In this article we’re breaking down everything you need to know about the lifetime value of your dental patients so you can maximize revenue and skyrocket your business, all while building meaningful relationships with your patients.
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What Is Customer Lifetime Value?
Customer Lifetime Value (CLV) is a prediction of the total worth of a client to a business over the entirety of their relationship.
CLV is a crucial marketing measurement for any business, but especially for relationship-driven businesses like dentistry.
Think about your ideal patient. They don’t just come in for one routine check-up and then disappear. Instead, these patients come to you for all their dental needs throughout their entire lifetime. They depend on you to maintain their healthy smile for years on end—and that can add up to some serious money.
What Is The Lifetime Value Of A Dental Patient?
No two dental practices are alike and, as a result, lifetime value will vary for each practice depending on location, the services offered and how effective their online marketing strategy is.
You’ll often hear $10,000 thrown around as the magic number for the lifetime value of a dental patient. Derek Naylor, a dentist practice consultant, claims a slightly more optimistic estimate at $22,000. At the top of the spectrum, True Dental Success believes that the CLV of a dental patient falls around $45,000 over a 20-year lifetime!
Given the large variables between estimates, we suggest taking the time to calculate the CLV for your particular dental practice. Here’s what you’ll need to consider:
- Lifelong Relationship: What is the total length of time (in years) that the average patient spends with you?
- Average Annual Value: What is the revenue you make from each patient on an annual basis?
- Client Referral Value: How many patients does the average client refer?
To calculate the lifetime value of your average dental patient, use this formula:
Average Annual Value x Lifelong Relationship + Client Referral Value = Lifetime Value
Let’s break that down. First determine how much the average patient spends per year. If most patients come in twice a year for hygiene/exams and spend $400 each time, then the Average Annual Value of your patient is $800.
Now we need to know the lifetime of your average dental patient. If you’re not sure, then use an industry average of ten years. We can plug that into the first part of our Lifetime Value Calculator and see that so far the patient’s lifetime value is $8,000.
Average Annual Value ($800) x Lifelong Relationship (10 Years) = $8,000
But we’re not done yet. Let’s say the average client refers two new patients over their lifelong relationship with your practice. Each new patient is worth an additional $8,000. For two patients, our Client Referral Value is $16,000.
Go back to our calculator:
Average Annual Value ($800) x Lifelong Relationship (10 Years) + Client Referral Value ($16,000) = A Lifetime Value of $24,000
While you won’t be able to predict the lifetime value of a dental patient down to the exact penny, as long as you know the average behavior of most of your patients, you will be able to get a realistic idea.
Still with me? Number crunching isn’t always glamorous, but taking the time to monitor your new patients and get a prediction on their total lifetime value is critical to the success of your dentistry practice.
Why Does Customer Lifetime Value Matter?
Once you know the lifetime value of a dental patient, then you’ll be able to make more informed decisions about marketing and advertising to new patients. You never want to be spending more money on acquiring new patients than the lifetime profit they deliver to your practice.
Knowing how much each new patient is worth to your practice right now will also give you a number to exceed. Improve the lifetime value of your patients and your dental office will become more successful and valuable.
How To Maximize Your Dental Patients Lifetime Value
1. Consistently Provide Quality Service
Never underestimate the value of over-delivering on your services and nurturing your relationship with your patients. Treat every patient like a VIP, and you can rest assured that your patients will keep coming back to you for all of their dental needs.
2. Aquire The Right Patients
To maximize the value that your patients are providing over time, you want to ensure you are acquiring the right patients. Those people who will say YES to complicated cases, and who have the insurance or income to pay for pricey procedures. Luckily, directing patients to these premium offerings is easier than you think.
Now that you know the real value of your dental patients, your practice can make more informed marketing decisions that will lead to your highest return on investment. And if you can increase the lifetime value of each patient, your dental office will experience steady profit gains—and your most successful practice yet.