Today we're excited to share a guest post from KeySmile. Enjoy!

The biggest problem with Fee For Service (FFS) patients for most dental practices is that the practice-patient relationship is merely transactional. With no allegiance to the practice, FFS patients will bounce from dental office to dental office trying to find the best “deal” on whatever treatment they think they need.

How many times have you quoted a treatment plan to a FFS patient only to have them start calling around for a better price and then never returning?

It is extremely frustrating and challenging to build a business on transactional relationships as there is constant pressure to lower prices without sacrificing quality (and with mediocre historical data to drive marketing and revenue expectations.)

In-house monthly subscription membership plans get practices off the transactional hamster wheel by turning transactional patient relationships into known assets.

Amazon has become the most recognized expert in converting transactional relationships with customers into known assets with their Prime membership subscription system. Once an Amazon customer becomes a Prime Member, Amazon can predict each Prime members value based on reams of historical data on Prime member behavior. Each Prime member is no longer a “one off” transactional customer, but Amazon knows that each Prime member will spend an average of 2-3X¹ more than a non-Prime Amazon customer.  Simply by getting a customer to put some “skin in the game” with a Prime membership, Amazon is guaranteed to double or triple their revenue on each member.

If that information wasn’t enough, Amazon also knows exactly what percentage of Prime members will fail to renew their Prime membership each year (retention/churn). This information allows them to easily predict Prime member revenue years into the future.

Dental practices can use the same power of subscription membership to build a predictive growth model with FFS patients—instead of offering discounted one-time deal transactions to gain new patients like every other practice in the neighborhood.

Membership practices focus on building a base of patients with a KeySmile in-house membership subscription plan.  Once patients are converted to membership, they become a predictable asset for the practice with current KeySmile patient retention at 93%.² Simply by getting a patient to put some “skin in the game,” dental practices can double or triple their patient lifetime value.³

The lifetime value of patients can grow so dramatically because not only is retention increased, but practices see increased treatment acceptance from membership patients. Pattie Grove, Business Manager at Kutsch and Renyer Family and Cosmetic Dentistry said, “We have also seen (FFS) patients accept treatment plans more readily when they are covered by KeySmile Membership and/or KeySmile Credit.” 

A membership plan is clearly a powerful tool for practice growth because members buy more dentistry!

As the number of patients with dental insurance and per-procedure insurance compensation continues to decline,⁴ developing a base of FFS subscription patients will become essential for independent dental practices’ long term growth and profitability.

Want to learn more about in-house membership plans for your practice?

Go to KeySmile and enter “Firegang” in the “How did you hear about us” box to learn more information.

1. Brad Tuttle “Amazon Prime: Bigger, More Powerful, More Profitable than Anyone Imagined, Membership in Amazon Prime, which offers unlimited free two-day shipping, has doubled in less than two years. Analysts predict it'll double again by 2017” Time Magazine, March 18 2013
2. Compass membership data as of 10.13.15 (does not include referrals)
3. John Warrillow, “The Automatic Customer: Creating a Subscription Business in Any Industry” Penguin Group 2015
4. 53% of the US population have dental insurance (down from 60% in 2002) http://www.deltadental.com/AmericanOralHealthRoleDentalBenefits.pdf