24 Oct What is the Lifetime Value of a Typical Dental Patient?
Knowing the average lifetime value of a dental patient is one of the most important marketing metrics a dentist can calculate. After all, if you know how much the average patient spends over the lifetime of their relationship with you, you will know how much you can (and should) spend on new patient acquisition.
Unfortunately, many dentists don’t know what the lifetime value of a patient is for their practice and they run into all sorts of problems because of it. Here’s one we hear from time to time – a dentist invests in a short-term pay-per-click (PPC) campaign that is advertising a new patient/first appointment special. He gets some new patients from the campaign. These new patients come in for the initial exam, x-rays and cleaning. However, since many dentists barely “break even” with first appointments, this dentist deems his pay-per-click campaign a failure and an unwise investment.
But is it? This is where the lifetime value of a patient becomes an imperative concept. While, yes, in the short-term – immediately after the PPC campaign ended – the campaign wasn’t profitable. But what about the lifetime value?
When calculating the lifetime value of a patient here are some factors to consider:
- How much do they spend per appointment?
- What is the typical frequency of appointments?
- Do they have a family? – Remember, if the household manager (usually the female and/or mom) books an appointment for herself, it’s more than likely she will also be booking appointments for the rest of her family.
- Do they refer?
- Do those referrals refer?
With this in mind, let’s go back to our dentist who ran the pay-per-click (PPC) campaign and make a few assumptions about one of the new patients. She’s a woman who is married with 2 school-aged kids. She just moved to town and doesn’t know anyone (ie – doesn’t have anyone to ask for a referral). Her husband was relocated for a job and right before she left her previous city, she was due for a 6 month cleaning and since she has always been a diligent dental patient, it was a high priority on her to-do list. So after she got settled in, she did a Google search for a family dentist, their ad displayed and she clicked on it. She was taken to a very professional-looking landing page and since she liked what she saw, she booked her cleaning and initial exam appointment. She had a great experience with the practice and left her appointment feeling very satisfied and thankful she found a new dentist for her family in a new city.
A few months later, she books her husband for a cracked tooth that needs a crown, one child for a cleaning and another child for a braces consultation. As you can see, her initial new patient appointment coming from the PPC campaign just went from “break-even” to quite profitable over a longer term that more than paid for the marketing it took to get her in the door.
When you’re busy practicing dentistry, it isn’t always easy to think long-term. But, if your online marketing includes pay-per-click advertising (PPC) or search engine optimization (SEO), it’s critical to understand that they aren’t silver bullet strategies that work overnight. In fact, if anyone tells you they are, you should run away…fast! They do take some time, but if you want to grow your practice, they’re crucial pieces of the marketing pie.
Our marketing team is currently developing a Lifetime Value of a Patient Calculator to help dental practices make more informed marketing decisions. For more information on that, contact our online marketing team today.