It’s often difficult to think of things in the long-term when you’re busy treating patients all day. So when your marketing efforts produce only one or two new patients, your first instinct might be to deem your marketing a failure.

As a doctor, dentist, or any other type of small-to-midsize business owner, you shouldn’t focus solely on the first appointment. Rather, start thinking in terms of lifetime value, as that will be the true gauge of how your marketing is performing.

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What is Lifetime Patient Value?

The lifetime value of your patients is the cumulative amount of money the average person will spend on your dentistry services during their tenure as your dental patient.

For example, let’s say that your average patient stays with your dental office for five years and pays $500 per year. That first-time appointment suddenly looks a lot more lucrative, doesn’t it?

 Now you can look at those three patients who just walked in and see them for how much they’re truly worth. And that is precisely why lifetime value is one of the most important metrics a doctor can focus on when attempting to build a practice from the ground up.

 Not only can knowing the cumulative value of each patient help you expand your thinking, but there are other very important reasons that deserve to be mentioned, such as: 

1. Knowing is Half the Battle
It’s important to know how much your patients are worth to you. Knowing that each patient is worth thousands of dollars makes it much more exciting when each new patient is earned.

2. Gives You a Goal to Strive For
Knowing how much you’re earning from every new patient acquisition gives you a number to beat. In a moment, you’ll find several options for improving the lifetime value of your patients, no matter what the number may be at the moment.

3. Makes it Easier to Establish Your Marketing Budget
Put a thousand dollars into your marketing and every new patient earns you a $5,000 return. Knowing these facts and figures can tell you, in a single glance, if your current marketing methods are indeed worth your while.

4. Your Exit Strategy Becomes Sweeter
 Knowing and exceeding the lifetime value of each patient can make your medical office more valuable, which is great news if you ever plan to sell.

5. It Takes a Load Off
Calculating the value of your dental patients eases stress because each new patient will be adding to the success of your dental office. Not only that, but you will be able to form a predictable marketing plan that can improve your success even more.

 Now that we’ve covered why it’s important to learn the value of each patient over the lifetime of their tenure with you, let’s discuss how to calculate this all-important figure. 

How to Calculate the Lifetime Value of Your Patients 

To effectively calculate Patient Lifetime Value or PLV, you first need to come up with a few figures that you’ll then plug into the formula. These figures include:

  • Years of Tenure (Years): This is the length of time in years that the average patient spends with you.
  • Frequency of Treatment (Frequency): This is how many times the average patient visits your office for treatment in a year’s time.
  • Dental Fees (Fees): This is the average amount in fees the typical person pays for each dental treatment.

 Knowing these figures, you can now calculate your PLV. You simply have to plug the figures into the formula, which looks like this: 

Years (Frequency * Fees) 

So if your average patient schedules 2 appointments a year for hygiene and exams at $400/each, and then a major case every three years costing around $2500, then we can figure that your patient’s average lifetime value is $1,633 per year. This was calculated by taking the $400 and doubling it for the exams and then dividing $2,500 by 3 to get the yearly amount. Add those two totals together and you’re very close to calculating your average PLV. Your average lifetime value calculator would look like this: 

Lifetime Value Calculator 

Treatment Type Frequency Fee Total
Hygiene and Exams 2 X per year $400/Treatment $800
Major Cases 1 Every 3 Years $2500 $833
Grand Total $1,633

Now you take that amount $1,633 and multiply it by the average number of Years your patients stay with you. If that number is 5 years, you would enter the following into your PLV calculator:

5* $1,634 = $8,165

Knowing that each new patient you attract is worth $8,165 allows you to be more liberal with your marketing investment, knowing that each new patient will potentially deliver a higher investment return. 

But there’s no reason that you have to stop there. The above formula will give you an instant snapshot of how your practice is doing, but remember your patients don’t exist in a vacuum. And in saying that, your PLV might be a lot higher than you expect. 

Let’s say that you have a PPC campaign that delivers one new patient. By your calculations, that one new patient is worth $8,165. But what if that person makes three new patient referrals to your practice? And what if those three refer another three who then go on to refer more new patients, and so on? That original patient’s lifetime value just became far more substantial.

And what if, on top of all those referrals, that original PPC acquisition was the manager of an entire household and went on to schedule appointments for the spouse and all the kids? 

Lifetime value isn’t always so cut and dry. However, the metric is still important to know so that you have a baseline to work with. Once you then have that baseline, you can strive to surpass it. Here are a few effective methods for doing exactly that. 

How to Maximize Your Patient’s Lifetime Value 

  • Immediate Attention: When a person comes in for their first appointment, spend time ensuring that the person feels welcome and is comfortable with your office environment. A grand tour might even be in order. Then, when the person goes home following the appointment, send out a personalized email thanking the person for coming in, and welcoming the person to your dental family.
  • Constant Attention: Get to know your patients and their families. Make notes in their files so that you can ask personalized questions on all subsequent visits. Your patients should feel as though they have your undivided attention and that they matter.
  • Quality Service: Your dental patients should leave your office feeling good about the treatment they just received and the bill they just paid (if insurance didn’t cover it). You can make your patients feel this way by explaining everything about the appointment from beginning to end, and going over all itemized charges before they leave.
  • A Reason to Brag: Your patients are used to getting marketed to. And dentists and their marketing methods are getting more intelligent every year. That means you need to bring your ‘A’ game with every patient you treat, and you need to treat every person who sits in your chair like a VIP. Do that and you’ll not only retain more quality patients, but your competitors won’t have a chance to steal any of them from you. 

To recap, knowing the lifetime value of each new patient who walks through your office doors is important for long-term thinking. Understanding the lifetime value of your dental patients will let you know if you’re earning a high return on your investment. And if you can manage to increase the value of each patient using the methods we’ve just covered, your dental office will experience steady profit gains, which is precisely what a successful dental practice should be doing. 

Want to improve your PLV? Start working with our dental marketing experts. Click here to learn more.