One of the most important metrics to know when investing in marketing is to find out HOW MUCH a new patient is worth to your dental clinic.
It’s NOT the cost of a cleaning (AED 700) that they do twice a year.
It’s not the value of the veneers campaign that brought them in the office (AED 30,000)
It’s not the cost of a few sealants or crowns.
It’s the Lifetime Value (or LTV) of a patient.
This is the amount of money a patient will spend throughout their relationship with a dental office. Since dentistry is a service-based industry that is very relationship-driven, it’s important to know how much a new patient is worth so you can spend marketing dollars accordingly.
How to calculate the Lifetime Value of a patient.
Generally you can look at your own patient data and take the Average patient spend per year x Average patient retention (in years). You also need to consider the importance of patient referral which I wrote about in another post here.
Here’s an easy way to calculate your patient spend:
Total Revenue from Last Year / Total patients that came to your clinic last year.
I’ve been studying dentistry in the US and Dubai for over 2 years and I consult with a dentistry expert who has been in the industry for 19 years and I’ve learned that the average LIfetime Value of a New Patient is AED 20,000 – AED 40,000
This accounts for several factors:
- Bi-annual hygiene appointments
- The average patient stays with you for 7-10 years
- The average patient spends about AED 2,000 – AED 4,000 per year.
- This could be from Oral health treatments (fillings, sealants, implants) and/or Cosmetic procedures (whitenings, veneers, orthodontics)
- Patients referring other patients to your practice (family and friends)
For general dentistry, a conservative number for a patient’s LTV is AED 20,000. For cosmetic dentistry and full-mouth reconstruction services, this number can go up a lot higher.
How This Affects Your Marketing Spend
When you’re spending money to acquire a lead, think about it in terms of LTV, not just the patient coming in for a few treatments in a year.
Generally, you want to invest 10% of your revenue into marketing, so you can spend AED 1,000- AED 2,000 in new leads because you KNOW the LTV is 10-20x that cost.
Here are some posts I wrote about how to improve your LTV:
- Implement a referral program: How to Setup A Referral Campaign To Bring in New Dental Patients
- Follow-up on your patients: How To Unlock Hidden Revenue In your Dubai Dental Clinic: The Unscheduled Treatment
- Follow-up on your new patient leads: 6 Tips to Convert New Dental Patients Into Consultations
I help service businesses hire and train remote sales reps so they can make an extra $20k-$25k per month without writing SOPs and spending time on 90% of the hiring process and it only takes 90 days, book a call with me to learn more. www.winwinwitheric.com