Good dentists put people first – which keeps patients happy, and coming back.
Of course, you should treat all of your patients with the same respect and professional bedside manner.
But… at the same time, it doesn’t hurt to think about your high-value patients in specific ways – both to find more of those types of patients AND to make sure you retain the ones you have.
Knowing who these patients are and going the extra mile to keep them happy, healthy and in your practice could mean a substantial difference in your income.
It’s not cynical or unseemly to give extra thought to your more profitable patients – because:
- It could help you extend your hours to see more patients in a timely manner.
- It can mean the difference between upgrading equipment (which benefits all patients) sooner rather than later.
- It could mean the difference between hiring an extra hygienist or receptionist to improve your overall service – or not.
In short, making savvy business decisions based on your most profitable patients can positively impact how you serve all of your patients.
And it could mean the difference between having the option to retire at the time of your choosing – or facing the necessity to keep working for an extra year or five…
It’s impossible to make those kinds of decisions, however, if you don’t know which patients are high value.
You might be saying to yourself, “my patients are all more or less at the same level of profitability.”
Depending on your practice, that could be true to a certain extent on an annual basis.
However, if you look at a matrix of your patients’ lifetime value, you might be surprised to see which patients are your most valuable.
A lifetime value matrix sounds complicated, but it can show you the gamut of how much profit each patient is projected to contribute to your bottom line.
So the key is to understand who your high-profit patients are, to understand where they came from, what they require, why they’re high value, and hopefully to get and/or retain more of them.
The real issue: not knowing for sure.
If you don’t know which patients are your most valuable, you might make subconscious detrimental business decisions.
For instance, some dentists believe the “good” money is in cosmetic dentistry. They see a per-procedure fee that’s 10 times higher than regular check-up and prevention appointments. What they don’t see is that a cosmetic dentistry patient might be more fickle, or to put it bluntly, near the end of their life-cycle as a patient.
A giant one-time fee for a complicated, multi-step cosmetic procedure doesn’t always stack up against the lifetime value of a younger patient who is likely to stay with your practice for decades to come.
Even if you’re near retirement age, your practice’s value certainly reflects the estimated total future value of the patients it could retain.
I’ve populated a (very) simple lifetime value matrix to show you what I mean:
2015 Billing Value
Projected Lifetime Value
Cosmetic Dentist Patient
“Regular” Check-Up Patient
So if you focused on the $10,000 billing, you’d need to get 5-times the number of cosmetic patients to equal just one “regular”check-up patient’s lifetime value.
That’s just a hypothetical scenario, but it shows how initial estimates could be misleading.
The answer really begins with the data points you already have about all of your patients.
It can be relatively onerous to dig through and sort your data to find meaningful information, but doing so gives you the tools you need to make your practice better – and to improve your personal finances.
If you’d like help with figuring out your important data points, I will cover the typical ways you can do so in the next blog post.