The greatest benefit of tracking your Lifetime New Patient Value is that it allows you to calculate how much value you get back compared with what you spend on marketing. Plus, it lets you know how valuable the new patients you’re receiving are and whether or not particular channels provide more value than others. If you’re not tracking this metric, you have a significant marketing cavity that needs mandatory treatment to prevent further injury. So the question remains, do you know the lifetime value of your new patients?!
Obviously, it’s difficult to accurately measure the lifetime value of a new patient, because they’re a new patient, they just barely came into your office. But with the right data, it’s totally possible to get an average that can significantly change the way you market and where you market for new patients.
There’s 2 ways to determine Lifetime New Patient Value:
Using the industry-average is a pretty good place to start, but you can’t get tailored information unless you use the advanced method. But to get you started, we’ve done a little research for you to determine the industry-average.
Averaging the lifetime value of a new patient using information from New Patients Inc and The Wealthy Dentist gives us an average value of $880 per new patient for dentists.
If you own a chiropractic clinic, according to Dr. Beck with dcpracticetools.com, "the lifetime value of a chiropractic patient is between $1000-3000 on average, depending on the type of practice, location and services offered."
Of course, the lifetime value of a new patient can range from as low as $500 to upwards of $25K or MORE, so using your own data is the most accurate way to determine the lifetime value of YOUR new patients.
Accuracy is important, so we definitely recommend taking the time to figure out YOUR Lifetime New Patient Value.
Here’s how:
Now you have the lifetime value for your own chiropractic or dental practice’s new patients, not the industry-average. You can use this data to tailor your marketing efforts.
In fact, using your Lifetime New Patient Value to calculate your Return on Investment (ROI), you can accurately calculate how much value you get back compared with what you spend on marketing.
Actually, in another blog post, we covered how to calculate your ROI and why it’s vital for determining your profitability and marketing efficiency. (We also have an article to teach you how to maximize your ROI with fervor! Check it out.)
Even without using the ROI formula, you can compare your Lifetime New Patient Value with the amount you spend on marketing. If you’re not getting back more than you spend, you may need to find more valuable new patients!
If you’re bringing in 20 new patients a month from Twitter and only 8 new patients from Facebook, you’d probably think to spend more marketing dollars on Twitter and possibly less on Facebook. But what if the new patients from Facebook actually have a higher Lifetime New Patient Value and provide a higher ROI?
Well, then they would be more valuable, and investing more dollars into Facebook would actually provide a higher return, even if you receive less new patients than Twitter.
The lesson here:
Your data has the answers to where to find more valuable new patients. So, if you’re not happy with your Lifetime New Patient Value and especially, your ROI, or you just want to optimize those numbers, then here are a few metrics your marketing team shouldn’t be without!
Here’s the deal:
Not all marketing sources are going to produce the same quality of new patients!
If you’re not tracking your acquisition source, you won’t be able to find out that you’re getting ridiculously higher care acceptance from new patients coming from Yelp than the new patients coming from mailers. Every PMS or EHR that I know of allows you to customize your “marketing source” so that as you enter the new patient’s information into the system, you can identify “where” they came from. So, do it! Don’t be lazy about filling it in. Acquisition source is a vital piece of data that your team should be tenaciously entering into your software.
If your sales team isn’t tracking % Care Acceptance and Average Care Acceptance $ Amount, you’ve got a cavity so severe, you need a root canal to relieve your pain and save your smile! To mirror and communicate with the marketing team, the first metric (% Care Acceptance) should be tracked per referral source as referred to above.
Don’t know how to track % Care Acceptance? We broke it down in our last blog, Expert Advice for Dentists to Increase Care Acceptance. (The calculation works the same for chiropractic offices.)
Once you start to identify which marketing channel is performing the highest, it’s easy to identify where to put your marketing dollars. By adding this information to Acquisition Cost Per New Patient (which we taught you how to track in our article, 3 Metrics That Will Transform Your Dental Marketing Results (FYI this formula applies to chiropractic offices as well)), especially if Acquisition Cost Per New Patient is divided by marketing channel, you can make intelligent decisions that optimize your marketing dollars!
When your marketing team and sales team are communicating about your data and are able to identify which marketing sources produce higher care acceptance, you can dial in your marketing and crank out higher ROI.
Want to go deeper?
If your team is making sure to identify the marketing source for each new patient, then every 6 months, it’s important to filter your last 6 or 12 months worth of new patients and see how much they’ve spent in your dental practice since their first visit.
Average that number out so you get an Average $ Per Patient spent from that marketing channel. You’ll be surprised to see one channel consistently outperforming the others. Using this data, you can make every marketing dollar count to the very last cent.
The total $ amount that a new patient brings into your practice (typically varies based on age) over their "lifetime" with you.
The amount of return on marketing relative to marketing costs.
The percentage of patients that accepted recommended treatment compared to cases presented.
The average dollar amount per accepted treatment.
How much you spend for each new patient you get.
The average dollar amount spent per patient.
Using these powerful metrics, you can optimize your marketing dollars, maximize your marketing decisions, and increase the Benjamins in your pocket!
So what are you waiting for? Start increasing your marketing efficiency and profitability today! If you want to make measurement simpler, and interpreting the data easier, check out what BlueIQ can do for you and your team today!
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