When discussing dental marketing, we must get the following fundamentals out in the open before we get to the actual strategies and tactics we use to grow a dental practice.
The Cost to Acquire a New Patient
The Lifetime Value of a Patient
New Patients versus Existing Patients
Let’s start with number 1 and work our way to number 5. Hopefully, by that time, the beginning of dental marketing will all come together, and you’ll have a firm understanding of how all of these things will affect your practice and, more importantly, your personal and financial wellbeing.
1. Cost to acquire a new patient
The first thing to consider when thinking about dental marketing is the cost of acquiring a new patient. This is simply how much you pay for each new patient who comes into your practice. This cost can easily be calculated by dividing the amount you spend on dental marketing each month by the number of new patients you see a month. For example, if you spend $3,000 on advertising and marketing and get 25 new patients from that investment, your cost per new patient is $120 ($3,000 / 25 = $120). That may seem like a lot of money, or it may not. Before you draw any conclusions on the figure, let’s discuss #2.
2. Lifetime value of a patient
The lifetime value of a patient is what your average patient will be worth to you, in dollars, over the lifetime of them being your patient. In the dental industry, the average lifetime value of a patient is about $22,000. If you didn’t already know that, you’re probably in a bit of shock right now. Now that you know how much the average patient is worth to you, here’s the question: is it worth $120 to get that patient in the door? What about $240? What about $480? Now, we’re getting a bit excessive, but we’re trying to make a point. If that patient will turn into $22,000 over the years, it’s important to look at every dollar you spend on dental marketing and advertising as an investment rather than an expense and do whatever it takes to get the person in the door and keep them around.
Now that we understand the cost of acquiring a new patient and each patient’s lifetime value, we need to get a major misconception cleared up, which leads us to our next point.
3. New patients versus existing patients
Many dental marketing companies will talk about how many new patients they can drive into your practice. New patients are exactly what you need, and the Abundant program drives in a ton of them, but that’s not where the real money is made in dentistry. Allow us to explain. When a new patient comes in, they’re probably responding to an advertisement with some offer. The amount of money they’ll spend on their initial visit will not be that much since they’re probably just going to receive an x-ray, exam, and cleaning, or maybe some minor treatment. We all know that dentistry’s real money is made from treatment plan fulfillment and long-term patients who return time and time.
Here’s what most dentists fail to understand…when a new patient comes into your office, they’re simply “checking you out.” They want to meet you and your staff, see if you’re gentle, have sterile equipment, and more or less get an overall feel for your practice. Just because they come in once doesn’t mean they’re committing a lifetime of dental work to you. Even if they like you, they still might not come back. Don’t worry about why they don’t, and it’s just human nature. They might get an appealing offer from another dentist, and they might move; they might not have the time. Whatever the reason, many of them won’t come back unless you employ the right retention and reactivation strategy.
A patient is only worth $22,000 if you have them over several years. They accept a treatment plan and refer other patients. They’re only worth an average of $800 in the first year you have them. This is why focusing exclusively on new patients will cost you a lot of money. It would help if you focused on acquiring and keeping patients to build a solid practice. We’ve met plenty of dentists who have patients going out the back door as fast as they have new ones coming in the front. While this is quite common, it is very costly. Dentists should have a productive and profitable practice while decreasing their marketing budget and new patient flow over time. This is a realistic objective when you have a good retention and reactivation strategy in place.
Contact GrowSmart for all your Digital Marketing needs.