In recent years, the UK dental market has experienced significant growth, with market value increasing by around 90% between 1999 and 2010. The market is estimated to be worth £5.73 billion year. In the UK, there are 49,350 dental care professionals and a further 32,900 working in the general practice sector.

As a dentist, your most valuable assets are your patients. And it’s not simply a matter of new dental patients your practice brings in. To successfully launch a dental marketing campaign, it is important to know the value of each patient to your practice. The total benefit, delivered over time by those patients, is what can make or break your dental business. If you’re going to retain a steady and growing number of patients, now you also need to keep them happy.

For example, a sizeable portion of the Irish now choose to receive their cosmetic dental treatment abroad in countries such as Turkey, Spain, Portugal and Eastern Europe. Dental clinics in some of these countries that offer their patients savings of up to 70% on what Dublin has to offer. Perhaps these countries add more value to their dental patients, which underscores the importance of why your practice needs to reevaluate its marketing strategies.

Value of a new dental patient

Most dental practices channel a portion of their overall marketing budgets into acquiring and locating new patients. The amount that should go towards attracting new patients will, of course, vary substantially from one dental clinic to another. It goes without saying that dollars spent on marketing efforts aimed at attracting a new patient should not exceed that patient’s lifetime value to the practice.

This makes calculating the value of a new patient a vital component in determining the most prudent way to allocate your marketing budget. However, marketers have a very wide estimate when it comes to the long-term value of a new customer. Some have placed estimates at just a couple hundred dollars, while others put it at over $10,000.

A Wealthy Dentist survey that revealed that of 68 dental respondents, only a quarter had ever attempted to estimate the value of a new dental patient. In general, the estimated value of new patients given by respondents was in the range of $200 to $3,000, with an average per dental patient between $900 and $1,200.

Determining the lifetime value of the patient

To build meaningful dentist-patient relationships, you must have an estimate of the lifetime value each dental patient brings. This way, you can strategically structure and market your practice with the goal of maximizing revenue and taking your business to the next level. The concept of Customer Lifetime Value or CLV is an estimate of the total value of a customer to a business over the entire period of their engagement.

For any business, Customer Lifetime Value is an indispensable marketing measurement tool. It’s particularly critical for relationship-based businesses like dentistry. Factors to consider when estimating CLV for your particular clinic include:

• Lifetime Relationship: Total length of time an average patient spends in your dentistry.

• Average Annual Value: Income made annually by each patient.

• Customer Referral Value: Patients referred by your average customer.

When calculating the lifetime value of an average patient, the following formula is helpful:

Patient Lifetime Value = Lifetime Ratio x Average Annual Value + Customer Reference Value

Importance of Calculating the Patient Lifetime Value

Once you have an estimate of the lifetime value of a new dental patient, it will be possible to make more informed decisions regarding advertising and marketing. You certainly don’t want to spend more resources acquiring new patients than they bring to your dental practice in a lifetime.

When you have a clear idea of ​​the current value of each new patient, it also gives you a customer guideline target number that must be exceeded. If, for example, you think the new client is worth $500 and you’ve invested $5,000 in a patient postcard campaign, then for your campaign to be considered a success, you’ll need to bring in more than 10 new patients.

Alternative Valuation Method

Another method of estimating the value of a new dental patient is to ask yourself how much money you would be willing to receive from another dentist if you “sold” one of your patients. Would you, for example, be willing to receive less than $400? In all likelihood, I would order more.

Many times, dental patients seeking services during an emergency tend to return to the dentist they see regularly. In such a scenario, when calculating the patient value, consider how you can turn that emergency patient into a regular one. Improve the lifetime value of your dental patients and your dental office will be more valuable and successful.

Conclusion

Armed with how to estimate the value of your new dental patients and why you need to estimate, your dental practice will be in a position to make more informed marketing decisions that lead to greater return on investment. The customer lifetime value measurement methodology helps you assess the profitability of targeted marketing and promotional efforts. It serves as a guide to highlight which promotional efforts should be dropped or maintained. If you can improve the lifetime value of every dental patient, your practice will experience consistent gains in profitability over the long term.