Practice Managers have few chances to come together. Clear Vision’s recent Practice Manager Mastery Event was one of them.
Part of the day was dedicated to discussing the important area of Key Performance Indicators or “KPIs”, the day-to-day numbers which influence the overall success and profitability of a dental business.
Driving the improvement of KPIs continues to be a crucial task for Practice Managers. And yet not all calculate and share one of the most important indicators: the lifetime value of a patient.
For many of the managers at the mastery event, it was the first time they had made this calculation. Many of them have since set about sharing it with their teams. Here’s the process so you can make the same calculation for your business:
1. Work out what each patient typically pays per year for exams and hygiene visits
2. Multiply this amount by an estimated number of years a patient attends when they continue to be happy with
the experience they receive
3. Consider the costs you incur of providing these fundamental services (there is likely to be little costs
4. Take these costs away from your working figure – this gives you your lifetime value before treatment
5. Consider what you can estimate to be an ‘average’ amount of treatment over the estimated period as applied in
6. Add this treatment income to your working figure
7. Take away estimated lab fees and material costs – you now have your indicative lifetime value of a patient
This is a calculation made by one of the Practice Managers at our event:
£200 annual charge for exams and hygiene
X 20 years = £4,000 (negligible costs involved)
1 x £75 filling every 2 years = £750
2 x crowns – £1,500, less £250 lab fees = £1,250
£4,000 + £2,000 treatment income =
Lifetime value of £6,000 over 20 years.
I’m not claiming the process to be scientific of course but you can imagine the power of sharing this indicative process with your team. Having them keep your estimated lifetime value in mind as they go about their daily work.
This is something which is especially important for certain dentists.
For instance, if patient recalls continue to be heavy going for your team, it can shine a new light on the importance of this area. It can instil a new sense of focus and application to the task, both from an administration point of view and for clinicians who are responsible for showing patients the value of examinations and hygiene sessions.
I urge you to share the lifetime value of a patient with your team. It can really bring home their part in protecting this income.
Remember to leave your comments and requests for help in the box below.
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