It's impossible to know if the marketing you are doing for your dental practice is working unless you know the Lifetime Value (LTV) of a new patient.
Understanding LTV Of Your Patients
In the world of dental practices, ensuring that every marketing dollar spent translates into a positive return on investment is crucial. The most powerful metric that can guide dental practitioners towards profitability and growth is the Lifetime Value (LTV) of their patients. Let's dive into how discovering and leveraging LTV can transform your practice's marketing strategy.
First, tracking return on ad spend (ROAS) is crucial. It's not just about running ads, it's about ensuring those ads generate revenue. By monitoring ROAS, dental practices can pinpoint which marketing efforts are yielding actual patient acquisitions versus merely draining resources. This financial clarity helps practitioners refine their marketing strategies for maximum effectiveness and efficiency.
How do we actually figure the LTV of a patient? Let's get into the (very simple) math! These are round numbers for the sake of easy math.
Formula: Average Value Of Visit x Numbers Of Visits Per Patient
Average Value Of Visit - $400
Average Number Of Visits - 9
Bi-Annual Check-Ups For 4 Years + 1 Small Treatment
LTV: $400 Visit x 9 Visits = $3,600 LTV
Let's assume you are running on a 25% profit margin. This means you are producing $900 in profit, per patient. You need to be spending less than $900 to acquire these new patients. If you are spending more than this, each patient that walks through the door is potentially costing you money.
DentistryIQ surveyed over 10,000 practices back in 2017 and found their average to be $4,200 LTV. That number is probably closer to $5,500 or $6,000 today and if you are in an urban area or you are a speciality practice, it will likely be even higher than that. This isn't news to anyone but it's extremely important to run your digital marketing campaigns efficiently to acquire new patients as lean and mean as possible.
Accurate tracking is the linchpin for understanding LTV. Taking the time to implement the correct tracking methods across campaigns and your website will allow your practice to close the marketing funnel effectively. This means knowing exactly how many new patients each campaign attracts and correctly attributing conversions. These granular insights enable informed decisions on where to allocate resources for optimal patient acquisition and retention.
Again, why does this matter? Because knowing the LTV equips your dental practice with the ability to gauge the effectiveness of your marketing efforts accurately. It provides a tangible metric against which to measure ROI and make data-driven decisions. Whether investing in new campaigns or optimizing existing ones, understanding LTV ensures that every marketing dollar is spent wisely and contributes to sustainable practice growth. Campaigns that worked should be repeated, pumping revenue to your practice. If it ain't broke, don't fix it!
We specialize in this at Alpha Dog Agency, helping dental practices from coast to coast explode with growth in the form of new, qualified patients through their door. Our team has a 98% retention rate in the practices that we work with and we are a month-to-month agency, never requiring long-term contracts to work with us. You'll receive the equivalent of a full-time, transparent marketing team under your roof at a fraction of the price.
Click here to contact us for a free consultation or even help in figuring out the LTV for your practice. You can also book a time directly at this link. We're always happy to lend a hand!
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