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How To Understand Your Patients’ Customer Lifetime Value

How To Understand Your Patients’ Customer Lifetime Value
by Brian Quinn

We all understand the importance of retaining existing patients and of attracting new ones to cultivate a thriving dental practice. But how can you precisely calculate the value of each patient who walks through your door? Using publicly available data, statistical models can provide insight about how various metrics will impact your patients’ customer lifetime value (CLV). These models also will help illustrate that changing just a few key metrics can have a major positive impact on your patients’ CLV.

A Simple Model

According to research from Henry Schein, the average dental practice has an annual patient attrition rate of 17%. This statistic is confirmed by data provided from Dental Intelligence, which also reported that the top 10% of practices only observe a 3% attrition rate. We can use this information to calculate the expected number of times that a typical patient will visit your practice.

In general, if your patient attrition rate is x%, the average number (the expected value) of years your patients will stay with your practice throughout their lifetime is 1/(x%) years. So, this means that in the average dental practice, the typical patient will stay with the practice for 1/0.17 years, or about 5.88 years. If your active patients visit your practice twice a year, this amounts to roughly 11.76 expected visits throughout their lifetime.

Read full article on Dentistry Today.