Five-step formula for calculating the value of a loyal patient

By Dr. Nate Booth

You should focus on patient loyalty, not patient satisfaction. Here’s how you can do it. At an hour-long team meeting, do the following:

Step 1: How much money does a loyal patient spend in your practice over a 10-year period? I'll bet it’s way more than the average, satisfied patient. As an example, let's say the patient spends $7,000 the first year and an average of $500 a year for the next nine years. $7,000 plus $4,500 equals $11,500.

Step 2: How many people do loyal patients refer to your practice in a year? Multiply that number times 10 to get the number of people the loyal patient refers to you over a 10-year period. As an example, six patients a year times 10 years equals 60 patients total.

Step 3: On average, how much does each of the 60 people spend over 10 years? Let's say it’s $6,000 each.

Step 4: Multiply the $6,000 times the 60 people equals $360,000.

Step 5: Add the original loyal patient’s $11,500 to the $360,000, and the total is $371,500.

So each loyal patient is worth $371,500 to your practice. And that figure doesn't include all the people the 60 patients refer to you!

After you calculate the value of a loyal patient, it’s time to ask the Loyalty Question: “How can we treat patients so they are compelled to tell other people how great we are?” Then spend the rest of the meeting coming up with creative answers. Some of your answers will include gifts and activities that cost money, and many of your ideas will include little unexpected things you can do for people. In fact, little unexpected things you do for people have more power than big expected things. Doing excellent dentistry is a big, expected thing. Sending people handwritten thank you notes is a little unexpected thing.

Satisfied patients lead to average dental practices. Loyal patients lead to excellent dental practices. Make the move to loyalty today!

Dr. Nate Booth is a speaker, consultant, and author who provides dentists with the information and systems they need to thrive in their dental practices. Dr. Booth teaches at the South Beach Dental Institute and is a practice management advisor for ChaseHealthAdvance. Dr. Booth is the creator of the in-office, DVD-based program, The "Yes" System: How to Make It Easy for People to Accept Comprehensive Dentistry. For more information, go to Yes System, or call (800) 917-0008.