It’s not just the number of new patients your practice brings in that matter, it’s the total profit that those patients deliver over time that can make or break your practice.
Think about your ideal patient.They don’t just come in for one exam and never return. Instead, these patients come to you for all their health care needs throughout their entire lifetime. They depend on you to maintain their health for years and that can add up to some serious value, also known as their lifetime value or LTV.
Why is Patient Lifetime Value Important?
Unlike other businesses, you sell your services by exams or sessions. So, determining your ROI for marketing efforts requires you to know your patient's average lifetime value. Determining, the LTV of your patients helps you make important decisions about how much you should be investing to acquire new patients and retain current patients. Additionally, comparing the LTV across patients can also help you can determine which are more or less profitable to you. You can then decide on where to focus your marketing acquisition and retention efforts.
Patient Lifetime Value can be calculated in many ways, but typically you need these four numbers:
- How much profit you make from one office visit, exam or session
- How many times a year the average patient books a service
- How may years patients remain with your practice
- Optional: How many other patients they are likely to refer to your practice
Once you have a hold of the above numbers, the formula for calculating LTV should look like the below:
So if a patient spends an average of $250 per office visit and makes an average of three office visits every year, for four years. The average lifetime value of your patient is $3,000.
Patient lifetime value can be a valuable tool in your practice's marketing arsenal.
Use our Patient Lifetime Value Calculator to estimate the LTV for your patients and start making smarter marketing decisions to drive long term success!