Ascent Predictive Growth Solutions Discusses Patient Acquisition for Dental Practices

President of Ascent Practice Growth Strategies discusses Patient Acquisition for dental practices.

What is considered a good cost to acquire new dental patients?

As with most business questions, the answer to this one begins with “That depends…” What does it depend on? It depends on your average annual per-patient value, your average patient’s lifetime value, and your overhead rate.

For the sake of this article, let’s assume an annual per-patient value of $1,000; we’ll set the lifetime value at five years with 80% retention, and for overhead, let’s take a rate of 70%. (Those are considered common numbers in dentistry).

Ideally, you’d like your per-patient acquisition costs to be less than the 30% gross margin remaining from your overhead for the average annual value of a single patient. So in our example here, that would equal $300. At that rate, you know you’re going to at least break even on average in year one and then, for the lifetime of the patient relationship, make a good profit for the remaining years.

In competitive areas, acquisition costs tend to be higher as online advertising fees go up due to the level of competition vying to buy the ad space. This means that there are times when it’s just not probable that you can attract patients at a cost less than the annual gross margin. If you live in one of these areas, it is important to factor in the lifetime value of a patient to determine whether the acquisition cost is worth the investment. For example, still assuming the numbers above, if your patient acquisition cost is $500, that can still be a good investment if you can retain new patients at a high rate. In this scenario, you’d start seeing profit on those patients in year two and beyond.

Understanding your new patient acquisition costs is critical in determining what type of marketing works best for you. This is why at Ascent we’re very proud of our average per patient acquisition costs of less than $200.

https://ascentpgs.com

Douglas Sligting is the founder and CEO of Ascent Practice Growth Strategies. He has spent his entire 25-year career in marketing, working for national advertising agencies in addition to owning his own agency for 10 years prior to creating Ascent. Doug’s singular vision is to help dentists thrive in today’s evolving dental industry by focusing on a proactive, comprehensive and strategic approach to marketing. His company, Ascent, formerly Dental Branding—now in its 10th year, is the antidote to status quo dental marketing, which has failed the dental industry. The focus of Ascent is to 1) control perceptions to attract a better quantity and quality of patients and 2) deliver objective analytics to ensure efficient management and effective planning of ongoing campaigns. This focus delivers the best possible outcome as well as sustainability, predictability, and confidence in your future. Ascent is a goal-focused, business-centric and long-term marketing partner.

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