Every medical practice has to use marketing to bring in patients to the practice. To run a profitable business, a doctor has to calculate the Lifetime Value of a Patient (LTV) to determine if the medical practice is heading for a disaster or it’s making good progress on the bottom line.
What is Lifetime Value of a Patient
Lifetime Value of a Patient (LTV) is the average revenue that one patient brings into your practice for every visit spread over several years. Medical practices measure their income through visits. Multiplying the amount paid per session with an estimated number of years they’re likely to stay with your patient visits gives you the LTV.
The higher the Lifetime Value of a Patient (LTV), the better your performance for healthcare SEO or Google PPC for doctors. A medical facility aims to bring in a patient and take care of their health as well as of their family and other referrals for a lifetime.
Failure to lock in a client after a first visit results in loss of revenue.
Importance of the Lifetime Value of a Patient (LTV)
Unlike other businesses, the medical field sustains by offering treatment services. To calculate your ROI, you have to know the worth of a new patient which sums up the return on your medical marketing investment. Since you don’t have the cost of goods, the Lifetime Value of a Patient (LTV) becomes a determinant of your revenue and a factor to consider when looking at the profitability of a marketing campaign.
Therefore, the lower the LTV, the less profitable the advertisement or marketing campaign used to bring them in.
How To Calculate a Lifetime Value of a Patient (LTV)
LTV calculation is simple and straightforward. If one of your visits revenue is X and a patient is likely to visit the facility Y times in a year for Z years, then the Lifetime Value of a Patient (LTV) is (X*Y*Z). If you acquire a patient via medical marketing that cost you $200, and your charge for each session is $250, then the patient’s value for just one treatment will not be enough to run the office, cover the costs, or pay you.
Another tip is to track the average number of family and referrals that a patient brings to your medical office and use that in the Lifetime Value of a Patient (LTV) calculations.
Different medical institutions calculate their Lifetime Value of a Patient (LTV) differently. A pediatrician can estimate their newborn client’s Lifetime Value of a Patient (LTV) using the number of years they’re likely to stay with the medical practice which can be decades. A new patient in teenage years may not remain with the office the same length of time before changing a physician in adulthood.
A dental facility can have several regular checkups a year and the estimated number of years a patient may stay with them depends on their age. Some more expensive medical procedures such as Invisalign can only be done once in a patient’s lifetime.
Every doctor should understand the nature of their patients and therefore calculate their LTV
accordingly. If you’re a facility that relies more on repeat customers and referrals such as a pediatric facility, in addition to medical marketing, you have to make other necessary changes to retain the customers such as a clean and serene premise. Further, you need to invest in a social media platform to engage with your growing clientele. On the social site, you can share the yearly or monthly offers and check on the clients’ well being after treatment. Also, keep an active emailing list to share tips and medical advice once in a while. You will be likely to keep clients for a lifetime if you employ this kind of engagement thus increasing your Lifetime Value of a Patient (LTV).
Calculating the LTV of a patient is very important when running pay per click campaigns for a medical practice. Telos Digital Marketing use the Lifetime Value of a Patient (LTV) to determine if a campaign is successful and has a positive return on marketing investment.