This is a cool time of the year.
We get to be thankful, joyous, merry and bright. We get to sing along, drink eggnog, give gifts and light candles. At the same time, we are supposed to be planning for a happy and prosperous new year. What? How is that going to happen?
The first answer is easy.
Give me (Healy) or your Growth Leader a call. We can help.
Ready to DIY? Here’s what you need to know.
- % Growth You Want in 2023: Think about it realistically. If you want to double the size of your practice over the next 10 years, 7% should be the goal. If you have loftier ambitions, set your target.
- 2022 Collections: Plain and simple, how much money has gone into your bank account this year. This one should be pretty easy, and a good estimate should be possible.
- Number of Active Patients. This one is trickier than it sounds. Before you find your Dentrix logins and attempt to navigate their maze of reports, realize your data is probably inaccurate. Only 4 of the 150+ practices we have analyzed actually inactivate patients in a consistent manner. Active patients should be defined as anyone who has completed a treatment in the last 18 months. If you have Dental Intel, Practice By Numbers, Jarvis or the like, you can get this one. If not, you are likely to need professional help.
- Rate of Patient Attrition: Uh oh. It is likely game over at this point as we have yet to find a practice that knows this number – even those with analytics software. Our team calculates this as the percentage of active patients who have gone 18 consecutive months without completing an appointment.
If you have started to question your DIY chops, do not despair.
Less than 10% of all dental practices know these numbers. We agree, that is crazy. At the same time, my hope is the following example will motivate you to continue the pursuit. Knowing and fully understanding these 4 numbers are critical to a meaningful plan for 2023.
Following are the actual facts and figures from a client we helped in early November. Since then, they have moved into the 2nd phase of planning, and everyone involved is truly excited about their potential for 2023 and beyond. Here is how it all started:
This practice was a start-up in 2014. They have sights set on adding an associate dentist in the next 2 or 3 years, and they want to double their current, active patient base of 1,486 over the next 10 years (7% target growth in 2023). We helped them calculate their patient attrition at 20.2%, and their 2022 collections are set to total just over $1.2 million.
With these numbers, we can get to work and do some calculating:
- Their average patient spends $807 per year with them ($1,200,000 / 1,486)
- Their 20.2% attrition means they are going to lose 300 patients and $242,200 in collections during 2023. In other words, they need 25 new patients per month – just to stay even.
- To grow 7%, they will have to generate 404 total, new patients during 2023 (34 per month). First, they have to make up for the 300 lost. Then, 7% growth of 1,486 active patients means another 104 new patients. That is the new patient target.
- Their average patient has a lifetime value of $3,995. While this does not directly impact the 2023 plan, it does provide a point of reference for a 2023 marketing budget. Even spending $400 to get a new patient would generate a 10:1 ROI.
At this point, we know enough to be dangerous. Now, we can start Phase 2 of our analysis and planning within this framework.
- Increase the average spend per patient to $900 per year by focusing on case acceptance and increasing hygiene production.
- Work to reduce attrition to less than 17% in a number of ways, such as improve re-appointment rates for hygiene and restorative patients to at least 90% and/or implement a patient engagement program to get active patients without appointments onto the books for another visit.
- Launch a Membership Plan to diversify away from 76% of their new patients having dental insurance.
2023 can be your best year yet.
While the full explanation of everything our Strategy Team does might be longer than A Night Before Christmas, my hope is you start to see the magic. No longer do you have to “just want more” or have to guess at the “right” number of new patients for your practice. It can be calculated with confidence. It can be known. Most importantly, it can be the starting point for an effective plan with specific goals.
If you agree this approach to planning is an upgrade, let me know. If you have related questions, do not hesitate to ask. Our goal has always been different than other marketing companies. We do not want to baffle you with BS reports. We want to show you actual results. We want to help you grow. We want to help you achieve all your goals.
Most importantly, we want you to be able to spend most of your holiday season focused on what is cool. The world needs more peace. The world needs more wise men (and women). And, the world needs more smiles.
You focus on those things and let us help with the planning. Our entire team is thankful to have your practice as part of the TNT family. We wish you nothing but a happy holiday season and a prosperous new year, and we hope you continue to sing along with one of our holiday favorites. . . all I want for Christmas is my 4 core numbers.
About The Author
Tim Healy is one of the founders of TNT Dental, the #1 creator of custom websites and marketing strategies for dentists. Recognized as a leading expert in helping dental practices attract new patients, Tim has a true passion for teaching dentists the important “business stuff” they do not teach you in dental school. If there is anything Tim can do to help you, please do not hesitate to contact him directly at the office, (877) 868-4932, on his cell, (214) 680-1270, or via email at firstname.lastname@example.org. Of course, you can always visit www.TNTDental.com to learn more.