The Impact of Patient Loyalty on EBITDA
Patient loyalty plays a crucial role in determining the success of dental organizations and impacts a significant financial metric — EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization).
Dental and DSO executives rightfully place a strong emphasis on EBITDA. However, amidst this priority, they frequently miss the unlocked potential lying within their existing patient base.
EBITDA is a key indicator of a business's operational performance, overall financial health, and capacity to generate cash. To help make sense of this relationship, let's review three primary ways that patient loyalty affects EBITDA:
- Appointment volume: Loyal patients seek your care exclusively and consistently recommend your services to others. A consistent flow of patients bolsters your revenue-generating capacity and supports economies of scale, enabling your practice to optimize its resources and achieve greater cost efficiencies.
- Cost of acquisition: Compared with marketing to acquire new patients, marketing to retain current patients is easier, cheaper, and more profitable. On average, dental practices spend $150-$300 for each new patient that comes to their practice, but only 40% of these patients complete a second appointment. This is a significant problem for practices that rely heavily on acquisition for growth. The expenses to acquire new patients rise to sustain a certain level of gross revenue.
- Retention: Loyal patients have a higher lifetime value, as they generate consistent hygiene and treatment revenue. Enhanced patient retention directly impacts EBITDA byreducing churn and its associated costs.
No matter the size of your practice, you want to keep your patients as close as possible for as long as possible. Investing in better processes helps dental teams better fulfill patient needs. This, in turn, produces a measurable financial outcome — EBITDA growth — while making a more significant impact on your practice goals.
So what are the best ways to increase patient loyalty? Let's explore some effective strategies:
Prioritize privacy and convenience
Respecting and safeguarding patient privacy and communicating with them through their preferred method makes patients feel valued and secure in their interactions with your practice. Additionally, emphasizing convenience, such as online appointment scheduling, and accepting digital payments and intake forms, demonstrates a commitment to providing a seamless experience.
Bonus EBITDA Impact:
- Increased convenience through digital engagement platforms helps reduce no-show rates and can quickly fill cancellations or gaps in your schedule.
Manage your reputation and listen to feedback
Your online reputation significantly contributes to your ability to build trust with patients. Make sure you have accurate information listed on review sites, such as Google, Yelp, or Healthgrades. And keep track of patients' feedback about their experiences in the office.
Polling on social media or sending an email or text surveying a recent experience is a great way to get quick answers. Use the data to make changes that are meaningful to patients and impactful to your business.
Bonus EBITDA Impact:
- Increasing your online ratings improve discoverability, organic acquisition, and higher rates of appointment booking.
Support greater investments in care with seamless financial experiences
Patient financing plays a pivotal role in breaking down patient-provider pain points — as 90% of patients say loyalty depends on their financial experience. When patients feel that their unique circumstances are being considered and they are not subjected to rigid financial terms, they are more likely to commit to your care without being deterred by high upfront costs.
Bonus EBITDA Impact:
- Using a third-party patient financing provider minimizes the likelihood of non-payment and losses for services rendered.
Build repeatable loyalty through a subscription-based membership plan
Dental membership plans are one of the easiest ways to foster a direct relationship with patients. Uninsured patients visit the dentist once every two years. And it's not always because they dread going to the dentist or had a bad experience — it's because they lack dental coverage and fear the cost of care.
A subscription-based membership plan unlocks the earning potential of your uninsured patients by taking the mystery and fear out of committing to oral care. The simplicity, transparency, and affordability of a membership plan make patients feel financially savvy, closer to your practice, and good about themselves for committing to better oral health.
Bonus EBITDA Impact:
- Membership plans generate recurring subscription revenue that provides guaranteed income to your practice. This kind of financial security is particularly valuable during economic downturns and periods of uncertainty.
Maximize your results with better coverage from Kleer
Embracing patient loyalty as a cornerstone of your practice's strategy promises a brighter future filled with greater patient satisfaction and business success.
Over 7,000 dentists use Kleer's dental membership plan solution to win more patients, strengthen relationships with existing ones, and create greater demand for their business. See how Kleer can boost your bottom line when you schedule your demo today!
