One of the common questions I get from potential clients is how to identify your marketing budget and the value of healthcare marketing in today’s digital marketing environment. So when building your marketing strategy or identifying a marketing budget, you must identify your customer’s lifetime value. Again, I’m going to repeat that. It’s essential to determine the lifetime value of your customer. We often undersell the lifetime value of our customers. So today, I’m hoping to unlock some new perspectives for you.
Hi, I’m Brandon Seigel. President of Wellness Works Management Partners. For over 15 years, I’ve been supporting purpose-driven entrepreneurs like you transform their bottom line, whether it be operations, marketing, patient experience, or workforce management.
Our net revenue plays a part in our business model, but not often the lifetime value of the customer because net revenue is always changing. Sometimes when we hit scale, we increase our net income, our margin, our meat on the bone metric. Learn more about metrics and how to make them work for you in my Making Your Metrics Matter training video.
When we’re working together, we focus on net revenue, but there’s a lot of factors when we’re building your business model that can affect this. Net values change based on scale, fixed costs, variable costs, et cetera.
And so you should keep in mind net revenue, but ultimately when we’re identifying your lifetime value, we’re going to focus on your gross revenue capability.
Please remember that we have customers that outproduce and under produce, and that’s why we’re going with the average monthly revenue on a gross revenue standpoint.
Then we need to look at the average duration of a customer.
Are they a patient for 6 months, 12 months, 18 months, or longer?
What’s the frequency, and what’s the duration of that customer?
Much of the work that I do happens to have many different frequencies and durations, meaning we might see one customer six times a week, two times multiple disciplines, and we may see them for 18 months. You just never know. It just depends.
What I want you to start to calculate from a gross revenue standpoint is the average frequency, duration, and monthly revenue associated with that patient?
It’s also vital to understand how long, on average, a patient will stay with your practice.
Another way to identify a one month value of a patient is to take all of your patient revenue from that month and divide it by the number of patients you saw. But then we also want to look at the duration of each customer. You know, how long are they a patient?
The majority of the practices I work with have a very long life duration of a customer. When I say long, I’m often saying 18 months or higher, depending on the type of practice. But the other piece of the puzzle is what the frequency of that patient is?
These are all variables that we measure when identifying the lifetime value of a patient using gross revenue. We also need to be careful when measuring gross revenue because it’s easy to get shortsighted.
I’ve always been told that the best businesses are referral only, but how did they get that way? We hear it all the time of that internal referral, and when we go to different business professionals, they say, I don’t advertise at all. Everything is a referral only.
Well, how do you build that referral base?
There’s a certain amount of advertising that you should do to jumpstart that referral network.
Internal family referrals are huge. I always find the apple doesn’t fall far from the tree. We have control over this as well. It’s not just going in the pond and pulling out one fish. It’s pulling out a full family. Some fish are going to create and generate more revenue for you down the line than others.
Are they a success story?
How do we market the value of each successful customer?
So I want you to look at your patient success stories and how marketing these stories can create more value and bring more revenue from internal referrals and external referrals.
And then there’s this other variable that we often forget. What’s the value of the employees having productivity being and seeing clients?
We often don’t attribute that to the lifetime value of a customer.
If I don’t have five new customers this month, how much am I losing just in paid time that my physicians or therapists might not produce? You might lose therapists, and your net revenue will undoubtedly be impacted.
I challenge anyone out there not to find a minimum $ 10,000-lifetime value of a patient. I believe it’s going to be two, three, four times that number.
If you can’t find $10,000 of lifetime value in your customer, I want you to set up a free strategy session with me today because you’re missing something. You’re missing a greater point in your process, in your systems, in your marketing protocols, et cetera.
I believe that every customer should be a minimum lifetime value of $10,000. And I’m happy to show you how to create that. I am all about unlocking the potential in your practice through purpose-driven and ethical work while unlocking revenue that transforms your vision’s trajectory.
So let me supercharge your growth trajectory with our patient pro system, where I’m not just going to focus on increasing your patients, but I want to increase your patients’ lifetime value.
So if I were to say tomorrow that I could bring in five new customers that become lifetime valued at $10,000 minimum, what’s that worth to you?
And I want to offer a guarantee in everything I do. If we don’t do right by you, I will make it right. And we have safeguards to back that up but don’t trust my words, trust my actions. I invite you to sign up today for a free consultation, get to know me, and get to know what we can do for you. And let’s supercharge your private practice.
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Brandon Seigel brings more than fifteen years of executive leadership experience, supporting organizations of all sizes. Seigel manages over 1,000 employees in multiple private practices and has paved the way for new workforce empowerment initiatives throughout the world.