I’ve talked recently about knowing the revenue per customer – let’s dig a little deeper on the profit equation. Keep in mind that anyone who buys from you once is more likely to buy from you a second time. It’s much easier to make subsequent sales than it is to make that first sale. Once they buy your product or become a client or patient, the chances of them sticking with you if you provide good value is very high and of course there are things you can do to maximize that possibility (that article comes next…)
I write a lot of marketing for dentists. Dental practices, like other professional practices, need a steady influx of new patients to keep their bottom line healthy. An average new patient is estimated to be worth $900 during their first year. A patient that stays with a dentist over their lifetime is likely to spend much more than that each year, especially if they have multiple family members seeing the same dentist, which is often the case. That patient is potentially worth thousands and more likely tens of thousands of dollars over their lifetime as a patient of that dental practice.
Let’s suppose the patient pays the dentist just $1000 each year for 15 years, that’s 15 thousand dollars over the “lifetime” of this patient. Many patients will have years where they (and/or their families) will spend significantly more on dentistry and oral health care. If the dentist has 100 patients that are similar, that will net the practice $1.5 million dollars in 15 years or $100,000 per year.
Do you think it would make sense to spend $5000 to create a great website and $500-1000/month to keep steady traffic coming to it and new patients coming in every single month? If you understand the lifetime value of a patient, you’d be crazy NOT to! Yet, professionals and business people tend to think in terms of financial output when it comes to marketing and NOT the exchange of value.
You need to understand these numbers for your business. And you need to assess whether you’re getting the results you need, want or know are possible. If you’re not, you need to think about hiring someone who can help make that happen.