Part of running a dental practice is analyzing the clinic’s performance and developing strategies for growth based on the data from your business tracking tools. One of the essential things to learn as a practice owner is how to measure customer loyalty and why doing so is important for your clinic’s success.
Knowing how to quantify patient loyalty will help you recognize where your clinic could improve, which patient groups need more attention, and how to manage a successful Patient Loyalty Program.
In this blog post, we’ll share details on which metrics you can use to measure your clinic’s patient loyalty and why the evaluation is crucial for dental practices.
Why Measure Customer Loyalty in a Dental Practice?
In any type of business, including dental clinics, it’s easier and less costly to keep existing customers than to attract new ones, so tracking and building up customer loyalty at your practice can save time and money on your marketing strategy.
High customer loyalty also leads to more five-star reviews online, which have a powerful impact on which clinics patients choose when searching the web for a new dentist. More loyal patients also mean more referrals for your practice since they’re more likely to recommend your clinic to friends and family.
How To Measure Customer Loyalty for a Dental Practice
Below, we’ve provided a few of the top metrics for analyzing how successful your clinic is in building and maintaining customer satisfaction and loyalty.
Customer Lifetime Value (CLV)
Customer lifetime value (a.k.a. CLV or LTV) is a metric that lets you know, on average, how much your dental practice can expect to earn from one patient.
The CLV formula requires multiple calculations across several metrics related to your clinic:
· Customer value = average purchase value x average number of purchases
· Average purchase value = total revenue / number of purchases
· Average number of purchases = number of purchases / number of customers
· Average customer lifespan = sum of customer lifespans / number of customers
Once you’ve calculated the customer value and average customer lifespan using the equations above, you can plug those variables into the following formula to find your dental clinic’s average CLV:
Average customer lifetime value = customer value x average customer lifespan
Repeat Purchase Rate
The repeat purchase rate metric lets you know the rate of returning customers you have versus the total number of customers. If you have a high rate of repeat purchases (or patients in this case), that’s a positive indication of your practice’s customer loyalty.
The formula to calculate repeat purchase rate is:
Repeat purchase rate = total repeat customers / total paying customers
Upsell Ratio
Like the repeat purchase rate metric, upsell ratio tells you the proportion of patients who purchase additional products or services as opposed to patients who never go beyond one.
Since patient satisfaction and loyalty play a large part in whether your patients are willing to purchase extras, calculating your upsell ratio can help measure patient loyalty.
You calculate the upsell ratio using the following formula:
Upsell ratio = number of customers who purchase more services / number of customers
Net Promoter Score (NPS)
The net promoter score (NPS) is a popular customer loyalty benchmark for large corporations, but it works just as well for dental practices. Getting your NPS is a little more involved than solving an equation, but knowing this score will give you valuable insight into patient satisfaction.
To find your NPS score, you must first send out a survey with one question: “On a scale from 1 to 10, how likely are you to recommend our dental practice to a friend?”
Anyone who answers 9 or 10 on the scale is a Promoter, while those who chose any number below 6 are Detractors. Promoters are your most loyal customers, while Detractors are more likely to not return to your clinic.
By subtracting the percentage of Detractors from Promoters, you get a score between -100 to 100, representing your NPS.
Get Daily Actionable Insights About Your Dental Practice
Now that you’ve learned how to measure customer loyalty, you might feel fired up to uncover more insights into your dental practice.
With the practice performance solution from Dental Intelligence, you can see simple Metrics & Reporting revealing your clinic’s performance, including gross production, number of patients, collections, and much more. We offer easy-to-use data analytics tools to help you discover factors affecting patient loyalty and other crucial insights.
.jpeg)
.jpeg)
