Dental savings plans have many benefits. In fact, we have come up with eight reasons why you need to implement a dental savings plan in your practice.
Multiply Your Practice’s Value
Membership plans create a recurring source of revenue coming in every single month. Having that source of income will make your practice stand out that much more if you are planning on selling it.
One of the most well known types of valuations, the discount cash flow method, calculates your practice’s future cashflow. Right now, most dentists are selling at 75%. That means that you are likely to get 75 cents on the dollar for your practice. (Please consult your CPA or consultant if you plan on selling your practice.) You can almost eliminate that with a predictable stream of cash into your practice.
Knowing that you can also get top dollar for your practice, it will give you a great incentive for growing your practice that much more.
Lower Barrier to Entry
Most plans cost around $20 to $40 per month, which most households can afford. I like to call this “under the radar” revenue. For example, many gym memberships cost around $20 to $35 per month. Even when people don’t go to the gym for months, their bank account or credit card still gets charged that fee.
Smooths Out Demand
Membership plans give you a predictable amount of revenue coming in every single month. This makes managing the peaks and valleys of your cashflow month in and month out a little less stressful. You may have great production one month and not such good production the next. A membership plan makes it easier to predict what your cashflow is going to be when you have to manage payroll and other operating expenses.
If you know your bare minimum of how much it costs to operate your practice every month, make it your goal to at least get your membership plan to cover the costs of that bare minimum overhead. Everything above that number is pure profit to you every month.
Free Market Research
When you have a membership plan, you begin to build a better relationship with your patients. With that said, your patients will be more likely to respond to surveys in regards to your membership plans.
When you purchase something on Amazon, Amazon often will ask you about your experience. You can and should do the same with your patients as well, and you can use their feedback to help improve your membership program. You also can use this survey to ask your patients to post positive reviews on Google and Facebook and even ask for referrals.
Get Paid Automatically
A membership plan will allow you to get paid automatically, especially if you use software such as BoomCloud to manage it all. You can get paid every single month without the headache of doing everything manually. There will not be any strain on your office staff by setting up a system to manage your membership plan.
Amazon, for example, keeps its customers’ credit card details on file to make it easy for them to buy more products. Amazon doesn’t have a representative call you for your credit card number before you can order something. Your membership plan should not be any different.
Make Your Patients Sticky
When you have a membership plan, your patients become more loyal. When they become more loyal, they tend to stick with you alot longer. They become invested in your practice.
For instance, Dr. Christopher Phelps implemented a dental savings plan in his office. Even though he had a patient who received a better deal from a different dentist on a procedure, that patient went to Dr. Phelps because he was invested in the plan.
Just think about the shift that a membership plan has on your patients’ mindset, which changes when they are charged a monthly fee to be part of something instead of a one-off payment.
Subscribers Buy More
When you have a membership plan, your patients tend to buy more with you. For example, Amazon Prime members spend more money with Amazon than non-members. Non-members spend roughly $600 dollars a year, whereas prime members spend upwards of about $1,400, according to Business Insider. You most likely will see an uptick in your case acceptance percentage. That means an increase in your production and profits for you.
Recession-Proof Your Business
When you have a membership plan that will provide predictable cash every month, you will be able to weather any recessions. Knowing when your cash will come in will help you make better decisions in your practice. You will be able to sleep well at night knowing that you will still have revenue coming in every month rather than starting over and not hitting your production goals every month.
Mr. Comstock is the founder of BoomCloud Apps, a software company that allows dental offices to easily create, organize, track, and automate an in-house membership program. You can download a free e-book about membership programs or schedule a live demo. He also travels the nation doing live workshops about creating and growing in-office membership plans. Contact him at email@example.com.