In this guest post, BoomCloud founder and CEO Jordon Comstock breaks down the true value of an in-house dental membership program, and explains whether practices risk losing money from their membership programs.
I speak with a lot of practices across the nation. When I do, one of the biggest questions I get from practice owners is, “Will my practice lose money when I offer an in-house dental membership program?”
This question is especially common if the practice is fee for service (FFS).
My team and I have worked with hundreds of practices, and have the benefit of seeing data and trends specific to dental membership programs.
The benefits of offering a dental membership program range from predictable recurring revenue to reducing insurance dependence to increasing patient loyalty.
We recently met up with Kevin Rossen from Divergent Dental, a software analytics tool, and talked about data that they are seeing with practices, specifically, when it comes to membership programs.
Together we looked at practices across the country that offer membership programs, curious to know the differences between spending habits of non-members vs. members. In doing so, we looked at thousands of uninsured patients and thousands of uninsured member patients.
We found that, on average, non-members spent $772.79 whereas members spent an average of $1,576.12 in a year's time.
This is a 104% increase or 2x more revenue spent from non-members.
Keep in mind that the members are paying the practice a monthly or yearly fee, as well as spending extra to get more treatment done.
We also looked at one specific dental office that had hundreds of paying members. In it, we found that their average non-member was spending $532.36. Alternatively, their member patients spent an average of $1,811.20 in one year's time.
This particular practice had member patients that were spending 240%, or 3.4x, more that non members!
This data suggests that starting and growing a membership program, even if you are an FFS practice, means that patients will spend more with you practice.
This data is extremely helpful because we are finding out that members spend more. Especially in dentistry, patients care about their teeth and want to take care of themselves.
When you throw in a slight discount structured with monthly subscription payments, members spend more with your practice.
Why does this work?
According to Dr. Robert Cialdini, the law of reciprocity is at play when you create an in-house dental membership program.
When a patient signs up to your program they immediately get discounts and benefits. Someone who feels like they've given something is more likely to reciprocate to the person or entity that gives.
It also works because dental insurance can be expensive. The benefits associated with it are also restrictive and full of red tape.
When your practice creates a system for purchasing services, people spend more.
If you charge $299 per year for your membership program, a patient's psychology will be figuring out how they can get that money back in savings.
Patients spend more when your membership program is set up the correct way.
Correctly setting up a membership program using an efficient software system increases revenue because of the membership mindset.
Even FFS practices find that patient loyalty goes up. Revenue from membership patients can increase by 104% to 240%, or more.
Practices with membership programs benefit from generating predictable recurring revenue. You'll also smooth out cash gaps and peak-and-valley months.
You will be able to cut out dental insurance and all the red tape it brings to your practice (and wasted time waiting to talk with insurance companies or fighting claims).
Enable patients to spend more with your practice and be able to take care of their needs. Starting a dental membership program is one of your best assets for growing your practice.
Jordon Comstock is the founder of BoomCloud Apps, a software company that enables dental offices to easily create, organize, track, and automate an in-house membership program. Learn more about how RevenueWell improves case acceptance and creates more close-knit relationships between dentists and their patients.