In-house membership programs can help your dental practice avoid some of the headaches associated with handling insurance, and can lead to patients becoming very loyal to your practice. Should you consider it for your dental practice?
Offering an in-house membership program is an excellent method for attracting new patients, retaining current patients, and offering quality dental care to patients without dental insurance. Relying on insurance companies to drive business to your practice is risky and unpredictable. Membership programs can offer many benefits to patients while helping transform your practice into a fiscally healthy business.
What is an in-house membership program?
A membership program is a set of plans that you offer your patients. These plans offer discounted dental care for a monthly or yearly subscription fee. Once subscribed, a member might benefit from free cleanings plus a discount on other needs. This frees patients and your office from the tethers of insurance companies by offering them the option of a membership plan.
Predictable revenue for your practice
Managing a successful practice can be challenging and revenue can be inconsistent at times. Economic lulls and patient cancellations can affect a practice. A stable membership program can provide you with a healthy stream of recurring revenue. This can provide some stability during slow periods. For example, if your office has a membership offering for $75 a month, and you secure 300 subscribers to this plan, you’ll generate $22,500 per month in revenue. This predictable amount allows you to feel secure during times of slow business.
Increase patient loyalty
By belonging to a membership program, patients are more likely to spend more with you that they might have otherwise. An example of this in action is Amazon’s membership program, Amazon Prime. According to Morning Star market research provider, the average Prime member spends about $1,224 annually, whereas a non-prime member spends about $505 annually. A similar instance can occur in your practice. Members who pay a subscription fee will be less likely to cancel their appointments. This of course leads to better dental health for them and a steady revenue stream for you.
Decreases hassle of working with insurance
Dealing with insurance can cause trouble for both your staff and patients. Waiting periods, PPO providers controlling your profits, claim submission, and payment processing are headaches and they ultimately slow your cash flow. Some contend that managing an in-house membership program carries its own pain points. But there are many resources, including membership software solutions, that help automate payments and make it easy for your office to create and manage plans and members.
Recurring revenue improves practice valuation
Recurring revenue can be a magic elixir to any business. I’ve worked with practices that have seen healthy returns on their in-house membership investment. If you want to build a financially strong practice, implementing a recurring revenue model can do wonders for your business and benefit you greatly if you decide to sell your practice.
I’ve seen many benefits of a healthy recurring revenue stream and the challenges that businesses have when they don’t have these streams. The lack of a healthy cash flow can have a negative effect on many aspects of your practice. Take action now, and implement a membership practice for your office. The benefits far outweigh the challenges of creating a program. You can sign up for free membership software and get started on some great changes for your practice.
By Jordon Comstock
This article was first published by DentistryIQ. Republished with permission of PennWell Corporation. All rights reserved.