I love monthly membership plans because there are so many advantages to creating and selling monthly membership plans for your practice. Some practice owners are scared to offer monthly membership plans because they think patients will end up canceling after 3 months. According to our data that is not the case. Patients love monthly membership plans because they are easy to understand and they seem more affordable than yearly even though most of the time practice collects more over the 12 months. We have found that there is less than a 0.3% cancellation rate for monthly membership plans, which is amazing for your practice! In this article, I will educate you on why I think monthly membership programs are amazing for your practice and for your patients.
1. Low barrier to entry
Low barrier to entry = more signups, more sign ups = more monthly recurring revenue. Also, $30/mo seems cheaper than $300/yr. When offering a membership program you want patients to feel like it is a no-brainer for them and monthly plans do just that.
2. Under the radar payments
I once paid a gym membership for 5 years after I switched to another new gym because of under the radar payments. The advantage of under the radar payments is that they are almost unnoticeable and they are not painful each month or each year. When you offer a yearly plan, your patients definitely feel that big chunk of money coming out of their bank account each year. On the other hand, small monthly payments are not a nuisance for your patients plus it trains your patients to pay you each month automatically!
3. Monthly Recurring Revenue
Ah! Monthly. Recurring. Revenue. It’s the best! Many of you know that I am obsessed with this type of revenue stream and I think all dental practices desperately need this working for them. Predictable monthly recurring revenue is the holy grail of business revenue. Imagine if you had $10k/mo or even $40K/mo+ in predictable recurring revenue? We see practices hitting these numbers all the time! Instead of starting each month at $0 you automatically collect all your membership fees and have cold hard cash in your bank account. Some practices have even said that BoomCloud has helped them build a cash reserve system with their membership program – Super powerful!
4. Higher Profit
Yes! most monthly membership plans offer a higher profit because most of the plans out there are more expensive than the yearly plan. So if you have a little patience you can create more cash in the long run!
5. Evergreen Subscribers
According to John Warrilow the author of the Automatic Customer, Evergreen subscriptions go on forever, or at least until a customer tells it to stop. In the world of recurring revenue, this is known as an “evergreen.” I recommend setting up your membership program as a monthly payment with yearly contract and have the contract auto-renew automatically each year and the payment automatically collected each month. This is the best strategy because your patient will continue to pay you month after month forever! This is a fantastic way to retain a patient in your dental membership program.
More tips below this free resource!
The Ultimate Starter Guide
If you are serious about growing a dental membership program, I recommend you download my Ultimate starter guide. This will help you and your team learn everything you need to know about creating and growing a dental membership program with BoomCloud. You can get it below:
What you get when you get access to The Ultimate Starter Guide:
- 1 Ebook about creating and growing a dental membership program
- 1 Ebook about generating 30k/mo with your membership program
- The BoomCloud University – Free video course on dental membership programs
- Webinar – How to grow your membership program by 1,000%
- What is BoomCloud? Videos talking about How BoomCloud can help your practice grow a membership plan.
- Checklist download to make sure you are organized when launching your membership program
- Video Course: The basics of a dental membership program
- 4 Podcast episodes about dental membership programs. The value of a membership patient, the value of recurring revenue, why you need recurring revenue, marketing strategies to reduce reliance on PPOs.
*s6. Improved Cash Flow Management
As mentioned above, traditionally practices start each month with $0 of revenue on the books. This is a problem and a really challenging business model. I know because I used to manage a dental lab and the business followed the same cash problems as a practice. One month we would hit record numbers and then once that month ended we started at $0, working our tails off to try and hit the numbers from the previous month. Trust me when I say this but business is a lot easier when you automatically start with a guaranteed $10K/mo, $20k/mo or more.
7. Easy to sell
Monthly membership programs are just easier to sell than yearly. Obviously yearly has its own benefits, I will write a whole article on that subject later. If you want to sell more membership plans and grow your recurring revenue your monthly membership plan makes it a “no-brainer” for your patients. Plus your team feels like superheroes when they say you get all these benefits and discounts for only $30/mo!
When offering a monthly dental membership program I recommend doing these two best practices.
- Lock them into a yearly agreement that auto-renews each year and collects the monthly payment each month.
- Use ACH or bank withdrawals to automatically collect the monthly funds from the patients.
ACH is not only cheaper in regards to merchant fees but it is extremely stable in regard to collecting funds. Credit and debit cards have expiration dates and fraud, causing it to decline and have issues. ACH is the best payment method for your monthly and even yearly membership program.
*The problem with yearly is that a the fee can seem huge the following year when it gets taken out automatically. This may cause the patient to cancel vs taking small amounts each month, this creates under the radar evergreen subscriptions.
If you are serious about creating and growing a dental membership program BoomCloud can help you create, organize and automate your dental membership program as well as connect all your patients to ACH payments! I highly encourage you to schedule a demo with my team to see if BoomCloud is a fit for your practice!