8 reasons why your dental practice needs recurring revenue

[Music] what's up everybody my name is Jordan Comstock I'm the founder and CEO of boom cloud dental member membership software where we help and create organize and automate your in-house membership program for your dental practice today I wanted to create this video to educate your practice on 8 reasons why you need to create predictable recurring revenue for your dental practice for those of you that don't know what a membership program is it is a way that your practice can generate predictable recurring revenues my definition of

an in-house membership program or a dental savings plan or wellness plan is a plan where you create in your office where your patients pay a monthly or yearly fee in order to get access to certain benefits and discounts that you create you offer for the patients right now the fee for that for the patient pays can range from $20 a month to $50 a month depending on the benefits you can also do a yearly which can range from $300 a year to $400 a year right

but you're in control and that's the concept of creating a dental membership program is because you can cut out or reduce dependence on the PPO so that are decreasing your profit margins and kind of fight back and have your own plan out there so that you can offer to your patients and create some loyalty and predictable return value for your practice so benefit number one recurring revenue increases the value of your largest asset what do I mean by that it increases the value of your practice

now when you have predictable recurring revenue coming in month after month or a year after a year on a financial statement or if you get a valuation expert to come in your practice that revenue is going to be more about valuable to you and your practice and whoever is going to acquire the practice if you're thinking about selling because of that predictability nobody wants to run a business that doesn't have any predictability in it every business owner that I know if the holy grail of revenue

is to generate predictable recurring revenue hence this type of revenue will increase the value of your practice I also want to talk about this book here this book is called the automatic customer it's by John Warlow this is the book that inspired me to create boom cloud and to help dental practices create in-house membership programs to generate predictable recoil recurring revenue and patient loyalty according to John Marlowe from the automatic customer here valuations for recurring revenue competing between 24 times the 60 times the monthly recurring

revenue you generate so a good example of that is if you have $45,000 in predictable recurring money that's coming in each month that means that that revenue stream right there will be worth a little over a million to two point seven million dollars in value so that's why when you generate predictable recurring revenue in your practice it's going to increase the value of your largest asset all right number two lower barrier to entry what do I mean by this the 29 cell versus the 4,500 $24.00

selling meaning when you sell someone a membership program right to your practice it's probably around 30 30 bucks 29 bucks a month versus the bigger yearly fee that is a huge benefit it allows patients to become a loyal patient to your practice with less and money right on their end so obviously you want to create some type of contract with the patient so they don't screw you over I recommend that you have a monthly membership program that generates that predictable cash flow for your practice and

that we you can attract the uninsured and in patients that can pay 30 bucks a month and I call it look under the radar revenue right 30 bucks a month is is revenue that most likely that patients going to forget that they are paying each month a good example of that is I've been a member to a gym that I don't go to anymore that they charge me $30 a month they run it through ACH so it's directly coming through my bank account but I forget

that I have it but I've been paying it for 10 years that's a long time thirty dollars a month right but since it's under the radar type expense for me I forget about it and what I do want to change it it's not a big enough deal for me to go in and change it keep that mind fit that that's really two benefits in number two lower barrier to entry and under the radar type payments that's a wonderful thing for both your business and for the

patient number three smooths out demands so I have been in the industry for over 15 years here in dentistry and I most of you know if you know me I manage a dental lab before that and the trend is with the dental lab is that it'll follow the trends of of the practice right on the restorative care site so well what we saw when I managed that dental lab is that we had feast and famine months right and a lot of you practices out there know

that we all have suck temper it's the month where it just sucks because nobody goes to the dentist right a lot of times there may be a couple months throughout the year that happens depending on your practice in your location right so when I say smoothes out demand you actually can get rid of those peak value or feast and famine moments in your business that stress you out and don't let you sleep at night because cash flow management can be very challenging and very hard to

get to work like a stream right because you have payroll and they have expenses each month so smoothly on demand if you're charging thirty five dollars a month and you get a thousand or more a thousand patients that's thirty five thousand dollars of predictable recurring revenue that's gonna come in each month whether you do dentistry or not meaning when you do that you you have payroll right and maybe more if you have more patients or if your your prices are higher than thirty five bucks a

month right but when you do have that recurring revenue coming in what can that do for your practice can it help you pay your expenses your overhead on time or even your payroll that is so critical that happens every two weeks right I know I'm a business owner too I deal with these same problems that you do as a business so when you can smooth out demand and and generate that cash flow coming in a predictable basis you're gonna sleep better at night Wow number four

free market research this is another benefit of having predictable revenue or a membership type program in your practice right and what do I mean by that well when a patient becomes a member and they subscribe monthly or even yearly to your your practice you are able to number one build a better relationship with them because they're more likely to come to your practice because they are a loyal member right and number two if you let's say you you have no idea what type of benefits or

plans that you want to offer your patients well you can just quickly create something that's pretty traditional out there and I obviously can help if you have questions on that but if you find that your market or your patient base isn't eating a different type of service that your office can provide well you can throw it later on in your membership program after you've developed that relationship with the patient and understood that need because in business we've got to understand needs that your patients may have

right and you may say hey this may be a perfect need for maybe our practice or for our membership program at generating predictable recurring revenue so free market research is a fantastic thing to have in any type of business in fact it's a necessity if you don't have any access to free market research then you're gonna have a hard time in understanding in patients and what they need to generate cells and help them with their with their oral care as well alright number five get paid

automatically who doesn't like that right I love getting paid automatically a running boom cloud our business is a subscription or a membership service right for you the dentist they use our software so when you get paid automatically like that's up amazing if you get paid you know fifty thousand dollars a month in recurring revenue automatically that's a benefit now if you have to manually collect that each month and try to get it and it doesn't come in on once that's a hassle right so the benefit

of generating predictable recurring revenue in your practice is getting paid automatically right and this is a revenue stream that practices don't tend to have or haven't had in the history of dentistry you know but other businesses if you look at Costco or Amazon Prime or other businesses like that that have some type of membership or even a software company like mine that we charge a subscription monthly fee to get access to our software Danna she's never had that business but if you can get paid automatically

every month there's no complaining they're like that's a huge benefit and that helps again with smoothy and demand and it kind of correlates with that as well remember when you have a membership program it's gonna you better structure it where you get paid automatically because it's just good business sense and good cash flow management make your customers or patients sticky so this is also another term for loyalty or retention stickiness so when you have a membership program or predictable return revenue where a patient is paying

monthly or yearly to get access to your benefits your practice you will automatically make them a sticky patient or customer and by this this is probably another term that it's going to help increase the value of your practice because if you don't have oil patients or sticky patients well then you probably don't have loyal predictable revenue right so if you can generate and your plan that attracts the patients where they love it and they say I can't you know do dentistry without your this to this

plan well that makes them sticky to your practice and unlike the PPO s where they come in and they have a network of dentists where the patient can pick and choose any dentist that's on that network and get the same discount well a membership program that generates predictable recurring revenue for your practice is gonna allow you to retain those patients in your practice and your practice only so creating stickiness is very essential and a very huge benefit for creating and growing a membership program that generates

predictable return well good for your practice remember seven subscribers buy more so I'm gonna give you an example outside of dentistry because I think that's the best way we can learn if we look outside of our industry and they're from the industries that are successful with different types of business models so the first story I'm going to tell you is I recently subscribed to a car wash right where I pay I think it's like thirty bucks a month and I get unlimited car washes come to

find out that with that package membership plan I was able to get discounts on car detailing which I've never done before ever so instead of doing it myself I realized well I just get a discount from this carwash business down the street here from my office well I'm gonna go try now so I became a customer of which I bought more I bought a detailed package to clean the seats of my car because my daughter had spilt milk or something in the backseat so I became

someone who bought more now I do that on a regular basis I go to the car wash I get my unlimited car watches each month but then I also get a detailed cleaning every few months for my cars and taking care of my cars I've never been a customer to do that in the past and now that I'm a subscriber I do that subscribers buy more right another example is is Amazon Prime and this is kind of a hybrid between subscribers buying more and being loyal

right so one time I was looking for a TV to buy from my home and I found the perfect TV I went down to Best Buy to check it out that's just down the street here from my office I loved everything about it and I'm like okay I'm gonna get this TV but then I remembered that I was an Amazon Prime member but I paid them yearly to get benefits and discounts so I pulled up my cap while I was in Best Buy and I realized

that that same TV wasn't for a better deal plus they deliver to my house I have a small car I can't fit TVs in my car so that was a benefit for me right than Amazon provided so I immediately bought that new TV on Amazon because I am an Amazon Prime member paying a subscription to their their website and it came me I bought it while I wasn't Best Buy so I keep doing that right with Amazon I realized that well I'm getting all this free

shipping might as well just buy a bunch of stuff on Amazon it and just buy more right the average Amazon Prime member spends on average $1,200 a year versus the non Amazon Prime member spends $500 on average so that tells us that subscribers buy more members buying more so keep that in mind when you're creating a membership for your practice that members buy more they'll end up getting more debt dentistry done with your practice because they feel like they're getting discounts and benefits to your practice

in your practice only and number eight recession-proof your business so I've been in dentistry like I said for 15 years I've been through a recession in this industry right and it was really rough for all of us when you have predictable recurring revenue come in each month it does come easier right you can get through recessions I've talked to countless companies that have a predictable recurring revenue structure and they've always been able to get through recessions because of that predictable recurring revenue and like I said

it's kind of a combination of a few things it creates loyalty in your in your patients and it's also the under-the-radar type of payments to the patients pay that kind of in the recession they don't really look at you know so keep in mind that recession proofing your business is essential because we will probably run into another recession recession sometime in the future it's just the nature of economies in business right so by creating a solid membership program you can recession-proof your business by hatch entering

that predictable recurring revenue and smoothing out the demand for your practice all right everybody so those are my tips and the the benefits of creating and generating a predictable recurring revenue stream for your practice just a recap number one increase the value of your largest asset to lower barrier to entry 3 smooth out demand for free market research 5 get paid automatically 6 make your customers or patients sticky 7 subscribers buy more and 8 recession-proof your business those are the benefits of creating a membership program

for your practice and generating that predictable recurring revenue now I want to give everybody I have a book as well it's called how to create and grow an in-house membership program for your dental practice it's 40 to 50 pages long I'm constantly adding things to it that relate to the dental industry but it's basically talking about how your practice can generate predictable recurring revenue patient loyalty smooth out demands recession-proof your business and create a successful membership program that generates hundreds of hundreds of thousands of dollars

of recurring revenue to your practice so that you can be you can sleep better at night so check it out this is a free book that I'm offering to anybody that comes to our website you can find it at wwe.com forward slash book