DPAS Regional Support Manager, Tracy Webb, highlights the benefits of a predictable income.
Having a predictable income in a practice is something that’s been difficult to achieve over the past few years. Rising costs, recruitment challenges, supplier price increases and changing patient spending habits have all introduced uncertainty into the market.
The problem with uncertainty is that it affects a practice owner’s decision-making and planning. Committing to a new piece of equipment is difficult if you’re unsure what your income is likely to be over the next six to 12 months. The same goes for recruitment and marketing.
Visibility changes everything
The practices able to make confident decisions about their future are those that have visibility. Typically, when people think about patient membership plans, they concentrate on the recurring revenue. Although that’s certainly important, arguably it isn’t the biggest benefit. The real value for a practice is visibility.
Knowing where a proportion of next month’s income will come from can change the way you think about your business. It offers a clearer picture of what’s likely to come in, regardless of how many patients agree to treatment, seasonal fluctuations or any surprises that crop up during the year. Although membership income doesn’t replace treatment revenue, it provides a firm foundation and removes some of the uncertainty.
The danger of living month to month
While things can appear to be going swimmingly, this can all be thrown off by an unexpected cost such as a big lab bill or a piece of equipment that needs replacing sooner than expected. Sadly, a practice can be clinically successful but still feel financially exposed if too much depends on what happens in a single month. This is where a strong membership base can make all the difference.
A regular monthly income helps smooth some of the peaks and troughs that are a natural part of running a business. It helps create breathing space and allows practice owners to be more proactive and less reactive.
Membership plans create options
One of the biggest misconceptions about patient plans is that they’re primarily about patient retention. While retention is important, the real benefit often lies in the fact that they create options. They open up the possibility of investing in things such as recruitment or improving facilities.
Knowing that a proportion of future income is more or less guaranteed allows practice owners to be more strategic in their thinking. Rather than having to wonder whether they can afford to invest money in a particular way, their thinking can turn to whether that spend is the right thing for the practice. This puts the business in a much healthier position.
Loyalty is valuable
In the current economic climate, patients are reviewing their household budgets carefully. Understandably, this can make some practice owners nervous about asking patients to commit to a monthly payment. However, patients are often looking for some predictability themselves.
By offering them the chance to join a membership plan, practice owners allow patients to spread the cost of their dental care, budget more effectively and maintain regular attendance. It also strengthens their relationship with the practice, which is of great value.
Acquiring new patients is important, but it can also be expensive and increasingly competitive. Retaining existing patients, maintaining regular attendance and building long-term loyalty often delivers far greater returns over time. And so, plan membership is more than simply a payment mechanism, but forms part of a broader patient retention strategy.
Strong plans are built through conversations, rather than selling
Aggressive promotion of plan membership is rarely the most effective way to increase numbers. It’s far more productive when membership is discussed naturally and consistently as part of a normal conversation. When reception team members understand the benefits and clinicians are confident talking about preventive care, patients are more likely to see the value because it is being communicated to them clearly and authentically.
The conversation should centre on helping patients understand the benefits of regular attendance, preventive dentistry and budgeting for their oral healthcare rather than simply pushing to get people to sign up. The practices that have a thriving membership base are the ones that appreciate that difference in approach.
Planning for the future
There are things, such as inflation, staffing shortages or wider economic conditions, that are beyond the control of a practice owner. However, they can build a business that is resilient when these challenges arise.
A well-supported membership plan is not a panacea. However, it can provide an element of certainty in a very uncertain world that can help ensure the future may not look as scary as it might have done.
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