The concept of "lifetime value" is an important one to consider as a health professional wanting to grow a health practice.
What do I mean by lifetime value? Well, when I started out in my own practice, as far as I was concerned if a new patient came into my clinic and paid me £50 for a consultation, then that patient was worth £50 to me.
Following this through, if I placed an advert that cost me £250 I had to get 5 patients through the door for it to be worth my money.
How wrong I was! The lifetime value of a patient/ client will be the amount of money that the AVERAGE patient spends with you IN TOTAL, not simply for one session.
This figure is the amount that I expect each patient to bring in to my practice over the course of several years.
Rather than thinking, as I did when I started my own practice, that each new patient was "worth" £50 to my practice, the actual figure is much higher than I initially thought.
The easiest way to work out the lifetime value of your patients/ clients is to do a rough calculation.
Try to work out how often a patient is likely to visit you over a period of several years.
If you are just starting out in practice this is not an easy figure to calculate, but perhaps try to estimate a figure.
If you have a more established practice or clinic one of the best ways to do this is to take a random sample of your patients and work out the average amount of treatment sessions that they saw you for.
To use myself as an example, I looked at a random selection of 50 patient notes and discovered that the average patient returned to me for 8 sessions.
(However, different health professions will have different answers for this calculation - for instance, a physical trainer I know expects to see his average client for 50 sessions, as his work involves an ongoing fitness regime, meaning that many clients see him weekly for several years.
) Once we have these estimates it is very easy to arrive at the lifetime value figure.
To use my example again, let's say I charge £50 per session.
As I would expect to see my average patient on 8 occasions, my lifetime value figure is £400.
What this means is that for every new patient that comes to see me, rather than earning the £50 I first suspected, in actual fact I am earning eight times that amount! That makes a huge difference to how I view my various practice building strategies.
Going back to my original example - if I was to spend £250 on an advert, even getting one new patient through my door was likely to make me a profit (although I wouldn't consider that to be a job well done!).
Likewise, if I wanted to spend £1000 on a smart, professional website, it becomes a much better financial proposition if I just need to generate three new patients from it to make a profit.
Having a prominent advert in the business section of the telephone directory may well be worth the money when viewed through the "lifetime value" lens.
Please don't get too hung up on these calculations, as it is not important to have an exact figure.
Rather, focus on the concept and see that you probably earn a great deal more from each new patient or client that comes through your door than you initially thought.