Patient Lifetime Value The Key to Success in a Plastic Surgery Practice

Dr. Dennis Schimpf

 

Plastic surgery is hyper-competitive both academically and in business.  After an aesthetic practice has devoted significant time, money and energy into acquiring new patients, it is then crucial to the success of every practice to maintain and retain each patient relationship. Correctly managed patient relationships will seamlessly encourage recurring future appointments for necessary maintenance and/or other new procedures and treatments. In this fascinating interview with Aesthetic Insider™, Dr. Dennis Schimpf of Sweetgrass Plastic Surgery discusses how Red Spot Interactive, a marketing and patient acquisition company, has combined classic marketing techniques with technology that allows a practice to correctly understand the true value of each patient, develop lasting relationships with them and ultimately retain and acquire more patients for total practice success. To learn more about Dr. Schimpf, visit www.sweetgrassplasticsurgery.com. To learn more about Red Spot Interactive, visit www.redspotinteractive.com.

 

 

What prompted you to go into plastic surgery?
I came to plastic surgery through a non-traditional route. Initially, I was a philosophy major, and my senior year of undergraduate, I volunteered in an emergency room and fell in love with medicine. Subsequently, I decided to go into a full general surgery residency followed by a plastic surgery fellowship at the Medical University of South Carolina in Charleston. Following my completion at University, I obtained a faculty position there and spent five years doing primarily breast reconstruction. Afterwards, I shifted to private practice and during that time, I acquired my MBA in International Business at the Darla Moore School of Business from the University of South Carolina.

What is patient lifetime value?
Patient lifetime value is the prediction of the overall worth of a patient to a practice over the total time span of that relationship between the practice and the patient. That value is not only based on their personal procedures, but in the referrals they will bring to the practice.

Why is it important to know the patients lifetime value?
To build a prosperous practice, it is critical to know the value of current patients and the value over the course of their lifetime. Additionally, when you have steady patient retention, which comes from how a patient feels when they come to the practice, it is easier to convert them to new procedures we may be currently offering or additional ones they may need in the future. For example, a thirty year old female patient may come in for fillers, she may later have children and want abdominoplasty, and later in her fifties begin face procedures. The return on investment is especially important to consider when you look at that patient retention and value. Also, when thinking about ROI, it is crucial to consider the cost of patient acquisition. An abundance of money goes into marketing and advertising to attain new patients. A patient will see a print advertisement or billboard numerous times before they are inspired to begin a particular procedure, which is indirect ROI. However, with direct ROI you can see exactly the number of people that saw the advertisement, clicked on the call to action, and actually completed the procedure.

How does Red Spot Interactive track ROI for you?
They generate a report that outlines what we spent on a campaign, the number of conversions, and patients that completed procedures. Additionally, they track the overall lifetime of a patient and inform us of the number of patients that come to our practice and had a procedure, both established and new patients. This allows us to examine which marketing tactics have been most effective for us. It also provides us the ability to determine where we should be investing in marketing. We primarily choose where we are going to invest in our marketing based on our ROI, which Red Spot Interactive calculates, and the other half of what we are going to spend in our marketing comes from how we want to build our brand.

How do you calculate your practice’s patient lifetime value?
Our Red Spot Interactive platform calculates and tracks the number of times that a patient has come into the practice and the money they have spent which determines the patient’s lifetime value. They are in charge of our lead management, making appointments, seeing how many of the patients actually show up to the appointment and make a purchase. CEO of Red Spot Interactive, Jason Tuchman regularly engages with businesses and advises us on which marketing campaigns and advertising efforts are producing conversions for us and which are not.

What can a practice do to improve the lifetime value of a patient?
A practice needs to truly know their audience and develop a marketing plan accordingly. It starts with the advertising and understanding how it makes the prospective patient feel when they look at it. Within your marketing, it is critical that you make an emotional connection with your potential patient and current patients in order to build trust. You need to understand what is going to help your patients, whether it is introducing a new product or technology, you need to know your patient base and realize just where your patients are showing more interest. When you truly support them and their needs, they will continue to come back to your practice on a regular basis. A practice needs to instill confidence in the patient in what it is doing for them and that they can depend on it. We want our patients to know that we appreciate them and their happiness is a priority for us, and that helps us create loyalty among our patients. Creating this patient loyalty is part of the value that, over their lifetime, they want to keep coming back to you and enjoying that value you bring to them. Also, we are firm believers that establishing patient loyalty starts with our practice employees. When hiring, we look for individuals who interact well with the public, are customer service oriented, can make our patients feel appreciated, and who understand that patient satisfaction is our number one priority.

What are the most important steps a practice can take to set itself apart in terms of patient/customer service?
Establishing a follow up method that makes the patient feel safe and cared for after the procedure is critical. For example, we give our patients direct contact after surgery. We will give the patient the surgeon’s cellphone number which makes them feel good, gives them peace of mind, and builds trust.  Building that trust is essential for building lifetime value. Also making sure each patient is knowledgeable about all the different procedures you offer. It is this combination of developing that trust so that they keep coming back and educating them on everything you have to offer that sets a practice apart. Even if the patient doesn’t need a particular procedure right now, they might want to in the future and your practice is the one they are going to call because you have built that loyalty.

Do you think that it’s true that the existing patients and referrals are the top three revenue drivers within the practice?
Yes, 100%. Existing patients are the first priority in that list. When a patient actually completes a procedure, and they refer a new patient to you, they become a trustworthy and reliable source because they have experienced it for themselves. Once you have a patient in the system, and they are a part of your contact list, creating an email blast on a new procedure or discount is extremely cost efficient because you can reach thousands of people in an inexpensive message that converts into revenue. Marketing and acquiring a new patient is considerably more costly than keeping a patient. Thousands of dollars go into marketing and we currently spend 10% of gross revenue monthly on marketing which includes everything from radio, billboards, print, internet, pay per click, and SEO. Advertising is expensive, but a necessity of business growth.

Is there a system with a dashboard with Red Spot Interactive that allows you to figure out the ROI and understand your patient value?
Yes, we have access to a dashboard which is continuously updated with the most current information. Also, whenever we have a question on our progress with a particular marketing campaign or our conversions, they have been a tremendous support in getting that information to us. Red Spot Interactive works with roughly one hundred seventy practices which is of great benefit to us because not only do they evaluate my practice, but they are able to bring their knowledge and expertise from all those other practices. They truly guide us in making the best marketing decisions based on what has been working for practices or what they have tried in other practices and it hasn’t been successful. This knowledge allows us to utilize our marketing spending for the best return on investment.

How has having the patient lifetime value knowledge and knowing the dollar amount associated with patients influenced your marketing decisions?
Once you know the dollar amount associated with a patient you already have, the patient lifetime value is clear. It is vastly more economical to cultivate the current patient with direct marketing through advertisements and information in the office, patient events, and open houses than spending our marketing dollars on acquiring new patients. We work on building a relationship of trust with our patients so they feel like family and when you have that connection, that’s when patient lifetime value truly increases. It is a necessity for business growth to have that lifetime value and to be certain that it’s increasing.

To learn more about Dr. Schimpf, visit www.sweetgrassplasticsurgery.com.

 To learn more about Red Spot Interactive, visit www.redspotinteractive.com.

 

To listen to Dr. Schimpf’s full interview at Aesthetic Insider™ Radio CLICK HERE!