In most businesses it is usually costlier to acquire new customers than retain existing ones. This happens because of possible efficiencies of exchange between buyer and seller. For example it would take much lesser time to explain a product or service to an already existing customer vis-à-vis a new one.
A corollary to this also means that losing a customer is disadvantageous, it affects customer acquisition, may spread a negative word of mouth, and harm the future prospects of the business in question.
Therefore it is important to quantify existing and potential customer value in order to increase Customer Lifetime Value. This kind of focus would imply that businesses have to change their marketing strategies to move away from being transaction based to becoming relationship-based.
They have to be focused on finding what defines value for a customer, and need to develop mechanisms to deliver that value.
So What Exactly Do We Mean By CLV?
CLV is a prediction of the average value a business can expect to get from its customers during the course of its entire relationship with them.
It is variously referred to as lifetime customer value or just lifetime value, and abbreviated as CLV, LCV or LTV.
In the business of healthcare, the lifetime value of a patient is all about how much value a patient brings to your practice in the course of his subscribing to your services.
And Why is Understanding The CLV Of Your Patients Important?
CLV is an excellent indicator of how patient satisfaction boosts your bottom line.
A satisfied customer means he is more likely to come back to you and even recommend your practice to others. He becomes a powerful marketing tool. Knowing the CLV will give you an insight into how you can enhance your customer service plans.
CLV can help you increase your revenue and profits because with CLV, you can analyze patient behavior pattern and business cycles, to identify and target those customers who promise the largest potential net value over time.
CLV helps you determine your ROI for marketing efforts. It will help you decide about how much to invest in acquiring new patients and retaining current patients.
Also when you compare CLV across patients, you will realize which ones are the more profitable patients and you can streamline your marketing acquisition and retention efforts in that direction.
How to Calculate Lifetime Value of a Patient
You need to have the following information to calculate a patient’s lifetime value.
· The profit you make from one visit of the patient
· The number of times a year the patient visits
· Number of years the patient stays with your practice
So your formula for calculating LTV of patient is:
Most often branding is misconstrued as marketing or advertising or public relations. Marketing, advertising and PR are in fact the ways that you employ to communicate your brand. To communicate your brand, it’s important that you first build it, make it into a recognizable identity that has a personality, values, and traits.
Let's take a look at how branding can influence patient loyalty and drive up patients' lifetime value.
Branding Helps You Become A Promise
Standing Out As Distinct From Others Makes Your Patient Feel He Is Getting More When He Comes To You
It is crucial that you get the experience right but there can be long gaps between the visits of any one patient. And if you think you can build patient loyalty just on the basis of that visit’s experience, you will miss out on the opportunity to engage with them and influence loyalty.