It’s the Holiday Season, what better present to give to yourself than the gift that keeps giving - an in-house membership program!
What is an in-house membership program?
An in-house membership program is basically like Amazon Prime but for your dental practice. Patients pay a monthly or yearly fee, and in return receive special benefits and discounts to your practice and your practice alone.
This allows your practice to focus specifically on quality dental care. It cuts out any middle man that interferes with your practice, and eliminates claim denials and delays. This helps your cash flow in two obvious ways: generating predictable, recurring revenue, and delaying payments from insurance companies.
Reduce Dependence on Dental Insurance
One of the biggest problems in dentistry is dental insurance.The model inflates costs in the industry, impacts the care you give to your patients, and complicates the way you run your practice.
By reducing dependence on dental insurance your practice can be free to provide quality care for your patients while improving cash flow.
In the traditional model, the only people that win are the insurance companies. A membership program provides a win-win solution to what was before a win-lose-lose problem.
Generate Recurring Revenue
As a business owner, “feast and famine” cash cycles can make running your practice a nightmare. One month you may be crazy busy and generating a lot of cash, but the next month may be a different story.
An in-house membership program can help your practice generate a predictable recurring revenue stream.
For example, the typical membership program costs a patient around $35 per month. If you sign up 1,000 patients you’ll generate $35,000 per month in recurring revenue.
I have seen practices across the nation benefit from recurring revenue generated by an in-house membership program. Stabilize your practice, and make it less stressful to manage.
Increase the Value of Your Practice
Membership programs increase your dental practice’s value because of their predicable cash flow model. According to The Automatic Customer by John Warrillow, recurring revenue can increase your practice’s value by two-to-six times the annual recurring revenue. Instead of receiving a discounted valuation for your practice, the revenue stream can be multiplied.
A Membership Program Smooths Out Demand
Demand can be high one month and demand can be low the next month. A membership program will help your practice become more stable and less stressful to run during those slow times.
If you generated $35,000 per month in predictable automatic revenue could you support your staff? Would it help with your fixed expenses?
Get Paid Automatically
The key ingredient to having a successful membership program is managing it correctly. Utilizing software, systems, and process will dramatically help you scale and grow your program.
It is critical to utilize automatic payments with your membership program. If you cannot automatically collect membership fees from your patients each year (or each month), you’ll miss out on the aforementioned benefits for your practice.
Getting paid automatically is the greatest feeling in the world. And as your tasks increase due to volume, automatic payments will ensure the successful growth of your membership program.
Members Buy More
It has been proven by both small and larger companies that members buy more than traditional non-members. Amazon Prime, a membership program for Amazon, has grown a billion dollar membership program. Data from consumer intelligence research shows that customers who spend $99 per year on Amazon Prime go on to spend $1,300 per year with the retailer.That’s nearly double the amount spent by a non-member customer!
Recession-Proof Your Practice
Recessions come and go in our economy, and the best way to protect your practice is by generating recurring revenue through an in-house membership program.
A practice that solely focuses on high-margin treatment plans will ultimately create a feast and famine model. This model is normally the first to feel the pressure of a bad recession.
It is so important for a practice to focus on recurring revenue and auto renewals in a membership program. They create stability no matter what the economic climate is.
Not only will you reduce dependency on dental insurance, generate recurring revenue for you practice, and enjoy patients buying more form your practice, but with an in-house membership program you’ll also turn your practice into a recession proof business.
When you think this Holiday Season of gifts, think of something beneficial. The gift of recurring revenue and patient loyalty. If you would like to learn more details about a dental membership program, check out our ebook. Visit BoomCloud to create your own in-house membership program.