Understanding The Lifetime Value Of A Patient

I just read a great article by Seth Godin, author of PERMISSION MARKETING, THE DIP and a number of other best-selling books on customer service.

Seth makes the point that practice owners should train themselves, and their staff, to look past how much you might make (or lose), on any individual transaction with a patient.

Instead, always think in terms of the potential lifetime dollar value of each patient.

Lifetime Value Of A Patient

Assuming a conservative average of $250 per patient, anyone you see just 10 times over the course of the next 20 years will be worth at least $3,000 to your practice when you factor in inflation.

When you look at it that way, it is much easier to understand why you need to bite the bullet when you lose a little money because of a staff mistake or something the patient does.

Here’s a true story to illustrate my point.

Just a few weeks ago, I ran into a longtime social friend at lunch. A real estate agent who knows a lot of people in town, ‘Lana’ is a very nice lady and the kind of person any optometrist would consider to be a quality patient.

She said ‘Hi’ and then quickly asked me for a referral to a ‘good contact lens doctor’.

She Left The OD Because The Staff Made Her Mad

I asked her who she had been going to, and she told me that she had been seeing ‘Dr. Fitter’. But, she had decided to change doctors.

While I was thinking, Lana volunteered that she liked Dr Fitter. In fact, she felt that he had done the best job on her contact lens care of any eye doctor she had ever seen.

But, she had decided to switch because his staff had made her mad.

It seems Dr. Fitter’s tech gave Lana the wrong power lens the last time she was in and Lana couldn’t tell until she wore it a while. Of course, Lana called back and the tech offered to order a new one right away.

That didn’t seem to bother Lana at all. Stuff happens.

However, when the new lens came in, the tech insisted that Lana return the ‘wrong’ lens before they sent her the new one at no charge. Otherwise, Dr. Fitter’s office was going to make Lana pay for both lenses.

Is Your Practice Easy To Do Business With?

Lana was not happy. The tech was asking a loyal patient to take time out of her busy schedule to drive across town to return a product because of a mistake the tech made.

According to Lana, she told the tech to ask Dr. Fitter to make an exception and he too said, “NO. We have to have the old lens back before we can give you the new one at no charge.”

Maybe the tech really asked Dr Fitter. Maybe she didn’t. At any rate, the damage was done.

Lana went from being inconvenienced to feeling insulted. She told the tech she would be happy to give them back their stupid lens, just as soon as she found a new eye doctor.

By the way, I know Lana’s husband Craig, he wears glasses too.

Focus On Providing Good Service, Not Being Right

So, as I write this, Dr. Fitter has lost a very good patient, and $3000 in future business. All because his contact lens tech didn’t meet a longterm patient’s service expectations.

This is the type of situation that calls for good judgment on the part of your staff. And, that in large part comes from the type of example you set as the practice owner.

If this were a court of law, the tech was probably right to demand the old lens back before dispensing a new one.

But optometrists aren’t trying to win cases in a court of law. You’re trying to please patients in the court of public opinion.

And, one of the ways you do that is to bend over backwards to provide good customer service. Especially when you’ve made a mistake.

And, if you still have a nagging doubt about losing money on a free replacement or warranty claim, just compare the cost of that transaction to the lifetime value of that patient.

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Disclaimer: The information and opinions contained on this site are for discussion purposes only and are NOT intended to serve as legal, accounting or investment advice. ©2009 Jerry Hayes, OD. Not to be reproduced without written permission of the author.