By Jordan Comstock
Are you interested in breaking free from the shackles of dental insurance? Insurance companies are taking over the dental industry. To help reduce your dependence on them, consider an alternative. It’s similar to Amazon Prime, but instead of selling books, electronics, clothing, and goods, you’re selling a membership to your dental practice.
These types of plans have a monthly or annual fee that gives patients access to specific types of benefits and discounts that are only available to members of your practice. Instead of negotiating fees and payments from big insurance preferred provider organizations, you can cut out the middle man and forgo the challenge of accepting cut rates and reduced fees.
In-house dental membership plans help boost your cash flow in two dynamic ways. First, they enable you to generate predictable recurring revenue from patients. Second, you can forgo receiving delayed payments from insurance companies.
Reduce Your Dependence
One of the most significant challenges in the dental industry is working with dental insurance companies. Their business model relies on inflating dental costs within the industry and makes it more complicated for you to give your patients the necessary care and treatment they require. In turn, this makes it more difficult for you to run your practice.
When you reduce your dependence on dental insurance, your practice can focus on providing quality care to patients, which will, in turn, boost your cash flow. A dental membership program is a win-win solution to the traditional win-lose-lose problem model. In the latter scenario, only big insurance companies win.
Generate and Boost Recurring Revenue
If you experience “feast or famine” cash cycles, you’re making your business a nightmare to run. This sets you up for having one busy month, followed by several months that are subpar. An in-house membership program helps you create a predictable recurring revenue stream.
Practices that implement in-house membership programs experience a significant revenue boost. For example, the typical membership program costs patients $35 a month. If you sign up 1,000 patients, your recurring revenue stream will be $35,000 a month. This type of revenue stream will help stabilize your practice, make it less stressful to manage, and allow you to focus on giving quality care to your patients.
Increase the Value of your Practice
Membership programs have the added benefit of increasing the value of your practice. Once a practice has a predictable cash flow, recurring revenue streams can enhance its value by as much as two to six times the annual recurring revenue. According to The Automatic Customer by John Warrillow, instead of only getting a discounted value for your practice, the revenue stream can be multiplied to give you the real value of your business.
A Consistent Workflow
With dental insurance, demand for services can be high one month and low the next. The dental industry is fraught with ups and downs. By understanding and accepting this, you can start to achieve your real worth by using a dental membership program.
This helps stabilize your practice and evens out the cashflow valleys, giving you the necessary income to survive slow times. By generating membership profits, you can help support your staff and pay fixed expenses with your predictable revenue stream.
Get Paid Automatically
To have a successful membership program, you need to manage it. By using timesaving software and billing systems and by instituting a set of proven processes, you will help scale and grow your practice.
Utilizing automatic payments for your membership program is critical. If you don’t have a way to collect monthly, semi-annual, or annual membership fees automatically, you won’t be receiving the necessary recurring revenue you need to succeed. Make sure that you use automatic payments to ensure that your practice is growing.
Members Buy More
Small and large companies alike have proven that patients, clients, or customers who are part of a membership program purchase more services and goods than traditional patients, clients, and customers. Whether it’s Amazon Prime or Costco, these billion-dollar membership services prove that membership fees equal customer loyalty and that members will spend nearly twice as much as non-members.
Make Your Practice Recession-Proof
I’m pretty sure I can speak for our entire industry when I say that we would prefer to never live through another recession. While recessions may come and go, the best way to protect and insulate your practice from taking a hit is by creating an in-house membership program. You will enjoy recurring revenue and be less dependent on dental insurance, and patients will begin to rely on you for all their dental needs.
If you’re interested in starting an in-house membership program, I encourage you to reach out to me and my team. We will give you access to free resources for starting up a membership program and maintaining it. Visit us at boomcloudapps.com for more information. If you’re interested in downloading a free ebook about how to create and grow your in-house membership program, visit boomcloudapps.com/book.
Mr. Comstock is the founder of BoomCloud Apps, a successful software company that allows dental offices to quickly create, organize, track, and automate their in-house membership program. Contact Jordon and his team at (800) 260-9285 or info@boomcloudapps.com.
Source: Dentistry Today, February 20, 2018 (http://www.dentistrytoday.com/news/todays-dental-news/item/2955-why-every-dental-practice-needs-a-dental-membership-program)