Lifetime Value of Our Cosmetic Contact Lens Patients
At a recent meeting, a doctor mentioned to me that he is confused as to why some of his colleagues don’t offer cosmetic contact lenses to their patients. He said that new patients come to his office and tell him they are interested in lenses and have been so for years. However, they also say no one has ever let them try them on or made mention of the fact that they exist. His question was two-fold: Do doctors not believe that they have interested patients? Or, do they not see the value of meeting their patients needs and wants?
His question made me realize that we in optometry don’t talk much about the concept of “Customer (or patient) Lifetime Value.” So, many of us may not understand the cost of losing one patient because of failing to meet his or her needs.
In those stories, I referenced an excellent book on the topic written by author Fred Reichheld entitled The Ultimate Question. In this book, we learn about something called the Net Promoter Score (NPS), which was developed in 2003 by Reichheld, a fellow at Bain and Company. This NPS is a way of measuring how well a company is treating its customers to the extent that they are creating relationships with these customers that result in loyalty.
The simple formula that Bain and Company uses for estimating the lifetime value of an average customer is:
From this average customer, you can then estimate the differences for promoters, passives, and detractors.
Explaining the Calculations
So what does it all mean? As an example, let’s assume your customer will be active for 20 years and that his or her annual contribution is $300. By plugging those numbers into the above equation, we can determine that, in this case, the Patient Lifetime Value is $6,000. Think of the average contribution of your cosmetic contact lens patients and this number is even greater.
Going back to our original query, to answer the doctor’s questions, think of this: If we do not understand what exactly our patients want and need at each visit—and as a result we fail to meet their needs—they will find someone else who will. This means we lose those patients for the rest of their life, as well as losing their referrals (more on the calculation for value of referrals next month).
Even more concerning for this topic is that the largest segment of patients interested in cosmetic contact lenses are women. And, if a mom leaves the practice, she takes her family and possibly her friends with her.
This doctor was right in asking these questions. What he has learned is how valuable each patient is to our practice—not just today, but for his or her lifetime.
April Jasper, OD, FAAO has a private practice in West Palm Beach, Florida. She serves on several Advisory boards including VSP, Vision Source, Allergan and Alcon. Dr. Jasper is Benedict Professor in practice management at Houston College of Optometry. Her passion is sharing with her colleagues in areas of practice management and technology in an effort to help them become more successful in patient care and personal growth.