- > Articles
- > Harvard Business Review: Acquiring New Customers Can Cost 25 Times More Than Retaining Them
Harvard Business Review: Acquiring New Customers Can Cost 25 Times More Than Retaining Them
Attracting new patients is critical. But building patient loyalty is just as important for the health of your dental practice. The cost ratio for acquiring customers, which includes patients, varies, with 10 to 1 considered a well-accepted ratio. That is, it costs 10 times more to acquire a new customer than to keep an existing one. Recently, Harvard Business Review reported that acquiring a new customer (again, this includes patients) is 5 to 25 times more expensive than retaining an existing one. That’s quite a range, but you can see a stark contrast.
It’s difficult to find precise and widely agreed-upon figures for acquisition versus retention costs unique to dentistry. But one reasonable contrast we’ve seen is that the cost of acquiring one new patient is approximately $282, while the approximate cost of retaining a patient is $57. Again, similar to the Harvard Business Review figure above, this is a stark contrast.
All these figures have in common one key data point of which every dentist should be aware: It is far more expensive to attract a new patient than to retain an existing one. Losing a patient requires a practice to spend sales and marketing dollars in hopes of attracting a new one. Thus, dentists who have and want to maintain healthy practices cannot take the loyalty of their patients for granted.
New patient acquisition
According to recent research from the Journal of the American Dental Association, dentists across the country are retaining only 41% of new patients. As you well know, just because a new patient comes through your doors doesn’t mean they’ll be your patient in six months—much less two years. Patient loyalty should be a practice’s top priority, as noted in An eNewsletter Makes for Loyal Dental Patients.
Harvard Business Review reported another compelling fact in the same article referenced above. While the article speaks broadly across industries, savvy dentists will take note. Increasing customer retention rates by 5% increases profits by 25% to 95%. That’s a ridiculously huge range, but even if you simply focus on the low end of 25%, think about the effect of patient retention on your practice!
What are you doing to retain your patients?
We’ve been involved in dental marketing long enough to say with absolute confidence that every dentist who wants to grow his or her practice must have an ongoing patient retention program. Clearly, the data in this article confirm that statement. Patient dental newsletters are not only extremely effective ways for dentists to increase patient loyalty but they are also cost-effective and easy for practices to implement.
Don’t spend all your marketing dollars working to attract new patients, while losing existing ones because you lack a quality, cost-effective patient loyalty program. If your dental practice is not using a patient eNewsletter to retain patients, talk to us about how you can build your practice with this powerful dental marketing tool.
[ Back to top ]