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How Did Your Practice Perform in 2023?
2023 has certainly had its share of challenges for dental clinics, two of which were the higher interest rates and increased cost of living. During times of financial hardship, the dental industry often struggles as our patients don’t prioritise their dental health when they have more pressing bills to pay.
In spite of the ups and downs, December is a great time for clinic owners and dentists to reflect on how the year went. And the question you must ask yourselves is: How did your clinic fare?
Practice owners often struggle to conduct thorough reviews of their clinics due to two main factors: time constraints and a lack of knowledge. Although there are several metrics by which practices can be measured, in this blog, I aim to provide streamlined solutions on how to locate, what I think are the top 4 key performance indicators and how to understand the significance and impact of these indicators on your dental practice. It is also important to consider that, in the long run, understanding your business better will allow you to save time by making effective and efficient solutions.
The Top 4 KPIs for Dental Practice Success
The first KPI dental practice owners need to monitor is production. Production refers to the total income earned by the clinic over a period of time. Some owners would attest that this is the most important factor when it comes to measuring the growth and success of a dental practice.
Your practice management software will be able to run a report showing the total income the practice has produced over a period of time. This figure is your production. By comparing the production year to year, practices should aim to see a steady increase, which usually represents growth for the clinic. A decrease in your production would suggest that you are earning less money, meaning something has to change.
2. Retention Rate
The next KPI that practices should monitor is the retention rate. Retention rate represents the number of patients that stay with your dental clinic for treatment over a period of time.
The easiest way to measure this is by using active patient numbers. Firstly, measure the number of active patients at the start of a period of time (usually 1.5 years ago) and then the number of active patients now. If the number of active patients has decreased over time, it could mean two things: firstly, your customers are not happy with the service you provide, as evidenced by the fact they choose not to come back. Secondly, it means that your follow-up and recall system is not working effectively to remind patients to rebook their routine appointments.
3. New Patient Numbers
The number of new patients your practice attracts per month is a crucial KPI when it comes to growing your dental clinic. This refers to the number of new patients that come to your clinic over a period of time.
Your practice management software will be able to run a report showing you the number of new patients attending appointments per month. Comparing this number over several months will give you a good indication of the effectiveness of your marketing and word-of-mouth referrals. It is vital to not only measure how many new patients attend but also to measure where these new patients are coming from. This allows marketing efforts to be directed effectively.
4. Conversion Rates
Also known as the treatment acceptance rate, the conversion rate is a KPI that uncovers the number of patients saying yes to the treatment plans you present to patients.
Your practice management software will allow you to run a report on the number of treatment plans that are still open or incomplete. This figure, divided by the total number of treatment plans in the same period will allow you to find your conversion rate. If your conversion rates are low, you need to consider if you are offering the right type of services for your demographic or if the price for your services is too high. You may also consider your method of presenting treatments and if there is a lapse in communication or satisfaction between you and the patient.
Practice owners and operators must take the time to work on the business, not just in the business, and taking a look at these metrics is a great start. These 4 KPIs are paramount for dental practices as they collectively gauge the overall health of your clinic, identify failures in 2023, and set the stage for a successful year ahead. These metrics will give busy practice owners a comprehensive understanding of their practice and serve as a foundation to boost the clinic’s overall performance in 2024.
About the Author
Dr Dish is a multi-practice owner and general dentist practising in Melbourne, Victoria. With only 4 years in the dental field, Dr Dish has been able to rapidly grow and scale his two clinics. Dr Dish is also a leading communications specialist. He coaches dental clinics and clinicians to enhance their communication skills to form meaningful relationships with their patients and how they can be a more profitable practice.
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