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The Many Benefits Of Membership Programs

Now that you have a firm understanding of what an in-house membership benefit program is, you might be thinking: “Sure, this sounds interesting, but what can it really do for my business?” You may think you’ll be more comfortable sticking with what you know—insurance claims—even though it means less money and more hassle for your practice.

There are many benefits to implementing an in-house membership program. I would encourage every office to focus on creating its own program. If you already have a program, focus on growing it so that you can take advantage of all the following benefits.

Higher Profits

Control over fees and higher profits are closely related, but the benefits of extra profits cannot be emphasized enough.

When running a business, you need profit. It is as essential to a business as a heart is to the body. Profits allow you to save in a reserve fund or to reinvest in your practice. They can be given away as bonuses or, if you’re feeling extra nice, you might even be able to take your staff on vacation!

When you control costs, you control your profit margin. By implementing an in-house membership program, you will realize that you can make more profit per patient than you could through a preferred provider organization (PPO).

No Yearly Maximums

Not having to deal with yearly maximums is a great benefit for both your patients and your practice. One of the main reasons patients stop coming to the dentist is because they have used up all their insurance benefits for the year.

But consider this: if you cut off all five of your fingers and went to the emergency room, they would immediately try and sew all of them back on. This sort of mentality does not transfer over to the world of dentistry with insurance. If a patient is having issues with his or her teeth, the insurance companies might make you say,  “You need to get four crowns, but since your insurance only covers one crown per year, you will need to come back each year and we will fix the rest.”  If a medical doctor did that to someone who cut off all his fingers, she would be considered crazy!

When I was a lab technician, I constantly saw patients who were miserable because they were missing a few teeth and could not get the care they needed fast enough. When you drop insurance and switch to using a membership plan, your patients can get the care they need right away because of the discounts you offer. When this happens, you will realize profits faster.

Better Patient Care And Lower Claim Rejection

As a dentist, you want to give the best quality of care to your patients. However, insurance companies want just the opposite. They want you to provide the cheapest and lowest-quality care so they don’t have to pay out hefty claims. In some cases, they will simply reject claims!

Dental insurance companies don’t work for you. They are not part of your staff, nor do they have a relationship with your patients. Most importantly, they are not doctors who have studied dentistry and understand how to treat patients with the best possible care. It’s just wrong for someone with no dental license to tell you, a licensed doctor, what you should or should not do for a patient.

By implementing an in-house membership program, you are in control of the care you give your patients. You can educate your patients about your program and explain that they are going to receive the best care your office can provide them because you are the one calling the shots.

More Loyal Patients

Patients are the lifeblood of your practice. Loyal patients will refer you to other friends, family and coworkers. They might even give you great reviews on Yelp, Facebook and elsewhere online. All these things boost your clientele and can increase your profits.

The reasons your patients will become more loyal are two-fold. First, they are paying for a membership to your practice, meaning they are less likely to visit a different dental practice for other procedures. Because they are putting money into your business, they will want to stick around and get their money’s worth.

Second, with an in-house membership plan, you can treat your patients more effectively. As we mentioned before, you can give the best quality of care to every patient because there is no fear of insurance company retaliation. When patients get great care, they will want to return again and again.

Patients Will Spend More

When you charge patients for a monthly or yearly membership, it’s likely they will spend more at your practice. This is because they want to feel like they are getting their money’s worth during the duration of their membership and can see the added value you provide.

This is the meat and potatoes of your program. You enroll patients in your membership program because they will end up buying more services from you in the long term. Everybody loves getting a discount. It’s why we subscribe to services like Costco and Amazon Prime—we feel like we get a good deal by doing so.

When patients subscribed to your dental practice need a crown or two, they might hesitate if they are not part of your membership program. However, since they can receive 10 percent off, 20 percent off or any other discount you might offer, they feel like they are getting a deal and will be more likely to buy into your services.

Recurring Revenue And Higher Value

Recurring revenue is an underrated part of any business, particularly dentistry. One of the best ways to create recurring revenue is by creating a membership program for all your services.

I encourage all dentists and office managers to read “The Automatic Customer,” by John Warrillow. This book explains why recurring revenue is so important and provides ideas for how any business or industry can implement this model. (And, if you are an Amazon Prime customer, you can even get free shipping when you purchase—see how those benefits make the Prime subscription more tempting?)

In Warrillow’s book, he refers to a company called WhatsApp, an online messaging platform. The company behind it created a subscription model for the app. For $1 a year, you could get unlimited text messaging. Through this subscription program, WhatsApp was able to acquire 450 million subscribers, each paying just $1 per year. Thus, the company earned $450 million per year of recurring revenue.

Following this subscription program, Facebook bought WhatsApp for $19 billion—one of the largest acquisitions of a tech company ever. Facebook paid a premium price because WhatsApp already had steady recurring revenue. This recurring revenue boosted the app’s value because the buyers knew what revenue they would be making in the foreseeable future.

The power of recurring revenue is amazing, and you can have similar success to WhatsApp on a smaller scale. I have heard of dental practices making $10,000 to $100,000 a month from their membership programs. When it comes to your business, if you have focused on building predictable recurring revenue, you will be able to sell your practice for a higher price when the time is right.

Improved Cash Flow

Cash flow is king when you run any business. You need a steady flow of money to be able to pay the rent, employee salaries, benefits and other expenses.

By implementing an in-house membership program, the recurring revenue you bring in will help improve cash flow. Your patients will become loyal to your practice, coming in more often for more procedures. Plus, when customers are happy with your services, they are more likely to pay bills on time, reducing the roadblocks you might encounter with billing and cash flow.

You Govern Your Own Program

Ultimately, when it comes to in-house membership benefit programs, you are in control of your fees, your profits, your patients and the quality of care. You won’t have yearly maximums, your patients will get the care they need and people can still get a discount for your services by paying a monthly or yearly fee to you—and not the insurance companies.

Creating an in-house membership program for your practice is the smartest and best thing you can do to reduce your dependency on insurance companies, increase your profit, build valuable recurring revenue and become less stressed about running your practice.


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