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Why your practice needs predictable recurring revenue and how to generate it

March 1, 2019
So many practices run on the feast or famine business model: in one month, you treat a lot of patients and complete many restorative services, but then the next month is slow, and you are stressed out of your mind with cash flow management.

Jordon Comstock

So many practices run on the feast or famine business model: in one month, you treat a lot of patients and complete many restorative services, but then the next month is slow, and you are stressed out of your mind with cash flow management. Aside from the peaks and valleys, your practice is probably stuck in a PPO trap in which you wait for delayed payments and deal with denied claims and red tape from the insurance companies. This article is going to teach you how to strategically reduce dependence on PPOs and create a predictable recurring revenue system to help give you peace of mind and increase the value of your practice.

Dental membership programs are the future

If you haven’t noticed lately, a shift has happened in the dental industry. Dentists are dominated by insurance companies and are sick and tired of this model, especially as insurance companies pay out less and make it challenging to run a practice. Dental membership programs allow your uninsured patients to pay a monthly or yearly fee directly to your dental practice in exchange for benefits and discounts that you create. The plans are not created by some third-party insurance company that doesn’t know your patients or your business. This will help your practice create a patient loyalty system, much like Amazon Prime or Costco membership. A membership program will also help increase case acceptance and generate predictable recurring revenue to your practice.

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Benefits of a membership program

There are so many benefits from creating a successful membership program. Here are a few of the main ones for your practice and your patients.

1. Patient loyalty

This is probably the most important benefit of creating a membership program. Patients will be completely committed to your practice, not to a network of practices as they are with a PPO. Retention is one of the most important skills any business should focus on; it’s more expensive to attract new patients compared to keeping the ones you already have. Plus, when you use your membership program as a marketing tool, there will be less attrition because of the loyalty aspect.

2. Increased case acceptance

When an uninsured patient comes to your practice and needs crowns or any other type of work done, his or her decision to get the crowns will be made easier when you say, “You need crowns at $1,000, but because you are a loyal member of our practice, you will only pay $800, plus all your cleanings, exams, etc., are included with your membership.” Strategic discounting can be great for your practice. If you do it right, you will not only enjoy predictable recurring revenue, but you will also see more patients saying yes to treatment.

3. Reduced dependence on insurance

Too much red tape means a challenging business. We all want to drop PPOs and stop working with them. The more members you get in your program, the less you have to worry about filing claims or dealing with denials. This does take work, but it is completely doable.

4. Predictable recurring revenue

Predictable recurring revenue is one of my favorite benefits as a fellow business owner. I used to manage a dental lab in Salt Lake City, Utah. I experienced years of managing a “lumpy” cash flow from the feast and famine cycle. This was challenging because our revenue varied so much, and we had a good amount of fixed expenses, so when we went past a certain threshold, it got really ugly. Imagine if you had 1,000 patients paying you $35 per month. That would be $35,000 per month automatically coming in—talk about easy cash flow management. Keep in mind that this would only be revenue from membership fees. You would continue to restore teeth and offer more of your services to these patients.

This is just the beginning of this model. I have seen practices with thousands of patients paying monthly or yearly fees to get access to benefits to their dental office. It takes work and good old-fashioned effort to get to that level, but it is completely worth it.

5. Increased practice value

According to John Warrillow, who wrote The Automatic Customer: Creating a Subscription Business in Any Industry, a business with predictable recurring revenue can see anywhere from 24 to 60 times the monthly recurring revenue when it comes to valuation.1 If you generate $35,000 per month, the revenue stream would be valued at $840,000–$2,100,000. Pretty cool, right? When you understand this, you will realize that a successful membership program could be one of your practice’s greatest assets.

6. Win-win for patients and practices

Patients win, practices win—this is a fantastic solution. Patients feel like you care about them, and they get discounts and benefits. The practice wins because of the recurring revenue, patient loyalty, reduced dependence on insurance, and increased practice value.

How to sign up one thousand–plus patients to your dental membership program

As you can imagine, one of the most important tasks in launching a membership program is to focus on marketing it to your existing patient base and to your local market. Let’s talk about marketing strategies that will work to help you grow your practice’s membership program.

Start with existing patients

If you are new to launching your membership program, you need to start with your existing patients, but don’t stop there. Your team can easily practice talking about your membership program to current uninsured patients. This is a huge benefit for them, and they will be grateful and more loyal to your office. Members spend about 250% more than uninsured or fee-for-service patients. Existing patients will also tell their family members and friends who don’t have dental insurance to go to your office because of your membership program. Referrals are one of the best forms of marketing, so make sure you treat your first members right so they will refer you.

Drive awareness with social media marketing

Everyone uses social media now. I recommend that you consistently post videos, posts, testimonials, and educational content about your membership program on your Facebook page. You can even create Facebook ads that target certain demographics in your local area. Use this to your advantage and start spreading the word about your membership program.

Target with direct mail

Direct mail can be a great option for your practice, especially if you are targeting retirees who are uninsured and have lost their dental benefits. You should focus on sending your direct-mail messages to 55-plus neighborhoods. Small businesses can also be a great market with local direct-mail marketing, as most of them pay too much or don’t offer dental benefits to their employees. I like working with small businesses because you can sell to one person but end up signing up many (leveraged sales). Make sure your advertisement messaging is focused on your membership program and that it is not just a generic message about your practice.

Working with news stations, radio, and local news websites

News is another great option to market your membership program. A news station’s model is to create interesting content and share it with the community. They are always looking for new and interesting content. This is such an awesome opportunity for your practice to talk about the challenges of dental insurance and how your dental membership program can help patients get the care they need. You can do live or recorded interviews, write articles on news sites, or do a radio show with your local news station.

Customer experience matters

If you are using your membership program to help reduce dependence on dental insurance, the patient experience you provide is so important. If you treat your team or patients poorly, your patients will likely not come back. Make sure you have a new-patient experience system in your practice with a checklist of tasks for your team to follow. Make sure patients are greeted and that your team is aware of every new patient.

If you focus on creating a membership-based practice, putting patient experience first will always be a benefit for you and your patients. Collecting reviews can be a great way to learn what your patients think about your practice. Reviews can give you valuable feedback, so you know how to improve. I recommend a tool such as Podium that helps you get reviews and makes it easy to text patients in a manageable, business-friendly way.

You need a system to manage your membership program

If you are building and growing your membership program, you will need a system to manage your member patients, keep track of monthly or yearly patients, track benefits, track declined cards, manage contracts, manage autorenewals, etc. I have found that, once a practice hits about 50 patients, growth can become challenging if the team is manually managing the program. Plus, if you have a team member dedicated to managing your program, you are paying for taxes, FICA, salary, and benefits. When you install an efficient system in your practice, your team will be less involved and do less work, which will save time and money.


I hope this article motivates and inspires you to develop a membership program in your practice. I have seen so many practices across the nation benefit from more recurring revenue, patient loyalty, and having a healthier business. I truly believe that a membership program can change your practice, especially if you are focused on growing it and getting those types of patients for your practice. It will take work, but it will be worth every ounce of effort you give it.


1. Warrillow J. The Automatic Customer: Creating a Subscription Business in Any Industry. New York, NY: Penguin Group; 2015.

Jordon Comstock is the founder of BoomCloud Apps, a software company that allows dental offices to easily create, organize, track, and automate an in-house membership program. Contact BoomCloud at (385) 225-9364, or download a free e-book about membership programs at info.boomcloudapps.com/economics. If you have questions about membership programs or would like to learn how your practice can automate a membership program, email [email protected].

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