Why Tracking Lifetime Value Metrics Can Help Retention Efforts
If acquiring a new customer is up to 25 times more expensive than retaining an existing one, why is so much attention paid to patient acquisition and so little to retention? Even the definition of “new patient” is relative. At what point does a former patient who has leaked out of the system have to be reacquired as a new patient?
Marketing executives from Johns Hopkins Medicine and CommonSpirit Health recently shared that, increasingly, they are focused on tracking the metrics of lifetime value (LTV), understanding the variables that impact it, and developing retention strategies to keep patients engaged early and often. One critical takeaway is that the longer you wait to engage a patient, the more likely it is that they will have moved on.
“The cost of acquisition can be considerable,” says Suzanne Sawyer, senior vice president, chief marketing and communications officer at Johns Hopkins Medicine. “The incremental cost of retention is relatively low.”
But the financial benefits of retention are high. “For every 1 percent positive change in that five-year retention metric, there’s a 4 percent increase in lifetime value,” says Dave Griffith, vice president of analytics and insights at Mercury Healthcare (formerly Healthgrades). Griffith and Rob Grant, executive vice president, chief strategy and innovation officer at Mercury Healthcare, co-presented with Sawyer and Adam Rice, senior vice president of marketing at CommonSpirit Health.
Grant explains, “Three years ago, we realized we had a great opportunity to aggregate data from hundreds of hospitals and benchmark retention data.” Mercury Healthcare’s modeler can analyze retention data at a high level down to a granular level to shed light on what is actually happening system-wide or within specific cohorts.
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