As financial advisors to medical practices, we often ask:

“Do you know what a single patient is worth to your business over time?”

Surprisingly, many practice owners don’t.

That number—called Lifetime Value (LTV)—is one of the most important financial metrics for any medspa, dermatology clinic, or plastic surgery practice. It’s not just about how much a patient spends today; it’s about how much revenue (and profit) they generate over the entire relationship.

What Is Patient Lifetime Value?

LTV measures the total revenue a patient brings in during their time with your practice. This insight can help:

• Justify marketing spend
• Forecast revenue
• Prioritize retention strategies
• Identify high-value services and patient types

How to Calculate It

Here’s a simple formula:

LTV = Average Spend per Visit × Average Visits per Year × Average Retention (Years)

Example (Medspa):

• Average Spend per Visit: $300
• Average Visits per Year: 4
• Average Retention Period: 5 years
• Lifetime Value = $300 × 4 × 5 = $6,000

In this case, the average patient is worth about $6,000 over five years.

In dermatology settings, it may make sense to calculate separate LTVs for medical and cosmetic patients separately. For plastic surgery practices, additional revenue from follow-ups, skincare, or referrals should be included.

Why LTV Matters

1. Better Marketing Decisions

When a patient is worth $6,000, a $250 acquisition cost is easy to justify. If patients aren’t returning beyond the first year, that number shifts dramatically.

2. Retention Drives Profitability

If retention drops from 5 years to 2 years, that’s $3,600 in lost value per patient. Rebooking systems, memberships, and personalized follow-up can extend lifetime value significantly.

3. Smarter Financial Planning

LTV allows practices to model revenue accurately when considering growth, hiring, or launching new service lines.

Common Pitfalls to Avoid

• Ignoring Attrition: If a large percentage of patients never return after the first visit, average LTV may be overstated.
• Treating All Patients the Same: Different services and patient segments have different LTVs. Segmenting is key.
• Focusing Only on Revenue: Ideally, we calculate both revenue and profit-based LTV for a clearer financial picture.

How to Use LTV in Your Practice

• Run LTV calculations regularly
• Segment by service line (e.g., injectables, medical dermatology, surgery)
• Use high-LTV insights to guide marketing and retention strategies
• Implement systems to increase rebooking and loyalty

Final Thoughts

Patient LTV is one of the most powerful tools a practice can use to improve financial performance. It shifts the focus from short-term volume to long-term value.

Understanding how long patients stay, how often they return, and how much they spend gives practices the clarity to scale confidently and profitably.

Need support calculating or improving your practice’s profitability?

We help medical and aesthetic practices turn financial data into a growth strategy. Let’s talk.

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