In recent conversations with practice owners, I sensed more anxiety on how to keep their businesses profitable.

Downward pressure on healthcare costs (including therapists’ incomes) has owners looking for ways to generate more revenues to offset rising overhead expenses.(therapists pay for health insurance too)

Some therapists are cranking up the “referral machine” to treat more patients per hour through assistants and techs. Numerous practices are becoming high volume dependent to make ends meet.

A hurried pace with an overbooked schedule can lead to staff burnout, patient dissatisfaction, and missing potential income right under our noses. Let me ask you an honest question.

What would you say will be the most significant driver of your practice’s growth over the next 1-3 years?

If you answered more referrals, you’re probably mistaken.

Most likely, it’s probably retaining patients you already have for a lifetime, according to a KPMG survey.

This article takes a look at this hidden source of income and how to make it yours.

I’ll help you understand how to improve your patient retention and identify actions that might result in producing more revenue.

3 ways to make money

There are three primary sources to generate income in your practice.

  1. New referrals
  2. Patient visits
  3. Previous patients

Or in business terms,

  1. Acquisition of new clients
  2. Retention of current clients
  3. Reactivation of past clients

Most marketing advice is heavily weighted towards a new patient acquisition or “getting more referrals.”

If you have an unbalanced approach to generating revenues you’ll most likely have a high levels of patient churn.


patient churn


Patient retention reduces patient churn


Patient churn is the number of no-shows, cancellations, and patients who don’t complete their plan of care.

Patient churn is a growth killer. It’s a silent revenue drain that robs clinic profitability.

The calculation of your patient churn rate can be straightforward. Take the total number of expected visits minus the actual visits and divide it by the expected visits times 100. The calculated percentage is your churn rate.

For example, a therapy practice had 1,000 scheduled visits last quarter. They had 5 no-shows, 25 canceled visits and 10 lost visits from patients dropping out before they completed their plan of care. The total actual visits for the quarter is 960. 40 visits divided by 1,000 times 100 equals for percent. The churn rate would be 4%.

Reducing your patient churn rate is tantamount to your practice’s success. A high churn rate leads to lost opportunities to impact your patients’ lives and lost revenues.

More often than not the proposed solution is to focus on “getting more referrals” with no real strategy fpr patient retention or reactivate previous patients.

A patient retention plan is not complaining or blaming staff about canceled appointments. Patient retention will improve when you have concrete strategies to decrease no-shows and dropouts. Plus you have procedures and staff in place to track and follow-up on patients who fall through the cracks. 

Think about your owner’s meetings, when was the last time you talked about retaining current patients? Compare that to how many times you discussed “How do we get more referrals?”

It’s almost always easier and cost effective to retain current patients than to generate new referrals.

The hidden cost of patient churn

According to an Invesp survey on customer acquisition and retention,

  • It costs five times more to attract new customers than keep an existing one.

  • 44% of companies have a greater focus on customer acquisition.

  • The probability of selling to an existing customer is 60-70%, whereas it’s 5-20% to a new prospect.

  • 89% of companies see customer experience as the key factor in customer loyalty.

Clearly, the data shows that focusing on your current and previous patients instead of new referrals is your best strategy for generating income and new referrals. 

Lifecycle marketing is a framework for patient communication that recognizes the different stages in the journey to becoming an engaged and lifelong client. Infusionsoft’s Lifecycle Marketing Planner is a great tool to guide your patient retention strategy. 


Increased Profits through patient retention


Why should you care so much about patient retention?


Every practice needs new referrals in order to survive.

I know it takes a tremendous amount of work to treat patients and manage staff. I get it.

But in the midst of the pressures don’t forget the easiest and most predictable source of revenue.

The patient right in front of you.

You’ve already established trust and confidence plus you most likely know a lot about their needs, problems, and solutions. They’ve already experienced your clinic’s services and culture. And they have shown a willingness to pay for what you offer them.

Here are several reasons why you should you should put an emphasis on patient retention:

  1. In physical therapy, 30% of new patients drop out of their care within their first 3 visits, which translates to $150k in lost revenue for the average clinic, Strive Labs.
  2. According to Bain and Company, you can increase your company’s profitability by 75% by increasing your customer retention by 5%.
  3. 80% of your company’s future income will come from 20% of your current customers, according to Gartner Group.
  4. Increased profits. You’ve already spent money to attract these patients now it’s time to get your return on your investment. You don’t have to convince them that you’re the one for them. Your focus is on helping them complete their full plan of care and exceed their expectations.
  5. You’ll spend 6-7 times more to attract new customers than keeping an existing customer, Bain & Company.
  6. Existing patients give priceless feedback on your patient experience. Is your staff providing exceptional service? Are you meeting patient expectations for scheduling and billing? Are they getting a good value for their money? Use their feedback to make every patient experience truly remarkable.


Patient retention through remarkable patient experiences


In today’s competitive market, if you want to attract and retain patients, you need to build WOW into every patient experience. You want to create a patient experience so remarkable that people will come back for more and talk about it.

[clickToTweet tweet=”You want to create a patient experience so remarkable that people will come back for more and talk about it.” quote=”You want to create a patient experience so remarkable that people will come back for more and talk about it.” theme=”style1″]

The strength of rehab services has always been extremely positive one-on-one patient relationships.

However, from a business standpoint, the greatest weakness of most therapy practices is a poor or non-existent patient relationship management system.

Healthcare providers have been slow to implement the processes and technology to enhance patient engagement, retention, and reactivation. It’s common to think that if you provide a great professional service, then patient loyalty will naturally follow.

While this might be partially true in some instances, the truth is it’s short-sighted. Sooner or later, if you don’t develop a patient relationship strategy your patients will feel like you don’t care about them and will eventually drop out.

As a therapist, you work hard to build quality relationships with all different types of patients. You build trust by listening and forming a partnership to reach agreed-upon goals. During the course of treatment, these relationships usually deepen through mutual commitment and communication.

Now does it make sense to abruptly end that relationship at “discharge” with a handshake and goodbye?

Having a patient retention program gives you the ability to identify, track and deliver a remarkable experience according to the patients who are the most likely to become lifelong patients. It’s these lifelong patients are most likely going to become your best long-term sources of income.


Patient Lifecycle MARKETING


Patient retention through lifecycle marketing


Lifecycle Marketing is an approach to client communication that recognizes the different stages to becoming an engaged and lifelong patient.

If you’re like most therapists, when you think of patient relationship management you think of monitoring and directing a patient’s plan of care. The information you need is normally located in an electronic medical record (EMR) system. Examples of popular EMR systems would be WebPT, Practice Perfect, and Kareo.

A clinic’s patient relationship management (PRM) is a system designed to manage a patient’s journey through the entire patient lifecycle. Simply, a PRM is a list of contacts, a method of communication and a way to monitor interactions with prospects and patients.

If your clinic is seeing prospects and current patients falling through the cracks because of lack of relevant communication. Free or inexpensive email service providers like MailChimp or ConvertKit can be used to email patients. You must be certain these types of emails don’t include patient health information (PHI) in order to be HIPAA compliant.

Some therapists use Hubspot’s 100% free CRM to take the plunge into a simple CRM that doesn’t require a lot of manual work. Other practice like Prosperworks CRM’s integration with Google’s Gmail and G suite.

Larger or multisite practices want to integrate their PRM with their electronic medical record system (EMR).

WebPT recently acquired the patient engagement software company Strive Labs. The StriveHub PMR is fully integrated with WebPT and allows therapists to develop automated email sequences, survey patients and create interactive-home exercise programs.

If you are interested in improving patient retention or patient reactivation I suggest that you gather and manage client business engagement with the help of a CRM or PRM software.



Relationships help you make more money


The secret to making more money in your practice is contained in one word: relationships.

PRM is all about knowing and communicating with your patients– future, current, and past. You want to know who they are, what they need and what works for them. And if all goes well, how likely are they to become a patient, refer someone or return for additional services.

While PRM software doesn’t manage your patient relationships all by itself, it does provide you the technology to develop a consistent patient retention system.

If you engage with your patients more consistently you will have fewer no-shows and cancellations and patients dropping out of treatment. The increases in revenues from a modest reduction in lost visits can make a significant difference in annual income with the same number of referrals.

With the use of a PRM software, you can schedule follow-up appointments at regular intervals to generate additional revenue through ongoing supervision and education.

A PRM allows you to have a list of patients to check on and update their home programs. You can delegate most communication to your support staff for follow-up and schedule appointments with you when appropriate.


Improving patient retention is good business


In today’s environment for private practice owners, the solution to generate more revenues by “getting more referrals” is more competitive and costly.

63% of existing clients stop doing business with a company because they feel neglected, according to Bloomberg Businessweek. Most clinics cannot afford to have such a high dropout rate.

Studies in multiple industries demonstrate that the cost of retaining a client is five to ten times less expensive than acquiring a new one.

Therefore, it makes sound economic sense to develop a patient retention system for your therapy practice. A good PRM will provide you the tools to retain and reactivate patients while improving your bottom line.

Today’s marketer must have empathy, humility, and generosity. Most therapists I know have an abundance of each.

The lifecycle marketing framework can show you how to attract, connect and delight with people who are a good fit for your practice. It’s definitely a marketing framework worth exploring.

To get started download Infusionsoft’s Lifecycle Marketing Planner to help you grow your practice and feel good about it.



Paul Potter PT


Paul Potter is a physical therapist and mentor who lives in Lincoln, Nebraska, with his wife, who is also a therapist. They have four daughters. For more than 35 years he successfully managed his private practice. He now shares his knowledge and experience through teaching and mentoring therapists who want to launch their own business. 

He has authored On Fire: Ignite Your Passion with a Cash Therapy Practice and the Cash Practice From Scratch Course. His website is dedicated to helping therapists achieve professional and financial freedom. Connect with Paul on his website or LinkedIn paulpotterpt. You can also get more free resources at