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Same-store growth (SSG) or same-store sales is a term to describe the difference in revenue generated by a business’s existing locations over a period of time, compared to an identical period in the past, usually in the previous year.

Why Measure Same-Store Growth?

Same-store growth figures are helpful to determine what portion of a practice’s sales revenue is a result of growth in existing locations versus revenues from the opening of new locations.

As interest rates rise and the cost of acquiring new practices increases, many groups and dental service organizations (DSOs) are focused on increasing revenue from their existing locations.

How to Calculate Same-Store Growth?

To calculate your SSG, you’ll need to identify the revenue generated from each of your existing locations in a given period. Then, compare this figure to the same period in a previous quarter or year. The difference between these two figures will provide you with your same-store growth rate.

Select a time period.
Identify comparable stores. These are locations that have been operational within that time frame. New stores or those that have undergone significant changes (e.g., renovations, expansions) are typically excluded and calculated separately.
Calculate total sales (revenue). Calculate the total sales (revenue) for each store for the selected time periods.
Calculate same-store growth: To calculate SSG, use the following formula: SSG (%) = [(Current Period Sales – Previous Period Sales) – 1] x 100
1. Current Period Sales: Total sales for the present time period (e.g., Q1 2023).
2. Previous Period Sales: Total sales in the prior time period (e.g., Q1 2022).

Now comes the exciting part – Interpreting the results and, if needed, identifying new ways to drive positive change in your business before adding additional locations. We’ve identified four strategies that can help:

1. Leverage your LTV/CAC ratio.

LTV, or Customer Lifetime Value, is the total expected gross profit a patient will generate for your practice throughout their relationship with your office. It encompasses the total dollar amount received from a patient before churn or attrition.

Customer acquisition cost, or CAC, refers to the expenses incurred in attracting and acquiring customers within a given period. This can include your marketing efforts, treatment discounts, and other expenditures contributing to building a more robust patient base.

The LTV/CAC ratio is a crucial metric in business. An ideal ratio is 3:1, indicating that your practice gets three times the value from each patient compared to the acquisition cost. If the ratio falls below 2:1, you’re either breaking even or operating in the negative, which necessitates the exploration of alternative strategies. Conversely, a higher ratio 5:1 or above could suggest missed growth opportunities, where reinvesting money back into your operational, hiring, or retention efforts can be more effective.

2. Keep your data connected.

A well-integrated tech stack is essential in ensuring the seamless flow of data across applications, mitigating silos and expediting informed decision-making. This connectivity allows greater opportunities to test and learn and is especially helpful in creating better benchmarks for evaluating same-store growth.

In a standard front office setup, various platforms cater to specific operational needs, ranging from membership plans to patient financing and patient engagement tools. The most efficient approach is to ensure these platforms integrate with your practice management software (PMS).

3. Renegotiate your contracts.

When you renegotiate contracts you can secure more favorable terms and pricing structures and improve vendor alignment with evolving business needs. It’s important to remember that your vendors are your partners in growth and are often willing to negotiate to keep your business.

4. Diversify your revenue with a membership plan.

Practices should implement a subscription-based dental membership plan as a strategic move to diversify their revenue and improve same-store growth.

DSOs often find themselves caught in networks with numerous unprofitable PPOs, driven by the need to keep chairs full. However, breaking free from underperforming PPOs safeguards your practice. Furthermore, it streamlines the administrative burden on your team, allowing for a more efficient and financially secure operation.

Adopting the model works to:

Increase patient visits and loyalty
With routine hygiene visits included, membership plan patients consistently book — and keep — their appointments, completing 2-3X more hygiene reappointments than other uninsured patients.

Help patients say YES! to treatment
Patients with a membership plan accept more treatment and generate 3X more production.

Empower your dental practice to break free from bad PPOs
Having an in-house plan gives you an alternative coverage option, enabling you to drop your bad PPOs — eliminating the hassles, costs, and ever-declining reimbursements of insurance and third-party payers.

We’ve analyzed the impact a membership plan can have on patient behavior and practice results. *You can learn more about the data in this report.

Powered by Kleer.

Over 300 leading dental groups and DSOs use Kleer to win more patients, strengthen relationships with existing ones, and create greater demand for their business. Kleer’s dental membership platform integrates with 90%+ of PMS solutions to help practices automate administrative processes, better manage their data, and identify and market to uninsured and dormant patients in their database — improving total visits, treatment acceptance, and revenue.

Whether you consider using a solution like Kleer or any of the ideas shared to improve same-store growth, the choice lies in leveraging the right combination of resources and strategies that align with your vision for success.

If you want to learn more about Kleer,
schedule your 1:1 consultation here.

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