What Is LTGP?

LTGP is how much, on average, a new patient goes on to spend with your clinic over their lifetime of doing business with you, minus your fulfillment costs.

This is one of the most difficult business metrics to track because not all EMRs and accounting systems properly report on this metric.

Traditional LTGP Calculation

Your EMR/accounting software may be able to pull an LTV (lifetime value) metric directly. In this case, you would just multiply LTV*Gross Margin to get your LTGP.

However, it’s quite rare for an EMR/accounting software to have this metric.

In this case, the traditional way to calculate LTGP is to multiply:

Average Purchase Value*Average Purchase Frequency*Customer Lifespan*Gross Margin

In the case where you’re not able to pull the metrics above from your EMR/accounting software, you can use the method below:

Chat GPT Calculation

If you cannot pull the required metrics from your existing software, you can alternatively export your client list and use Chat GPT to calculate your LTGP for you.

Step 1: Export client list from your EMR/accounting software

Export from whatever software contains the financial transactions of each patient. The only information you need in this export is patient name, purchase value, and purchase date.

Step 2: Upload to Chat GPT and use following prompt

The next step is to head over to Chat GPT, upload a CSV file of your patient database, and enter the following prompt.

I would like to calculate the average LTV from this customer database. To do this, sum up all purchases for each customer from up to the past 3 years. After you have summed up the purchases, divide by the number of customers who have made at least one purchase. Make sure to SKIP records of customers who have spent $0 as we don’t want to include them in the LTV calculation.

Step 3: Multiply LTV by your gross margin

Once you have your LTV figure, the next step is to multiply it by your average gross margin to get your LTGP. Most EMRs and accounting software should provide your average gross margin across all services. If you do not know your average gross margins, you can see this video for instructions on calculating margins on your services/packages.

Calculating LTGP On Memberships

You may also wish to calculate the LTGP of your membership programs.

Calculating membership LTGP is relatively simple:

Membership LTGP = (Average Monthly Subscription/Churn)*Gross Margin

For example, if your average subscription is $97, your churn is 2.55%, and your gross margin is 70% for delivering your membership, then your LTGP is ($97/2.55%)*70% = $2663.

Most membership platforms should provide data on churn. If you are using Stripe as a payment processor, Subscriber Churn Rate is displayed by default on your home page.