Turning new leads into loyal patients is a huge concern in the dental industry. As we discussed last week, outbound marketing can direct leads toward your office, but when 135 millions Americans lack dental insurance, dentists are often forced to say no to patients that need care. Many dentists are turning these patients into loyal customers by using non-traditional financing solutions, and among these, membership programs are becoming increasingly popular.

Membership programs provide an easy mechanism to bundle a suite of products and services together that meet the basic, and in some cases, advanced, needs of customers. They typically have a modest monthly price that is paid over the course of the year in which the customer consumes the services.

The strength of the membership model is a concept tried and true in multiple industries. For a key example, we can look no further than the juggernaut of members-only-savings, Costco. In its nearly three decades in business, the success of the plus-sized wholesale chain is dwarfed only by the pallets of foodstuffs, appliances, and household items that line its aisles. By paying a small annual membership fee, consumers gain access to savings and benefits they wouldn’t find at any other retailer. Once they’ve committed to a membership (as 1 in 5 Americans have), consumers are consistently more likely to patronize Costco over competitors, and spend more freely due to the perceived savings afforded by the program.

A 2007 Harvard Business School study referred to this phenomenon as the “fee-to-savings” link. Through field data research and a series of customized studies, they showed that fees could serve as a signal of price discounts. Stores that charge fees are perceived as offering better deals for identical items, and the presence of fees can increase consumer spending and overall store profitability. The study additionally showed that the presence of fees could drive choice of retail outlets, such that stores with membership fees are more popular even when they offer the same goods at the same prices as stores without fees.

Furthermore, the loyalty that comes with a consumer’s commitment to a membership program carries benefits beyond that single member’s spending. A 2011 Colloquy Loyalty Census, entitled “The Billion Member March,” showed that members of a loyalty program are 75% more likely to refer other members to that service.

Now, how does this proven concept help dentists and their patients? As we mentioned, around 50% of the U.S. population has dental coverage. The other half pays for each procedure out of pocket, and as a result, may go longer than recommended between check-ups, wait around for a favorable coupon deal from a site such as Groupon, or completely forego treatment. As time goes by, problems compound, creating the need for more expensive procedures down the line. But if a dentist creates a simple oral care plan (say, $30 a month for basic coverage), patients are much more likely to keep up with regular check-ups, saving them from serious problems in the long run.

Meanwhile, the practice benefits by creating loyal customers from a segment of the population they would otherwise turn away. It’s no wonder so many dental practices are implementing their own dental membership programs, allowing them to help more patients, and building a steadier foundation for their business.