Robbie Kellman Baxter is the leading expert on how to apply membership and subscription models to build engagement, loyalty and recurring revenue in nearly in business.. As the Principal at Peninsula Strategies LLC, she has advised organizations across over 20 industries on how to leverage subscription pricing, digital community and freemium content to build deeper relationships with the people they serve. Her clients have included health care organizations and professional services providers as well as industry leaders such as Netflix, Electronic Arts and the Wall Street Journal.
As the author of The Membership Economy: Find Your Superusers, Master the Forever Transaction & Build Recurring Revenue, a book that has been named a top 5 Marketing Book of the Year by Inc.com, Robbie coined the popular business term “Membership Economy”, which is now being used by organizations and journalists around the country and beyond.
A sought-after writer and keynote speaker, Robbie has presented to alumni organizations at Stanford, Harvard and Haas, associations including the American Nurses Association, the American Society of Association Executives, and the American Board of Internal Medicine. She has been quoted on business issues in the Wall Street Journal, The New York Times, and Consumer Reports, and has had pieces published in HBR.org, CNN.com, and the Journal for Quality & Participation.
VIDEO-DUwHF #1086 Robbie Kellman Baxter
AUDIO-DUwHF #1086 Robbie Kellman Baxter
Howard: It's just a huge honor for me today the podcast interview Robbie Kellman Baxter, the leading expert on how to apply membership and subscription models to build engagement loyalty and recurring revenue in nearly any business. As the principles at Peninsula Strategies LLC she has advised organizations across over 20 industries on how to leverage subscription pricing digital community and freemium content to build deeper relationships with the people they serve. Her clients have included healthcare organizations and professional service providers as well as industry leaders such as Netflix, Electronics arts and The Wall Street Journal. As author of the membership economy find your super users master The Forever Transaction and Building Reoccurring Revenue, a book that has been named a top-five marketing book of the Year by inc.com. Robbie coin the popular business term membership economy which is now being used by organizations and journalists around the country and beyond. A sought-after writer and keynote speaker Robbie has presented to alumni organizations at Stanford Harbour and Haas HAAS associations including the American nurse sociation the American Society of Association executives and the American Board of Internal Medicine. She has been quoted on business issues in the Wall Street Journal the New York Times consumer reports and it's had pieces published in HBR org cnn.com and the journal for quality participation. My god it's an honor that you would come and talk to a bunch of damn dentist with all your qualifications it was our podcast we did with a was it let me see what I was the what episode was it, it was it was with Ken Newhouse manage starting camera he was episode 1043 he said you were the best first the best guest he ever had on your podcast and the reason I wanted to get you on is because you I mean there's so many reasons I want to get on but some of them are like notice the fortune 500 they want customers for life.
Howard: and I notice all the dental offices and chiropractors ah they're always wanting a new patient and when you start doing the math you start saying okay if your hygienist worked 40 hours a week 50 weeks a year she only works 2,000 hours a year she can only see a thousand people twice a year but you get 25 new patients a month for cleanings well then every three and a half years you'd have another hygienist but you go to that dental office 40 years later and you say where are the 12 full-time hygienists they say oh actually I need new patients I only have one hygienist. So nobody keeps their customers and then what really blew my mind the most and what you've written so eloquently about is here you have Disney and Netflix with the same valuation on Wall Street and one of them is old school with theme parks and movie theaters and Disney ships but they're boom and bust, they'll dump 100 million into a movie but they got to get 300 million out of it and the next ones bust and then Wall Street looks at these reoccurring revenues like Netflix where every month they just ding a gazillion people for 10 bucks myself included and that predictable reoccurring revenue as opposed to your sales team having a good month selling a bunch of ads the next month they don't sell any ads and boom bust boom bust boom bust, where is that predictable reoccurring revenue whether it's Spotify or Netflix our music that's what you speak about how does how does this all apply to dentistry?
Robbie: Yeah well I think it applies perfectly the way the way I think about it is you start by saying what is it that my customers that the people that come to see me want my patients want they want healthy mouths they want to look good and do they want that for a transaction no they want it for the rest of their life. Right what they really want is to never have to worry again about that part of their life and have somebody that they trust who's just going to handle it. So if dental practices could focus on helping people achieve their objective which is a healthy mouth a beautiful smile in the most painless way possible I would probably add for most people most people be willing to just keep paying on a regular basis and say to their dentist tell me what I need to do tell me how often I need to come in and make it as easy as possible fact d'arnot you know come to my house and that would be great but you know it's really changing that focus from being transactional to being a membership and I mean I think that it works it's actually a very easy model I think for a dentist to apply the principles make a lot of a lot of organic sense.
Howard: Well you know you're in Menlo Park you're in Silicon Valley you work with these high-tech firms but you know dentists you know you don't care if they come to your house the founder of Facebook Mark Zuckerberg his dad's a dentist and his dental office was in his house Mark Zuckerberg grew up first floor was dad's dental office,
Howard: and the second floor was front room living room the kitchen the third floor they all slept upstairs but they do I love the way you say they don't want dentistry for a transaction
Howard: They want whiter brighter sexier teeth for the rest of their life.
Robbie: For the rest and that's the thing is if I come into the dentist that first meeting because you talked we were talking a little bit about acquisition right a lot of dentists are very focused on I got to get new patients I gotta find new patients I'm gonna do this campaign I see it all the time on on the community right I see on dentaltown you know here's how to get new patients here's how to do this campaign or that campaign and get people in the door and that's great and that's part of part of any good business practice but the real magic is in retention and engagement, it's how often does that patient come back to you how loyal are they and how willing are they to refer other people to your practice. I would argue I would I would suggest that a really good dentist might not even need to have any marketing activities because his current patients understand or his or her patients understand the value proposition and what they're getting so well that they're spreading the word and not just spreading the word but bringing in the right of patients. I did some work with the dental pain management company and one of the things we talked about was the fact that for them their best customers the dentists that they really wanted to sell to were dentists who are differentiating for example around pain management saying you know we're a pain-free shop come to us we really care about that that's an area of focus and expertise for us, so they have a more targeted target and patient base but you can be sure that those patients are going to talk about it right because they're gonna say oh I hate going to the dentist I mean I'm afraid of needles I'm afraid of pain but you know these guys seem to you know really know what they're doing and and it's a pleasure to go so.
Howard: When they do research and there's a ton of it out there that when a when i market to you and you don't know me from Steve and you come in and you'll buy a dollar but if one of my existing patients comes in though by three because we sell the invisible I mean you know the difference between an iPhone and a Samsung I don't have to tell you the difference in Nike and Reebok but when you go but when your engine light comes on and some man tells you that you have to have a whole new transmission and I'm sitting here I grew up with five sisters played Barbie dolls till I was 12 I mean I just have to trust you and when your dentist tells you you have four cavities you have to decide do I trust this dentist...
Howard: and that's why keeping an existing patient is actually forget the marketing cos they buy three times more just because they trust you.
Robbie: Right oh yeah and it costs I mean they'll buy more they'll be easier to work with as you pointed out because if I come in for my dental appointment and I'm still in that I don't trust you mode I'm gonna give you a hard time I'm gonna ask a lot of questions I'm gonna hem and haw I might wait too long for the treatment which creates more problems later which I'll blame you for. I mean there's just a whole bunch about things but if I trust you and I say look I don't I'm not a dentist I'm not an expert tell me what I need charge me a fair price and I'll do it that's the kind of relationship that is not only is it most lucrative for the dentist but it's such a joy for the patient to say with pride I trust my dentist she's taking really good care of me the last 20 years takes good care of my kids takes good care of my spouse takes good care my mom.
Howard: and I also think long-term staff helps with that I mean you come in every time you come in you know it's the same staff, like people will tell you you know their actions and words are so different they'll say to you like well I'm a really good shopper I'm really good I shop well okay well how many different grocery stores you go to to compare they go to the same grocery store every time because they know where everything is and I look at the look at the people that I buy from like like I been using the same auto mechanic across the street from me for 20 years and we always joked that we're in the same business we both work with her hands and I'm working on teeth and he's working on engines and all of our customers have no idea what's going on. I mean these people come in and say well why can't you just you know spray with wd-40 and kick it like you know my dad and they don't understand the cars now are so much more complicated and his whole business he gave up advertising and marketing years ago and said he says when you when new people come in he calls us the these people that don't know engines and and anymore he hardly knows the engine because they're so more complicated and I would say in my lifetime I'm 56 but the single biggest thing I've seen negative in my half-century is a loss of trust. I mean I remember when I got asked about 30 years ago I'd say well the Centers for Disease Control supports water fluoridation with 5,000 studies and now it's like one-fourth of America oh well they're just shells they're just puppets for the farmers to do they they probably get paid by the people who sell the fluoride you're like wow and they say well why will all the dentist support it yeah because it makes your teeth weaker then you'll need to do more dentistry.
Howard: It's like only you think I went to nine years of college to harm people so I can make money. I mean so when you have a society that for 25 years has only given Congress an 11 percent approval rating in fact I saw an interesting study did you know more people in communist country in autocratic countries like Singapore and China and Russia a higher percent of the people like their government than in the United States of America...
Robbie: Wow that's amazing yeah.
Howard: This is what we're dying for we're dying for freedom went with more people like the government in Singapore in China and Russia than America. So how does this apply to when we're dentists selling the invisible and we have to have a relationship based on trust or you're just out the door.
Robbie: Well I think Trust is all about credibility and relevance, so how do you know if someone's credible like if I asked you how do you know that your mechanic is trustworthy right it's he knows people that I know maybe it's the school he went to but more likely you know it's the what other people say about him or it's your own experience. So if you bring that into into dentistry word of mouth is so important and what your existing if your existing members become super users where they explain to other people like hey you know and I'm sure you've had this experience where they're not experts on what you do but they know just enough to say you know I know you don't trust about the fluoride and what they said the CDC but you know what you know Howard he's a great guy and we've been seeing him for 20 years and you know I don't know what he does but it's magic and my teeth are great and you should trust him that's how people trust each other right because somebody they trust it's like the transitive property of trust and so once you have that kind I mean if you're gonna start at the beginning and say what is the most important thing that I do in my practice it's build those kinds of trusted relationships figure out who you can serve well and then serve the heck out of them and then make it really easy for them this is kind of the next step make it really easy for your best patients to bring in other people just like them ask them for the referral make it easy for them to make a referral give them status or recognition for making referrals all of that builds that kind of flywheel for growth's that has the trust built in like as the secret sauce.
Howard: Now you're a brainiac man you went to Harvard University and Stanford University's School of Business I mean that that's impressive.
Robbie: Don't hold it against me please.
Howard: I got to tell you my favorite harvard joke so if your international Harvard and Stanford I mean Harvard and MIT are in the same city what is a Cambridge Massachusetts?
Howard: and Harvard is known for like law and philosophy and English and poetry and MIT is just known for math and engineering so there's this guy at a grocery store you've got ten items and he's standing in the five items or less Lane and the lady looks and says well you're either from MIT and can't read or you're from Harvard and can count and you're in Menlo with I mean you're in Silicon Valley with the smartest minds out there do you see do you think these valuations like on Netflix are really worth what an old-school Disney Company is like or do you think this is do you do see I noticed Apple music, Apple rarely ever makes a mistake but they look at their original business model where they were selling me a song to download on my iPhone for 99 cents.
Robbie: Yeah it didn't work
Howard: Man they sure the hell wish they would have just got me four nine four you know...
Robbie: The subscription
Howard: The subscription model and I'm starting to see that in dentistry where some dental companies are popping up and saying look half the country doesn't have dental insurance okay so why don't you get them to give you a record this model but what I don't like about those business models as I see it all in dentistry and you know dentistry is a cottage industry and they're not as sophisticated as iTunes and all that stuff is they'll do the contract for a year I'm like a year a recurring revenue model you should dig them every month till they die because if you put all that effort of your staff talking about it and getting them all signed up once you get that credit card you got that money revenue every single month until that credit card doesn't work anymore which could be a very very long time, what do you think of every dental insurance in office dental plan a year contract that expires in a year and then they got to start it all over again?
Robbie: So I'm a fan of the monthly subscription I'm a fan of optimizing what you offer to those patients based on what they want so instead of saying I provide these services which are really transactions right it's saying this is what you need to be healthy and these are the things you worry about that you need insurance for and this is a fixed price for most of it and you pay every month because you're committed to me and you should be committed to me until you don't have teeth or until you don't have a mouth or until you die and if it's fair people will go with it forever. I think having a one-time transaction that's just for one year where people have to re-decide every year that's a problem. I think about it as the moment when somebody and you probably have this in your office when somebody takes off what I call it takes off their consumer hat and puts on their member hat where they're not looking for alternatives anymore where they're like this is my grocery store this is my dentist I'm gonna go to unless he really does something horrible I unless I learned something terrible this is where I'm going for the rest of my life I'm not gonna check the prices anymore I'm not gonna look for up you know other options before that's really that moment of the forever transaction that we should be focused on and then you're asked about Netflix what they've done that's really smart as you keep layering in value so that people are subscribing right so they have their monthly fee for their dentist and then there's new stuff coming in all the time you know now we have later hours now we come to your house now we send you you know special products in the mail to keep you healthy now we I mean I was just thinking about this like now we call you once a week to check in and say hey are you flossing what's going on with the flossing is that working out how are your kids doing. It's really focusing on what the patient needs and then figuring out ways to build that into your offer as opposed to being product centric and saying these are the treatments we provide these are the interventions we are trained to do and that's what we sell, it's a very different way of looking at it it's very it's very patient centric.
Howard: and the two industries that have never been patient centric or customer centric are just government and health care I mean yeah anyway you would yeah like like take a line I mean I you know the pizza delivered in 30 minutes I've never had to make an appointment to go to Walmart or Fry's or any grocery store. The only time I'm standing in line waiting is when the government's involved are its health care and raising four boys I can't tell you how many gazillion hours I spent in the emergency room for all their stupid stuff and every single time I checked in by your name.
Robbie: I know that's very frustrating you're like you know my name.
Howard: I come here every other month for 20 years and you wanna know my name.
Robbie: Right right and it should be I mean this is I think this is a little bit of the Amazon effect which is that we expect because we all use Amazon right and we know that Amazon makes recommendations for us Amazon cuts us slack when we say hey I bought this product and I actually don't like it I want my money back we expect that level of personalization and recognition from every business we deal with. So we walk into the dentist's office we're like why do I have to fill out this form you should know you should know me you should know that I don't like this you should know that I like that you should you know and it's this feeling of you know Amazon can do it so why can't you and on the one hand it's much harder for a small business owner to do that because they don't have the sophisticated data systems in most cases on the other side it could be easier because they actually know their patients in real life right like my dentist I've been seeing my dentist since I was 16 years old and he sees my mom and my dad and my sister and my three kids and my husband and when I come in they do not say name they say hey Robbie how are the kids how was your summer saw your mom yesterday feels great and we all need more of that we need recognition and we need to feel known. It's like a basic human need when I'm as well as hierarchy of needs right the feeling of being recognized for who you are and then being recognized for your achievements and contribution it's something we don't get enough of.
Howard: I publish your book on dentaltown I wish you would do an article this because the culture is so messed up like but you you look at people lecturing and dentistry and posting on dentaltown and they they always talk about the new patient experience I mean why would that be different you just said when you walk in there they go Robbie what up and I mean why would why would a new patient have a different experience and an existing patient and and they're always worried about a dsos they're always worried about these big corporate chains which is hilarious because there's yes worst great I'm sitting here for third I've been watching this for 30 years from orthodontic Centers of America and all these deals when the patients come back and they say well I thought they were cheaper had better hours but every time I go in there it's a different doctor. I had a friend at dinner about two weeks ago and she was teary-eyed because the ob/gyn she goes to is gone and she says you know that every time she goes this place it's different OBGYN well she's having a baby and she wants you to be there every month for nine months and I mean can you imagine you met her and then you see her every month and then you're a month away from delivering the baby and I was gone.
Robbie: Well I had that experience like I you're you're preaching to the choir I was seven months pregnant and they said oh you know we're looking at your insurance and it turns out that this doctor can't perform a delivery at this hospital so would you like this other doctor now and I was seven months pregnant I mean it is it's a I mean it's such an intimate thing and I think having people in your mouth is also a pretty intimate thing you want to know those people and so I think that if you're I mean there are economies of scale to these kind of big corporate systems but the trade-off is that sense of connection that sense of personal the sense of trust so you know if you're if you want to hang out your own shingle you you better be thinking about what your advantages are and delivering on that promise know who you are know it.
Howard: Speaking of happy I have four boys 22, 24 not what are they yeah 22 24 26 at my 28 year old turns 29 tomorrow on 911 Tomorrow is 911 I got to tell you about the 911 story so 911 happened to his first thing in the morning it was you know a couple days of just profound shock and was the third day he was born in 89 so how old would he have been in on the actual 911?
Howard: The third day I said Earic why are you sad and we're having dinner he said are we ever going to celebrate my birthday alright and we had the birthday stuff but you just look forgot about everything.
Robbie: Oh yeah what a day.
Howard: We had his birthday three days late but I always said that writing a book is like having a baby I mean it takes nine months to make a baby and you wrote an amazing book that's on Amazon and I can't believe you have hundreds of only five-star reviews the membership economy, what are my homies gonna read and why should it everybody listen to you right now why is your the dentist go to amazon.com and buy your amazing book the membership economy find your super users master the forever transaction and build reoccurring revenue by Robbie Kellman Baxter?
Robbie: Because it will allow the dentist's to do what they do best which is taking care of patients while making a really good living and not having to worry about marketing at the top of the funnel all the time. It allows you by focusing on membership and applying some very simple principles you can create this flywheel for growth through the relationships that you establish. It's really simple and it's the same tactics that Netflix is using and Salesforce is using but it can be applied really really well to a dental practice and results in you know predictable revenue which is you know as business people it's what we all want to not have to worry about where the next dollar is coming from not have to worry about lumpy revenue and to be able to decide on your own do I want to grow my business or do I want to just have consistency over time but not to be worrying about you know every time I bring someone in the door I have to assume that half of them are going to go out the back door within a year which you know makes it very very hard to run a good business.
Howard: and the endorsement on these books I mean the CEO Weight Watchers I mean a president of consumer products for American Express, Six Flags Entertainment, Cora I'm not sure what that one is the guy in charge of research design at Pinterest which was which really beat Instagram and I mean it was the first photo sharing deal but they didn't seem to have a reoccurring revenue model.
Robbie: Right they they were moving towards that they had built out a fantastic membership and there were a lot of opportunities to build out the recurring revenue but they've just gone in a different direction which you know I said with I didn't agree with with you know they don't always do what I suggest but but what's interesting is that these principles of membership are working for so many different kinds of businesses you know everything you know I have a company I'm an advisor to called Fuzzy which is pet health and they have veterinarians who come to your house and see your dog a few times a year and then they send you all the medications the well they're the well pet medications that you should be giving your dog or your cat and they're growing like gangbusters because they're solving the problem right. Nobody wants to go to the vet right you want to have a healthy dog you want to feel confident that you're taking good care of your dog. So it's like flipping your model on the head if you if you as dentists focus on what are my patients really here for and a great thing to do is ask them you know why do you stop coming in for regular check-ups you know do you know or care that I use premium pain medications do you know that you can't you know figuring out why do people come to me why do they stop coming to me and if you really understand that you can optimize your offering to get more of the people that you want your best patients fewer of the bad patients that cause all the heartache in the trouble and you can keep your good ones for longer.
Howard: You know I went to on under Gregor with sake and just went to Creighton in Omaha.
Robbie: I have to say one thing I had the best vacation of my life in Wichita Kansas when I was 14 years old my best friend at that time her grandparents the Glickman's I don't know I mean I don't know how big Wichita is but her grandparents lived there and they they were very involved with the Wichita aeros baseball team and we went to those games every night and then we went to the mall during the day and Wichita was one of the first places to have MTV. So all we did was watch MTV go to the mall in the arcade and go to the baseball games and it was like heaven it was.
Howard: and the first song was wasn't radio killed the...
Robbie: Video killed the radio star.
Howard: Video killed the radio star. You know I love that place when I went to Omaha that was where Warren Buffett was and he came in lectured to our business class and that was the first sign that I was a complete idiot because they got 10 points to review his lecture and I said he was a crazy old man and he was nuts and all this kind of stuff I had because I was all excited about the nifty 50 you know Xerox and IBM and and I asked about that and he said well you know if you can't explain it to me on a 5x7 business card I don't know what you're doing is I don't invest in anythings I don't understand and I don't understand any of that crap and I don't invest in that crap and looking back if I would have dropped out of college one year tuition money and then got a job at the IHOP running the dishwasher I'd be like a hundred times more wealthy right now and and he and Peter Lynch always made a profound deal he said oh my said I didn't want to listen all the idiots in Wall Street in all their voodooed and Peter Lynch said the same thing he would leave Wall Street on Monday morning and he would get a list of all the companies that he was going to think about investing in instead of sitting there in Wall Street reading ten K's and ten Q's he just packed in his car and he would drive up announced aside you know is it clean is it nice was I greeted it does a CEO make a religion of availability what did they give me a tour were they proud and he said you walk up these dirty places and no one had weight on you and the CEO couldn't be found and nobody knew and then he get back to Manhattan all these guys said oh yeah but look at their price earnings ratio and look at this and that and you know and I also on investment like you're 40 your book was written by the co-founder of LinkedIn I mean my gosh Allen blue co-founder of LinkedIn that so amazing but I look at these companies invest in it's the same thing like why would you invest in Twitter if you've never given them a dollar I've never given Pinterest a dollar but LinkedIn I've given them money.
Robbie: LinkedIn I understand is a one of my very favorite businesses yeah anything.
Howard: I give them money regularly so yeah it'd have to be good business but how could PInterest be a good business or are LinkedIn I mean our Twitter if I've never given them a dollar because they don't even know who I am on their site they never asked me what my occupation was they never I mean how could you even target me I mean I you know when you I mean when you register on other social media sites they they get a lot of information about you so they so they can target you and these dentists. I mean they will back to Peter Lynch going around I've seen a thousand dental offices and I've always told me but you can smell success I mean you walk into some dental offices they got the glass wall the receptionists don't even look at you, you go stand at the counter and you're standing there for like three minutes before she even raises her eye to even look at you and I'm just like I mean this you only see this at the Department of Motor Vehicles and health care and when you're talking about the vet I mean I think the average dentist, vet and chiropractor has ten times a better game than the hospital physician.
Robbie: Oh definitely
Howard: I mean the physician the physicians are right there with the post office and the Department of Motor Vehicles I mean they're and I think that's one of the biggest hardest sales about when they're trying to you know sell socialized medicine it's like the site people are thinking oh my god I mean this I mean when you look at the benefits of it but they're looking at they're experiencing the last person I want to run the hospital is the guy running the post office the IRA.
Robbie: The DMV
Howard: Why is it that no matter when you go to the emergency room it's three and a half hours I mean couldn't they have figured that out like 200 years ago.
Howard: Can't somebody from Stanford School of Business just say well let's go through your processes I mean like what I check in a Hertz rent-a-car the guys out there he's got a personal dental assistant he gets he gets four or five pieces of data boom when you walk into a door Hilton they already know who you are.
Robbie: At hurts now you don't even have to I don't the last time I rented a car I left the airport I got on the Hertz bus they dropped me off at this station and they said if you have a gold whatever if your name is on the on the wall pick a car and drive away and so I didn't even talk to me but I just like walked around I was like oh I'll take this minivan I got in the minivan or reminded me of home and I drove away like I didn't have to talk to anybody I didn't have to wait I mean there's always a better way if you really care about the customer and the thing that I always say when I'm worked, so if I were to work with with the dentist let's say that you know one of one of the people listening wanted to hire me I would start by saying do you really care about your patients are you ready to build it around them being happy as opposed to what's easiest for you and if they really were I could help them make a lot more money but if they're not there's probably other ways for them to make money but it's not this way I think this is one of the most easy and ethical ways to make more money because you're basically making more money by focusing on how do I give more value that this person who's willing to pay me more money for more value right. Like I see my dentist it just happens I see him four times a year for four cleanings because I want my teeth clean and he told me 20 years ago that I build up more plaque than the average bear and you know so I go all the time and I recommend them to everybody you know because...
Howard: Well you have pretty straight teeth.
Robbie: Well thank you for that orthodontia and all the other stuff.
Howard: but yeah you know orthodontia has even changed and there that you're out there in the backyard of Invisalign.
Howard: Aren't they out there in San Fran and it's funny because when I was little just the ugliest daughter who could never get married with her bad teeth got braces and now people everyone gets braces and they get him two or three times in a lifetime I mean I see people dropping $6,500 for braces because she's a woman and she just said...
Robbie: She doesn't like the way it looks
Howard: and she doesn't and the rehab market after a divorce or a I'm out here in Phoenix a lot of retirees I mean that grandma as soon as grandpa dies oh my god she's got a new haircut new teeth bleaching bonding veneers same with the divorce market but it's just but these dentists they just got they got a care and they got a hustle and that's the other dilemma about managed care is because the people like you and me who are just born to hustle and we're smart and we read and we hustle and we care and we're into it they all own their own business every dental office and then the ones you like you know what I don't want to have these skin in the game I don't want to take the risk I just want the 8 to 5 job I want to go work at the post office they all go work at mcdentals and then the people that I talk to you Mc Dentals are just like my god I mean I when they go to a seminar that the Mcdentals office man is like ok all my doctors I force them to go so they all sit in there surfing Facebook for eight hours and then the other dentists who own their own dental office have skin in the game they're all sitting in the front row taking notes and and so if you're not if you're not into the hustle if you're not gonna work hard and care I mean if you just work hard and give a crap, your going to win at this game it kind of reminds me of a couple of friends of mine that built the largest construction company. I was born and raised in Wichita Kansas and the Cannon Dave Wells started their own construction company and I said oh I remember when they started I said well you know what's new and construction what's gonna be your unique selling propositions and you know what they said to me, they said it was in their first 20 years of life construction was that they were they they didn't have a uniform they showed up late they they just miss it if they said the customer service is so bad he said if we the construction company where instead of blue jeans and three inches of your earring hanging out on a white t-shirt and being three hours late if everybody showed up in a uniform with a white shirt and a nametag and we just nailed customer service, we stood behind her work if one of our lectures since and 30 years later guess what they were awarded the 1 billion dollar contract to redo the Wichita International Airport which is now named after Eisenhower so now the guys own a jet and he also also you know what he did he would say K state he dropped out senior year because he always wanted to say I want to be a millionaire was saying I never graduated from college to have a college degree. So he purposely dropped out senior year second semester two weeks to go.
Robbie: Oh my gosh his parents must have been freaking out.
Howard: To have bragging rights and now he has a jet why construction and why dentists are going you need some new technology you need a laser you need a CAD cam you need all this fancy expensive crap and they're like no you don't have customer service.
Robbie: Yeah well the funny thing when you said that you need a laser you need this and that the funny thing is that most people and this goes beyond dentists this is like engineers this is the surgeons this is you know journalists they think that the problem with their business is the product you know if I have better equipment if I had better facilities I'd make more money and the truth is that that's almost never what the customer cares about right once you have the basic needs met what they really want is the full experience right and if you ask them this is the other really interesting part if you ask them or if you just watch them you can figure out what they want and it's not like I think about it with with cars right I told you right I drove a minivan for a long time and you know sometimes it's just about the cupholders but the engineers who build the cars they don't want to build cup holders they want to build awesome engines right but if you ask the people that drive minivans were like well you know I have seven kids in the back of the car and they're all drinking their Slurpees and we need a few more couple and so gotta ask what people really care about.
Howard: You know I never realized when I gave my first dental lecture that 30 years later I would have lectured in 50 countries and it's kind of sad when you live in America because when you go I watch it in Japan and Germany and when you go to those countries their manufactures like you go to Honda it's a square mile everybody's there and everybody lives and fraternizes and they just build the best cars the last forever same in Germany you come to America and the the headquarters of Boeing is in Chicago but the planes are made in Seattle and Wichita makes another wing and you go to the car companies and they're there they're ordering 30,000 parts from all around the world and the management doesn't even know the management can't even make a car and that's the same thing I see in dental dsos. I mean you know in the old day if you had a dental office and everybody was about to dentistry and I guarantee you like when you go into when you go into dental companies in America dental manufacturing and you go into dental manufacturing companies in Japan and Europe I mean one is like Star Wars. I'll give you another example in which is Switzerland half Germany and half France and a nutshell but you go in there and you know America you'd be in a company and probably three or four times a day someone's gonna ask you know well where's the bathroom you know so that you ask that one time in Germany you look down on the floor and that red line is to the front door that blue line is to the boys room that red line to the girl I mean above every light switch is all the instructions everything but all going to those dental companies doesn't want to switch so I said well where's your marketing department I know we're not American we're Swiss we don't have a marketing department and they had six PhDs and then I would sit there thinking hey I know every company about that size in America they were about the 100 million dollar range in revenue and the 100 million dollar range in revenue companies in America they didn't have a single PhD but they had a telemarketing room then like 30 people dialing for dollars and some guy standing with the thermostat our daily goal is like $10,000 and everybody's wrong it's like the Americans can sell anything the German strategy in the Japanese strategies will make it so good it'll sell itself and then China's really got a reinvent themselves because they're still miss Dracula we'll just make it so damn cheap right you'll just buy it if you don't like it we'll just throw it away and the Chinese and America and Korea are really second-tier cars second tier look at Samsung I mean go read the reviews on any Samsung Refrigerator in America I mean we I mean the they're so bad that when a guy comes to work on your refrieragot he goes did you even do a Google review no why did you buy why did you buy an LT and your repairmen saying just don't buy American or Korean and you're like well this is Japan make a refrigerator or German they unfortunately not and I said well what what refrigerators do you buy well the least crappiest American or Korean refrigerator is a GE. Oh great I'm buying the least crappiest refrigerator and then you're saying the doctors say well you know I'll be successful I'll get $100,000 laser and aw get this I'll get can't can I'll get all this high technology hey how about you just be nice and make it work.
Robbie: Yeah yeah it's not that hard.
Howard: Hustle I mean you know you know when the you know and that you didn't do the filling right and you need to stop take it back out and redo it but you don't why don't you do it why don't you just make it right. So what do you do you have a book you lecture you're an amazing keynote speaker, if you want to see her speak go to youtube go to her website and what website you want him to go to Peninsulastrategy.com?
Robbie: Yeah www.peninsulastrategy.com
Howard: and where did you get that name, Peninsula strategy?
Robbie: Well I live on the peninsula in California Silicon Valley is you know on this peninsula San Francisco's at the top and I'm kind of in the middle and I'm a strategist so that's what I've always done is helped companies and and entrepreneurs build their their business strategies. So you know if somebody wanted to work with me you know I would coach them on how to how to fix or improve their business model by focusing on using membership tracking data focusing on who your best customers are figuring out how to make more of them making it easier for people to make referrals figuring out why people leave when they leave if you told me at the beginning of this conversation that you know a lot of people you talk to you say I still only have one hygienist after 20 years because I lose you know every year I lose as many people as I bring in the front door or coming out the back door. So we stand at the back door and we ask people why they're leaving and then we solved those problems one by one and you know it's not complex you could probably write it on the back of the napkin like Mr. Buffett you know writes his businesses but it's very very effective at building recurring revenue and it makes every it takes pressure off of the rest of their systems.
Howard: Well your talking to alot of dentists right now, who would be your ideal client?
Robbie: My ideal client is somebody who really wants to optimize their business around the people they serve who's very passionate about about wanting to do a great job and wanting to be recognized for doing a great job and they want to build a business that serves those people really well. So it might be somebody you know in some some people talk about like concierge medicine or constant you know concierge treatment but who has like a clearer idea like I want to focus on a particular group and give them a really amazing experience how do I do that and make money at it anybody familiar Wednesday's the people that I don't want to work with are people who are really focused on short term I need to make more money this month and I don't really care what that does next month that for me I think both you know as a strategist and just as a human being it's hard for me to want to focus on getting a buck out of somebody when I know it's not in their best interest. I would much rather make money by providing such value that people don't care what the cost is and that's what I've seen over and over again, when somebody tells you they're leaving you because you're too expensive they're lying almost a hundred percent of the time they're there leaving you because you don't give them enough value to justify what they're spending and that's a whole different ball game because what that means is you're not giving me something I'm willing to pay for.
Howard: You know dentistry is one of the hardest games I can prove it so many different ways number one you'll never meet a dentist I've been in business ten years I'm in Beverly Hills I can't service them. I mean you they cannot understand you you don't present the treatment right you hurt them it doesn't look right and then to stop there then the dentist way to pissed them off or the assistant are the hygienists are the personnel I mean there's so many things that go wrong and then when you go into the big on the big DSOs. I mean I'll never forget I was at a DSO one time I had 36 operatorys and it had a complaint department I thought oh my god talk about I would just quit can you imagine driving to work if it had a complaint department and there was some lady in there screaming about how they lost her crown and that's the third time she's been back, this is such a hard game to win and then one last thing I want to go out is then the other problem is that you can't become a dentist a physician or a lawyer unless you were this introvert geek who didn't have a personality in college and lived in a library for four years. I mean the people who had a girlfriend and joined a fraternity and went out three nights way and actually had a date those are people persons but when you line up a room full of dentist I mean these are most dentists became an identity cuz they didn't have enough personality become an accountant.
Robbie: I worked with the accountants.
Howard: Accountants engineers dentists they're all the same mold they're scientists.
Robbie: but here's the thing so I work all the time with engineers in Silicon Valley and it's a very similar thing if you're in an enterprise software company they could be complaining because the software was coded wrong because it was implemented incorrectly because the sales guy promised something that actually the product can't do because the sales guy promised something that was supposed to be developed but it hasn't been developed yet it's not the sales guys fault. I mean there's any number of reasons why they can be frustrated but the thing you have to do is break down all the reasons people are complaining and and fix them one by one so what do you do when somebody says you know the sales guy promised me something and I didn't deliver it well you go back and you figure out why that's happening and you fix that if they say you know the same bug in the software is causing a lot of issues you fix that first. So you know I recognize that you know in a complex business like dentistry where you have people that you know did not go into as you said did not go into dentistry to glad-hand and be in sales they went into you know to do they're very you know sort of technical medical scientific work it's there's a lot of issues that that could get in the way of a patient's satisfaction but they want to help the patients get better and stay healthy and so it's just blocking and tackling solve one problem solve the next problem fix the next problem if you find that there's a certain group of people that complain the most figure out how to optimize your practice so that those people don't come anymore right that's most businesses do that you know you know that you know I worked for the company and they realized that they're you know so for example with the dental pain management company you know one of the things that they realized was some of their their dentist clients were not marketing themselves as pain management specialists, so for them this was just a very very expensive option and so what I told them is stop selling to those guys say if you don't care about how how much pain your patients feel don't buy our products because they're too expensive for you right and then if you're not dealing with those people you can really focus on solving the problems of the dentists who value what you're providing and I think it's the same thing with the dentist's themselves.
Howard: I think one of the other funniest things are the dentist is of all the dentists that I personally know and I know what they're most passionate about and what they're good at and what they look like let's say they just love their the best on implants.
Howard: and you go to their website you'd never even know it.
Robbie: See that's such a good point right if you're great at implants and you love doing it and it's lucrative and you're the best people should know that and you might be building your reputation both with your patients and with your peers and with the people who like where does I mean this is the stuff that I always think about like if I need dental implants where am I gonna go how am I gonna get smart like I Robbie like tomorrow I find out that I need dental implants where would I go to learn about that right and if that's your specialty you want to make sure that you're gonna somehow I'm gonna stumble across you either through other you know when I ask my friends they're gonna all point in the same direction or I ask my dentists in my dentist says that's not something that I really do but this guy you know down the hall is great at it but you really want to know what you're good at and they make sure people and certainly on your website you should have it be you know front center.
Howard: and the work the dentist who put an article in dentaltown and that's searchable on the web. I'll never forget this story I hope this is an appropriate example but it's just true story this this woman wanted to have a breast augmentation and she was very concerned about who it was and she asked me if I would go with her to the consultation and she sent up three appointments in one day and the first two were in Scottsdale and the dentist came out there and he showed her a brochure from the American Academy of plastic surgery and was just nice and everything's fine everything and you looked at the amenity and it was just it was just a simple deal and it was just so overwhelming she was just shattered by this you couldn't do it we went to the third one and he sit there and got out this is back of the day got to thirty five-millimeter carousels of slides and you know sat in a room hit the lights and just went through case after case after case of his own work and then I look at my dentist friends who live in a city like Phoenix Arizona which has 3,800 dentists the best dentists in the world and they flew to San Diego or Utah or whatever because they were going to a great dentist who's a friend of mine who does the best implants in the world but they would never know it but they were google searching and found this website that showed all these implant cases and dad was like oh my god and then we paid $25,000 an arch fifty thousand dollars for two all on fours and their own damn dentist right in their backyard a mile from their home what it would do it just as well or better.
Robbie: Right because people don't what you need to do is make it easy for people to make the best choices that's really what you're doing and if you're confident you know as a practitioner you can say I don't have this expertise or or I'm pretty good but this other guy is the best cuz it's all he does he does a hundred a day and I do you know one a year and you make those referrals and then you make sure that people also understand what you do and you make sure that you ask them the questions what do you need what are you thinking about because that's another another piece of this is letting people know kind of what their options are and how you'd think about it and being comfortable with them checking out other people but say look you can go to you can go to this dentist in San Diego with the cool website let me show you the work that I've done and here's some ways to evaluate here's the kinds of questions you should be asking.
Howard: I always tell dentist that the most number one return on investment high-tech piece of leather you get is just a camera dental photography, that's what mom wants to do mom is on you know when I get out of school she was on the yellow pages and asking all the ladies at church and bowling. Now she's on that iPhone and she's visual and she's looking at work and and I mean the websites I would I would say half there's two hundred eleven thousand Americans who are alive with an active license to practice sensory a hundred fifty thousand to be General Dentistry 32 hours a week or more thirty thousand we'd be specialist thirty two hours a week or more and I'd say fifty percent of all those websites are a solid F just an F and it's so funny when you're like in Kansas City and this lady has to get on an airplane in Wichita Kansas and fly to Kansas City after on Southwest Airlines because she thinks that's the only doctor who does implants or veneers or bleaching or bonding but she just absolutely couldn't find it in Wichita, Kansas when it has you know you know several hundred dentists. So how do you work how much does it cost do you do it over the phone do you fly down to the location what's your regular plan is it one day two day three day how do how do you operate?
Robbie: So with most people I work remotely you know especially for solo practitioners with smaller offices and it usually ranges from like between five and twenty thousand dollars for six months and and then there's somewhere if you have a bigger practice or you know you're you want greater involvement in hand-holding and you know I always think of it as that's more reactive you call me we walk through things I give you things to do you come back and tell me how they went the other side which gets more expensive as if you want me to come up with the plan for you and do the implementation.
Howard: and I do you like doing this I mean?
Robbie: I love it I love it because the results you see the results right away and so for me I feel like it's a wit like I'm always looking for the intersection of you know is your practice better and you're having more fun and are your patients grateful and feel like what you really want your patients to say is I don't even know what they charge me and I don't care because I'm so confident that he's always looking out for my best interests so back to your point about you know I didn't know that he did veneers or I didn't know that he does implants or I didn't know you know that he does whitening or whatever it is bleaching that I want, you know your obligation to your patient is to understand why they're coming to you and what things they might be thinking about and to give them ideas right. When I go to my my intern you know week we had this into your decorator come to to help my son still had the bunk beds that were in his sisters rooms 20 years ago and we thought we should give him a big-boy bed and everything so we asked this woman to come in and just help with his room and then she said do you mind if I give you a suggestion about your floor and then you know of course you know where this goes right now we redid the whole downstairs we painted the whole house we have all new lighting because she kept pointing out things that she'd say you know my other clients have found that this whatever it is lights or painting it a lighter color or you know putting new knobs on or redoing the floors makes such a huge difference for that let me show you some pictures back to your pictures thing. Why wouldn't my dentist say you know I could do veneers for you I could I complete you know a lot of a lot of people your age are doing veneers or you know it seems like blah blah blah can I help you with that you know I'm up for it.
Howard: Yeah and one of the guys who blew my mind the earliest was on the veneer king of the world in Manhattan his name's Larry Rosenthal and I went out there in the 80s and because when you're young you think well who buys all the cosmetic stuff it's all young hot women and his entire practice was like 80 year-old Manhattan Jewish women and his line was my god if you did veneers everyone would think you're 65 and they would just throw 50 thousand dollars at him and I'm sitting here at that young age thinking well I never would have suggested to a 85 year old woman that she said cosmic destiny but that 85 year old woman has more money than any eighteen year old or 28 year old she's not paying student loans her kids are gone if she's lucky her husband passed on just this crazy and he has money.
Robbie: and 25 year old girls look beautiful without any work and as you get older you have to work a little harder.
Howard: You know the funny thing I read some amazing research on that I mean real research that the deal it's 13 years when you I don't know if you're 93 and you see an 80 year old she's 13 years younger that's a perfect ten by the time she's thirteen years younger than you she's perfect and I still don't know what to do I mean I'm in Phoenix Arizona and got all these retirees and when an 85 year old guy pulls out a picture of this girl in his wallet he's showing you it's like he's bragging and you're like okay she has a liver spot and I have more hair than she does but you're supposed to I guess it's a guy thing she's a beauty but you know I'm sorry I'm sitting over the last 30 years like how do you how do you can you use can tell an 80-year I'm a like dude she's 80 you're making me sick quit doing that 55 it's like now any girl under 30 looks like a high school or something yeah it's all just relative when you're 85 years old and your husband died and you're going back to your 50 year class reunion.
Robbie: Well and then - I mean the thing that I'm noticing I mean you're talking about cosmetic dentistry I mean men are doing it to people I mean this is the thing I bet whoever's listening out here if you said to a 55 year old man forget the the 86 year old woman if you said to a 55 year old man you know what there's a couple of new techniques that I think would make you it would brighten up your face and lighten up you know it's natural that your teeth yellow with age and I can brighten up your smile I can fix some of those chips and you look like a million bucks are you interested in that. I bet you one in three people will say yes maybe more and nobody will be offended that you offered.
Howard: Yeah what I do is I just I just pick a table and I unscrew the light bulb by that table just make it real dark so they can't see me, then it's all good. I can't believe went over an hour but in the show every time I am is showing the same thing you know I love my homies I loved and I get it I mean I'd rather pull for wisdom teeth then play golf any day of the week I mean I love dentistry but the bottom line is here's what my homies do they won't blink at dropping a hundred and fifty thousand dollars next week at the Sirona meeting they won't blink and dropping a hundred and fifty thousand dollars on a 3d x-ray machine or a hundred thousand dollars on a lanap laser machine how that can all the way to 135 140 and then and then you sit there inside this little old measly five thousand twenty thousand bucks and it's the only thing that always has a return on investment. The only thing that you always get all your money back is the consultant everybody who's my age who's got two three four million dollar office anybody my age who's taking home 350 to 750 a year they had you wouldn't say well do you recommend this consultant they'd say dude I've used every consultant dentistry or last three years I've never given a consultant a dollar that by the end of the year I didn't get my dollar back but when I decided to get into implants about a hundred and fifty thousand our CBCT about fifty thousand dollars of equipment with all this training and three years later I'd only placed nine implants, I mean they dug themselves a third of a million dollars in debt and they've only gotten three grand backs and here's a guy across who says you don't want I'm in Phoenix what does have some periodontist from Tucson driving up once a month I'll load up all my implants I'll pay him 50 percent of whatever he does and I'm not gonna learn how to place implants and all that stuff like that. I'm gonna focus on my team my customers my business those are always the ones that make the most money.
Howard: If you're sitting there thinking I don't know up five twenty thousand dollars on a consult no easy drop five to twenty thousand dollars on a consultant and then next year get a different one all right bring him back or whatever I mean but son you're my age by the time you're a grandpa my four boys turned into five my four problems have now turned into five great grand problems and but the bottom line if by the time you have five grandchildren if you haven't used five consultants then you're not even going to be above average. I mean put your money and I get it imagine a restaurant it's going bankrupt in Silicon Valley and the guy says you well you know the problem is weren't Italian restaurant we sell lasagna but we need to add we need to add what's in another we need alfredo right we need we need now alfredo recipe yeah yeah I just went to this $5,000 weekend course and came back and had a fettuccine alfredo to my menu my failing restaurant would go under it's like now dude I'm pretty sure I mean I mean it's crazy stuff your restaurants going under for all the business the experience how people felt right wouldn't come back.
Robbie: Right the restaurants dirty the waiters not nice, it's in the middle of nowhere.
Howard: I've been in this itty bitty neck of the woods it's Phoenix Arizona it's everybody here calls it Ahwatukee there's only 3 restaurants that have survived here 30 years that have my dental office and one is Ck's one is Vabene's and then the other one across through my office and all through him same owner same waiter I mean my waiter when I do sit down at Vabene I know my waiter was born in Utah he was in the Marine Corps for 12 years I mean I've known this guy for 15-20 years I mean it's just so easy to it's so easy to be successful but my homies they'll say that's the soft fluffy stuff I need to learn how to do bone grafting and pull impacted wisdom teeth it's like dude.
Robbie: Its because that's what they like to do.
Howard: Yeah and I get it I said I could pay a monkey to come in and do that I mean I could find oral surgeons in the next county over to do I can find someone to do all of it. Hell there's a guy out in California named Steven Thorn he's not even a dentist and he owns 500 dental offices what do you think he was concentrating on and then and then one of my mentors Herb Kelleher he never became a pilot he said why would I spend my time being a pilot I can hire ten thousand pilots I spent all my time on making sure that when you ride Southwest Airlines she's gonna crack yeah she's gonna laugh blah blah blah you know his whole career but if he would have been a dentist he would have spent his whole career chasing flight certifications. Well I want a certain five out of seven twenty seven and a seven thirty seven and 747s 757 and Airbus an l-1011 and I want to go I want to go visit, I mean he would have put his whole life mastering every weird air pilot thing and you would never heard of Southwest Airlines. So who built the biggest in my lifetime a guy who never even went to pilot school and then here Steve Thorne in California with 500 dental office, his dad's a dentist and they said well are you gonna go to the dental school and be like your dad and he goes why would I spend eight years of my life being a dentist I could hire a dentist in eight minutes on Craigslist. Thank you for all you do thank you for coming on my show thank you for being a townie I'm your biggest fan and my entire management team is in love with your book and the recurring revenue model is the way to go and you're leading that parade thank you so much for coming on the show today.
Robbie: Oh thanks for having me it was a lot of fun, great to spend time with you.
Howard: All right see you on the boards.