About Dr. Dustin Coles
Dr. Dustin Coles is the founder of Premier Orthodontics, the largest and fastest growing private-practice orthodontic specialty office in Arizona. He is passionate about excellent orthodontic treatment and was voted as the Top Invisalign Orthodontist in North America at the Invisalign Case Shootout.
Since founding Premier Orthodontics in 2006 his practices have transformed over 15,000 patients in Arizona. He has over 14 years of practice management and ownership experience, managing six doctors and over 50 staff members in seven locations.
Dr. Coles also teaches at the Arizona School of Dentistry & Oral Health Graduate Orthodontic Program. In 2016 Dr. Dustin and Tyler Coles were honored to receive the Gini Award from the Smiles Change Lives Foundation for their commitment to donate over $600,000 worth of orthodontic treatment to underprivileged children living in Arizona each year.
About Dr. Tyler Coles
Dr. Tyler Coles is a speaker, teacher, marketer, and orthodontic specialist. Since joining his brother's practice in 2012 he has helped grow their practice from 2 to 7 locations in just under six years. In 2016 Dr. Coles co-founded Ortho Marketing DFY, a marketing agency that provides done-for-you marketing services for orthodontists.
Ortho Marketing DFY now implements the same marketing strategies that Dr. Coles uses in his own practice into the practices of over 100 orthodontic clients throughout the US and Canada. These marketing strategies have helped generate over $150 million dollars in revenue for his orthodontic clients and in his own private practices.
Dr. Tyler Coles is the only orthodontist in the world that is also an Infusionsoft Certified Provider. Dr. Tyler Coles has been invited to speak throughout the country and has shared the stage with experts in the orthodontic industry as well as world-renown marketers.
Dr. Tyler Coles continues to practice orthodontics in his own private practice where he and his brother donate over $600,000 of free orthodontic care each year to children in the Phoenix, Arizona area through the Smile Change Lives Foundation.
VIDEO - DUwHF #1119 - Drs. Dustin and Tyles Coles
AUDIO - DUwHF #1119 - Drs. Dustin and Tyler Coles
Howard: It is just a huge honor for me today to be podcast interviewing Dustin Coles and his little brother Tyler Coles who are just completely tearing it up in Phoenix Arizona. You guys have been here about what 15 years
Dustin: Yeah, about that
Howard: and you're already at seven locations and I wanted to get the two premiere Arizona orthodontist on here because hell that's even their name Premiere Orthodontics because I'm you know the big controversies in dentistry when I got out of school was HMOs it was capitation now it's DSOs and in your space it's Invisalign and Smiles Direct Club and but you guys haven't really been entrepreneurs. So tell us about your journey you guys both grew up in Utah and then you went to dental school at Creighton both of you and I went to Creighton undergrad and then I went to Missouri Dental School and then you guys became orthodontist at Indiana
Howard: and how about you?
Tyler: The same
Howard: both Indiana. So you're both Hoosiers and they just figured out what hoosiers ment, did you hear that on MPR?
Dustin: No what is it
Howard: It's a true story when they use to lay railroads they would lay like five miles a day so when you're laying over to a town it wouldn't make sense to everybody introduce first name deal, so they always say who they work for and sure enough the lady doing a railroad history book, a man named Hoosier Laid railroad clear across Indiana. So it would have been the norm and so let's said hey who are you I'm one of Hoosiers boys and so that is what that's not all the historian said yeah that's evidence that's definitive that's no more joke but so then what maybe gosh Utah, Creighton, in Nebraska, Indiana. What made you come here and tell us about your journey.
Dustin: Yeah for me I was the first one they come, I my wife is from Hawaii and so we've been Utah, Nebraska, went to Indiana and she said I'm done with winter. So yeah she gave me a few few places to go and Arizona was one of them so...
Howard: Was Hawaii one of them? Did she want to go there?
Dustin: It was but I didn't really want to go to Hawaii
Howard: and why was that was it island fever
Dustin: Island fever, competition it's a tough go over there's it's expensive to live and to practice.
Howard: Yeah people don't realize I mean just a box of Ritz crackers has to get on a boat from LA and fly (inaudible 2:34) I mean it's incredibly high overhead infrastructure and so what year did you open up at Arizona?
Dustin: So I started in 2006
Howard: I should have be professional reader intros so Dustin goals there is the founder of premier orthodontics the largest and fastest-growing private-practice orthodontic specially office in Arizona. He is passionate about excellent orthodontic treatment and was voted as the Top Invisalign Orthodontist in North America at the Invisalign Case Shootout. Since founding Premier Orthodontics in 2006 his practices have transformed over 15,000 patients in Arizona. He has over 14 years of practice management and ownership experience, managing six doctors and over 50 staff members in seven locations. Dr. Coles also teaches at the Arizona School of Dentistry & Oral Health Graduate Orthodontic Program. In 2016 Dr. Dustin and Tyler Coles were honored to receive the Gini Award from the Smiles Change Lives Foundation for their commitment to donate over $600,000 worth of orthodontic treatment to underprivileged children living in Arizona each year. Dr. Dustin Coles completed his undergraduate studies at Brigham Young University went on receive his DDS with distinction from Creighton University School of Dentistry graduating with the highest academic standing in his class. Dr. Coles completed a certificate of advanced graduate study in orthodontics and dental facial worth of Peaks at the Indiana University School of Dentistry in 2006. Now you're 41 and this year 35 year old brother so Mike that's the same difference between my oldest Eric to my end so you'd be my Zach. So Dr. Tyler Coles s a speaker, teacher, marketer, and orthodontic specialist. Since joining his brother's practice in 2012 he has helped grow their practice from 2 to 7 locations in just under six years. That is so amazing. In 2016 Dr. Coles co-founded Ortho Marketing DFY, and DFY is Done for you?
Tyler: Done for you, yeah
Howard: A marketing agency that provides done-for-you marketing services for orthodontists. Ortho Marketing DFY now implements the same marketing strategies that Dr. Coles uses in his own practice into the practices of over 100 orthodontic clients throughout the US and Canada. These marketing strategies have helped generate over $150 million dollars in revenue for his orthodontic clients and in his own private practices. Dr. Tyler Coles is the only orthodontist in the world that is also an Infusionsoft Certified Provider. Dr. Tyler Coles has been invited to speak throughout the country and has shared the stage with experts in the orthodontic industry as well as world-renown marketers. Dr. Tyler Coles continues to practice orthodontics in his own private practice where he and his brother donate over $600,000 of free orthodontic care each year to children in the Phoenix. Six hundred thousand each year...
Tyler: Yeah so about 100 kids each year
Howard: A hundred kids and how do you pick those 100 kids?
Tyler: So they're identified by Smiles Change Lives, they have a system where they you know base it on income and household size and things like that.
Tyler: Change Lives
Howard: Is that out of Kansas is that part of Dustin's?
Tyler: He's a part of it but it's
Dustin: It's their own foundation
Tyler: It's their own foundation so
Howard: Where are they at?
Tyler: Their in Kansas City
Howard: Where did where does that come from where word is committing to a hundred children
Tyler: So when we first signed up with them we found out there's 20 kids on the waitlist and most of them bit on there almost like five years because there just weren't enough providers so first year we signed up we just said let's take them all in and clear off the list and we've got a lot of practices a lot of you know opening so we decided we wanted to go bigger and make it a big deal so we actually decided to do a hundred kids and there weren't enough kids in Phoenix to fill that list so we partnered with news organizations to try to get the word out. So we just decide if we're gonna do it might as well go big and you know help as many kids as we can.
Howard: and where does that come from?
Tyler: So I mean a lot of it is our father he was always very generous with dentistry he was always bartering either you know horse riding lessons for dentistry or house painting for dentistry. So we always thought growing up where he was able to help people who couldn't otherwise afford it by being creative so we really wanted to do the same thing in our practice and you know this is also it was given us a lot of opportunities to be on the media to be on the news and we don't feel like giving away treatment like hurts your practice you feel it actually grows your practice. So the more you give the more you are charitable the more you get in return, these kids usually turn in your best referral sources the parents are your biggest fans and so rather than doing it once and having nobody know about it might as well do the hundred times and let everybody know about it that's kind of been our philosophy in our strategy
Dustion: Yeah most most guys because there's there's probably 10 or 12 guys that that offer the service here in Phoenix most of Moultrie playing one or two cases a year for free and for us we're like you're gonna do one or two why do it at all and so we just thought you know as crazy as it sounds it actually helps grow our practice by giving something away you know. It grows your practice the media and you know like he said was saying people that talked about it and it it helps and not only that but when we deep in our hearts we like doing it but it's also as a side effect its helped us to grow our business.
Howard: Well you know most orthodontic you know Americans you know they always they always say one thing and they do another and you know what made America great is intense competition but when DSOs came out all these American dentists didn't like the DSOs and it's like well that's increased competition. I mean the consumer when I got here in 87 I mean I got if you broke did you on a Saturday or Sunday you might as well go to a hospital. I mean you couldn't but with the DSOs came out early morning evening more weekend. The orthodontist have never seen competition the first 10 20 years I practice but now with Invisalign and general dentist doing Invisalign and now we're out here in Arizona and Invisalign actually opened up their own store and Camelback mall or...
Dustin: Scottsdale Fashion Center
Howard: Scottsdale Fashion Center, I tried to shop there but they stopped me in the parking lot and said you're so unfashionable back here currently and they say go back to Kansas and now Smiles Direct Club has got what three locations no four locations?
Dustin: Four locations around Phoenix
Howard: So I want to talk about that because that's the controversy you know if you have media for bleeds it leads. So do you see this as a threat to orthodontics you see this a plus, I mean how do you or is it just a that's what it is?
Dustin: I mean it's funny cuz you know a lots of different Facebook groups and these Orthodontists in these groups to talk about how basically the sky is falling and smile direct club is the worst thing that could have ever happened and how all these patients you know being treated unfairly or poorly and I have the exact opposite view of it and not do I agree with it a hundred percent but I feel like the a rising tide raises all boats and whether or not you know were. So orthodontic I guess people looking to fix their teeth the fact that there's other companies that are talking about that are talking about straightening teeth with clear aligners that they have commercials all over the place, I mean I think that the consumer awarenesses is how significantly because of it and I think it actually helps if you could tap into that same kind of market that they're driving. I mean really I think it's a it's almost some people talking about this link you know just this is when orthodontics goes off cliff and I think it's almost like the Golden Age of orthodontics people can be talking about it they're aware of it and it's an opportunity.
Howard: Well you know I noticed that when Clear Choice came to Arizona. I mean Clear Choice and we had the founding oral surgeon on the show from Denver and my gosh when they came to Arizona all the oral surgeons of periodontists were like oh my god you know evil force and they just started running all these infomercials on TV and every other day some lady would be in my office saying guys watching that commercials you know talking about and and it's like well the dentists were not advertising their they're nonprofit associations aren't advertising and I think Clear Choice inform in Arizona's it was seven million people and what four million in the valley and I think they totally raised the dental implant IQ of Arizona single-handedly. I think every periodontist and oral surgeon is doing more implants a day. Yeah and if you look at the implants pay place per million Americans on you know I love when these dental companies are publicly traded like the the largest dental implant company in the world is oh it's straumann because they've been acquired the biggest one out of Brazil, they acquired in Israel what is a MIS make it simple and plan the other done all these acquisitions are publicly traded and in their 10k annual report they show how many implants are placed per million people for all the countries, America is like number 30 on the list. I mean so the room I mean that's one of the reasons a stock does so well because Wall Street likes that say got it Americans got implants at the rate of Koreans the stock should double or triple or it's got so much upper room. In Ortho when I was little Catholic family five sisters a brother back then all everybody had a big family only the most crowded kid who had no chance of getting married got braces and headgear and all that stuff and now with smaller families it's like orthodontics I mean I see the kids all getting them in high school and then I see them get them again at like 30 and sometimes you're getting them again at 50 I mean it's just I see the upward trend of ortho, I mean it's just like and just like people are gonna have white straight teeth.
Tyler: There's even more people like if you look at the percentage of people that actually get orthodontic treatment I mean it's maybe five percent of the US population there's this huge percentage.
Howard: Only 5% of Americans get ortho?
Tyler: Yes it's very small so
Howard: Are you kidding
Tyler: you look at the number of people where there's potentially could get orthodontic treatment or before they didn't get it because it was five or six thousand dollars there's this huge market that might pay two or three thousand that's really what Smile Direct Club is doing is they're tapping into that huge market that no one else is. So again you can complain about it they're going after those people that probably wouldn't be your patients anyway or you can strategically position yourself where you can provide a similar service maybe at a higher cost but you know lower the new normal service our normal fee and capture percentage that market because that ninety-five percent that wasn't going to buy braces from you anyway now is looking and is interested because Smile Direct Club raised the awareness. So again it it will require us changing our position changing our strategy and our price points but I think there's even more opportunity to do but it will just require change which most orthodontists and dentists don't like to change but that's the bottom line is the way it was 10 years ago it will never be that way again so that's why you know we got to figure out the new way to do it and how that's going to look for a private practice orthodontist.
Howard: So America has 326 million people and only 5% of them got ortho?
Tyler: that's why...
Howard: I mean you should just buying Invisalign, now the Smiles Direct are they doing an IPO?
Tyler: They will eventually they haven't yet
Howard: Are they going to
Tyler: I'm sure they will
Howard: Does Invisalign or Align technology which owns Invisalign and iTero do they still own like 17%?
Dustin: 17%, Their in a lawsuit with them.
Tyler: Yeah they're not friends anymore so they will part ways.
Howard: So why are they not friends what's the
Tyler: Their suing each other over
Dustin: So when Invisalign opened their stores they said that that was a breach of the non-compete contract as Smile Direct Club has their scanning centers and so if Invisalign trying to do something to compete with it and Smile Direct didnt like that.
Howard: So Invisalign, let's first address the earlier lawsuit. Are they having issues with 3Shape out of Copenhagen Denmark the scanner.
Dustin: I know they've stopped accepting scans from the 3Shape scanner. So I'm assuming I don't know the details but
Howard: Well Invisalign owns iTero?
Howard: So they're probably you think it's just they're just trying to
Dustin: I think they're doing it to force people to iTero.
Howard: Yeah and have you scanned with iTero and 3Shape?
Dustin: I've only used iTero but first from the looks of it I think 3Shape is like very intuitive and it looks like it's almost better.
Dustin: I've never used it though
Howard: I got a theory on why 3Shape which is in Copenhagen, Denmark and what's the other one in Helsinki, Finland what's the other one...
Howard: Yeah Planmeca because I've lecture in those cities and went to the headquarters and the the country is frozen like eight months of the year and this is what dentists tell me, you can't make this stuff up. They say in the winter when it's like dark and frozen you're either gonna work like ten hours a day six days a week are you just gonna like sit your basement drink and I think they're the hardest-working people in the world Scandinavia because I mean I'm you know the winters are so brutal I mean it's not like you're tempted. Like I remember when I got my ASU at MBA at Arizona State University , when I was at creighton so many times I had the worst motives in my mind you know of not wanting to study in fact me and Gary Asaldy and Randy Kern we'd look out the window and it's frozen it's sleet or snow and you're like well we might as well just stay in and study and then I go to ASU and it's like perfect weather and there's all these people skateboarding I thought man if I went to ASU I would have flunked out and I think every college university should be an Antarctica just send the kids there they're completely frozen they have no options. So the Invisalign is probably Align Technology is probably doesn't want embraced 3Shape to protect their iTero. So in Smiles Direct Club well let's talk about on Smiles Direct Club because if you go in if I go to Arizona Smiles Direct Club near me my gosh they have several locations just in Phoenix Arizona. So what are they doing in a Smile Direct Club are they just scanning do they have an orthodontist there, or doctor oversights?
Tyler: So we actually secret stopped it we sent our manager in to get treatment so they went to the one in Mesa but you know they schedule the online on the website they were able to schedule their appointment online he showed up there was just two dental assistants sitting there there's no doctor on the site.
Dustin: Just one scanner
Tyler: and all I did was like they did a scan of his teeth
Howard: With what scanner?
Tyler: Then they show them the the scan that I got right here's your two treatment options which one do you want, painful or financing.
Howard: So as one clinical treatment plan but two financial arrangements
Howard: and what was price?
Tyler: It was twenty four ninety seven for pay in full or no I think it's 2297 if you pay in full 2497 if you financed
Dustin: Make payments
Howard: and what were the, so $2299 pay in full yeah and $2499 if it was financed.
Tyler: It's $200 down and $80 a month
Howard: $200 down $80 a month, now I wouldn't I don't think you guys are old enough to remember Orthodontic Centers of America.
Dustin: I was right at the tail end of it when it kind of collapsed.
Howard: and what year was that
Howard: cuz the one the lesson takeaway that that's what's so great about being 56 and having grandchildren besides just the diabetes and all the other things is the the fact that you keep seeing these rodeos over you know you recognize pattern. Like I graduated in 80 and the praying rate from the Federal Reserve is twenty point five double-digit unemployment. So when people talk about a bad economy, they don't know what a bad economy is. The interest rate of my first home mortgage was fourteen percent and now the interest rates are going from two to three everybody's freaking out like and then I graduated the school May of 87 in October was Black Monday where the market fell 25% a day and then there was the y2k level apart March 2000 then there was Lehman Brothers and August 15 2008. So I've seen all these rodeos and where it smells just like that again I mean where it's been ten years since last correction we're totally a you know the whole the whole thing and it's no big deal because you survived I survived the last for after a year and you also write this one and the reason there's a business cycles because the people making all the decisions are humans and it makes a lot of bad decisions. So about every eight ten twelve years the market has to correct for all this mal fees and investment all these bad irrational decisions, but what I liked about a Orthodontic Centers of America I lived it at the beginning in the end and it was what was his name
Dustin: Gasper Lazzara
Howard: Gasper Lazzara good old boy and the genius part of the lesson was lost he didn't understand why people financed ortho, because if I'm GM and I make you a car I have to buy thirty thousand parts, I have to buy them they assemble cars they don't make cars they assemble them. So when I sell you this car I need my money to pay my suppliers but he looked at ortho like getting a mani-pedi. Imagine going to get a mani-pedi I'm sure you guys get your nails done every week. What would you do if the lady said okay then get your nails done you're gonna get them done once a month for two years and the cost of once it's a it's a hundred dollars for twenty four months it's $2,400 I need a thousand dollars down and I'll finance the other fourteen hundred at 10 percent. Well you're selling a service you know your main cost why are you financing a cost you don't even have. Lazzara's said $0 down 0% interest nobody will be denied and you give us I it's a hundred rooms I think was that what was it two hundred for $199 a month for 24 months and he only and once you bracket adapt all these people he only had one percent leave and never come back and so that $0 down 0% interest nobody's credit denied made braces affordable and he was the only DSO who made it to the New York Stock Exchange publicly traded on the NY no one else no DSOs ever done it again and it was just amazing. Now it fell apart because he couldn't get all the orthodontists to be his employees, they're too highly educated standing linemen. A DSO is like herding cats if you want to have a million employees you should go into the military or Walmart but not yeah I mean to have a 10,000 orthodontist taking your orders that's never gonna happen there they're too educated to take orders but it was all the financing package. So in this $2499 not only is he making it affordable but I mean you know there's just it's all of the financing. So this Smiles Direct Club they scan it with iTero then where do they send it they send it to Invisalign?
Dustin: I think they do most of their liners on their own now they have...
Tyler: So previously Invisalign made the liners for him but I believe they're trying to distance themselves from Invisalign and they're doing their own manufacturing I believe.
Howard: Manufacturing of clear aligners.
Howard: Now some orthodontists, I'm on, I'm not allowed to go on Orthotown because you have to be an orthodontist to go on even though I own Orthotown. Every time I've ever posted in like the last 10 years someone said excuse me but you're not an orthodontist. They will even let their suppliers which I think is really sad on Orthotown because you know the dental orthodontic manufacturers they always come to me and ask me well what do the orthodontists...what do they think about this or that, is like all those threads but the orthodontist won't let them come on Orthotown and I processor I thought this was Dentaltown the beginning and all these dentists were emailing me back in 98 saying you know this guy is on Dentaltown and he works for shine and I'm like and your question is. Well he's just ready to sell something, I'm like oh so you're a volunteer what are you working in public health. So you don't sell thousand-dollar not why how come when you sell something you're the Virgin Mary and then when someone else sells something your satan. I mean how where does that come from but I on Dentaltown I made it so if all the dentists were saying this composite was too thick well it's not going to get fixed unless all the people that make composites are nice and all you dental manufacturer looking that's a lot of dentists well a lot of manufacturers say well what are the dentist think about this or that. Dude I'll do a search on Dentaltown there's five and a half million posts and I'll search your company's product and you could read for two hours of what all the dentists are saying about it. So it's crazy but you gosh Im on so many tangents okay but a lot of the orthodontists they don't like Invisalign because it's competition and they don't like competition which I don't know why they don't leave America, America was just based on capitalism and competition but I say well if you don't like them why are you still doing it they say well the clear tray aligner really is a different beast that Invisalign has so much technology in there plastics and they're acricls making their liners that are really that you can't really say all clear aligner trades were saying you believe that or not believe that?
Dustin: Yeah I think that Invisalign is I mean I've never I've used a couple that the companies but the technology the process is so refinement Invisalign I think it makes it really hard to use something different nothing really compares with it as far as in my opinion.
Howard: Now what about the brand when I got out of school at 87 all the national brands were already made you nobody knew what Colgate was and Listerine and all that stuff but Invisalign is the only hot new brand. When people come to you and they say they want Invisalign is it easy switch them to a clear aligner do they really want brand specific like I want the Gucci Invisalign I don't want this knock off Michael Kors is it like that or not really.
Dustin: I think that Invisalign has almost become like chapstick it's you know like lip balm we call it all chapstick or like tissues is called a Kleenex I think in this line it's just kind of it's it's so well known now that even patients will come in and ask for a Invisalign retainer. We make clear retainers for patients with their done with braces and so Invisalign has become that if you give them something clear that's plastic it's Invisalign oh yeah I don't think there's anything I think they've lost some of their proprietary effectiveness because of how much
Howard: Well they'll have to defend that because when people start saying go make a Xerox copy this it was a canon printer Xerox loses they're right because it becomes a verb yeah and a Kleenex lost their deal because people would say hand me a Kleenex in fact when you travel around the world there's like 238 countries and in the majority of countries there's no word for tooth paste just Colgate. So mama stay put Colgate on that and you might be using one of the thousand different types of toothpaste made which it'll blow your mind. I was in Philadelphia one time election this dentist said you got to see this and it was a generic toothpaste manufacturers had tubes and they were making I mean just this machine is making Tuesday toothpaste so fast you can barely even see them with all these different labels he was private original manufacturer for like a thousand brands from Brazil to Gorden. I mean it was just amazing but the word is toothpaste for most countries I mean the word for toothpaste is Colgate, but you think it's headed that way for Invisalign where people just associate clear aligners?
Dustin: I think so, yeah
Howard: and what percent, what year did you get out of ortho school?
Howard: 06, so in 2006 when did Invisalign start
Dustin: Probably 10 years prior to me I can't remember, I think it's 99 or 98 years
Howard: and in in 2006 versus today 2000 hell 2019 I mean it was two weeks from 2019 in from 2006 what percent of the ortho market was clear liners and what has it grown to now in 2019?
Dustin:Do you know the number?
Tyler: I can't remember the exact numbers but it's still pretty small but
Dustin: I think they're less than 10% of orthodontics maybe it's even less than that it might be like 5% and I think they had less than 0.05%.
Howard: In 2006
Howard: So only 5% of the 326 million Americans are getting ortho and of those only 5% are getting Invisalign.
Dustin: It's small
Howard: So is that a stock you feel like you could just buy it at 20 years okay I mean it's gotta have Warren Buffett buying a whole deal I mean
Dustin: Especially now it started out stocks plummeting
Tyler: If your going to buy it buy it now
Howard: Well all there all the stocks
Dustin: All the tech stocks are down
Howard: Facebook is down
Dustin: It's down 25% over the last two months and having its worst market directed thing rather than this one directed thing but.
Dustin: I think it 290 was it that peak and now its at 220 or something
Howard: So we'll go on will go max Wow yeah
Tyler: It's spiked there and I got some so I've been watching it closely
Howard: So basically
Dustin: I still think the market is
Tyler: Yeah there's barely penetrating Asia and South America thing yeah they're just starting in these huge markets.
Howard: So I lecture, whenever I lecture you know my boys won't go to me go with me to lecture you know Cincinnati, Ohio or Tulsa Oklahoma but whenever I leave the country usually three out of four will go with me. Last time we were lecturing in Cambodia, Malaysia everybody wanted. Anytime your at a restaurant someone found out you're a dentist they just went right to Invisalign and it was just amazing even South Africa we were in Tanzania, South Africa and Namibia and every single girl that found out we were in dentistry went straight to Invisalign but the weirdest thing that was just some amazing was I'll never forget Malaysia this beautiful waitress just completely gorgeous had Invisalign and in there it was twelve hundred US dollars in her annual her income for the year would be four thousand US and she spent a quarter of her yearly income on Invisalign and I'm positive that a hundred percent of all the boys nation would have said she was a you know she was perfectly fine beautiful gorgeous and I asked her why would she spend that quarter every year's income and she was telling me every little thing wrong with it now I saw wow what a damn market because it's completely insanity. I mean you know that people would just pay a quarter of their year's income because their lateral incisor was crooked and this and that. So another big controversy on Invisalign, some Invisalign providers say and I can do any case and some orthodontist say now it's not for for by extraction or it's not for some of these other cases what percent of cases do you think they can do.
Dustin: So in our practice we have a tag line as you can have Invisalign guaranteed. So basically a hundred percent of well I'd say there's bread 95% that we will recommend it on not recommend it but we'll just we'll ask the patient what do you want and as long as they don't have an impact of canine that's kind of like my limit my limitation, impacted canine like a super deep bite other than that will treat almost anybody with Invisalign.
Howard: So what percent of your practice, you have seven practices what percent of your cases this year will be Invisalign versus fixed wire?
Dustin: It's about 30%
Howard: 30% and what we say the average is for the worth of the average orthodontist in the United States?
Dustin: Probably less than 5%
Howard: Less than 5% and what percent of the ortho market in the United States is done by general dentists versus orthodontist?
Dustin: I don't know
Tyler: I know majority of Invisalign is done by orthodontist still by far were still providing most of the Invisalign treatment even though every general dentist is an orthodontic curtain is like provider by far like the majority of Invisalign treatment is done by orthodontist.
Howard: and then why do you think that is I've been preaching on my show for a thousand episodes that I'm convinced that if you don't do the procedure at least once a week you never get fast enough and you efficient enough to be profitable. So like these dentists will have and all this time and money on the implants and they'll go buy a CBCT and I mean they'll go get a quarter million into the hole and then they place an implant every three months and then you go next door to the periodontist that's in the same building and he's placing two a day and same thing so I always tell dentists if you can't get to one a week you're not gonna make a return on investment your money and so when you know it's a procedure where the dentist's drive to work and think oh my god I got an Invisalign case I need to go in orally do you ever have to go in early if you have an Invisalign case it's a cram for your appointment ones that think you had that where you had a knot in your stomach where you wanted to get to work early to cram for a procedure the patient.
Dustin: It's been 12 years
Howard: Yeah so when you have that knot in your stomach really oh my god I have a sleep apnea case I got Invisalign case I'm going to place an implant I'm a good sign and then furthermore you know my two older sisters are nuns and my oldest sister's probably smartest person I know she's right every major religion she said the only thing that's in every major religion is the Golden Rule there's not a name of a person place thing city that shows up in Hinduism the Quran the bible all these different things. It's true than people like you want to be treated I mean I really had one surgery a vasectomy, I wouldn't want to go to some guy who does a vasectomy every three months you know. I wouldn't want to go to a guy that can do it them Stevie Wonder style you know blindfolded. So you know if you needed an implant when you really want you to do and then as far as making money on it you know much more profitable isn't Phoenix if you're gonna place five implants a month to have some Perignon us from Tucson or from Flagstaff drive into your office one Friday half-day a month and place your five implants and split the fee with them fifty-fifty now you don't have to have all the infrastructure overhead. I mean if you're just making money on the deal you know if you're not doing one a week. So these general dentists, do you think the general what percent of the general dentists doing ortho do you think don't even make money on it?
Tyler: Unless they're using as a loss leader like most of them don't make very little so I mean some guys will do Invisalign for the purpose of acquiring a patient they just break even on the Invisalign.
Dustin: Bate and switch more than money maker. I would say it's less than ten percent that actually make money because of orthodontic treatments.
Tyler: Big part is just the lab fees, Invisalign gets quantity discounts if you're doing one case a month there's a $1,800 for our lab fees closer to $1,000 so...
Howard: because of the volume discounts?
Tyler: Yes so just the profit margin is not there if you're not doing enough of it because you're upfront lab fees eighteen hundred how much can you charge and still turn a profit if you're taking time away from doing your cleanings exams crowns and everything else that actually makes you money.
Tyler: Again if it's a bait-and-switch I think they might turn profit but otherwise I don't know it unless you're doing it like an orthodontist we have entire day with just ortho adjustments if you're trying to fit it in between a crown and a filling and it you know cleaning then I don't know that it's efficient or profitable.
Howard: Now if you guys went from one location in 2006 right just seven locations now and we're worth at Gilbert Mesa Chandler?
Dustin: Maricopa Casa Grande Chandler
Howard: Maricopa, Casa Grande
Dustin: Chandler and central Phenix there's four for Phoenix
Howard: So the largest city Arizona's Phoenix number two is Tucson three is Mesa four is Chandler five is Gilbert and I kid you not six is Dentaltown. Dentaltown that's true we have 250,000 members that actually the six largest city in Arizona. So you have four in Phoenix you haven't gone down to Tucson yet
Howard: and you have how many in Maricopa
Howard: and in Casa Grande?
Howard: in Chandler
Howard: one and what were your next one be
Dustin: Probably Tempe
Dustin: Tempe Mesa
Howard: Yeah Tempe so on but you couldn't you this I mean if someone said what is the core compensation growth from one to seven locations, it isn't gonna be that understanding of secretary Invisalign, attracting the finding office man it can only be marketing it can only be how do you feed this growth and you started you know we started beginning showed you started ortho marketing DFY Done-for-you it work the marketing DFY, tell us about your journey of ortho marketing DFY, you said that you do this for 100 orthodontist United States in Canada?
Tyler: Yeah so
Howard: for general dentist
Tyler: We have a handful, like our assistants already so now that first one my brother's practice in 2006 or sorry 2012 there wasn't really enough work for the two of us so I was working like one day a week for him and then four days and corporate dental offices and so I didn't love working for them so I was really motivated to try to figure out how to grow or practice so I could quit the corporate jobs and just work with my brother full-time and so we started attending a lot of marketing seminars I started researching on how to do all this stuff and then over the course of figuring it out implementing it we started growing our practice I was able to quit my corporate jobs and we were going to a lot of coaching consulting meetings another orthodontist saw that we were growing asked who was doing our marketing I was told I was doing it. So on the flight home from one of these meetings Dustin said you know you've already figured out how to do this for us maybe was just doing for other people as well. So we started to kind of just like a side project where we were just taking the handful of clients and helping them but I quickly found out there was a huge need for it and so over the last two years we went from 1 to 25 full time employees doing marketing.
Howard: Holy moly in how long of a time?
Tyler: A little over two years
Howard: In two years you went from 1 to 25 people
Howard: Holy moly
Tyler: So it's very evident that you know orthodontics is changing that in order to grow your practice and compete with the Smile Direct Clubs, Invisaligns and the DSOs i mean you have to market you can't just sit back and hope that things are gonna change and so that's really been our thing is being proactive going to get your own patients going direct to consumer and then you're able to acquire patients. So most orthodontists aren't you know expert marketers they don't learn how to do it in school.
Howard: It's worse than that not only are there not marketers there and every doctor.
Tyler: They think it's beneath them.
Howard: They think they know everything
Howard: I mean once you tell someone they're a doctor law doc I mean we look at Congress it's all lawyers and they just sit up there so pugnacious they you know I'm a lawyer, I'm a congressman, I'm the smartest an earth knows you're actually dumber than a rock. So middle-class people then the first people say I'm gonna call a plumber because I don't know how to fix the toilet I'm gonna call I'm gonna take my car into the mechanic because my engine light came on I'm not a mechanic. A dentist says I'm a plumber, Im a mechanic, marketer, I'm a doctor dammit. So that so direct to consumer, I want to talk there so when I get out of school all your specialist got all their patients from dentist and then the first ones that jump are the pediatric dentists they realize well if I wait for the general dentist they're just going to wait until this kids five or six and then already had a bad experience now he's afraid to the dentist so these they bypass it down then it's gone right to the pediatricians and focused all of the pediatricians sort of get these kids in at two or three and they just don't even really want referrals from general dentists. So when I got a school the orthodontist got all their cases from general dentists but what percent of you seen that switch from 2006 we started the 2019 at what percent were from General Dentistry referrals to now getting them from direct consumer?
Dustin: So yeah back in the day we were like eighty ninety percent from dentists that's all the marketing I did. I had kind of a mentor when I first came out and that's what that's all he knew how to do was to go to the dentist's and you know mafia runs and lunches and all that kind of stuff I mean that's you know just just go and kiss butt to the dentist and as things have kind of changed over the years were probably like twenty percent for referrals now and eighty percent all other sources via you know external marketing, Google, Facebook and we have a ton of patient referrals and so that's kind of we flipped that.
Tyler: We almost refer more patients to dentists now then we receive or more patients
Dustin: because we know the dentist when they come to us because of how are you tracked us.
Howard: So we're they are they running muffins do you know
Dustin: They should, I actually got a Christmas gift from a dentist that's like the first time ever this year.
Howard: This year what was the gift?
Dustin: I don't know it's a pancake mix or something but wasn't super exciting but I've sent him twenty patients the last two months.
Howard: Holy moly you should have got his firstborn child and my god that is amazing. So is all of your marketing digital virtual or you doing any prints no more radio TV?
Tyler: We do a lot of direct mail so
Tyler: So we do postcards things like that through the mail we also run the radio so we have a big footprint in Phoenix so we can advertise and hit all the radio stations and we just started dabbling with TV recently so we're still trying to figure that out.
Howard: I tried to do an ad for TV for my practice, they told me I have a face for radio. I want to tell you something when you're 56 and got an MBA it's been doing this 30 years I can smell Bologna your biases is everything. So since these young Millennials spend all their time on Facebook and Yelp and they just believe that's the deal but anybody that I talk to you can show me data and tracking Direct Mail is still a king thing I mean they'll even tell you hello one percent by mail to one hundred homes and get Invisalign patient do the math Direct Mail so many Millennials if you told them to do direct mail or a postcard a Direct Mail they think this guys senile but direct mail was the first thing in your mouth.
Howard: and they're gonna think it's Facebook because they're on Facebook four hours a day so they said well it has to be Facebook but where would you put your money direct mail or Facebook?
Tyler: Both, so I mean we literally can purchase a list a mailing list I can upload that same listen to Facebook advertising to them on Facebook and then mail to them in the same time.
Howard: but when they're doing Facebook things have their office space their just posting a meme...
Tyler: You can upload a list and then run ads specifically to that list and that's the same postcard.
Howard: What does that call when you got pulled the list?
Tyler: So you can make a custom audience inside of Facebook so if you can get names phone numbers or emails Facebook knows all of that about everybody and so if you get a list of phone numbers and upload that and Facebook it'll match them to their profile you could say run ads to these people.
Howard: I think it's so fun to talk about how times change I was in college in high school and all the sudden everybody feared the government and it was the gorge water well they were gonna spy on you turns out it wasn't the government all it was free enterprise now we have Alexa and Amazon and Facebook and Google search and they're giving them all the private data that they were afraid that government is gonna get really good and now they just freely given away for free and people are just bad. I'm convinced at 56 years old that I'm the only normal person living in American. You know
Tyler: That's crazy I mean we purchased a list of 27,000 people just last week I uploaded into Facebook and it matched 88% of them.
Howard: and what do you do with 88% of them?
Tyler: So of that 27,000 88% matched up so now I can run ads.
Howard: Let's talk about that was that just for like one of these cities that like everybody America?
Tyler: So that was around each office I did a radius of like five miles and I said I want everybody there in $60,000 or more income that's kids in the home and it's a homeowner within five miles of these offices.
Howard: Okay 60,000 are now set combined average household income yet without a household if you're working there so yeah so 60,000 or more has kids and
Tyler: homeowners, we want them to be staying there for two years of braces.
Howard: Oh nice, homeowners and with kids and why kids is is ortho still more a kids thing than an adult thing?
Tyler: Probably 80% of our practice is still kids.
Howard: and what is a definition of a kid what was
Tyler: 7 to 17
Howard: So 7 to 17 and sorry to jump around but our kids complaint with removable retainers I mean wouldn't you rather go in there
Dustin: What's funny is that I think they're more compliant than some of the adults.
Howard: It is that peer pressure because they want that cosmetic advantage
Dustin: I think sometimes they want it they don't want braces and then their parents also are on them the you know the best ones are the home schoolers they were a hundred percent
Howard: Right it is homeschooling getting bigger in the United States
Dustin: I don't know in Arizona I think it's pretty yeah
Howard: What percent that gives are home-schooled out here you think
Dustin: Id stay its still probably 5% or less
Howard: So you did what is it called when you on do a direct mail and that you load the address and than you tag them?
Tyler: So you purchase a list and then you just upload that list into Facebook as a custom audience and then once you have that audience inside of Facebook I can run ads to those people anytime I want they're now in there I can't see their names inside of Facebook but I could say run this ad to these people and spend as much money as I want on those people. So if we're gonna do a campaign and for New Year's I'm gonna run an ad about a New Year special to these people and then seven days later the postcard shows up at the exact same special that they've been seen on Facebook so that's the multi-touch marketing where you can show up multi times and multiple times on Facebook they have the postcard if they show up on the the landing page we make we can then follow them around with banner ads as well. So then you kind of heard ever-present in multi-channel so.
Howard: So when you you say Facebook Facebook is going down and Instagram is exploding and when you say Facebook are you also talking
Tyler: Yeah Facebook owns Instagram
Tyler: So when you use the Facebook Ads platform you run the exact same out on Facebook and Instagram to those same people so and I upload that list in the Facebook I follow them around on Instagram or Facebook wherever they happen to be.
Howard: and where in is it young kids on Instagram and there are old parents on Facebook?
Tyler: Moms are still on Facebook for the most part teenagers are on the Instagram, so your buyers are still in Facebook before.
Howard: So you'll really care about the kids on Instagram or snapchat because they're not gonna write you a check for yeah.
Tyler: Like young 20 year olds looking for Invisalign that are probably more on Instagram but again the Facebook Ads platform is the same platform for instagrams.
Howard: It was considered the number one acquisition on Wall Street
Tyler: yes and any one big enough
Howard: One million dollars is all he paid for that
Tyler: Yeah I mean Facebook owns everyone's data that's where the power is so if there's ever a social media platform think it's big enough Facebook will just buy them and acquire them.
Howard: So I want to step to the other side, Mark Zuckerberg the founder of Facebook his dad Ed is a dentist you know have you met him, I had him on the show three times he sat in that chair right there. You see all this backlash and all this you know about all the data or you know this that but I don't really see a decrease in user so if you think it's just monkeys screaming throwing bananas but they're all gonna stay on that platform or do you think it can have the material backlash?
Tyler: I think they're so big that they can't really fail at this point
Howard: Too big to fail
Tyler: because that's where everybody is and even if again they switch platforms Facebook people just acquire those platforms yeah and as long as they own the data, that's where all that money is for the advertisers and so the money is gonna follow the data and Facebook will be able to...
Howard: So let's go to your competition since I know all the general dentists in Maricopa. I got 10 particular down there you got Jerry Polk. Now if there are general dentists they wouldn't I mean doesn't everybody dentist no favor if you're a general dentist in Maricopa would you just upload all of Maricopa? I mean you wouldn't care if their homeowners a renter or had kids or not. If you're a general dentist wouldn't you just upload all the people?
Tyler: Yes so if you were gonna do it as a general dentist in a small town you could do Facebook ads the entire town because there's not that many in Maricopa, it's probably 40 50 thousand.
Tyler: and then you can do it every door direct mail campaign if everybody's your target demographic and just mail to every single person. So again if you don't have a target demographic you can just do everybody if you will.
Howard: Would you say the general dentists really don't have a target I mean I could see a periodontist wanting implants, I guess their wanting the older people.
Howard: Or meth heads in Apache Junction. Why does everybody in the valley always accused Apache Junction of all the meth is it true or false?
Dustin: I've heard it but I don't know
Howard: Well I actually, several of my police officers he says gosh dang it, I've got more police officers in my practice tell me there is not a trailer park in Apache Junction that doesn't have a meth lab. So periodontist and oral surgeons I could see periodontists that want a third of your patients, I could see oral surgeons wanting your ortho market for wisdom teeth.
Howard: General Dennis would you say would you advise the general dentist that everybody needs a dentist whether they own or rent or what their income?
Tyler: You may or
Howard: Have you seen a marketing that there is an income minimum floor before you're really getting your teeth cleaned every 6 months?
Tyler: So probably to be most effective if you try to be everything to everyone you're nothing no one, so you probably want to choose like do I want to go after young families and create a message and a marketing message and target them, if you want to do more you know implants in your practice you might go after that or if you just want to have like homeowners with higher incomes you might go after those.
Howard: You know what my sweet spot love was for years you drove by my practice just to get here at something you know every I was a general noticing what that really nice lady mrs. Whimpleton who brushes and flosses every morning every night he comes in every six months for a cleaning doesn't ever be quiet. I don't think anybody on that my biggest cash cow for twenty five years sometimes with a toothache and he's a twenty five dollar root canal buildup and crown you do the whole thing in two hours. I mean that long I mean your time days a missing pieces $2,500 smile scan or Smiles Direct Club they gotta see them do do they have to see the patient?
Dustin: They know they dont wear their aligners
Howard: So they're never seen again
Howard: That's a problem but I that's why I don't have you know everybody needs a dentist but I really had a moral conflict because from the earliest day I realized I just want to have emergency dental. I don't want all day overhead and hygiene, you know that so I just want to do emergency stuff and then we're there stabilized who broke tooth they need a crown, a toothache needing a root canal and a crown, pull out a tooth that was the cash cow but then back to treat other people like you want to be treated and I had these for baby boys and it's like well I didn't want them growing up in a society where everybody just treated people when they had a disaster. Preventative, that's why I worked on water fluoridation when I first got here got the Arizona work from the Arizona State Dental Society for water fluoridation efforts in Phoenix and had this big ole recall but they cash that net income is always the worst outpatient the best dental patient doesn't need anything.
Howard: I manage I had a cleaning last week I haven't needed anything in a decade or two so I'm really like so the general dentist side, you want that hillbilly farmer you know that hasn't brushed or flossed teeth in five years and he's for quadrupling curettage the extractions implants, root canals, the money is. So how does that work the orthodontist listening to this we'll put this on Orthotown. How does a orthodontist get involved with you?
Tyler: So they can check us out of www.orthomarketingdfy.com that's our website and so there's phone number email you can request they have a call with us it's free just to chat to see if this is a good fit if it makes sense to you know implement this new practice.
Howard: I see you have Dr. Burleson on your
Tyler: Yeah something
Howard: He's been on the podcast show
Tyler: Yeah we started out as clients of his and a lot of the strategies we kind of learned from him and then his thing is he's always provided ideas he never implemented them and so a lot of our early clients were clients of his that couldn't figure out how to actually get things done and so we would just then go on and do it for clients and then since then probably 30%of our clients are working with Dustin burrows in most of them or not now and so we've kind of taken those same strategies.
Howard: So is he happy about that is he still your buddy or?
Tyler: Yeah I mean we still work, I mean 30% of our clients are still neutral clients with him.
Howard: So what does he do differently than you what does he do for orthodontists and what do you do for orthodontists?
Tyler: So he's a coach and consultant you give his ideas and tells you how to do it he doesn't do it for you. Ours has done for you meaning that all those marketing ideas that you don't if you don't know Facebook if you don't know Direct Mail if you don't know how to get a mailing list and do all that stuff I just talked about you just say do that for us and we'll get it done.
Howard: and how many orthodontists are you working with? You said about 100?
Tyler: About 100 yeah
Howard: and how many of those guys understand who could just leave you do it themselves and really understand it's a lot with 25 employees.
Tyler: None yeah
Howard: I mean it's sorry I love dentists I do I mean every time I go out for dinner or to a party or it's only that I love my homies but gosh dang it if I have to throw you under a bus for one thing it's like by dentist crying because he was in a strip center and the flood started dripping into his deal and so the yoga shop next door when they found out he was tripping out they had to pay for this thing and there was a yoga studio about the bill they just folded, it was some girls hobby she had another job and this guy literally has to pay like this 15,000 square foot centers roof even though he rents. I'm like I would sue the real estate attorney who reviewed the lease for you who which lawyer did this why didn't your lawyer and really. So in eight years of dentistry did you have like lease 101 that's like it's like they just don't get help and same thing with the return on investments, they always want to at any time go into a dentist they want to ask you a clinical question or a clinical technology cad/cam CBCT and I told them for 31 years the number one investment you can get is a dental office consultant and then you talk to the dental office consultants they say the only people that come to us they're already doing over a million a year. I talked to a consultant this saturday and her average new client this year was collecting a one and a half million dollars and then you got all these people doing 750 and there too smart for consultants. I can do my own advertising I'm a doctor dammit, here's my degree, look at my degree, it says it right there a doctor of everything. It's like they don't know marketing they don't know real estate leases they don't know they don't know any of that stuff and the smart ones are humble like me I've always raised my hand and said gasps there's gotta be with eight billion people on the planet someone's got to know more than me about this and then so the orthodontists, theirs 10800 orthodontist that we mail or the town magazine too and half that on the website. Why do you think you only got a hundred out of ten thousand of those ten thousand eight hundred how many I would benefit from your service?
Tyler: I mean anyone who wants more patients, so if you have all the patients you want the maybe you don't need us.
Howard: and if only five percent of orthodontists a fully five percent of Americans are going to the orthodontist the upside in this market, when I saw, found the CEO of Align Tech who owns Invisalign and iTero, Joe...
Dustin: Joe Hogan
Howard: Joe Hogan who I've asked to come on the show every time was talking when I say yeah anyone the show come on he's on Kramer that's another I'm a same age balled, I'm a mini Kramer of dentistry. When he's talking to wall street that upside on the ortho market is just crazy I mean even if America goes from five percent going to orthodontist to just ten percent that's a double and the orthodontist don't want to look at the upside they want to look they want to get all negative the glass half-empty blame it on Invisalign and Smiles Direct and the general dentist down the street that did one ortho case three months ago. I have general dentists that tell me that they did a ortho course they became an Invisalign provider and now when they go to their study club and now the orthodontist in their town won't even talk to you what do you think about that?
Dustin: So we have a little different perspective of that but what we've done is we've reached out to the dentists in our market and I think it's good when they do Invisalign because then they have eyes for orthodontist they're looking at teeth that are crooked and need to be straightened and what a lot of times happens is I'll call this dentist up like hey how come you never sent patients and it's not that they just never they never look for orthodontics that's part of the thing. So at least when they're Invisalign certified they're thinking about it and then I go to them and just say hey do you ever need if you need help on a clinic call me I'll help you like I offered to help them to do and Invisalign case and in 13 years I've had about two people that have actually taken me up on the offer to to help them. It's the same thing they're experts already you know they're doctors so they don't need my help.
Howard: and where are you going to get in trouble on an ortho cases because sometimes are young they got $400,000 to loans they really want to get into this and their patient selection is is they're the worst there deal. What would you tell them just do not try this case if it was...
Tyler:Yeah I mean stick with class one mild crowding the same people that are good candidates for Smile Direct Club would be good candidates for Invisalign that's one that you could slap Invisalign on it and it's hard to screw up.
Howard: So you're saying class one
Tyler: Mild crowding
Howard: Now would you you really only need a pono if it's a growing adult I mean once you're not growing anymore you're not trying to predict the future but would you want when you say adult not growing they're already grown.
Tyler: Yeah so some of the you know older teen would probably fine too like
Dustin: Ortho relapse(inaudible 1:01:44)
Howard: So I would say adult ortho, non growing
Tyler: Yeah relapse patients
Howard: Non-growing and what would be what would be the nightmare, long face?
Tyler: If you try to do overbites with Invisalign those are extremely difficult they're a lot harder than they look then class two class threes is just the mechanics are...
Howard: Do you even like doing patients, when you see a class three I mean do you even want the case?
Dustin: If I could do all class one mild crowding Id prefer that.
Howard: Right but I mean do you like class three patients yourself, I mean when its a class three patient are like it's a cool challenge or your like oh brother.
Tyler: I like being able to help them out but I know that my work cut out for me.
Dustin: We know that those we don't make any money.
Tyler: Because it takes so long.
Dustin: If an orthodontist doesn't make money trading hard cases(inaudible 1:02:38)
Howard: It's just like endo, it's like endo. You talk to any endodontist around town they don't get any one canal incisors canines. I mean those are so profitable but a retreat on a molar they operated three canals and missed a canal I mean the endodontist
Dustin: They don't want to treat it.
Howard: They don't want to treat it, that's why the endodontist is funny because they love the ones that send them the virgin molars that need initial ortho and an initial endo and that's you know like twenty percent of the referrals is like eighty percent of their business and then the other 80% of referrals is a nonprofit retreat some messed up wedged canal you know
Tyler: Vinyl broken off of it.
Howard: Yeah there was a microscope yeah like that so yeah there is a sweet spot in ortho but
Tyler: Theirs I mean the ones that take us a long time we don't make money on but we do it because we're specialists because someone has to take care of the patient but those are not the ones that we make money on that no you know someone's not doing this every day.
Howard: and what about these technologies you're hearing about there's some vibration technologies what are those?
Tyler: Yeah I mean jury's kind of still out
Howard: What was the names of those
Howard: Acceledent and that's like vibrating tray to seat.
Dustin: Yeah and Propel
Howard: and Propel is the same thing?
Dustin: It has vibration but also has like mini osteo perforations.
Howard: So Propel the drawing of the micro perforations okay are you doing any of that?
Dustin: I've done a little bit.
Howard: but you don't really see
Dustin: So kind of
Howard: is the main variable to speed instead of training out changing up the trace once a month to changing around every two weeks
Dustin: For Invisalign yeah I mean I think there is a little bit of a difference but to us if we can't generate enough extra revenue to cover the cost of it so it doesn't make it work well.
Howard: So your only flipping trays once a month?
Dustin: We do it once a week we do it weekly.
Tyler: Invisalign standard protocol is once a week
Howard: So when did the protocol go too once a month once a week?
Tyler: It use to be once every two weeks and then probably bout a year ago they went to once a week.
Howard: So they're gonna send so is Smiles Direct Club gonna send the patient a tray every week?
Tyler: They send them to the whole box of trays.
Dustin: (Inaudible 1:04:57) two weeks at a time and they give all their trays at once.
Howard: and how many trays are there?
Dustin: I think it's up to twenty or something like that.
Howard: So they give them 20 trays all at once and you think this is gonna happen what do you think this is a solid strategy. I mean if they're half price, what do you guys charge for Invisalign?What's your standard?
Dustin: Its like 58 to 62
Howard: 58 to 62, so we'll just say six thousand and then you said these smiles direct was a
Howard: $2500 so they're less than half so you think you know price elasticity I mean obviously you sell more you sell hardly any Cadillacs and as you lower the price to Buicks you some more in order to oldest you some more the Chevy's you sell the most. Do you think that they're going to really expand by dropping the price point in half usually this...
Tyler: They have no this is my doctor overheads that's where they can make all their money, they don't pay a doctor to be in the facility and then the patient never has to return and it's like they've cut all the expensive parts of dentistry out of the equation.
Howard: but their business model, their going to be an IPO this year. I'm gonna say that I'm asking for a friend asking for Buster, Buster wants to know. Do you think this is a rock-solid business model I mean...
Dustin: Yes they outspend Invisalign on marketing and their a billion dollar company
Howard: Well its a billion dollar company but
Dustin: I don't know if they're profitable
Howard: Yeah he's a Uber you know and then it's another thing about you know like when Uber came out and they were saying their words a gazillion billion dollars I think they first jumped at whether it was worth like 80 billion. It's like do you guys on this with hotels.com but where's your protective moat I guarantee you that someday when hotels.com came out in our they are everything how many travel sites are there on the Internet. So now you already have lyft, lyft came out there we've got a quarter of the market and I bet you anything in 10 years now you'll have an app that will feed into all the ride sharing things and you can say well there's an uber car ten minutes away in the lyft car five minutes away and your cousin Eddie you know that's doing it by himself. I don't see the protective barrier I don't see the patents
Tyler:There's already about six different companies doing the direct to consumer aligners so
Tyler: There's already tons of people who's jumping into it
Howard: Can you email me that list?
Howard: Do you know them off the top of your head?
Tyler: Their's Candid is
Tyler: The next biggest one
Howard: I got that one
Tyler: and smile love I think is
Howard: Candid, Smile Love
Tyler: or is it Smile Co.
Howard: Smile Co.yeah
Tyler: and then there's everybody else those small directs the biggest, Candid's number two and then there's probably four other copycats that I see them on facebook.
Howard: So Rogan and Align Tech are in lawsuits with Smiles Direct but they own ninety percent say they're an IPO that's kind of a weird relationship.
Tyler: Yeah, I think they'll have a nasty divorce or they're trying to have one already so they'll part ways. I think initially Smile Direct Club wanted to kind of partner with them thinking that they eventually sell out to Invisalign but then they quickly figured out they had something that had some legs on it now they've since wanted to do their own things so.
Howard: Yeah and then wouldn't technology originally invented by a guy from Pakistan he moved to Dallas
Dustin: He was in the Bay area originally when he left, he left Invisalign that's when he started that Ortho Clear.
Howard: Is their Ortho Clear?
Dustin: Ortho Clear then Invisalign sued them and put him out of business and then it's someone started Clear Correct after that.
Howard: Was he behind Clear Correct
Dustin: I know he was behind Ortho Clear but I don't know who is Clear Correct
Howard: because didn't a lot of their patents just go
Dustin: Yeah everything expired and I think in December of last year so at the AAO meeting this year there was about thirty companies now doing aligners.
Howard: Henry Schein's doing it
Dustin: Henry Schein's doing it, 3M's doing it, Ormco has them.
Howard: So then back to the back to the stock in the company now that the all the tags are expired in thirty new players right do you see anybody with a protective mote?
Tyler: I think being the first in the industry always gives you a huge competitive advantage and so I think Invisalign is gonna be the first and the best for the foreseeable future and Smile Direct Club already has that in the direct consumer model and so I don't think anyone's going to be able to match them I mean they've already expanded to hundreds of smile centers or all over the nation.
Howard: So I want you guys cut your own throats, I'm going to give you the rope and then you hang yourself we have two dental schools up the street from us your faculty at A.T. Still dental school, the kid comes out $400,000 in general dentistry I mean four hundred thousand dollars in student loans you know these kids you know we started this practice yeah would you recommend that a general dentists learn implants or Invisalign for their practice?
Tyler: Depends on where they are but
Howard: Mesa, Tempe, Chandler-gilbert, Mesa, Ahwatukee...
Dustin: I think that the one thing about here to differentiate the two with implants or oral surgery or something like that if it's not working out for you shut it down. If you're into orthodontics like we've been talked about that working out of a GP's office, you should still got a two-year commitment you've still got to finish those cases. So I think from a start-stop standpoint like implants probably makes more sense it depends on the type of practice you're gonna get into you.
Tyler: If you like the older patients then implants.
Dustin: yeah and I think you know treat those treat the implant patients but I think be good be really good at what you do and figure out what you want like that's the advice I'd give. Is figure out what it is you want to be and be really good at that I think if your trying to be...
Howard: but they're going they're gonna be obsolete in 1900 healthcare is 1% of the GDP there are no specialties by 2000 it was 14% of GDP the physicians had 50 specialties and dentists had nine, and now it's 2018 and now their's 18. So if there's 40,000 healthcare monthly journal magazines, 40,000 and then these dentists they want to be a jack-of-all-trades yeah okay we're going back to 1900. I'm going implant and Invisalign and sleep apnea, cosmetic and veneers and root canals and bone graft it's like dude are you out of your mind. I mean and when a dentist tells me you know I'm gonna go learning implants I said what are you gonna give up, oh nothing. So for me it's totally really hard to stay up on endo and they're not the implants I mean look at implants I got by diplomat International Congress or my policy might posit mister he'll just bone grafting you couldn't keep up on and then they say oh yeah I'm gonna know everything about endo and retreats and then Invisalign and ortho and then I'm gonna learn implantology and bone grafting and then I'm gonna learn sleep apnea it's like you're going back to 1900. You really see that a hundred years from now that those just have a general surgeon at Chandler Memorial Hospital just operate on any part of your body or you just see it going further further further specialized?
Tyler: I think it'll be further specialized so I mean the average general dentist I would say find out what you're actually passionate about what you want to really focus on and get good at that and then figure out a marketing message to attract more of those patients cuz I think there's enough teeth to go around there's enough business to go around whatever you want to do but I don't think again you're trying to for marketing if you try to be everything to everyone you're nothing to no one. So you should choose one vertical one demographic that you want to be the best of that and then make that be your message.
Howard: Kind of like what you've done with your website well your ortho marketing DFY where not only use your marketing but it's just for ortho.
Howard: So you're already doing any are you offering your services to pediatric dentist and endodontists and general dentists or you just really want to focus on orthodontists?
Tyler: So all of our clients are orthodontists, their's a handful of dentists who do ortho on their practice that use us but that's really like we have a system that we know works for gathering you know direct to consumer to get orthodontic patients and so that's our model and so we can do that really well if we try to do you know implants here then wisdom teeth here root canals here we probably wouldn't be very good at any of them. So we decide to be one thing really really good at that and choose our niche. So that's why they say there's riches and niches with marketing because if you get really good at one vertical and that's scalable and that's really profitable I think it's the same thing in any business that if you try to be everything it's hard to be profitable that one in all things you can get profit with one thing if that's your niche.
Howard: So how much does it cost for an orthodontist to join your program?
Tyler: So their's a couple different packages to get like the entire done-for-you service where we're on Facebook you know internal marketing external marketing social media marketing Direct Mail everything it's about 29.97 per month for like a full comprehensive service there are some people that choose little bits and pieces of that and we can unbundle based on that but we always like to say if we get you one patient a month you break even everyone after that as a pure profit so.
Tyler: It's the nice thing about orthodontics is we have really big profit margins each patient is worth a lot so you know if we do a thousand things and gets accessible in ten percent of them we still need a whole lot of money.
Howard: So on your marketing back there we talked about orthodontists of Arizona, by the way you said you give me an hour well into overtime... that $29.97 but is that that plus the cost of like say your going to do direct mail campaign that $29.97 wouldn’t include the printing of the postcard right and mailing it?
Tyler: So we try to look at it as if you were to do this yourself you're gonna have the cost of the direct mail the Facebook Ads all those costs plus you're gonna have to hire an employee we're basically your employee and we cost less than a full-time employee would.
Howard: So that $29.97 is for that employee but they still got to pay for
Howard: They still got postage and the ads on Facebook and all that kind of stuff.
Tyler: but because they use us we at quantity discounts on like the print and postage we can get it cheaper than anyone else.
Howard: Is that in town here?
Tyler: It's actually in Kansas
Howard: That's where I was born and raised, which town?
Tyler: It's actually in Wichita so
Howard: No way
Tyler: Yeah there's a print and post out that we get
Howard: Will you email me the name of it
Howard: because I mail a hundred page magazine
Tyler: Yeah you would save a ton of money
Howard: to 125,000 dentists and then at ten thousand orthodontists
Dustin: The mail house is across the street so they walk across the street and they save you on the postage there
Howard: Yeah My printing bill is seventy thousand a month my postage is seventy thousand month and my paper is seventy thousand a month. So I have to I have a quarter million dollars a month overhead just on printing postage paper and labels it's crazy, and you're 100 orthodontists how many do you think they have how much what is your average how many clients he gets a month from being on the service? One to break even.
Tyler: Yeah I mean really depends on the size of their geographic area so bigger practicing with a bigger footprint will get more but like the sub clients they hit goal like one client did one of our system wherever they go and text blast all their no sell list and she got 31 patients like in a week and so that was every once in a while we'll get like insane numbers like that but we haven't had anyone who get less than like 5 in a month.
Howard: Okay back to do demographics matter you're in a high competitive market.
Howard: I mean if you guys don't know Gilbert, Chandler I mean you couldn't throw a cat and not get a dentist, pediatrician. I mean just so much if some kid was coming out of A.T. Still 400 thousand dollars in debt, would you say dude demographics matter go out to eloy?
Tyler: I'd say go to Montana so if you look at the map there are certain areas that country where we have no clients those are all the areas that they should go because everywhere it's competitive that's where everybody needs our services.
Howard: So where?
Tyler: East, west coast, Texas, Colorado, Utah, Arizona. We have a lot of clients.
Howard: So say it again
Tyler: So East Coast West Coast you know Florida for sure Texas, Colorado, Utah, Arizona and Vegas as well.
Howard: So demographics what would you want you tell graduates?
Tyler: Go somewhere we're not everyone wants to live, so you know Midwest you know Montana, North Dakota, South Dakota. We don't have any clients in those areas because they've got enough patients simply by you know supply and demand so if you want to do well without having a market you should go in one of those areas if you want to live in you know Southern California you should prepare to be very best in marketing.
Howard: and here's what I can tell you you just on this show, if it takes you the number one airline the United States at Southwest Airlines are 27% of all passenger seat mile itself and so if it takes you once you're two hours away from an airport that has Southwest Airlines the dentist's office is doing a billion and their overheads 50% and you can see the damn coast or the ocean or the airport from your office yeah you're going to be struggling and it sounds so bad you say well I just don't want to live there dude we are we're in ground zero for Google as alphabet it was Google they own Waymo the driverless cars. I have seen all these driverless cars the test market was here they did the one year test and you know the test was over in like six months ago and Google ordered 60,000 more cars. So what it's going to be like you can live wherever you want gonna be gonna be a work at eight you're just gonna your alarm clock goes off at six in here it's gonna walk out into a driverless box and go back to bed and it's gonna automatically Drive you two hours out the middle of nowhere and then you'll be at work and then you can get up and then you go work. I tell just do this do four tens, go practice Monday through Thursday for ten hour days and they get back into your driverless car and then go live like a rich rockstar Friday Saturday and Sunday. I know dentists in bakersfield that makes so much money on four-tens Monday, Tuesday, Wednesday, Thursday, then they jump in their black Porsche or their single prop or double drop airplane fly back into Orange County and then have a million-dollar condo overlooking the ocean live like a rock star we can't say the name and lets just say his name is Chip Catstain class of 87 it's like they work and commit where they're needed yeah it's like dentists say to me they're come I well I just want to live in Scottdale, dude opening up in Scottsdale I would advise I probably a better decision to get addicted to weed becoming alcoholic I mean I could think of like five better decisions it's like well why don't you live in Scottsdale and commute out to Eloy which still doesn't have a dentist. Do you guys know ever know a guy name Jerod Tope?
Dustin & Tyler: Yeah
Howard: One of the earliest guys that was listening he came to me as a kid he came out of school and everything I said dude there's not a dentist in Maricopa don't even look I said where are you leaving me is like Chandler, Gilbert. I said don't know even this is where you live but you open out there when I told him that Florence didn't have a dentist, Maricopa didn't have a dentist. He went out there and just it was just like shooting fish in a barrel and then when you drive from Phoenix to LA when you get to the Arizona line on ten. What's that city there?
Howard: Blythe yeah did you know Blythe doesn't have a dentist, did you know that?
Dustin: I didn't
Howard: I mean Blythe doesn't have a dentist and how long would the commute would it be from Scottsdale to Blythe?
Dustin: Probably 2.5 hours
Howard: Yeah so why don't you go live in Blythe and live in some little apartment and work four- ten hour days and then get in your black Porsche and drive back three and a half hours and Friday Saturday Sunday you can live in the riches house in Scottsdale and live like a rock star they they just don't get that ever and if you say demographics don't matter what you should do open your practice in the Congo or Afghanistan and practice in Afghanistan for three years and then call back say yeah demographics don't matter I'm crushing it in Afghanistan I've got branch offices in the Congo and I'm rolling me up another one in Tanzania and go to Venezuela it's even closer. Demographics don't matter go to Venezuela were the United Nations has five million of their fifty million people have already left the country because the whole societies collapsed, yeah go there. Maybe after a year in Venezuela you'll say maybe the country matters maybe the economic system matters maybe demographics matter and about you guys not so what's your final what what did I wasn't not smart enough to ask you that you should have talked about to my homies.
Dustin: I think one thing to get this on Orthotown even Dentaltown that to the young guys is I would just realize that stuff doesn't matter too. What I'm talking about it's like gadgets and gizmos and cone beams and scanners and whatever else will have people that will say I'm opening my new practice I'm gonna get a scanner which one should I get don't get a scanner you know they think that this special piece of equipment is going to bring them all the patience in the world and I think you have to justify the cost of whatever it is that you're buying and that's why a lot of like the acceladents and the propels and whatever orthodontically speaking even Invisalign. If I was this new startup and then they have any money I wouldn't do Invisalign, I can't afford a lab bill. I think you gotta be smart
Howard: What would you start with?
Tyler: Cheapest brackets available
Dustin: Dollar brackets that you can get you know cheapest dollar brackets
Howard: Which brand, which one that would that be
Tyler: We get them on eBay for a quarter
Howard: I've been using Impergum
for 31 years it's like $19 I said it's a lab up the street Gladwell's and they said they were quoting a crown for $99 and they oh you should get a scanner how much is it; seventeen thousand really seven seventy thousand dollars to replace my $17 impression yeah and then you have to have a software agreement it's $200 a month. I don't even buy $200 a month in Impergum and the businesses jump on the site and it's a dentist thing because when you go to lunch with a physician and I recommended network I mean I'm in Ahwatukee and in the last year I've had lunch or deals a lot more for those every chiropractor every natural path, any referral you know anything like that and they never talk about technology you go meet with a physician you know say oh yeah I just about a $17,000 ultrasound machine I use. Only dentists, chiropractors don't, vet dont, physicians don't, MD's don't. I never had lunch or dinner with an MD who talked about a high dollar technology purchase he bought and then you go talk to dentist and it's all they want to talk about it's like it's a dental office. I'm like well instead of the $17,000 3M true depth scanner why don't you use the 3M Impregum which they got when they bought SP from Germany which I mean apolly I mean yeah just it's not what you earn it's what you burn and some of the million dollar practices a dentist takes home a hundred thousand here and it's some of the $400,000 practices the dentist takes home 200,000 a year. So did you go to school eight years so you can buy all this high tech stuff or did you want to pay back your student loans and make bank.
Howard: So anything else I want to talk about?
Tyler: I think biggest thing is orthodontics and probably dentistry in general is changing you need to approach it like a business person not like a doctor which means you need to invest in marketing you need to figure out how to be profitable and it's not all about I'm a doctor I'm entitled to make money it's what do I need to do inside of this new you know business that I'm in to make money because ultimately if like I said if you have student loans if you have debts all these things your goal is to provide a good service but also to earn an income and so it needs to be approached differently, so that's why marketing is a big thing where you have to invest in it especially based on where you're at if you want to be successful and continue providing service.
Howard: and another way to cut your overheard we was talking about not buying a high tech, buy Impregum not a true deaf scanner all these scanners remember don't get married because then you won't get divorced no alimony don't have kids and you want to put them through college. So if you say single you'll never get divorced no kids you'll never have to put anyone through college, so you just don't get married don't have kids enough that's what you're saying don't get married own again I'm done by high technology you heard it from them but I was funny I can't tell you what an honor it was that the two biggest ortho faces in Arizona drove over to my house. Were you scared when we drove into Phoenix I mean I'm in Phoenix you guys are in Gilbert did you pack a weapon when you drove into Phoenix to cover my house.
Dustin: Little sketchy
Howard: Thank you so much for coming on the show
Dustin & Tyler: Thank you