It appears that SmileDirectClub (SDC) has no intention of abandoning its business model and “going quietly into that good night.” In fact, it would be fair to say that it intends to take no prisoners.
On June 27, 2019, the American Dental Association sent a complaint to the Federal Trade Commission’s Bureau of Consumer Protection alleging “unfair and deceptive” practices. The move follows another ADA communication to the Food And Drug Administration in April claiming that SDC was not in compliance with the “prescription only” requirement for clear aligners.
In response, SDC issued a response on October 4 defending its direct-to-consumer (DTC) business model and denying allegations made by the ADA and other industry groups, as well as in a class-action lawsuit filed in federal court in Nashville. SDC decried what it called an “anticompetitive” campaign against it and noted that the Department of Justice and the Federal Trade Commission had filed amicus briefs in the lawsuit on behalf of SDC’s position.
Beyond court actions and complaints to the federal government, SDC faces other challenges. On August 16th of this year, Fortune Magazine noted, “The Georgia Board of Dentistry and the Board of Dental Examiners of Alabama have have ruled that a medical professional needs to be physically present during the 3D imaging process—decisions that SmileDirectClub has sued to overturn.” While not certain, it seems likely that other state dental associations will also require a medical professional to be physically present.
Fortune also noted that SDC has yet to achieve profitability despite reported revenues of $423 million in 2018. However, it would be premature to assume that the challenge of the DTC dental business model is going away.
The Dentist In The Middle
If your practice includes clear aligners, you’ve likely felt at least some impact from SDC’s business model. It’s hard for solo or small dental practices to compete with the corporation’s low overhead, it’s purchasing power, and the convenience it offers to patients wanting clear aligners. The patients who want “straight teeth on a budget and in a hurry” seem to be flocking to SDC’s 300+ “SmileShops.”
Patients who choose to take their own impressions at home and mail them in – an idea that makes most dentists shudder – are also a growing segment of SDC’s business.
Regardless of the importance of clear aligners to your revenue, no dentist likes to see their revenues decrease due to a business model that they can’t possibly hope to adopt – even if they wanted to. However, there is a way to make SDC’s “advantages” irrelevant to your success.
The Personal And Professional Touch
A significant segment of patients in almost every market has no interest whatsoever in SDC’s “value” proposition. Those patients, ones with the financial resources and willingness to pay for the dental care they want – are looking for a relationship with a dental professional they trust.
They want to feel confident in their decision and the outcome. They want to know that they’ll be well cared for and that there’s a live, professional human being who they can talk if they have any concerns or problems with their treatment. And they’ll pay the “extra” to get what they want.
When you focus your patient attraction efforts on that specific segment of your market, SDC becomes irrelevant. You and they are not competing for the same prospect base. Will you lose out on some of the lower end of your market? Probably. But your revenues from happy patients who pay, stay, and refer should more than make up for it.