Following its initial public offering in September 2019, SmileDirectClub has used the cash infusion to make multiple investments. Those investments have largely focused on improving the customer experience, improving access to the company’s services and increasing the company’s production capabilities. The investments have spurred substantial growth -- or “hypergrowth,” as Chief Financial Officer Kyle Wailes described it in a recent interview -- and they should lead to continued growth in the near future.
Improving the customer Experience
SmileDirectClub has made multiple adjustments that improve the customer experience, but two endeavors stand out from the rest.
The most notable achievement is SmileDirectClub’s new Comfort Sense ™ technology, which is designed to mitigate the discomfort customers experience when they begin treatment. The technology features precision-cut edges that are sculpted by lasers, as well as a progression from thinner to thicker aligners. The edges don’t dig into gums nearly as much as the aligners’ predecessors did, and the progression eases customers into treatment. By the time they’re using thick aligners for major realignments, customers have become accustomed to the treatment.
The Comfort Sense ™ technology also allows for better alignments, as it can more precisely realign individual teeth. Altogether, this is a better system that’s both easier to use and produces a better result. It’s now included on all of the aligners that SmileDirectClub offers, including both Nighttime Aligners and SmileDirectClub Aligners.
The other change SmileDirectClub has made is a relatively recent partnership with MetLife. The partnership was established in December 2019, shortly after the IPO was completed. While this isn’t the only partnership that SmileDirectClub has with an insurance company, it’s emblematic of how the partnerships positively affect the customer experience.
Because of the partnership, MetLife now considers SmileDirectClub to be an in-network provider.
When the company was an out-of-network provider, it could only help customers assess their eligibility and submit reimbursement claims. The company couldn’t bill MetLife directly, and customers had to pay the full cost of their treatment as a result. Only after paying could they seek reimbursement for their insurance company’s share.
Now that SmileDirectClub is in-network, it can bill MetLife directly -- and customers don’t need to pay the full cost of treatment themselves. Instead, they pay only their portion of the cost. That works out to between $600 and $800 for most people, and it’s much less than the $1,800-plus that treatment costs altogether.
Increasing Access to Aligners in the U.S. and Abroad
The market researchers at SmileDirectClub have calculated that around a half-billion people are potential customers. These are all people who could benefit from having their teeth straightened and who can afford the price that SmileDirectClub charges. In order to reach more of these potential customers, the company’s marketing teams are focusing on three specific demographics and have explored two new sales channels.
The demographics that SmileDirectClub is targeting include the mainstream domestic (U.S.) market, the teen U.S. market and the international market.
The company’s researchers have determined that there are about 125 million potential customers stateside, and they don’t believe the market here is fully tapped. The general population still offers plenty of growth potential, and the teenage market is especially intriguing. Teens normally account for about three-fourths of traditional orthodontists’ customer base, but they make up only one-tenth of SmileDirectClub’s base.
The remaining 375 million potential customers that SmileDirectClub has identified lie outside of the U.S. The company has expanded into several countries already, including New Zealand, Australia, Hong Kong, Austria, Germany, Spain, the United Kingdom, Ireland and Canada. There are plans being developed to expand into even more, with a focus on Asia, Europe and Latin America per Wailes.
SmileDirectClub’s current customer base is extensive, given that the company is only seven years old and has been publicly traded for less than two years. Making headway into any (or all) of these target markets has the potential to significantly grow revenues, though.
The new sales channels that SmileDirectClub is developing are branded storefronts and partnerships with local dentists.
The company’s branded storefronts are still fairly new, but the company has been pleased with their results thus far. The stores serve as an effective way to grow awareness of the brand and to show potential customers how the process works.
Partnerships with established dentists seek to utilize the existing infrastructure of the dental industry. Many customers that dentists see are potential customers that fall within the demographics of who SmileDriectClub hopes to reach. Dentists also have the trust of their customers and are able to provide personal, on-site service.
Increasing Production Capacity
All of SmileDirectClub’s aligners are made within the U.S., and the company has built a high-tech factory in Tennessee. The factory is one of the biggest 3D printing facilities in all of North America, and it’s where the laser-cut Comfort Sense ™ aligners are produced. Through this factory, SmileDirectClub has unparalleled quality control within the aligner industry and substantial vertical integration.
As the company’s orders increase, this factory is able to take on more production to meet increased order volume.
More Plans to Invest in Future Growth
Although the interview with Kyle Wailes on Fox Business didn’t expound on SmileDirectClub’s future plans in detail, Wailes made it clear that the company does intend to keep up its investment in growth drivers. Efforts to increase access, awareness, convenience, care and production even more are currently underway and will continue to be pursued. SmileDirectClub is currently the leader in telehealth aligner treatments, and leadership is making moves to maintain the company’s prominent position.
