E11: Podcast: Jerry Jones talks marketing and profitability

Hello and welcome to Ascent Dental Radio. A program dedicated to the balance between the clinical aspect of health care and the business of health care. And now here is your host, Dr. Kevin Coughlin.

Kevin: My name is Dr. Coughlin, owner and developer of Ascent Dental Solutions with a focus on knowledge, consultation, training and development. In today’s podcast, we’re honored to have Mr. Jerry Jones.

He is from the Oregon region and has been in the dental business for over 20 years and has a fantastic practice out on the west coast and he has some novel ideas in how to improve our practices and help develop an outstanding dental mission statement along with dental organization.

Jerry, it’s a pleasure to have you here today. Can you give us a little bit of information and background about yourself?

Jerry: Sure, you bet. It’s my pleasure and I appreciate you giving me the opportunity to be on your podcast.

The thumbnail sketch is I’ve been in dentistry for a little over 20 years. I’ve owned a dental office for 14, started it from scratch. No patients, no doctor, no staff, just a sweet pool of dental equipment. I’ve built a few dental offices over the years and sold a couple.

I’ve built and sold a number of other companies as well, but predominantly my businesses today revolve around the dental industry. I have a company that works with dental practices to increase patient retention and patient attraction, so putting new patients in the ops, so to speak. I also have a company that is a dental office franchise business called Wellness Springs Dental and we’re now franchising dental offices in 26 states.

I love dentistry, it’s pretty clear. I spent my life in it. I was at my office today for the usual time I’m in my dental office between 30 and 45 minutes a week. I run the majority of the business from home. I’ve got a great team and I just stay out of their way and I let them reach their potential. So that’s a quick thumbnail sketch.

Kevin: Let me ask you some questions about the franchisee and franchise in general. Is there a general plan that differentiates health care franchises from other types of franchises

Jerry: That’s a great question. I’ve never had that one before, but that’s a good question. Yes. Here we are in health care and the delivery of service in health care is such an intimate relationship-based business, if you want to call it that, versus say franchising a restaurant.

I just heard today, for example, that I believe it was former Cleveland Browns or Shaquille O’Neil, I can’t remember who it was, one of the big basketball players and I believe it was the gentleman — his name escapes me, but one of the top players in NBA right now for Cleveland.

Kevin: You’re not talking about Michael Jordan, are you?

Jerry: No, not Michael Jordan, although I think he’s in the restaurant business as well, but another well-known NBA player just purchased a franchise that sells donuts. That’s not really a high touch high experience business you’re going in to get fat. Let’s just be honest: they test good and people like to eat them. It’s not delivery of a health care service.

So the difference between the two is that franchise in health care has to maintain that relationship aspect, that relationship component that in a service business it’s nowhere near that deep of a relationship, if you will.

So I think there’s a big difference between the two and I don’t think because one is successful in franchising a restaurant they would automatically be successful in franchising in the healthcare industry. I think it’s a totally different ballgame, but that’s my opinion.

Kevin: Typically, my experience with franchise is roughly the owner of the franchise is taking between 11 and 14 percent of profit or gross revenues. Is there a formula that your particular system advocates?

Jerry: Yeah. We have a formula and that’s based on a percentage of income, gross receipts, if you will. In this case, it’s collection in a dental practice. So the franchise in exchange for a percentage of the gross receipts or collections, if you will, deposits, the franchise provides a huge number of services.

It’s not just coaching, it’s not just consulting, it’s not just here is what you need to do to be successful to attract new patients or here’s what you need to do to retain existing patients. It’s an incredibly vast offering for franchisees.

So the percentages, when you begin to compare when a dentist purchases is ala carte in a solo practice, you’re probably looking at about a 16 to 20 percent value versus the eight percent that a franchise requires for royalty. So there’s a big spread between — which there should be — a big spread between value received and actual costs to the franchisee.

So it’s a typical formula when it comes to compensation to the franchisor. The franchisee benefits are vast and we would probably need a full day to go through them all and that’s absolutely no joke.

Kevin: In your experience, Jerry, about what percentage of the gross revenues or net revenues do you apply towards marketing?

Jerry: That’s going to really be dependent a lot upon where that particular practice is in its development, its growth curve, if it’s a start-up practice versus a mature practice versus one that is in a serious growth mode. And I’ll cover all three.

A start-up practice, depending upon the area, you’re looking at a minimum of $6,000 to $10,000 a month. The reason why there’s no percentages, there’s no percentage of collections you had established. So you’re looking at 6 to 10 grand a month and up, depending on how stiff the competition is, cost of media because that varies from market to market and dental demand.

Obviously, the higher the dental demand, the easier it is to get your ads to work and fill your appointment book.

If you’re looking at a practice that’s in hyper growth mode, like mine is right now, we have four doctors and we just added two, I’m spending between 15 and 20 grand a month. I can’t tell you what that relates to as a percentage simply because I’m hamstrung by FDC constraints due to the franchise so I can’t share revenue numbers with folks any longer at my practice.

But we’re spending a good amount of money each month to drive patients in. For us, we’re looking at spending anywhere between $50 and $100 to acquire a new patient. That’s really what our formula is and that’s dependent upon the media as well. So hyper growth mode, a person could be spending anywhere from 5 to 15 percent of collections just depending upon how quickly they want to grow and what their budget is.

Mature practice, you really should be able to get by with five percent. I can’t imagine dedicating a whole lot more to that, especially if you’re focused on internal marketing and referrals which most dentists claim they are.

Most in fact, have no system in place for it and they’re miserable at creating systems and keeping them intact to general referrals and even holding them accountable. So every dentist in America that has a staff of one, two, three, four or five should be getting one, two, three, four or five referrals a month from each person.

If you have a staff of ten, you should have ten referrals a month just from your team alone. That’s not asking a whole lot. And if you’re a great dentist, your team loves your work and they trust you, why wouldn’t they be referring one person a month to you? It’s very little to ask considering the cost of business cards.

Kevin: In your expertise, Jerry, with the $6,000 to $10,000 earmarked for marketing, and I know that’s an average depending on the market and the development of the particular practice, what do you find is the most effective means of marketing?

Jerry: Let’s talk retention, so in other words, keeping patients in the practice. That’s going to be the least expensive of all, which is just providing a great experience and communicating with them on a regular monthly basis through a printed newsletter. That’s number one in my book for retention.

Number two, for patient attraction, right now Kevin I got to tell you that the number one thing that we do in offices all over the United States from Long Island, New York to San Diego, California, from Bellingham, Washington which is all the way near the Canadian border all the way down to Sandestin, Florida, we’re seeing newspapers and the use of free standing inserts to be our number one media.

I can cite two cases just from the last week. Dr. Harold in Long Island, New York generated 15 new patient phone calls the first day his newspaper ad (free standing insert) hit. Another doctor in Toledo, Ohio, Dr. Amber Leer, we’ve generated over 100 phone calls on two different drops of free standing inserts. And you’re looking anywhere between $1,200 per drop to maybe $1,500 or $2,000 per drop.

Drops are relative. I’ll explain what I mean by that. A typical newspaper will do a minimum free standing insertion of about 10,000 pieces. The national average is 10 cents a piece for printing and distribution.

So you’re looking at the cost of $1,000 for 10,000 free standing inserts distributed and printed. So it’s dirt cheap and they’re extremely effective and the best part is nobody wants to use them because everybody thinks all patients live online, which is a bunch of BS and we prove it every day. So we’re killing it with newspapers and we have been for years. So that’s probably one of the best kept secrets for new patient attraction in the United States.

Kevin: Jerry, that’s a good segue for me. As you know, I have about 150 employees, 14 offices here in western Massachusetts and constantly are struggling with the trials and tribulations of owning and running and growing a business successfully.

Whether any type of marketing you choose, and right now we’re talking about these inserts or drops, obviously no matter how many calls you get, you have to have an excellently trained and motivated staff.

Could you explain in your model how much time is devoted to training, modeling, role playing, et cetera, to convert those phone calls to actual scheduled appointments that keep the appointment and turn into revenue and successful care and treatment?

Jerry: Ideally, there is initial training for each and every individual that’s answering the phone and that goes for a DA who is cross training and fills in on occasion or that goes for a full time front office person or an office manager who on occasionally answers the phone.

All of our employees go through a ten point phone training system. It’s ten CDs in length, it’s part of my ClearPath Society membership for members here at Jerry Jones Direct. They go through that training, they have a workbook to complete, they have a test to take.

And then by each phone in my office is a flipchart that instructs them exactly how to answer the phone and how to build rapport as fast as possible, which means trust with the caller, with our guest. And then from there each individual is responsible for about an hour of continuing education on phone training every month. That does not include, by the way, reviewing the phone calls that come into our office and coaching on an as-needed basis.

So during that month there may very well be an opportunity of four, five, six calls where we’re going to sit down with our front office folks and go, “Okay, let’s listen to this call together. How do you think it went? Where were the challenges? Where did you have a problem?” And we take them through and we coach them on those.

And I’ve got to tell you, if any dentist out there is spending any more than $1 a month on advertising their practice and trying to attract new patients or just trying to retain the existing patients they have, if they are not training their team on the phones, they might as well just had given me the check and we’ll split the difference.

It’s really a waste of money to spend money on marketing and then having people that are not trained answering your phones. Not only that, it’s answering your phones before 8:00 in the morning, in other words, it’s 7:00 somebody should be ready to answer that phone all the way up until 7:00 or 8:00 at night.

Because right now with the active marketing that we’re doing, we have people calling on Saturday, on Sunday, it’s 7:00 at night, it’s 6:30 in the morning. I want that damn phone answered. I’m not spending money for fun.

Every dentist in America should be as insistent as I am about that process because look, money doesn’t grow on trees. It’s hard to make money in a dental business and we shouldn’t be pissing our money away through advertising and these driving calls and never going to answer.

Because I can show studies, I can show just data on my own interface here that I’m staring at on my computer screen right now, I can show you calls that are not answered that those people do not and they will not call back.

You get one shot and if you’re not answering the phone live as often as you possibly can and expecting your employees to answer the phone on the weekends, just send me your money. I’ll take better care of it than the media will. I’ll take better care of it than your team will because they’re not answering the phones. That’s my soapbox moment on phones which ring.

Kevin: Jerry, I had the pleasure to read an excellent article about you in the Profitable Dentist fall issue. A beautiful article. If the listeners out there haven’t received the Profitable Dentist, it’s an excellent magazine started by Dr. Woody Oakes and Mr. Steve Parker, two extremely intelligent gentlemen who’ve worked very hard to improve care and service in the field of dentistry. Can you expound, as we get close to ending here, on the acronym ACE and what it means to you and how it’s helped your business?

Jerry: We’re not talking about card games, are we?

Kevin: No.

Jerry: This is a take home for everybody that’s listening to the podcast. We are in a sea of sameness right now. Every dental office in the United States looks the same, smells the same, acts the same and unless you’re willing and able and interested in being different, unique and standing out, you’re not going to be attracting the patients that you should be.

So there’s a reason why corporate dentistry, chained dentistry, whatever label you’d like to put on it and I think it serves the purpose and serves the place, but if you’re worried about competing against them, you need to use this idea of ACE.

It was developed by a friend of mine Matt Zagula, a client actually of mine. A phenomenal marketer and great salesman, but Matt developed this to differentiate himself in the sea of sameness that he was in. He was in a very competitive industry and Matt realized that there’s three things that set people apart and what it does is it takes you from being a what to a who.

There’s a lot of dentists out there, that’s the what, but if you want to stand out and be different, you want to be a who. You want to be somebody. So ACE gets you there.

ACE stands for Authority Celebrity and Exclusivity. Using the ACE principle you can differentiate you and your practice from these massive numbers of other dentists and dental practices out there that are competing for your patients or competing for patients. Example, and this is probably the most visible example that everybody on this podcast will understand, and that simply is look at Dr. Oz. Dr. Oz may have incredible clinical skills, but then again he may be just average as far as physicians go. You and I don’t know. But what we do know is that he is somebody that is important and he has developed a phenomenal practice where there is a waiting list to get in and he’s done it through media and through differentiation.

He’s used and capitalized on the principles of authority, celebrity and exclusivity. Authority; he’s written how many books at this point? I don’t even know. Two or three or four major books. He’s on TV constantly. Everybody knows his name. I mean, Oprah essentially made the guy a star.

So he really has relied on authority, he’s now probably America’s top doctor as far as recognition goes. Celebrity; when you hang out with Oprah and any of the other stars that are on TV that you have as guests, that builds your celebrity.

Exclusivity; you’re not getting into his office unless you got a big fat checkbook or you know somebody. So that is a way to build a practice that is in high demand, can charge whatever it wants and is never concerned about attracting patients because you’re relying on that principle of ACE.

And I would let every one of your listeners know if you want to differentiate, the first thing you can do is write a book. And books are easy. They are a lot easier than you think. I’ve written, I don’t know, seven or eight of them at this point. I don’t even know. I’ve lost track because I don’t really care, but I’ve written a lot of books.

They’re not hard to write and as long as you write them for the sixth grade level and you have a way to distribute them to get the books into the hands of potential patients, that’s the name of the game. So that’s ACE. A phenomenal principle if folks are willing to tap into it.

Kevin: Jerry, I can’t tell you, I know how busy you are and I appreciate so much you taking the time for tonight’s podcast. Can you allow the listeners how and what is the best way for them to reach you if they have questions or they’re interested in your franchise?

Jerry: Sure, you bet. I’m going to give two websites and my email address. I’ll give my email address first, it’s jerry@jerryjonesdirect.com. By the way, I answer every single email. I get hundreds of emails a day, but I answer every single email. It might take me a few days, but I will always answer.

Two websites to go check out; if you’re interested in patient attraction or retention, go to www.jerryjonesdirect.com. In other words, if you want to attract more new patients and keep more in your practice, go to www.jerryjonesdirect.com. Get on our email list and you’re going to get a bunch of great information from us on a regular basis.

If you’re interested in taking your practice to the next level and interested in having someone help you build a series of practices, whether it’s one or whether it’s 350. My partner actually has 350 health care practices around the United States and I’ve got another partner who has a 26 operatory practice up in Eau Claire, Wisconsin. He’s absolutely crushing it, doing multiple six figures a month on his own, in addition to the three or four dentists he has working in his 26 ops.

So we’ve got some phenomenal systems and a phenomenal leadership team at Wellness Springs Dental Franchise and you can go to www.wellnessspringsdental.com to learn more about the franchise.

Kevin: As always the case, I usually always learn a lot when I do these podcasts and today is no exception. Terrific speaking with you and thank you so much for volunteering your time and promoting health care and dentistry in particular. I wish you the very best and thank you so much for providing your knowledge and expertise.

Jerry: My pleasure.

Kevin: My name is Dr. Kevin Coughlin, owner and developer of Ascent Dental Solutions, where the focus is on knowledge, consultation, development and training. I would like to send out a personal thank to Doug who is promoting and continues to promote the advantageous use of podcast in health care. Thank you Doug for your outstanding commitment to education and promoting the betterment of health care and in particular, dental care.

Thanks again for listening. My name is Dr. Kevin Coughlin.