Fred Joyal's shiny incisors are the perfect advertisement for the dental referral service he promotes. As Futuredontics Inc.'s chief executive and pitchman, he walks the fine line between reducing fear and increasing guilt of his TV audience as he cajoles them to pick up the phone and call 1-800-DENTIST.
Joyal, who became his 20-year-old Los Angeles company's TV spokesman two years ago, pours all the non-judgmental concern he can into his message that it doesn't matter how long it's been since you last went to the dentist.
Just give his referral specialists operators standing by 24 hours a day the opportunity to hook you up with the right dentist right now.
"I'm not going to make them unafraid of going to the dentist that would take a really brilliant 30-second commercial but I can reduce their anxiety level and persuade them to make that call," said Joyal, a veteran L.A. advertising copywriter who entered the dental services industry by chance in 1986 when a friend obtained rights to the easily remembered 800-number. "That's what makes us dominant in our industry."
About 3,000 member dentists pay Futuredontics a fee for a guaranteed minimum number of monthly referrals, most commonly 15. Southern California is the company's largest market at 400 dentists, with waiting lists in communities where the network is kept a certain size so as to not spread referrals too thin.
Its simple co-op marketing business model seems so replicable that Futuredontics' business could have been nibbled away at long ago, particularly in the age of inexpensive paid Internet search. Yet 1-800-DENTIST remains the 800-pound gorilla in its niche.
The privately held company was on track to gross $42 million in revenue in 2006, and has averaged 12.5 percent annual growth over the past five years, according to President Larry Twersky.
"There's really no other organization with the same national reach they have most anything else you'd find is localized," said James Ferrell, publisher of Anaheim-based industry newsletter DentalFax. "I've moved 14 times in my life and the hardest thing to find in a new town is a barber and a dentist. So they provide a valuable service."
Dr. Jeffrey Goldstein, who teaches dentistry practice management at UCLA's School of Dentistry, says young dentists are inundated with solicitations for marketing services, with 1-800-DENTIST among the most established.
He notes that the company over the years has had to beef up its practice management consulting services to help members better convert referrals to paying patients.
"The kind of people who call 1-800-DENTIST tend have a lot of fear of the dentist already and it takes more work to get them through the door," Goldstein said. "The problem is training the dentist office staff in the verbal skills necessary not to lose them."
A Steady Stream
Goldstein considers 1-800-DENTIST somewhat overpriced. But it has many longtime members, such as Dr. Parimal Kansagra, who considers the typical $18,000 he spends for up to 90 monthly referrals for his multi-office practice his most cost-effective marketing, aside from referrals from existing patients.
Kansagra, who joined the network in 1987 just as he was establishing his practice in Diamond Bar, now has seven associate dentists at three offices in surrounding communities, with a fourth to open soon.
"What I appreciate is that the patients I get from them are already educated about me and my practice so my office doesn't have to answer a lot of questions just make the appointment," he said.
Joyal credits two decades of trial-and-error experience in dental match-making that led to his company's technology-enabled personal touch.
Futuredontics developed proprietary telephone and computer software years ago to meet his goal of creating an environment where a jittery, dentist-phobic caller feels they're getting a personal referral from a friend. During office hours, callers can be seamlessly forwarded to the selected dentist's receptionist, or placed in a call sheet for later call-back.
The company offers an Internet version of its telephone service, but almost grudgingly so. As they click through survey questions, 1-800-DENTIST.com visitors are urged to hit the "Talk Live" button, which can trigger a call within seconds.
"We want to talk with them live," Joyal said. "We're creating a first impression for our dentists. Key to what we do is having a compassionate, non-judgmental voice on the phone to guide callers through the process."
Another important feature of the service is the U.S.-based voice answering the phone. Futuredontics pays pricey Westside rents to house everyone from executives to call center operators at corporate headquarters multiple floors of an office building at the Howard Hughes Center.
The company's insistence on not outsourcing call center operations overseas did earn Joyal an on-air interview once with populist CNN host Lou Dobbs, who regularly editorializes against globalization. But Futuredontics' rationale for a domestic workforce seems more procedural than ideological.
"We're not a boiler room in India because our people have to understand the very particular geography of U.S. cities," Joyal said. "Our people learn very quickly what parts of a city that people from a certain part of town will or won't drive to for an appointment."
There also are compelling corporate cultural reasons for keeping everyone under the same roof. Joyal, Twersky and co-founder Gary Saint-Denis, now company chairman, are advocates of the culture-of-fun school of management.
New employees receive a week of training in a toy-filled conference room that resembles a pre-school classroom. As holiday decorations were being hung around the office last month, there remained vestiges of last Halloween, during which often disparate departments are partnered to create elaborate decorations and skits.
"Happy people make better referrals," said Twersky, who considers Halloween his most effective team-building activity.
While 1-800-DENTIST may not be a long-term career for many employees, Joyal said his turnover rate is less than 50 percent, or about half the industry average, and several senior managers got their start in the call center.
"How (operators) feel is part of what they project over the phone," he said.
At the same time, Joyal admits he's had less success exporting the 1-800-DENTIST model to other professions.
Recalling a failed partnership with a Texas-based 1-800-ATTORNEY service several years ago, Joyal said, "There'd be these attorneys who'd lie about referrals, refuse to pay, and if you sued them they could fight the suit themselves."
Twersky, a veteran of the contact management software industry who had been a consultant to the company for years, agreed to come on board six years ago after the company took a financial bath when the tech boom went bust.
"We tried to go on the Internet before there was a revenue model, but unlike other dot.coms we had commitments we had to fulfill or else the brand name would have gone down with the ship," he said. "Now we've doubled the business in the past five years."
The company also has had mixed success with its acquisition strategy. The company did successfully integrate its 2002 purchase of Dental Referral Service, a telephone directory and Internet-driven marketing company that had been in business for more than 24 years.
But last summer the company received a public slap-down when it made an unsolicited offer for a publicly held chain of standalone teeth-whitening spas.
Walnut Creek-based BriteSmile Inc., which boasted a high-flying stock in the late 1990s, had since been severely weakened in a costly legal and marketplace battle with Culver City-based Discus Dental Inc., which BriteSmile had sued over Discus' competing in-office whitening system called Zoom.
"We believed (BriteSmile's) model was tragically flawed in that they basically would whiten the teeth and then kick the patient to the curb, an incredible waste of marketing dollars," Joyal said. "We thought we could capture those patients long-term for our dentists."
But the board of what is now BSML Inc. rejected Futuredontics's $42.2 million cash-and-stock offer only a few days after Joyal's company issued a press release describing the proposed deal. Shareholders would have received $2 a share in cash (slightly more than the share price at the time) plus $2 worth of Futuredontics stock when the reverse merger was complete.
Ian Ellis, whose MicroCapital LLC is BSML's second largest shareholder, said Futuredontics' vision was an intriguing one, but he considered the financials of the offer an "incomplete proposition" given the problems investors would have in valuing assets of a privately held acquirer.
BriteSmile in a press release asserted at the time that Futuredontics had told the board it didn't have the funds required to complete the transaction. Joyal denies this, saying financing for the deal as proposed was in place.
While reverse mergers have become a popular way for small companies to gain access to capital markets, Joyal insists BriteSmile's ticker symbol was actually more of a liability than an asset.
"In a way I'm not that disappointed the deal didn't go through because I don't like dancing for Wall Street every quarter," he said. "I've been my own boss for 20 years; I don't need a bunch of shareholders telling me how to run the business."
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