“As a marketer, I get pretty excited about this,” John Sheldon, chief marketing officer of SmileDirectClub, says of his latest campaign “Direct,” which takes on the seven-year-old teeth-straightening brand’s market-leading competitor Invisalign head-on in a series of spots that debuted in July. “There’s not a lot of times you can do a direct competitive campaign, but this was a case where we felt it was really appropriate.
“Growing our business to the size we have so fast, we’ve done a good job finding and working with people who didn’t have other choices,” Sheldon continues. “Maybe they couldn’t afford Invisalign and braces and they had to select us. What we need to do is now get to the people who can do that, but choose us. So that’s the fundamental shift of the campaign, getting the word out that we’re the smarter choice.”
The campaign introduces a new brand mascot, Deedee, who outlines all the ways SmileDirectClub is a more accessible, cost-effective choice as SmileDirectClub evolves from a startup to a true challenger brand. “When we started our business, we really thought of ourselves as a disruptor,” Sheldon says. “We were coming in with a D-to-C model, doing something different in a way that had never been done before. Over time, we built out that experience, and for almost all customers in that mild to moderate category, we have the superior experience — it costs 60% less, it’s much more convenient, et cetera. We just want to tell people you don’t have to do it the old way and spend $6,000, you can do it in a more direct way and pass those savings directly to the consumer.”
Teeth straightening isn’t the only category SmileDirectClub is challenging: in recent years, the company has introduced a teeth whitening kit to take on Crest and P&G, and a power-floss product to steal share from Waterpik. And as telehealth becomes the new norm in a post-lockdown landscape, SmileDirectClub’s video chat capabilities have helped its app grow to usage from over 70% of the company’s customer base.
Diversifying its product offerings and scaling its digital pivots are just two of the elements helping SmileDirectClub bounce back from the impact the COVID-19 pandemic had on its retail business, which was comprised of 350 stores worldwide pre-pandemic and has since been reduced to less than half, to nearly 140 locations. In the company’s second-quarter 2021 earnings, released last week, SmileDirectClub reported total revenue of $174 million during the time period, an increase of 62.7% from the year prior, which helped offset a net loss of $55 million (itself an improvement of 41.6% compared to second-quarter 2020).
Brand Innovators caught up with the Nashville-based Sheldon from a beat-the-heat getaway in Boothbay Harbor, Maine to learn more about his pandemic pivots that have led to “incrementality” in new business, rethinking the role of retail and experiential, and how early investors like NBA star Draymond Green are shaping his approach to influencer marketing. The conversation has been edited for length and clarity.
Brand Innovators: What innovations or pivots did you put in place when the COVID-19 pandemic first led to global lockdown in spring 2020, and what long-term impact or success have you seen from those innovations?
John Sheldon: One of the good things about our business model is we have a couple ways to start. You can start with an impression kit at home, or one of our SmileShops. Right before the pandemic, 85-90% people started in a SmileShop, but those got shut down for a certain amount of time while we figured out what we had to do from a stay-at-home perspective. Business shifted over to exclusively impression kits on a global basis — it went from 90-10 one way, to 99-1 the other way. That was a pretty important pivot for the business, and the good news is we had both of those options available and we were able to execute against that pivot. It had an impact on our manufacturing and operations, but we put the capital in place to make that shift.
The second piece is while we were handling some of that shift, it gave us the opportunity to take advantage of our fleet of 3D printers. We had the U.S.’ largest fleet, and we shifted that to making PPE when that was a big need. We printed hundreds of thousands of face shields and got those out at cost to folks in the medical field when they were really necessary, from frontline workers to dentists, to help them service customers. That was a really important pivot for us, we sold shields in 46 states and 3D printing is great for that kind of short-burst manufacturing. We were able to jump in and help people right out of the gate.
And when we started to come back a little bit, it really gave the business the opportunity to take a look at what truly drives incrementality. As I ramped my marketing spend back up, we looked at every single thing and said, “Is this really driving the incrementality that we need in the business?” And we did the same in the shops, we had about 350 shops globally and six or seven DMAs where we had several shops, and we’re at 130 to 140 right now and continuing to grow the business. That ability to establish incrementality is really important.
What’s the role of retail now in your customer experience and the balance of your business?
We’re now back to a pretty good balance between kits and scans, and that’s for a couple reasons. The idea of telehealth had some headwinds before COVID, and now it has tailwinds. The retail experience is always a good entrypoint for some people looking to buy a $2,000 product to straighten their teeth and they want to talk to someone, we’ve got the kits for a delivery experience and the third piece we’ve done is opened up what we call the partner network, which allows people to start with their dentist. We have over 1,500 locations in the partner network where people can get started with SmileDirectClub in a neighborhood dental location. We’re available to meet people wherever they are.
With your new “Direct” campaign, you talk a lot about the cost efficiencies and values of choosing SmileDirectClub over Invisalign. How do you make sure the message is more than just about price?
We’re telling a lot more than the price story. We’re ensuring people know the program is doctor directed, and yes it’s 60% less but we offer something that Invisalign doesn’t which is a lifetime smile guarantee. If you stay with the program, we’ll continue to work with you if your teeth shift back and we’ll stay with you for life. That entire ability to both be less and stay with you for life is what we want to highlight as it’s something that frankly Invisalign can’t do.
You held a variety of roles on both the agency and brand side before joining SmileDirectClub. What are some guiding principles that you abide by as a marketer from company to company?
I’ve been in and around the transformation of digital business for 25 years. That’s really the common thread I’ve been working on, whether it’s building out Office Depot’s first ecommerce business, or helping Ally Bank get off the ground, all the way to disruptive businesses like SmileDirectClub. Also, the change management associated with my time at Mastercard helped solidify that discipline of innovation management, these are the key things that I’m all about.
I’m really grateful for a lot of experiences I’ve had in my career, whether it’s Ogilvy, which was like a school for advertising, and BBH, which is a terrific brand building and TV shop that taught me the other pieces which helped round me out as a marketer. And I’ve carried those learnings to SmileDirectClub and how we’re building out the brand, whether it’s the “blurple” color of our logo, Deedee the character and the sound mnemonic — all these elements work together to make sure our brand is top of mind with the consumer when they’re on their journey to improve their smile.
SmileDirectClub has had a pretty robust influencer program in recent years, including work with notable celebrities like Kelsea Ballerini, Draymond Green and Shawn Mendes. How would you characterize what success looks like in these partnerships, and what does your influencer/celebrity talent strategy look like today?
We’ve done a lot of learning about what works and what doesn’t work for our brand on the influencer side, and what we’ve really learned is it’s really important for anybody who’s engaging with our brand to be connected to the experience, whether it’s through a family member or having gone through the treatment themselves, that’s super valuable. Draymond Green was an early investor in the brand, and that idea of being invested in the business — whether as a customer or an investor — is a really important part of our strategy.
One of the things I’m really proud of is we’re not growing by borrowing other people’s equity. Most of our relationships are a year or more in length, because when you’re dealing with a transformational product like ours, you want to make sure you’re telling all the pieces of that transformation with people who are invested in them. Rather than going out to partner with the most popular TikTok personality, do one or two things and buy equity, we’d rather build it through these long-lasting partnerships.
What consumer behaviors or trends did you see emerge these past 18 months that you think might be here to stay?
We’re going to be a huge beneficiary in the increase of telehealth. We’ve been telehealth from day one and made all the investments to know how to make that experience great for customers, so the shift in usage as a result of COVID is a big one.
Another one for us is the emergence of TikTok. We’ve embraced that pretty aggressively in our own advertising mix to be a place where we’re building equity. One of our team members, Emily Watson, was originally a model for us on a photo shoot for one of our first campaigns, then she became a customer because she heard about us from the shoot, then she actively sought to become a team member. She works in our marketing group now, and we’ve turned her into our TikTok celebrity. It’s a fun story to see Emily’s evolution with the brand. We just did a TikTok video with Emily related to the “Direct” campaign where she was doing some messaging about our competitors and got our legal guy because she was making fun of disclaimers. It’s very funny.
SmileDirectClub invested a lot in experiential marketing prior to the pandemic. As the U.S. starts to reopen, have you started to revisit what an in-person or hybrid event strategy might look like for the year ahead?
As we were coming back and looking at some of the key areas of incrementality, brand activation work was one of the areas we took a really hard look at and came at it from a couple different angles. And other than our SmileBuses, we struggled to get that moving.
When I think about our brand activation, the piece that worked the most is taking what we do at the SmileShops and bringing it to new places. We’ve done this with three approaches: one is embedding a SmileShop in one of our partner network office locations, another is doing pop-up events in hotels where we’ll go for three days in Syracuse and show how you can get started with SmileDirectClub, and the third is our SmileBuses which are going to Sam’s Club and Walmart parking lots and bringing that access.
It really ties back to our access-to-care message — 60% of the counties in the U.S. do not have a licensed orthodontist. We service all of them, so we’re putting our buses and pop-up events in some of these places and allowing people access to care around teeth straightening. It’s an approach that’s closest to our mission, and it’s really working for us.
Andrew Hampp is an entertainment marketing consultant for Brand Innovators and the founder of consultancy 1803 LLC, based in Berkeley, California.
