Removing Barriers for a Seamless Customer Experience

Kailey Raymond: The beating heart of any marketing system is an exceptional CRM filled with rich customer data. In an industry like teeth straightening, it's critical to remove barriers, both physical and emotional, that customers may face and encourage them to continue on their path towards better teeth. Things like telling them exactly where the store is, where to park, or even addressing their concerns over how to use impression putty. Helping customers overcome these hurdles empowers them with the confidence to move forward in their journey towards straighter teeth. Chief Marketing Officer of SmileDirectClub John Sheldon is an expert in eliminating these barriers. A self-proclaimed truffle pig of customer data, John has over 30 years of experience in digital marketing, brand, and customer engagement.

John, you have a storied career in tons of different marketing organizations, Ogilvy, MasterCard, eBay, just to name a few. I would love to learn about your career journey from your perspective. Tell me how you got to where you are today.

John Sheldon: Sure. I like to think about my career in three buckets. First was really in a kind of consulting world, fresh out of school, but right at the dawn of the internet. And I'd been actually working on things connected to the internet since 1989 when I was interning for IBM, and so kind of knew about gofer.NET and this kind of stuff. And so when the commercial internet came available in '95, I just wanted to be involved in it. I had no idea how obviously pervasive it was going to be. But I just wanted to be involved in that. And that led me into doing consulting, really focused on digital transformations.

And so number of different groups. Worked at Oracle, a small boutique in Boston with some of the smartest people I've ever met at called Dialogos. Founded my own company, which we launched and ran for five years to help people with these digital transformations called Customer Portfolios, which is still up in Boston. It was just a great time. So that was kind of bucket one, and I did that for a good while.

And then I made a transition to the agency side because I really... I poked at the different ways of digital transformation in my time doing that consulting work. And the door that I loved going through the most was the marketing door. And so I really embraced that. And that's what Customer Portfolios was, was a marketing services firm. And I loved that. But I actually wanted to broaden my understanding and knowledge of marketing. And so honestly, got this opportunity at Ogilvy that you mentioned. And Ogilvy is basically the teaching hospital of the advertising industry. And so I got to bring what I knew but also learn the stuff that they've been doing excellently for years. And so worked at a couple agencies there.

And then lastly, kind of going client side. And did that with a transition at eBay where I was working for kind of a agency, if you will, but it was owned by a company called GSI, which got bought by eBay. And so eBay themselves became a client firm for me and my team. They were the parent company but also my client. So it was a little bit like a internal, but that was the beginning of really working inside of large organizations. And between the work I did at BBH, which was after Ogilvy, and at eBay, really got to do a huge amount of business launches, Ally Bank, the Google Chrome browser, things along those lines, but also really got deep into performance eCommerce.

And so having done CRM earlier in my career and adding this performance marketing piece to it, all the while being surrounded by brand people, I was able to create a fairly well rounded background so that when I left MasterCard, which was a little bit of a departure in my career, more focused on innovation itself as opposed to the marketing, it made me ripe for this D2C movement that was really happening. And so did some work with Fresh Direct, but then quickly the SmileDirectClub folks found me, and I've been here for the last four and a half years and it's been a really fun ride.

Kailey Raymond: That's awesome. You've seen a lot of different parts of the business and I love that... Digital transformation comes up on this show all the time, and it's so good to anchor yourself on, the fact that we think it's this big mega trend that's happening right now currently, and certainly it is, but you started your career in it. So I think it's just interesting to kind of note that it's here, it's been here, it's here to stay forever and for always, digital transformation.

And one of the things that I kind of picked up on is you leaning into performance and a little bit more of the digital side of marketing. And that's what you're doing a lot as I understand it at SmileDirectClub. And obviously, digital marketing has changed a whole lot over the course of the pandemic. And I also think that maybe there's this new paradigm shift that's happening right now as it relates to the state of the economy and everybody being really focused on return on ad spend is one of the big kind of question marks. So I'd love to learn from you in terms of what you think the biggest digital marketing differences are at SmileDirectClub pre-pandemic to today.

John Sheldon: I've always been a quant type of person. I was a finance major, I was supposed to be an investment banker. I'm a numbers person first. And so looking at the marketing world through that lens has frankly benefited me a lot and over the last long period of time, actually. When I look at digital marketing and what it's going through right now, I'm not sure I would talk about pre and post-pandemic as much as I would talk about pre and post-iOS 14.5. To me, that's the marker of when digital marketing started making really important transitions. In the pre-world, it was really straightforward. Facebook could find the exact person you want who wanted to do the exact thing that you wanted and put them right in front of you. And afterwards, it's like, "We think it's somebody in this group." It just became a very different thing. And it forced marketers like us at SmileDirectClub and others to really rethink the role of digital in the funnel. And we had to move it from being really bottom of funnel, convert now/buy now stuff, to moving it up into that consideration level which changes the creative, it changes your brand building, and so on.

And so for all the performance parts that I love in our business, actually one of the stats I'm proudest of is a brand stat. Which is when I got to SmileDirectClub, the company had about 16% aided awareness in the US, and now that number 61%. So we went from a somewhat obscure brand to more rivaling the biggest brand in the teeth straightening area, Invisalign, in our brand awareness now. And so to me that's been an important effort. And some of that digital marketing work, that transition around 14.5 has helped us to do some of that building.

Kailey Raymond: That's amazing. And we hear about that as well all the time at Segment. Obviously, we're really focused on first-party data and so any of the different transitions that are happening with other government entities that are making people be a little bit more stricter on their privacy, but then of course the big platforms changes happening with iOS and happening with Chrome obviously coming up. Those are going to change the ways that people-

John Sheldon: We'll see when Google finally gets that.

Kailey Raymond: They keep pushing it back, it's like 2022, 2023, 2024 is where we're currently at. So we'll see what happens there. Want to learn a little bit more about some of the other trends that are maybe impacting customer experience and customer engagement in your industry. What are you keeping on track of?

John Sheldon: Well, from our perspective, SmileDirectClub, as much as any company I've ever been in involved in, completely obsessed with the customer experience. And in my time here, and not only because of me, the whole company is so focused on improving the customer experience, we've turned it over twice and we're about to do it again. And that's one of the most exciting things that we're up to. And it's taking advantage of innovative new technologies which are now being applied in our world that hadn't been previously.

By way of example, we're changing our go to market strategy. We talked about this in our earnings call where today people buy a kit or schedule a scan, and then it could be days or weeks before that gets completed and then days until they get their treatment plan. And by then, they've kind of cooled off a little bit. And we're moving to an environment where we now can use AI to let them use their phones, do a quick scan of their mouth, and get a pretty good looking treatment plan that tells them, "Hey, this is how we're going to move your teeth," and we can do that all in two or three minutes. And so that shift of using AI to close the customer experience gap and answer the number one question people care about, "What can it look like at the other side?" so powerful. And we think that's going to transform the business.

Kailey Raymond: That's amazing. That AI application is something that I've never heard. And as it relates to telehealth, that is always been a question of mine is when it comes to physical doctor experiences, you're going into the dentist, you're going into your primary care physician, the ability for them to assess, I've always had that trust be in person. But the ability to map your teeth using AI is so cool. I love that you guys are pushing the boundaries of what customer experience looks like.

John Sheldon: Yeah, we still need to get that scan a little bit higher fidelity scan to be able to make aligners because that's like a hundred micron tolerance. But the stuff that we can do with the phone is amazing and tells you exactly where we're going to take your smile.

Kailey Raymond: Amazing. What are some new customer behaviors that you've been noticing over the past couple of years that are starting to impact some of the strategies? Obviously, people do want to be home a little bit more. That's one of them we just spoke about. That's certainly pandemic related. Are there any other consumer behaviors that you all are tracking?

John Sheldon: Let's just talk about the one you mentioned. When we started pre-pandemic, February of 2019, we had 350 stores, shops where people would go in and get scans. And 90-ish percent of people began their journey in our shops. Pandemic shows up, we have to close all of them down, where 99% via the impression kits that we mail to people's homes. As people got confidence in telehealth, our business has come back. We've opened about 150 shops back up, but actually about half of our business now is the kit being mailed to people's homes because people are much more confident in telehealth and so on.

What I talk about a lot is just the consumerization of healthcare in general. And we sit right at the heart of that, where people are not waiting for doctors to tell them what drugs to use, they're coming to the doctor and saying, "I heard this could work, can we talk about it?" and solving for things that are important to them. You take a look at us, obviously, it's the same thing. While many of our customers talk to their dentists about SmileDirectClub before they become customers, they're the ones bringing the conversation up to the dentist and so on. And so for me, that consumerization of healthcare, that empowerment of the consumer to really control the process and work it the way they want to work it, is a really important consumer behavior trend.

Kailey Raymond: That's amazing. We were talking about that with a leader at CVS Health the other week about how patients are really being empowered to drive better outcomes for themselves, and they're doing that through educational nudges. And so it's an amazing thing to see the different kind of portions of the healthcare industry that are taking in different directions and making sure that they are responding to that new kind of consumer behavior. And I heard that you like to watch some of the videos that are actually coming out of shops and retail shops that offer SmileDirect. What kind of insights are you gaining by actually watching customers interacting with your brand? Any specific examples of things that you might have picked up on or learned from that?

John Sheldon: Yeah, let me just start by saying we do that with the customer's permission, to speak explicitly.

Kailey Raymond: Consent is here.

John Sheldon: Just want to be perfectly clear about that. But yeah, there's no better way to get consumer perspective than to hear how they talk to our smile guides in the shops about how they hide their smile when they're laughing or they hate looking at themselves on Instagram or whatever it is, the thing that's their emotional reason why they want to straighten their teeth. But also, you get a lot of hearing a lot of the objections, "Oh, I want to know about insurance," or, "Does it hurt?" And just being able to find out what are the things that are on their mind and how can we provide them with the confidence to move forward. And so hearing it from the mouths of the customer, no better way to do that.

Our leadership team and over a hundred people in the company will hop on and we'll go through these videos that have been curated to help us and manifest itself in changes to what that journey looks like in shop. Or, "Hey, let's add something to a CRM piece that goes out before the person shows up so they already have that answer in hand." All of those elements really help us make a better customer experience all the time. And I would say we continue to improve the customer experience dramatically as we listen to that customer.

Kailey Raymond: I love that oftentimes we think about data as kind of the clickstream data or you think of it as just really quantitative metrics. And obviously, as somebody who started in the more finance side of things, that's a part of the way that your brain is wired. But watching those are also giving you such robust data that's more qualitative. And one of the things that you said was it also surfaces some of those things that might be a little bit harder, some of those challenges. So what are some of those challenges as it relates to the customer engagement journey?

John Sheldon: Well again, I mentioned it before in terms of changing our go to market strategy, is customer interest wanes over time. They have a moment where they're highly motivated, they come to the site and so on. I have a colleague named Blake who talks about “nobody wants to eat a cold hot dog”. As that hot dog gets colder, fewer people want to take a bite. And so making sure that for adults, and we service mostly adults today, for adults, they've been living with the teeth in the way they are right now for a long time. And so our competition is really inertia, it's getting the person to go right now, to feel urgency to move. And so that's the stuff that we're trying to understand is what creates that urgency that gets the person over the hurdles of this process. Because listen, moving teeth isn't fun. It's uncomfortable at times. So how do you get a person to voluntarily sign up for that? You have to help them envision what life is going to be like on the other side. And that's what we try to do with a lot of our marketing work and a lot of our communications.

Kailey Raymond: Any insights that you have there in terms of what are those motivators or those connective devices that you've said, like, "Oh, this equals that," that you've been able to find that will move somebody to actually go?

John Sheldon: Well, about 20% of our customers have an event in mind. I'm getting married, there's a family reunion, there's something, there's an event in mind and that moves people. No question about it.

Kailey Raymond: That makes sense.

John Sheldon: The other elements that I think can move people along, obviously sometimes promotionally, we just put the right economics in front of them. Obviously we're 60% less than Invisalign and braces, and so we've lowered that barrier in a really meaningful way. Just discovering that they have access to us. 60% of the counties in the United States don't have an orthodontist in them. And we've actually sold aligners into 95% of those counties. And so we're just creating an access to care that didn't exist before. And helping educate people that that exists, that can often be the motivator, something that they never had access is now available. There's lots of different things that can trigger a person to move.

But just to keep going on that for a second. One of the things you can do, if you go to our website and look at the results page, you see hundreds of before and after photos from people who voluntarily provide them to us because they're so excited. And you can see that that person is going through often a much bigger transformation than just straightening their teeth. And that's an honor for us to be a part of that in their lives. Whether they're taking control of their weight or deciding to go to college or entering the dating field again after 15 years of marriage or whatever those things are. And you can see it manifest itself in new hair colors and dressing up and losing weight and all that stuff. We're a transformation product, but we're part of somebody's much bigger transformation. And for me, those motivators really come from understanding where that person is in those journeys.

Kailey Raymond: That's an inspiring mission to be connected to. So I can appreciate the excitement that you bring into all of your different campaigns. And what I'm hearing from just a data perspective is there's so many of these things that you might be wanting to know about your customers to be able to help influence them in their journey. So walk me through right now how data in a few different ways, I'm sure there's many, many, but how is data influencing marketing at SmileDirectClub?

John Sheldon: Obviously as big digital marketers, we're looking at data all the time. And obviously, it has to do with targeting, it has to do with sending signals to the big engines to help them optimize against the things that we care about. And obviously, downstream it has to do with where do we go fix first and make sure our NPS scores continue to rise. 

Kailey Raymond: Let's talk about NPS. What are some of the programs that you're running off the back of that?

John Sheldon: By way of example, we built out a orientation video. It started actually as a call that we were doing, but nobody wants to pick up the phone anymore. And so what we do is we mail them a customized orientation video that takes them end to end through everything that's in the box and everything that we put in there to help them have a better experience.

Kailey Raymond: We talk about this often, is the definitions around data and how you might define good data. Obviously, that's the name of the podcast. And everybody's defining it relatively differently actually. So from your perspective, John, how do you define good data?

John Sheldon: It comes down to a couple things. Obviously, number one is what is the cleanliness of that data? Is it clean or are you making lots of inferences? The biggest danger you have is when you're starting to build models on models. And people do that an awful lot, and that's a pretty rough way to get to answers. But for me, we try to get a lot of really clear, clean, raw data that allows us to chew on it in the ways that our analytics team, and we've got a great analytics team. I actually have woman who worked with me at Fresh Direct now heads up analytics at SmileDirectClub. And it's a really powerful team. And so what we really want to understand is how do we take a look at the funnels, conversion funnels and all your cost pers on that? That's what I wake up to and start looking at. And that's what the team looks at every day. We have the series of whatever Looker reports that we jump on for the first hour of the day. And it just says, "This is what I got to go chase down today." And so the only way we can do that is with good, clean, well-understood, well-defined data.

Kailey Raymond: I fully hear you, making sure that everybody understands all the definitions of what we're talking about so that everybody's on the same page with what the data means so they can actually action on it. So now that we have the definition of data and what good data means for you, how are you leveraging that to build some of your customer engagement tactics?

John Sheldon: It touches every part of our customer experience. So I talked about a little bit of the qualitative reviews of watching folks in the shop, etc., previously, but we also are very much looking at the quantitative views, looking at each one of our funnels, every step of that aligner process. And we're looking for places where people drop out and the reasons why. And we have a really strong research team that we go out and ask them and say, "What happened here?" And we give them options and let them tell us the answers. And it's been very helpful for us not only in continuing to improve the customer experience, but also new product ideas, new innovation ideas that help build on the business.

So I'll give you one example. We are going to launch, by the end of this year, a product that's really intended for more, I'll call it the traditional orthodontic customer. We opened up the market to people who didn't have access to that before. But higher household incomes and parents of teens, they have different needs. And we went out and just did the research and also looked at their behavior on our website, but did the research with them and got that quantitative data, said, "What is different about that audience? What do they need to see from us?" And so for them, they want to start in a local location and look somebody in the eye. They want to look their dentist in the eye. And so we're building on our partner network to be able to create kind of a higher service level model that starts with them looking somebody in the eye. That came from key research work that we had done. And obviously we're comparing, doing overlays and comparing what percentage of our customers are teens today versus where we think they can be. And knowing there was a gap there, it's time to go chase that down and figure out how can we service them in the ways that they want.

Kailey Raymond: I always appreciate the mixed models of folks that both have digital and in person experiences. And I'm fascinated by how people are bringing together all of that data into unified profiles to make sure that in every step of the way, whether they're online or they're in person, they're getting a really unified customer experience that's speaking directly to them. What are the ways that you're doing that at SmileDirect? How are you making sure that you are pairing together all of these different channels and sources of data coming from both qualitative and quantitative and feeding it into these audiences and making sure it is feeling really relevant and personal to your customers?

John Sheldon: First and foremost, first, every one of our customers basically begins their process with SmileDirectClub online, today on our website. Eventually it will be within the app as per our conversation previously, but today on our website. And so there's no easier way to do that than just do it through straight doorway pages, landing pages that are tailored to the people that you're targeting in paid media or based on the keywords that they search in Google, etc. And so you're just putting them on targeted landing pages like a parent of teen page or a teen page or a "Hey, I need to find out if my insurance will work for SmileDirectClub page," and just drop them right in the place that answers the question that got them to click. And so to be honest, that's the simplest way that we do it and it's one of the most important.

Kailey Raymond: Value exchange, making sure that everything that you're saying to somebody is worthwhile for them to enter that email address that you can start to capture all of that rich customer data and be able to action on it.

John Sheldon: That's absolutely true. And for us, CRM is the circulatory system of our marketing system. You couldn't rip it out. It's so vital and critical because there are so many places for a customer to get lost in the cycle because of things like, "I don't know where the shop is," or, "I'm scared of putting the put in the tray," or whatever for them is the barrier that they've created, we have to basically say, "Don't worry, the putty's not expired yet," or, "The shop's right around the corner and there's parking next to Mel's Diner," or whatever it is so that they have the confidence and comfort to continue to move down that experience.

Kailey Raymond: I love that. Who do you think is doing it right in terms of customer engagement? Any people that you look to for inspiration?

John Sheldon: There's lots of interesting brands, some of which also kind of grew up in our class that are having a little bit of trouble right now. Their customer experiences are really good. It's just I think all of us are seeing some really interesting headwinds from the macroeconomic environment. But yeah, I'll tell you somebody I think doing just a killer job from a branding perspective, a content perspective, and just building up their business is somebody like YETI. Between the content work that they're doing, the strength of their brand, anything you look at from them looks like them. They've done a wonderful job. And they carry it through, they carry it through to their website, they carry it through the eCommerce, even their store on Amazon. All that stuff is really powerful.

Kailey Raymond: And I feel like for the past few years, it's no matter what swag, whatever company you're going to get it from, one of the items is going to come from YETI, no matter what. It's guaranteed. And everybody loves them. So yeah, they're definitely doing something right.

John Sheldon: Yeah, no, right. They've done a terrific job. And I think it's because it's clear what they stand for. The products are incredibly high quality. And they've really been awesome about building out content about who they want to represent as a brand.

Kailey Raymond: Yeah. Do you have an example of maybe your favorite data-based marketing campaign?

John Sheldon: Actually, I'm going to tell you a story from 20 years ago, 22 years ago now. I worked with an eCommerce company as a consultant called Outpost.com. And we were really working in the earliest days of eCommerce, but we were capturing a ton of data through Broad Vision, which was their web service at the time. And we had a program we called the chicken [bleep] program. And it was literally basically if a person came back to the same product on their site a third time, we were like, "Okay, chicken [bleep], put it in your cart for 20% off. You know you want to buy." This is before people were comfortable with eCommerce. And so the whole point was just get them to put anything in the cart to start to commit to the process of actually buying online because people hadn't done that previously. That's still my favorite. I still think about that all the time now. I'm talking to you 23 years later about that. It just did the right thing. It incentivized the right behavior from customers just based on their data, based on their behavior on the site.

Kailey Raymond: I love that because it's one of the most common campaigns ever now, cart abandoner, every commerce company in the world has a flow that's set up that's for cart abandoners. So the fact that you are kind of in the very breaking moment of what that looks like and calling it the chicken [bleep] campaign is absolute gold.

John Sheldon: Yeah, it's before you could do retargeting around the web. That wasn't a thing. And so we were just doing it on the site itself, but obviously that's turned into a massive retargeting business for all the people that are doing that.

Kailey Raymond: Absolutely. What about any changes? So we talked about some of the trends that are happening right now, but what are some of the changes that you see on the horizon as it relates to customer engagement in the next six to 12 months?

John Sheldon: I think the privacy changes that are existing in Europe right now, the opt-in changes, all of that, that is going to continue to tighten. And so all the ways that you can gather first-party data about your site visitors, your customers, so you can really talk to them in the ways that they want to be talked to without having to ask somebody else for the data is going to really be one of the most important things that's happening as a marketer over the next couple years. I'll give you another one, which is the transition from linear television to CTV or OTT, whatever you want to call it, and the ability to utilize the householding work that they do to try to figure out who's in that house and who's watching this TV spot that we just targeted? Hilariously, my daughter is an excellent Spanish speaker, and she keeps her phone in Spanish.

Kailey Raymond: Me too.

John Sheldon: Do you really? That's amazing.

Kailey Raymond: It's for practice, it's for practice. But you know what's really annoying for people is when you react to things on iOS at least, if you're in with anybody that has a non-iOS device, then it reacts in Spanish. So it's like, "Kailey, [inaudible 00:28:39] gracias." It's very funny for people.

John Sheldon: What's funny about it for us is she's off at college, but Hulu is convinced there's a Spanish speaker in their house and keeps firing Spanish commercials at me. I'm like, "I don't even know what they're saying." It's figuring that stuff out, as the privacy noose gets tighter, it's going to be even harder for folks to figure it out. And funny, weird things like that are going to happen more and more often. And it's going to have some interesting effects on things like CTV or digital advertising in general.

Kailey Raymond: I like that you called out what... You're not saying it explicitly, but what you're describing is the tension between privacy and personalization and really what marketers are going to be able to do in the future. But you already labeled a solution, I think, which is first-party data and making sure that you are collecting as much of that really rich data stream as humanly possible and making sure you're providing value to those people through entering your website, entering your app, making sure that you're consenting the entire way through. So being able to have control of that information and then feeding that out into other channels is I think certainly the future. And if people are not already doing that, then they're probably already behind, not even six to 12 months ahead.

John Sheldon: So I would say it this way, the best thing a digital performance marketer can do is build their brand. A lot of times performance marketers say, "I don't need that brand stuff. I can do that hard targeting, all that stuff." In today's world, that's going to be too hard unless you're like Yeti and you build that brand. I'm a big believer in how brands are built, the Byron Sharp stuff. Unless you're building up that level to your brand, people aren't going to know to find you and they're not going to know to look for you. And you're going to have a hard time finding them too because you're not going to have that first-party data we just talked about. And so in today's world, the best thing you can do as a performance marketer is build your brand.

Kailey Raymond: I love that you're saying that. And this actually kind of reminds me of post-2008 financial crisis, I feel like all these startups kind of came about. And in the marketing world at the very least, I think everybody was leaning into community strategies, community led growth, those were the big things that people were talking about. And really, that's a big brand exercise. And a lot of it you weren't able to calculate the performance of it. It was way squishier than that. And I think we're heading in that direction again. And what you just said, I think is an example of exactly that trend moving in this direction once more. So my last question for you, John, what are some of the steps or recommendations that you might have for somebody that's looking to up level their customer engagement strategies?

John Sheldon: One, find every way possible to listen to your customer, whether it's listening to an hour of customer service calls, watching people in your shops, surveying them extensively. Listen to your customer and they'll tell you what they need and what they want and what their hang ups are and why they didn't go with you today. And so to me, that's number one. Number two, build your brand, for all the reasons we talked about. Be consistent, have iconography, follow the Byron Sharp methodology, where he says, "You have to be physically present and mentally present for your customer." And so we worked really hard to do that with our marketing strategies. And then number three is hone, hone your customer journeys, your funnels. Look at all the places that people are falling out and not behaving the way you want to. You're doing something with a word, with a design element. You're raising barriers all through your experience. And so you have to do the test and learn thing. We use optimizing. You can use whatever you need. In CRM, we use a different tool. And you just go through, and you have to test and learn. What removes the barrier 2%? You do five things where you improve by 1%, now you're talking about really impacting the business. And so from my perspective, it's just really testing and learning your way to a much smoother customer experience.

Kailey Raymond: I love that. Incremental progress, listening to your customer, and making sure you have a unified brand experience. Definitely wise words. John, thank you so much. This has been super insightful. I learned a lot today.

John Sheldon: Well, great. Thanks, Kailey. I appreciate your time.