Howard: It is a huge honor for me to be sitting in Sydney Australia with an unbelievable man Dr. Safa Souzani. How are you doing?
Dr. Safa: Thank you very much Howard, pleasure being here.
Howard: I've been told by several people that are extremely successful that this is the smartest businessman dentist in all of Australia. So, basically his bio, you started Dental Members Australia in 2011 by local Brisbane dentist Dr. Safa Souzani. He was frustrated that his patients who needed the most dental work couldn't actually start treatment because the upfront cost so, dental members Australia created a cloud platform to enable patients to pay for treatment in weekly or fortnightly payments. What does fortnightly mean?
Dr. Safa: Fortnightly is every two weeks.
Howard: So weekly or fortnightly, okay. DMA which is Dental Members Australia dental vouchers from a thousand to five thousand dollars this voucher system combined with capped fee pricing is the first of its kind in Australia. Dental members partnered with 1-300- Smiles and which is one of the two publicly traded chains on the Australian stock exchange ASX it's 1-300-SMILES and what's the other one?
Dr. Safa: Pacific Smiles Group Dr. Alex Abrahams.
Howard: Pacific Smiles Group and Alex Abraham's who we podcast interviewed- we've already seen him and who's the CEO of 1-300-SMILES?
Dr. Safa: Dr. Daryl Holmes.
Howard: So, we're gonna podcast is he a friend of yours?
Dr. Safa: Absolutely, he's my mentor and a very good friend.
Howard: Well what we'll do is do his podcast over Skype.
Dr. Safa: Lovely.
Howard: And we'll publish his the day after yours.So, we'll do yours and his.
Dr. Safa: Thank you.
Howard: And also, you own dental clinics like you own what? five dental offices?
Dr. Safa: absolutely, absolutely.
Howard: So, basically here's why I was so excited to get Safa on the show, so… I've been a dentist for 30 years when you tell someone they need dentistry they only have two reactions. Half goes into fear and they're like ‘oh my God I need a crown, are you give me a shot, is it gonna hurt? can you put me out? can you give me nitrous or whatever.’ The other half go into fear of cost ‘oh my god how much does that cost? I don't have insurance I don't get paid till Friday.’ So, it's just fear of pain and fear costs is the two huge markets and you're focused on ‘Oh what they want is same-day dentistry so I need to buy chairside milling.’ What percent of when you tell someone they need a crown, what percent are mostly concerned that they get it the same day with chairside milling?
Dr. Safa. They're not concerned at all.
Howard: Yeah, what percent are afraid of the shot and the dentist and what percent are afraid of fear?
Dr. Safa: Fear is high.
Howard: Yeah I'd say it's half and half.
Dr. Safa: Half - half, exactly.
Howard: So when we always talk, one of my reoccurring themes are that, ten people have to land on your website before your horrible website converts one to call the office. Three people have to call your office before your untrained receptionist can convert one to come in, three people have to come in with a cavity before you convert one to drill fill and bill and do the dentistry. So, for the average American doing 750,000 collection and taking home a hundred and eighty you literally - to get to do one filling three have to come in, for three to come in nine have to call for nine to call, for 9 to call, 90 have to land on your website. So, what if your website address the two major concerns and not with a still picture not a bunch of text but like a YouTube video where the first one says, "Hey, afraid of the dentist?" If you're afraid of dentists you need to come and talk to me, we are gentle, we have laughing matches. We pride ourselves in treating fear seriously if you're afraid of the dentist you need to come in and call me in fact call me right now call-to-action call my number and then the other one is "Hey are you afraid of the cost of Dentistry? are you afraid this isn’t going to be affordable?" And if you don't talk money and your treatment coordinator talks money your, office manager talks money, whoever talks money in your office, she needs to be in that video, ‘Hey I'm Veronica from Dr. Goods office and you have a problem, are you worried about the cost of dentistry, give me a call let me talk to you, we have several things we can work out’ and what I like about you is that you have innovated something new in the fear of cost affordability. So tell my homies what you've done as far as on the cost side of this.
Dr. Safa: Well doctor Farran, as a practice owner, the result of this was because I was seeing patients that couldn't actually afford the treatment that I was providing them and -
Howard: And you were working in Brisbane?
Dr. Safa: I was working in Brisbane as a dentist, I had my own clinic at the time and that was a complete frustration. I knew that it was because of the cost that they couldn't because I would spend the time, I'd be polite to them, I'd be nice to them, ‘yes, I’ll think about it.’ So, I started going to lots of seminars, treatment conversions looking after patients, all that sort of thing but there is one fundamental thing I started looking at and that was the average Australian household income and how much I was actually asking them to pay and I would end up in seminars and the seminars would go look look after the top 20 % if they can't afford you, move them on and slowly, slowly I realized that dentistry is really a small cottage industry. It is we are focused on our own patients and we are in our own little bubble people come to us, we do the work and people pay us. To actually think a little bit outside of that, to actually look after a larger portion of people we have to think a little bit differently. Financing companies at the time weren't really an option because it was expensive, interest rates were high and at the time 2009 I knew with new technologies were coming like the cloud technology, software was becoming more and more prevalent and with software you could actually start doing direct debits very quickly and so I actually stopped doing dentistry at the time I had two practices and I went and sold my apartment that I was living in and I stopped doing dentistry I had associates working and I went to live with my parents because the banks wouldn't lend me any money to do a software for direct debit and I actually found a software company in Melbourne, came and lived here for a while and created a platform which is able to do direct debits in-house at a click of a button without needing staff. So, it's a platform that can go into people's accounts, take direct debits in small amounts and everything automatically send texts automatically, send emails automatically, take money for thousands of thousands of thousands of people. So, as that finish edI thought great, my problems are over I'm going to now introduce this to the four or five dentists that work between these practices. Little I knew the problem was just beginning because dealing with the dentist and the frame of receiving money slowly is a problem of its own. So, hence that's how dental members Australia was born that's it and it began from there.
Howard: So you're you're advertising straight to the consumer .
Dr. Safa: That's correct for the first three or four years we actually went out looking for dental practices and introduced membership programs to them. We call it the care plan and payment plan platforms but we realized that to actually survive you need high-volume and dental practices are not equipped, they're not in sales, they can't get the treatment converted, they can't, they don't discuss payment plans; dentists don't want to discuss money or payment plans. So, we realized that we have to go externally, luckily in my travels I met now my mentor Dr. Darrel Holmes which is a..
Howard: Who is the founding directors father?
Dr. Safa: Absolutely.
Howard: of 1-300-SMILES one of the only two publicly-traded chains on the ASX
Dr. Safa: Absolutely.
Howard: The Australian Stock Exchange,it's 1-300-SMILES with Daryl.
Dr. Safa: And Pacific Smiles group.
Howard: Pacific Smiles Group with Alex.
Dr. Safa: with Alex, correct. So ...
Howard: Alex Abrahams.
Dr. Safa: Alex Abrahams. I was in my mid 30's and I flew up to Townsville where Daryl's based and introduced this membership program and the membership program was you to pay $30 a month the software does it all and the patients can come in and get all their exam clean and fluoride done twice a year. Luckily at that meeting, there were executives there that were involved in membership programs with other industries that we're doing consulting for Daryl mainly Gym industry, this is five six years ago. So, I met with some of them we rolled the ideas and we rolled the membership program in all of 1-300-SMILES practices.
Howard: And how many practices do they have?
Dr. Safa: They have 25 large practices, 25 very prominent practices mainly in Queensland.
Howard: Queensland is Brisbane?
Dr. Safa: exactly, Brisbane, Wincanton, Gold Coast, it's that region.
Howard: And when you say 25 large offices, like how many operatories and dentists and an average practices are there?
Dr. Safa: Some of Daryl's practices could be ten, eleven chairs. Daryl 1-300-SMILES is the most profitable dental corporate here in Australia and I learnt a lot from them.
Howard: Do they have hygienists?
Dr. Safa: Hygienists they don't have and generally I believe it's because probably the rooms are pretty full with dentists doing the work. So,
Howard: I noticed the 1-300- SMILES and Pacific Dental Group neither of them use hygienists.
Dr. Safa: Yes, hygienists hadn't really taken off as much as I believe as the United States. Our own practices, the practices that we have - smaller practices they do have, we do have hygienists.
Howard: In your five?
Dr. Safa: Correct.
Howard: So, you have hygienists in all five of yours?
Dr. Safa: We have hygienists, in three of them.
Howard: Well I think in the United States a lot of people, they're thinking as well, I want to have the hygienist because I can be doing profitable dentist .
Dr. Safae: Correct.
Howard:But the problem in the hygiene department is when they're paying their hygienist $40 an hour...
Dr. Safa: Correct.
Howard: And the PPO is only giving them $45 or $50 for a cleaning, they're losing their butt.
Dr. Safa: Absolutely.
Howard: And then with the increase in young dentists out of school whenever you put an add-up for a hygienist, you'll have dental students call up and say I'll take that job.
Dr. Safa: Yes.
Howard: So, then all the really cost focused a corporate dentist chains will say, " Well I will have the dentists do the cleaning" because then they can bond and meet with the patient and then later on do fillings and crowns and other dentistry.
Dr. Safa: And that's exactly the situation here. So, yes and we eventually stop actually looking for dental practices wanting to convince dentists about membership programs and payment plans. We found that it wasn't working the staff turnover of dental practices, the whole way dentistry is done. So, only about two years ago we changed our focus into the actual patient's telling patients what we have and with social media, Facebook especially we were able to reach a large portion of people and there we realized, wow people actually want this because we put a post up about you know affordable dentistry and wham there is a hundred comments how can I get access to it? So, in lieu of that we started focusing our own practices, my own practices and Daryl's and we actually at the moment don't accept anymore dental practices coming on board because it's too difficult and too costly and we just focus on building our own practices why various payment plan solution and Dr. Farran most of these payment plan solutions are sold before the patient goes to the dental practice in a voucher system. This is where we're finding the best results- not that the patient goes to the dentist's meets the dentist and the dentist recommends a treatment plan and then goes on a payment plan, we're not doing that because we then again are relying on the dentist and the dentist has their own set mind on various things depending what I've done in the past. So, we have a professional help desk patients call up only dentistry, I know I haven't been, what do you recommend to help this. Look we've got a 1,000 2,000 3,000 5,000 dollar package, why don't you start with a $3,000 payment plan it’s $99 a week after your second or third payment go to this particular dentist, Dr. Safa Souzani who does this particular procedure really well, he is about 15 kilometres away from you and he will start your work. So, we have taken away the whole process of what happens inside the dental practice externally and we send the patients externally into the practices.
Howard: So, you they have to make a couple two or three payments before?
Dr Safa: Correct two or three payments
Howard: To make sure everythings good?
Dr Safa: Everything's good everything's okay
Howard: So before you're extending credit to them is software better these days in determining who's a credit risk?
Dr. Safa: Absolutely there's various various things we can do, we have various statistics that we know out of every bank account we have an 8% failure rate of director of it but of those 8% we know bad debt is only 1, 2 or 3% noting that we don't go and finish the work immediately either. So, we start with the emergency work. So we first get the passion and do a treatment plan start with the emergency work and then every four to six weeks depending on the payment plan.
Howard: So you say 8% is bad debt, no 8% is default.
Dr. Safa: ...Default and bad debt is 1, 2, 3%.
Howard: But what is the difference between bad debt 1, 2, 3% versus a 8% default?
Dr. Safa: So foul payment is if they failed a payment but they will come to the practice and actually pay that off and bad debt is look, we've finished the work and that we're not going to see them again and again that's why we're actually dealing with our own practices because dentist we find we'll focus on that 1 or 2 % and suddenly say look, I've done a procedure I did a crown for $1000 I only received 750 for the patient closed their bank account it's 1 out of 20 patients and they don't want to do the voucher system anymore. So, we find that the focus becomes that and once the focus becomes that, it becomes difficult so we have our own dentists. Most of them are employment model so they don't have to worry about that and that's how we're starting to..
Howard: What do you mean they don't worry about it because they're not getting paid on collections or and paid on production?
Dr. Safa: No, we do you actually get paid on collection but most of the new generation coming through are actually on a salary doctor Farran. So, they're on a salary package.
Howard: Is it a salary versus percentage?
Dr.Safa: Correct, I think once it hits a particular level then it goes into commission.
Howard: So what is the interest, what is the salary and what is the percent collection?
Dr. Safa: Generally at the moment for our clinics these commission-based goes from 35 to 40 percent depending on the level of experience and salary packages start at 80, 90,000 AUD.
Howard: So, they start with at $80 000 to $90 000 salary?
Dr. Safa: Correct.
Howard: Then 35 to 40 percent of collection but that's after lab though, right?
Dr. Safa: Correct. The lab bill is taken out of that.
Howard: So it's the collected revenue minus the lab bill times 35 to 40 percent correct?
Dr. Safa: Correct and that's becoming more easier because the number of dentists in Australia is very high at the moment the number of dental schools that have opened up over the last few years has increased dramatically the government 457 visas has had a huge migration of dentists that have come to Australia.
Howard: Are those the government work visa?
Dr. Safa: they referred to as the 457 skilled visa.
Howard: 457 skilled visa?
Dr. Safa. Correct.
Howard: And I think this is like I think the sixth time I've been down under and starting in the 90s I would come down to five cities in ten days. I do Auckland, New Zealand, Melbourne, Sydney, Gold Coast, Perth and I did that five-city tour like three times and been down here other times and when I was coming down here in the 90s and I'd ask the dentists so what is your main problem? And the main problem is if someone called with a toothache I couldn't get him in for six weeks and I told them you know your government is not gonna like that.
Dr. Safa: No.
Howard: And the government is going to go crazy and the dentist didn't solve that problem so the government got in and gave these visas -how many foreign trained dentists they let in, in the last five years?
Dr. Safa: Thousands.
Howard: Thousands?
Dr. Safa: Not sure of the number but there are thousands and..
Howard: And what did they do to the number of dental schools?
Dr. Safa: At least five or six new dental schools.
Howard: They doubled the number dentals schools.
Dr. Safa: Absolutely.
Howard: And then corporate dentistry came.
Dr. Safa: Absolutely.
Howard: And then you had the global financial crisis of 2008 so the economy got rocked while they doubled the supply of dental schools, they let in thousands of foreign trained dentists mostly from Asia.
Dr. Safa: Absolutely.
Howard: And now it's a very competitive environment.
Dr. Safa: Yes.
Howard: Then the dentists are upset but the patients aren't upset.
Dr. Safa: No.
Howard: The government's not upset.
Dr. Safa: Yes.
Howard: And you still have that problem in the United States where these dentists don't realize that the reason they're building so many dental schools is because people call up and say ‘yeah I broke my tooth is there any way you can see me today?’ And they're like ‘well no I can’t see you for five days’ and they go ‘well it's emergency my tooth broke’ and they go ‘well are you in pain? Did it wake you up at night?’
Dr. Safa: No.
Howard: Are you taking Aspirin ? Well that's not an emergency, you just broke your tooth wait five days’ and Americans can get a pizza delivered in 30 minutes.
Dr. Safa: Absolutely.
Howard: But I have to wait five days ...
Dr. Safa: To see a dentist.
Howard: To see a dentist and then to get your teeth cleaned with the hygienist, several weeks.
Dr. Safa: Absolutely
Howard: And then in Phoenix on Sunday you'd be better off breaking your leg than your tooth because if you broke your leg on a Sunday you could call an ambulance they’d pick you up they’d take you to a hospital. It would be fully staffed on Christmas, Easter, Hanukkah, seven days a week they'd fix it. You know what the chances are that you’d get your teeth cleaned in Phoenix on a Sunday?
Dr. Safa: Zero
Howard: Zero
Dr. Safa: Absolutely
Howard: And then the dentists say ‘why do they keep building Dental schools?’ Because you all work Monday through Thursday eight to five.
Dr. Safa: Yes
Howard: And so they're gonna keep doing things..
Dr. Safa: Absolutely.
Howard: Until people can get dentistry seven days a week like they can get bypasses done seven days a week, broken legs fixed seven days a week. You can get a bypass in the middle of the night on Christmas if you drop that heart attack.
Dr. Safa: Absolutely. So, we have a whole lot dentists here that complain a lot about a number of dentists and the number of competition but perhaps we forget that we are in the health industry which is primary health. We're here to look after people and to actually care and teeth are very important yet a lot of things come into it and that the dentist would only see their own point of view.
Howard: Right, that's what all humans do.
Dr. Safa: Absolutely.
Howard: Humans only see their own point of view.
Dr. Safa: Absolutely
Howard: And the best businessmen are the ones that meet someone else and they say ‘this is what I need and I can see what you need and we can find common ground’
Dr. Safa: Absolutely
Howard: And a poor businessman is trying to shove down your throat what I need..
Dr. Safa: Absolutely.
Howard: ..without any regard for what you need and when you look at financing, it will cost over $1000 ninety percent of the time so we finance.
Dr. Safa: Absolutely.
Howard: So the dentists says I don't want to do financing.
Dr. Safa: Absolutely.
Howard: It reminds me I'm Irish descendant, I'm 100% Irish and if I asked you what's the greatest sewing machine in the world what would you say? Name a brand of sewing machine that you...
Dr. Safa: I think it is Stinger?
Howard: Singer.
Dr. Safa: Singer that's right.
Howard: You know why?
Dr. Safa: Why is that?
Howard: Because the Irish diaspora was 1850, it was 40 years before the Statue of Liberty when a million Irish starved to death and a million left and landed on America and there was like 85 different sewing machine manufacturers, all the jobs were in textiles and it was only Singer who realized that none of these Irishmen can get a job because they don't have $50 for a sewing machine .So, he was the only one - everyone else needed 50 bucks for a sewing machine. It was only Singer who said ‘hey come here Irish guy I'll give you $50 for a sewing machine, you can get a textile job every Friday. They're gonna pay you three bucks but you’ve got to come back and give me one of those bucks.’
Dr. Safa: How smart.
Howard: ...for 50 weeks and then you own your sewing machine. So where did the other Irish go? To Singer. They all got jobs, who bankrupted all the other sewing machine factories because they had installment credit. Another story was, everybody knows that Henry Ford..
Dr. Safa: Absolutely
Howard: Started the assembly line
Dr. Safa: Absolutely and he halved the price of his cars and made it only black.
Howard: They started at 668 and ten million units later it was 220. So, he's doing very good at making everything faster, easier higher quality, lower cost. He kept tinkering with the assembly line, driving down costs and efficiencies but no one talks about what was the end? Why did they stop at ten million and they stopped at ten million because of GM. GM’s secret was GMAC financing.
Dr. Safa: Yes.
Howard: And GM said well, Henry he needs all of his money up front but you buy a car from GM, GMAC financing will give you an installment credit and you can make payments for 36 months.
Dr. Safa: Absolutely.
Howard: And that's what shut down Ford's model-T assembly line.
Dr. Safa: Absolutely and a GM I believe Dr. Frank couldn't compete with the low price so GM was one of the first companies that said look, I will put in these cars absolutely everything. So, I won't play in the middle I will go and produce the Cadillac, the electric window and I will go and market to the Beverly Hills actors and actresses and have the price way up here because I can't be as low as Henry Ford's car. I can be either top or really bottom. I can't compete in the bottom I'll go right to the top.
So, again they picked their mark and they stick to it and they persist and eventually they win whereas I think we discussed that before once you play in the middle and you don't have a focus or where you want to be you're either the high-end dentist charging thousands of dollars or you've got to have affordability, access seven days a week long hours so on and so forth. Playing in the middle in an environment, in a competitive environment will no longer get you growing.
Howard: Well you know I think that you know if I had to give a dental student a magical, if I could wave a wand and give it to you I want you to be able to walk in that operatory and have instant likability and trust, an amazing chairside manner that shows empathy, compassion, connecting and you can really communicate that you actually have these cavities and you can show them on the digital x-rays intraoral cameras. No one cares about all the alphabet soup degrees behind your name, they don't even know what that stuff means- they don't care, they'll never even ask what dental school you go to.
Dr. Safa: Absolutely.
Howard: So you can think, I went to the best dental school in Queensland, no one cares.
Dr. Safa: No
Howard: Do they like you? Do they trust you?
Dr. Safa: It's here, is there a connection from here is their care. It's the human connection at the end of the day that matters the most.
Howard: And then after that, they're gonna be afraid of the dentistry so, you got to be able to say you're gonna be okay, if you raise your hand I'll stop I'm not gonna hurt you I love being a gentle dentist ,we're gonna get through this you're gonna be okay fear of pain and the fear of pain is weird I mean, I have men come in and they could pick me up and throw me on a roof, who have sleeve tattoos and it's like okay so your tattoo was one thousand shots.
Dr. Safa: Yes.
Howard: And you're afraid of my one shot so it's all just in their head.
Dr. Safa: Yes.
Howard: And but you address the the other completely major concern fear of cost and I want to talk about fixed pricing because I hear anytime I get on airplane sitting next to someone, I ask what their dental experience this and that and they always say things like ‘ well, he told me I need a crown and he told me it’s a $1000 but then when I got up front they added on another two hundred dollars for a buildup. Implants are the worst. I called them up and they told me the implant was $1500 but then when I went to pay it was $1500 the implant, there's $1000 for the bone graft and it was another $500 for a surgical guide and I thought it was going to cost fifteen hundred and by the time I got upfront it was almost $4000.
Dr. Safa: Absolutely.
Howard: So what would you say about that?
Dr. Safa: And that's exactly. That is totally one of the things that exists in our community as dentists. The patients not knowing what prices really are.
Howard: What total cost.
Dr. Safa: What total costs are and the additions but that psychology actually begins before them stepping into a dental practice and that’s what stops patients coming in and the story comes from the Olympics in London where they brought actually a pricing specialist from the United States into London and they said ‘look we're under trouble we need to be selling.’ I'm not sure about the figures you know about six hundred million dollars worth of ticket sales for this London Olympics or else we're gonna go broke. So, the pricing specialists from the United States I'm not sure if the gentleman's name said look, ‘the only way I will commit to helping you guys is that I do not have any inference about what I'm going to say. You signed this contract there can't be any interference.’ So, he came I believe it was to 2000 and Dr. Farran 2011 was their London Olympics or 2001 one of those but what he did was he said simplicity of pricing. London Olympics all of the fees if it was 2001 is going to be 20 pounds between two to twenty pounds. Kids age whatever your ages if you have a fourteen year old child the price will be fourteen pounds, by making the price simplicity to the public and advertising it, the ticket sales for the London Olympics where the most successful ever by simplicity of pricing. The price itself is not so much the issue. it’s the unknown. It's a bit like going to the restaurant and wanting to order and there is no price on the steak you want to order. I'm sure you could potentially afford fifty, sixty, seventy dollars for a steak but not knowing makes it worse and this is what the pricing specialist actually did from the United States there's a story I read it...
Howard: I don't even like going to these fancy dinners with dentists..
Dr. Safa: Yes.
Howard: Because they expect that you know if it's four people we're just gonna split the bill.
Dr. Safa: Yes.
Howard: But if you if you go to dinner with four dentists one of them's gonna order a $500 bottle of wine and I'm not gonna drink any of your wine. I really don't want to pay for half of your $500 bottle of wine.
Dr. Safa: Absolutely.
Howard: We're having dinner the other nig.ht and it was four guys and they bring the bill it's $1000.
Dr. Safa: I see
Howard: and the dumbass says, okay so it's 250 says everybody give America's best 250 each. I'm like 250 each you ordered a $600 bottle of wine and you and your asshole buddy drank the whole thing.
Dr. Safa: Absolutely.
Howard: I think that you guys should just split the bill between the two of you because my little $50 dinner was not even a rounding error on your stupid bottle of wine.
Dr. Safa: And it's not about... it's a psychology of it all isn't it Dr. Farran?
Howard: Yeah.
Dr. Safa: It's the psychology of that not knowing. So the moment we introduce the capped fees, we cannot keep up with the demand on our social media I'm constantly told stop stop the posts because the help desk of seven people can't keep up, we don't have the facilities, we don't have the chairs.
Howard: So what are you advertising capped fees on? for like capped total fee for a filling, a crown, what else?
Dr. Safa: Fillings a capped fee. Crowns a capped fee, root canals a capped fee.
Howard: And what is that what is the fee?
Dr. Safa: The fee for fillings is $149 AUD now that is not liked amongst our Queensland colleagues they believe that it is too low and we're doing this dentistry and that dentistry but the pure fact of it is, I've been a dentist for 20 years Dr. Farran I will do $149 quadrant filling dentistry all day long if I had to.
Howard: And then what's your fee for the crown?
Dr. Safa: Crowns or ceramic is $ 999.
Howard: That's a lot, thousand bucks.
Dr. Safa: In Queensland a dentist most dentists are in the 1,500 to 1,800 dollars a crown and still sit there rather do two crowns a week but at 1500 to 1800..
Howard: What other capped fees you have, what are they?
Dr. Safa: So $999 is for crowns, $149 is for fillings.
Howard: So why are you doing $999 instead of $1000 and $149?
Dr. Safa: It's an interesting question, I think this was partly again between the colleague of mine David Cooke who's was a membership guru from fitness first that is part of our team and also Darryl.
Howard: Because I believe a lot of that's an error, I believe a lot of people think they believe it's urban legend that 999 sounds cheaper than a 1000?
Dr. Safa: Yup, potentially.
Howard: But the PhD economists..
Dr. Safa: Yes.
Howard: ..that I follow said there's no evidence that where it actually started from..
Dr. Safa: Yes.
Howard: When they started with the cash registers they needed for internal control over peculation, embezzlement, stealing and just general accounting they needed to know how many transactions were done so going back to 1850 in New York City when they opened the cash register and they’d bust open a roll of pennies and put in 50 pennies and then instead of charging a dollar they charge 99 cents so at the end so every time someone give you a dollar you to give them a penny so the end today I count the pennies and there's only 20 pennies we started with 50 so now I know you did 30 transactions.
Dr. Safa: I see.
Howard: And that was a data point they needed.
Dr. Safa: Oh I see.
Howard: But after they did that for a hundred years urban legend was well it just sounds better if it's 99 cents but actually 999, 149, it doesn't matter.
Dr. Safa: It doesn't matter.
Howard: But there's no evidence that people buy more at 99c than they do for $1 so it was an internal control over peculation they wanted a transaction count.
Dr. Safa: I understand, and hence it’s continued on now through a hundred years later.
Howard: And that's also that copper penny that's also why cops are called cops. You know why cops are called cops?
Dr. Safa: Because of that?
Howard: Because in the the original New York City police officers, you know the Yankees emblem the New York Yankees?
Dr. Safa: Yes.
Howard: That was the emblem for the New York cops or New York police officers the New York City police officers and they were made of copper.
Dr. Safa: Oh I see.
Howard: Like the copper penny so they wore that Yankee that New York City emblem was made of copper so they were called cops because a lot of people think that calling them cops is disrespectful or whatever but it's not. So, you're charging $999 or a $1000 for crown, $150 for a filling..
Dr. Safa: Correct.
Howard: What about a root canal?
Dr. Safa: Root canal caps at $1000 also.
Howard: So root canals are $1000?
Dr. Safa: For a molar.
Howard: And a crowns $1000.
Dr. Safa: Correct.
Howard: And the fillings $149 that's nice money.
Dr. Safa: In Australia that's considered we are - what are these guys doing wrong to be charging so little amongst our community, amongst dentists. Of course we're not interested to see what doctor...
Howard: There's a lot of money in Australia like we're in Sydney what is the average price of the average home in Sydney Australia?
Dr. Safa: It's ridiculously high.
Howard: But do you know what it is because I saw a number the other day in the papers.
Dr. Safa: Seven, eight hundred thousand?
Howard: Yeah, seven hundred and fifty, the average home in Sydney costs seven fifty and I thought..
Dr. Safa: Correct. A lot of this was of course with the Chinese coming in with money and sort of inflating the costs here.
Howard: You mean after the Hong Kong?
Dr. Safa: Yes, even China mainland a lot of Chinamen.
Howard: Is there still a lot of Chinese money coming here?
Dr. Safa: There was up until recently.
Howard: Then it's backed off?
Dr. Safa: Correct.
Howard: And why do you think it’s backed off?
Dr. Safa: I think the government regulations..
Howard: From Australia or from?
Dr. Safa: From Australia because of the price increases so there's there will be a lot of Chinese that own apartments here but the apartments will be sitting empty and that was happening here but it is massively over very, very expensive here, housing is very expensive.
Howard: So now how does this work so you have capped total fees..
Dr. Safa: Correct
Howard: And then you you market mostly on Facebook and..
Dr. Safa: Social media..
Howard: What does social media mean? Facebook?
Dr. Safa: Facebook mostly its Facebook and
Howard: Any others?
Dr. Safa: A little bit on Google and
Howard: Google Plus?
Dr. Safa: Google AdWords?
Howard: So Facebook, Google AdWords anything else?
Dr. Safa: That's it essentially we've just recently..
Howard: And what does your average ad look like?
Dr. Safa: An average at is “Start your dental treatment with $49 to $99 per week dental payment plans. Vouchers available from $1000 to $5000. So, we then start communication via social media then we have a professional help desk where their dentally trained so they understand dentistry so, we're not reliant on the dentist's or the practice receptionist.
Howard: They can call that number and talk..
Dr. Safa: That's right they'll call that number..
Howard: So you’re controlling the inbound conversation..
Dr. Safa: Absolutely..
Howard: The inbound phone calls?
Dr. Safa: Absolutely. So, we have a whole dialogue of what goes on we can't rely, we used to rely on the practice reception but it's a difficult task, practice reception gets busy..
Howard: And you're only doing this for 1-300- SMILES and they have twenty, how many offices?
Dr. Safa: Twenty five.
Howard: Twenty five.
Dr. Safa: Correct.
Howard: So you're only doing this for these thirty offices?
Dr. Safa: Yes and Dr. Farran, just the main practice that I'm at and I practice two days a week- across the road we are in the planning section to open a super clinic to cope with the demand hopefully eight nine ten chairs. So, we have an existing five chair facility and we're building a purpose-built building called the dental member super clinic and we've asked the council now- we've got the land for at least eight, ten, twelve chairs as well as the five just in that one.
Howard: So twenty five offices for 1-300- SMILES and five for you, that's thirty. How much revenue are you selling for a week, month, year?
Dr. Safa: At the moment the dental vouchers with the capacity that we have we're selling about a million dollars a month.
Howard: A million a month?
Dr. Safa: A million a month.
Howard: That's amazing.
Dr. Safa: Through a help desk so these patients are not -I want to see this doctor John Smith or Dr. Safa Souzani, these patients are ringing, yes I need to see a dentist, I'm interested, I'll start paying. The problem is at the moment, some of the clinics are so full that the amount of collection is higher than the production. So in the main practice that I'm at, the collection the money we're receiving via direct debit is higher. Patients are getting annoyed because it's taking time to see them and then there are refunds that are happening. So, the problem we have is actually absolute opposite of what's happening out there with dental clinics.
Howard: So, what's your plans between 30 offices, it's not in Sydney, it's not Melbourne. So, in Australia half the population lives in Melbourne and Sydney I mean each town has about four and a half million..
Dr. Safa: Correct.
Howard: It's nine million total there's only twenty, how many in the total state in the country? Twenty million?
Dr. Safa: Twenty-three million.
Howard: Twenty-three million. So, nine million live in Melbourne in Sydney so for all my homies listening in Melbourne and Sydney when will this be available in Melbourne and Sydney?
Dr. Safa: For them, never Dr. Farran.
Howard: For them, never?
Dr. Safa: For them, never. We cannot - I'm sorry to say to dentists, we can't actually sit in front of a dentist and actually explain the process to them or actually train the whole system. We have decided that our website says registration to dental members Australia is closed. Our focus is only the patient because changing is a difficult task.
Howard: But will you sell these vouchers to Australians in Melbourne and Sydney?
Dr. Safa: Only if we have our own clinics there.
Howard: Only if you have your own clinics there.
Dr. Safa: Correct. Only if we have our own clinics there under our own system the whole full circle. Our dentists under employment ,our own areas, our own centers, our own scanning centers, our own clinics, our own organization.
Howard: So, will you try to go and get the other Pacific Dental smiles?
Dr. Safa: Look, Dr. Alex Abraham is an extremely, extremely astute gentleman there and in the earlier days we met with Dr. Alex about our membership program and we've always have been in talk but no, again we're really interested..
Howard: But the point I make is a lot of dentists are trying to wrestle with the decision they want to make in their office. Well in an office you can make a really bad decision and that bad decision might only be just like a little Doberman Pinscher in the corner snapping at ya but by the time you get to 50 locations that little Doberman Pinscher can be a Tyrannosaurus Rex and take down the whole operation. So, a lot of times you're wondering ‘well should I do this or should I do that?’ You ought to have played it out through infancy and saw ‘well, why don't you go see what Heartland Dentals doing. They got 500 locations, Pacific Dental has 350 locations, Comfort Dental has like 150 locations. A lot of times it's really good to go see what the major players are doing as I say you can you can make some grand mistakes but still eat that mistake in the solo practice. In fact you might eat a mistake and be losing money and not even know it. Some of you guys are losing money in your hygiene department but you make a decision like ‘well you know what, maybe I can keep a second hygienist busy.’ So, now instead of losing $300 a day, you're losing $600 a day but you don't even know it and it all blends with the turbulence, the time but by the time you have five hundred offices you can't do that.
Dr. Safa: Correct.
Howard: So there's a lot of , so that's why I always tell people if you have something and the solo practicing dentist doesn't get it because they're not businessmen- they have no training in business I tell them why don't you go first pitch this to Rick Workman at Heartland or Steve Thorne at Pacific dental or pitch it to Aspen. Pitch it to these major players because that's where you have a business team that will sit down and it doesn't surprise me that the only other dentists you let do this is a dentist that's publicly traded and has 25 locations.
Dr. Safa: Absolutely.
Howard: because they, because in any industry I don't care if you're selling cars or fixing teeth it's 51% business and 49% cars and once you think it's all about the car and it's all about the dentistry then you're gonna go bankrupt I mean, it's 51% business. I don't care we're selling iPhones microphones root, canals or cars..
Dr. Safa: Absolutely.
Howard: It's always more business than your art and craft.
Dr. Safa: Absolutely, a lot of the corporates of course here also have dentists that are self employed, Dr. Farran. So, they're on a commission basis and they’re referred to a self-employed, so, a self-employed dentist uses the facilities at Pacific Smiles Group about 1-300-SMILE but they run their own business within the business and again that can be limiting because essentially that dentist from Pacific Smiles could go ‘I'm not really interested in dental vouchers at $149 fillings because I'm a self-employed dentist at these facilities.’ So, again that has its own limiting limiting practice.
Howard: So, how long you how long have you been a dentist?
Dr. Safa: Twenty years.
Howard: Twenty years, so on Dentaltown there's twenty thousand dentists in Australia and before I left I looked at how many Australian dentists are members of Dentaltown and it's north of four thousand and over four hundred next door New Zealand. There seems to be more Millennials.
Dr. Safa: Yep.
Howard: What advice would you tell her she just graduated from dental school and she's leaving dental kindergarten..
Dr. Safa: Yep.
Howard: And she's gonna go open up her own practice, what advice would you give her to be a successful dentist?
Dr. Safa: I said firstly, Dr. Lisa that 23, 24 year old not to listen to people like me and believe in yourself and what you're doing and what you believe it's here because things are changing so quickly that what I believed five years ago is absolutely irrelevant for today. So, I wouldn't want to listen to me Dr. Farran because I've gone through various things that have shaped my own belief system and that belief system no longer holds true in a world where information technology changes everything so quickly and you pick up your phone you're being brought up with a phone and in your hand for the last 10 years and you can get any information you want. Listening to me could potentially hamper your growth so I know that as long as you care from here you'll be okay, you don't need to actually listen to me and that's the advice I would give them.
Howard: Nice, I always tell every dentist, my four boys the main thing is to be happy and healthy.
Dr. Safa: Absolutely.
Howard: And if you're not happy and you're doing things you don't like to do for money you're gonna quickly become unhealthy, you're gonna become an alcoholic, you're gonna be passive-aggressive, you're gonna be very upset in the end we all die and we in the end we all live in the same size condo a little casket and just be happy and healthy and I think if you maintain happy and healthy and quit doing things you hate for money. Life is an attitude..
Dr. Safa: Absolutely.
Howard: And just be happy and get through it everything that you're stressing out out at twenty five, when you're fifty five, I look at the things you’re stressing out about when you’re twenty five and it’s like well when you're fifty five, it's gonna be a joke I mean so, everything that scares the shit out of you is just because you're only 25 and just like that molar root-canal scared the shit of you because it's your first one, it's your third one. When you've done a thousand molar root canals they're not hard, you won't pull a wisdom because you're afraid of it. Pull it anyway and the first 100 are gonna suck but after you pull a hundred or a thousand they're all fun and easy. It is like swimming so, I had four boys the biggest nightmare I had the one of the biggest decisions, struggles I ever made was putting a swimming pool in your backyard because the last thing you want is one of your kids to drown. So, you put a fence over but you know someone can leave the gate open and all that stuff. So my idea was when I put the swimming pool, I didn't care what their age was I made them all take swimming lessons and it was so funny because they were all scared, they were all scared, they were all scared and they cried and they hung on, hanging on for dear life and the bottom line is you had to forcibly take the kid off you and hand it to the instructor and leave and the first thing she did is jumped in the pool with them and in five minutes they were all having fun and splashing and learning. Same thing with why are you referring out all your wisdom teeth? Why are you referring out all your second molars? Because you're afraid, everyone you do that kicks your ass makes you better on the next one. Life's an attitude half - I mean what's the worst-case scenario when you're pulling a wisdom tooth and you can't get it out? That you’ve got to stop halfway through and send it to an oral surgeon to finish it? That you got a temporize this root canal and send it to an endodontist? Just have fun, just relax and I also don't think you went to school eight years to be an employee working for someone else. I’ve never seen two dentists to agree on anything.
Dr. Safa: Absolutely.
Howard: I want you to give this first because you moved back with your parents to save money to launch this program.
Dr. Safa: Correct.
Howard: I want to ask, one of the stressful things I say and I don't know really know how to answer this because I'm a man but a lot of girls, their dad's a dentist..
Dr. Safa: Yes.
Howard: ..and she was the the pride of his life, his little princess she could do no wrong. She comes out dental school, he kind of guilt fathers her to come back and work with me and then she's working with her dad and she's miserable because she's always gonna be the little princess, he doesn't treat her like an equal, he's bossing her around telling her what to do. What would you say to a 25 year old girl who loves our dad more than anything but is really frustrated working for her old man, what would you say to her?
Dr. Safa: Turn your back and move on
Howard: Yeah.
Dr. Safa: Absolutely.
Howard: Or just go to your mom and say ‘Mum, you married him, I'm not married to him’ but I tell these girls the other thing I'd rather you move on so you can keep a great relationship with your dad.
Dr. Safa: Absolutely.
Howard: Than working with them until you get to a point where you go separate ways then don't ever talk to each other again.
Dr. Safa: Correct.
Howard: And have you seen that case before?
Dr. Safa: Absolutely.
Howard: You know how many dentists I know that work for their dad for three or four or five years and now they haven't talked one time in 10 or 20 years and we're talking about a lot of dentists and some very big name dentist.
Dr. Safa: Yes.
Howard: I mean there's dentists out there that are very famous who haven't talked to their son in 20 years. So, don't do things you don't like to do for money including working for your dad, working for your mom. So what other advice would you give her? What advice would you tell her if she says I’ve got $200 000 of student loans. Should that scare her? Is that a big threat or concern ?
Dr. Safa: Absolutely not. I mean, a number is a number isn't it on a bank statement and you just start slowly and you have to be prepared to fail and you keep failing and you and you move on and you learn from each little failure and you get better and better and move on and you become stronger at each step of the way. So, you have to see it as a, you have to you have to go under pressure to get better. If you don't want to go under pressure you will never become a bigger person. so, pressure is a great thing and I've certainly had quite a bit of pressure Dr. Farran from Dr. Darryl Holmes who's a very strong-minded, strong personality in his fifties that you become better. So, pressure is a good thing and as Dr. Farran said if something worries you and scares you have to actually embrace that you have to go, yes this is it. I will grow from this.
Howard: My favorite rock and roll line growing up was Janis Joplin when she sung freedom is when you got nothing left to lose.
Dr. Safa: Absolutely.
Howard: And that's attitude. I mean so you sit there and say ‘I'm afraid to open up my business because what if It went bankrupt’ Oh what if it went bankrupt?
Dr. Safa: Yes.
Howard: Who cares? It went bankrupt go get a job with 1-300-SMILES. Go get a job with Pacific. You’ll get a job in an hour. You’re sitting there saying ‘well what if I start pulling this wisdom teeth and I can't get it out?’ Who cares they'll call an oral surgeon, someone's gonna finish it. You start a root canal and you can't find the canal they're called Endodontists. Freedoms when you’ve got nothing left to lose and you know what your biggest fear is? Your big ego.
Dr. Safa: Absolutely.
Howard: Your huge ego and when I'm sitting next to someone in an airplane and I say if I was talking to let’s say like a politician, a dentist, a lawyer , a physician. Let’s just say a dentist, would you say dentists are by and large humble? They like roll their eyes and laugh. I'll say describe three adjectives for a dentist: arrogant, condescending..
Dr. Safa: Correct.
Howard: Talks down to me. They never say humble, great guy, really likable. I grew up Catholic. Our family, we had to go to Mass every single day.
Dr. Safa: Yes.
Howard: From birth to seventeen. How many of those priests were humble? how many of them were pretentious, above all, kiss my ring, children should be seen not heard.I mean, you're not gonna build a business being an arrogant, priest, rabbi, politician, physician, doctor, lawyer just be humble.
Dr. Safa: Correct.
Howard: Be happy, be relaxed, quit living in fear.
Dr. Safa: Absolutely and ego is a big one especially in an industry where patients always are coming to you and seeing you and paying you it's easy to forget about the outside world and then lose a little bit of perspective.
Howard: But Safa, like I say it was an honor I mean you hopped on an airplane and flew from Brisbane to come here and when I got here I have several dentist friends who told me you're the smartest businessman..
Dr. Safa: No, please, you're building me up.
Howard: No and you're an innovator, you're a pioneer it was an honor for you to come on my show.
Dr. Safa: Thank you very much pleasure seeing you.
Howard: Thank you.