A "Sweeping Monk" in the dental clinic circle

Editorial department

2021-12-21

The Way is paramount, the methods follow.

Since their inception, private dental clinics have stood on the balance between medicine and commerce:

What is the balance between medicine and business?

This is a fundamental issue faced by every dental brand and every dental professional.

This episode's guest speaker: Lian Qiang

True masters may live in seclusion amidst the city, but "wherever there are people, there is a world of its own."

Baise is truly an inconspicuous city, not even ranking highly in the "lower-tier market." Yet, in this very city, a dental clinic with a stable net profit margin of over 40% has emerged. Last year, more than a thousand people from across the country flew there to visit and inspect the clinic. In other words, the owner of this clinic receives an average of more than three business owners from the same industry every day.

In fact, Baise, a small city with a population of just over 300,000 located in the southwestern border region, is indeed experiencing a decline in its rural development. However, the director of this private dental clinic has gained international renown.

Lian Qiang: a tenured visiting scholar at the University of Southern California, a lecturer at the Swiss Dental Institute, and a Chinese director of the Japan-China Dental Prevention Friendship Association... Although he lives in Baise, he is often invited to attend international dental exhibitions as a guest speaker.

His friends in the industry jokingly call him a "hidden master" (or "unassuming monk").

The Sweeping Monk is a character from Jin Yong's novel *Demi-Gods and Semi-Devils*. He lives in seclusion in the Shaolin Temple's Sutra Pavilion, witnessing the rise and fall of the martial arts world, his daily life seemingly as an unknown figure sweeping the floor. Yet, at the martial arts tournament, he easily defeats top-tier martial arts masters, later healing their internal injuries and resolving grudges with Buddhist teachings.

Part 1 | He's not like a dentist, he's a product manager

On the way to the training session, his friends chatted about his newly released "achievements":

In the recently concluded nationwide joint live broadcast of dental clinics in 100 cities, he took the lead in the first half. In less than 3 hours of live broadcast, a single store sold 600 teeth cleaning cards and 70 orthodontic projects in 3 days, generating revenue of over 1 million yuan.

He "left without a trace," skipping the second half of the session, much to the organizer's bewilderment. When asked why, he replied, "Sales were just right, so the service was just right." For comparison, consider this data: Taikang Baibo, a large chain with over 200 stores nationwide, achieved 438 dental implant orders and over 2.85 million RMB in sales during a single live stream, thanks to celebrity endorsements and Alibaba platform traffic support.

In the lounge of Guangzhou Suihua, we met Lian, who had just finished teaching:

He wore a short-sleeved shirt, glasses, and his left eyebrow was slightly higher than his right. His watch was worn low on his left wrist. He looked like a university professor who had just finished class, sitting relaxed on the sofa.

Lian isn't actually a native of Baise; his ancestral home is Guangdong, and he moved to Baise with his parents. Although he's a professional dentist, he worked in various other fields early in his career. During our casual conversation, Lian talked about his experiences dealing with different industries, saying that most of his experience came from these cross-disciplinary "non-dental" experiences.

The entire chat was very interesting. Lian, who is almost fifty, has a very internet-savvy language system because of his commitment to "lifelong learning." He talked about the logic of hit products, the tooling of processes, consumer emotional accounts, and the emotional mobilization of user flow... Less than ten minutes into the conversation, we decided that we had to switch to the language system of "product logic" in order to "interact" more thoroughly with this "product manager".

Going back to the TMT startup boom of a few years ago, "product manager" was a highly sought-after position, with everyone wanting to become "Zhang Xiaolong" (a famous Chinese entrepreneur known for his entrepreneurial prowess). What many perceived as a low-barrier-to-entry job actually demands extremely high comprehensive abilities. From requirements gathering and analysis, requirements implementation, project tracking and launch, data tracking, and training business personnel, to assisting operations, sales, and customer service… simply put, it requires both technical expertise (or technical language translation) and management skills. Therefore, most people give up after "experiencing the pain of the world."

However, through self-reflection and improvement, Lian has been adjusting the revenue structure, refining processes, adjusting salary incentives, and adjusting growth methods of the treatment projects based on product logic, using a clinic as the underlying system and continuously iterating.

The clinic, named after him, has now grown to include 5 doctors, over 20 medical staff, nearly 100 outpatient visits per day, and an average monthly revenue of over 50,000 RMB per person. What was originally a low-priced teeth cleaning service has become his hottest star product, achieving success as both a lead-generating and high-profit item.

Strengthening and Team

Part Two | Delayed Gratification? He's actually quite good at calculating.

"Focusing a clinic's operations on preventative dental programs requires a huge commitment and a long-term mindset of delayed gratification. Most people probably wouldn't take that risk easily, would they?"

But Lian said, let me first do some calculations with you, calculations he's been doing for 5 years. Presupposition: Imagine a family where all members have near-perfectly healthy teeth: no rot, no extractions, no fillings, all teeth are beautiful and don't need orthodontics or implants. How much potential spending power would this family have in the dental sector?

Assuming each person participates in 4 oral health preventative programs (including teeth cleaning) per year, with an average price of 300 yuan per program, and considering a customer lifespan of 30 years, then:

Good dental art

According to this calculation formula, a family's minimum lifetime spending capacity (only for preventative purposes) is between 210,000 and 280,000.

“Unleashing the potential of household consumption is not only related to household income, but also to the rate of teeth cleaning,” Lian said. “Comparing the preventive teeth cleaning rates in China and the United States, in 2017, the teeth cleaning rate in the United States was about 64.7%, while in China it was less than 1%.”

The nearly 70-fold difference in teeth cleaning rates between China and the United States

Since the release of the "Healthy China 2030" plan, the national government has been increasingly emphasizing "prevention," coupled with consumers' growing awareness of health and wellness. Preventative teeth cleaning programs, which focus on "treating disease before it occurs," may seem to have a low average order value, but this also means relatively low costs, while allowing them to reach a wider population.

From a social perspective, preventative teeth cleaning essentially restructures the traditional healthcare process. This structural adjustment can balance the overall time granularity (the basic unit of time management) for dentists, better allocate medical resources, and reduce overall social costs. Given the struggles in providing dental healthcare education in China, this could be a viable solution.

Lian said that if efforts are focused on prevention, many clinics that are "aware first" are very likely to achieve a leapfrog development. If the situation is even more optimistic, and clinics can form an alliance to popularize "preventive teeth cleaning," this will be a growth market that can be expanded together.

"Our industry is now entering a window of opportunity. The national government is advocating a shift from treatment to prevention. What used to be a minor trend is now becoming a transformative change..." In Lian's view, preventive teeth cleaning is a small trend that is expanding within this window of opportunity.

Judging from the current situation, there is still a lot of room for change in the industry: at present, private clinics in China tend to focus more on high-priced projects such as "orthodontics" and "implantation" in market expansion, and their marketing budgets also account for the majority of these two items.

Essentially, dental implants and orthodontics are high-priced services, placing them at the top of the dental service revenue pyramid. Pushing these two services can indeed help quickly recoup cash. However, let's do the math: these two services have long service cycles, and in terms of output per unit of time, they are actually far less efficient than "small things" like teeth cleaning. Furthermore, due to the lack of repeat purchases, they are essentially just depleting the existing market of customers with only basic needs.

Most clinic owners are still enthusiastically promoting high-average-order projects because the industry is still enjoying China's demographic dividend, and in the short term, it is a harmless short-term operation. However, in the long run, they are worried that this may affect the health of the clinic's revenue structure: clinics with a "sub-healthy" revenue structure will face risks such as the COVID-19 pandemic. Due to the lack of highly loyal patients and new high-average-order customers, their cash flow will suddenly become tight, and their true risk resistance will naturally be revealed.

"Dentists who only care about dental diseases treat patients as if they are 'plundering' resources; they are focused on 'gold and silver mountains.' In the long run, they are doing subtraction. On the other hand, dentists who care about people consider more about renewable 'green mountains and clear waters,' and in the long run, they are doing addition."

Lian explains that the underlying logic of his meticulously refined preventative teeth cleaning program is to transform low-frequency medical interactions into high-frequency service products, thereby achieving sustained growth in new customers and repeat purchases. This is Lian's blockbuster product strategy. Choosing teeth cleaning as a blockbuster product perfectly fulfills the three characteristics of a market blockbuster:

Wide audience;

High repurchase rate;

The market reacts quickly.

“When I went to Japan, I discovered something very interesting. Japan is full of drugstores, and healthy people go there not just because they are sick. In contrast, people in China only go to pharmacies to buy medicine as needed when they are sick. If one day we can make Chinese clinics like Japanese drugstores, serving healthy people and healthy teeth, instead of patients and diseased teeth, then China's dental market will move towards a sustainable ecosystem.”

Lian also shared data from a Japanese dental brand: a total of 21 stores, annual revenue of 500 million yen, and 1.2 million patients. Teeth cleaning accounts for 23% of revenue, exceeding 100 million yen; fillings (simple fillings) account for 15%, also reaching over 70 million yen. Based on this profit margin and customer retention rate, even without any business operations, it would be enough to pay the current number of employees for 21 years.

Part 3 | So, how is the product experience done?

"When we opened a clinic, our customer acquisition strategy was still in the hunting era; now that the risks have increased, we need to enter the agricultural era, where self-sufficiency is the key to health." After five years of refinement, the teeth cleaning service, which is often considered "marginalized" (and sometimes free) at other clinics, has been given new possibilities at Lian.

He has a somewhat "geeky" approach to meticulous process management: he deconstructed and then reconstructed the entire teeth cleaning project, even addressing the smallest details of user experience. He calls this self-created process the "Ten-Step Teeth Cleaning Method."

Outline of the "Ten-Step Teeth Cleaning Method"

This complete standardized process is now not only implemented in his own clinic, but has also become a recommended process in 137 countries around the world.

Study tour groups from all over the country

Once a process becomes a standard module that can be replicated across borders, the doubt that "Baise is an insufficiently competitive market" is almost no longer a question that Lian has needed to answer over the years.

With these adjustments, clinics no longer need to have a consultant. "Trust isn't built from the consultant's words, but from the patient's experience." In this way, dental hygienists have been moved from the lower rungs of the traditional clinic's professional hierarchy to the forefront of value creation.

As their sense of professional pride increased, their income also increased exponentially: the dental hygienists in their clinic earn an average of over 100,000 yuan per month; even the front desk nurses maintain an average monthly salary of over 10,000 yuan.

However, as a key player in the process, dental hygienists have a great deal of "transformation discretion," and Lian has obviously also considered the potential risks of overtreatment, designing a complete set of management and constraint mechanisms:

Light commission, heavy conversion + front-end and back-end conversion closed loop + centrality theory.

1 | Light Commission, Heavy Conversion: How the pie is divided determines how big the pie can be: The commission rate for front-end single teeth cleaning services is low, while the commission rate for back-end conversion is relatively high. However, relying solely on this may pose a risk of "over-treatment," so Lian created a closed-loop assessment system:

2 | Front-end and back-end conversion closed loop:

The clinic business is divided into three segments:

A. High-value procedures (e.g., orthodontics, implants) B. Routine procedures (e.g., fillings, extractions) C. Preventative procedures (teeth cleaning)

In this closed loop, if the customer journey ends abruptly with only C→B→A, it's unhealthy, and therefore the hygienist's score will be low (as it's linked to performance). A perfect customer journey needs to start from C→B→A→C, beginning with prevention and returning to prevention. Only then can the hygienist's score be considered excellent.

Good dental art

3 | Centrality Theory

To foster positive interactions between dental hygienists, clients, and dentists, it's essential to consider the central value of this profession.

• Identity centrality: This is the scenario where you interact most with customers and is the source of trust.

• Location centrality: Both clients and dentists rely on dental hygienists;

• Eigenvector centrality: Utilizing dental resources to maximize the effectiveness of dental hygienists.

Lian used an interesting analogy: dental hygienists are like weed growers; only when the weeds are planted well will patients come to harvest them. Even more interestingly, besides his "unique skill" of preventative teeth cleaning, his overall clinic operations also incorporate many management and marketing techniques commonly used by large internet companies.

Dentists can commit to next month's performance based on this month's results and pay next month's salary in advance. They are adept at "loss aversion," using intertemporal income as an incentive program. For invisible braces, they employ a "taxi-style" pricing model: breaking down invisible braces into several treatment sessions, with a starting price slightly higher than fixed braces, and an additional 2000 yuan for each subsequent session...

The nearly eight-hour brainstorming session yielded many interesting operational methods and insightful quotes, all worth studying.

It was 2 a.m. when it ended, and I only then learned that I would be flying to the next stop after 6 hours of training. With everything settled at home, I had more time to promote innovation and transformation in other clinics. Now a frequent flyer, Lian is managing his time more and more meticulously... Even as we parted, Lian was still full of energy, like a "middle-aged man riding the waves."

Indeed, the habitual thinking and product standards derived from life experiences, such as "cross-border", "innovation", and "self-iteration", are re-enacted after being adapted in the "idyllic" environment that Lian has personally created.

Everything we see and experience will eventually come back to us.

Rooting, sprouting, sowing

Green mountains and clear waters, thriving