Marketing Strategy ALIGN TECHNOLOGY, INC.
Sheila Tan Vice President and Chief Marketing Officer October 28, 2010
Forward-Looking Statements During this presentation and corresponding commentary we may make forward-looking statements, including statements regarding Align’s strategy for future growth, the anticipated impact of product innovation, consumer demand generation, geographic expansion and sales force productivity on, among other things, customer adoption, as well as statements related to Align’s business outlook for Q4 2010. Any such forward-looking statements contained in this presentation and corresponding commentary are based upon information available to Align as of the date hereof. These forwardlooking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict. As a result, actual results may differ materially and adversely from those expressed in any forward-looking statement. Factors that may cause such a difference include, but are not limited to, the factors that are discussed in more detail in Align Technology’s Forms 10-K and 10-Q, as well as in other reports and documents filed from time to time with the Securities and Exchange Commission. Align undertakes no obligation to revise or update publicly any forward-looking statements for any reason.
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Today’s Agenda
• Align Strategic Overview
Tom Prescott
• Marketing Strategy
Sheila Tan
• Technology Innovation and Advantage
Dana Cambra
• International Growth and Expansion
Richard Twomey
• Financial Review and Target Model
Ken Arola
• Q&A
All
Addresses what you want to know 3 Align Technology, Inc. All rights reserved | 2010 Analyst Meeting
Strategic Objectives and Levers Focused Execution Drives Growth Strategic Objectives Deliver sustainable, profitable growth while driving dramatic improvement in customer and consumer/patient satisfaction. Financial • Revenue growth • Operating margins
Non-Financial • Customer satisfaction • Consumer/patient satisfaction • Employee satisfaction
Strategic levers drive resource allocation, and strategic and tactical management
Consumer Demand
Clinical Innovation
4 Align Technology, Inc. All rights reserved | 2010 Analyst Meeting
Customer Experience
International Expansion
Marketing Strategy Framework Huge Opportunity GP Channel
Ortho Channel
• Improve Selling & Closing Skills
• Improve Outcomes & Scope
• Increase Clinical Confidence
• Prove Clinical Applicability
• Improve Predictability
• Drive Moms & Teen
Consumers • Shift Marketing Mix • Increase Awareness and Preference with Moms • Engage and Excite Teens
5 Align Technology, Inc. All rights reserved | 2010 Analyst Meeting
Large Opportunity Among Invisalign GPs Invisalign GPs use Invisalign for 13% of their applicable ortho cases 600
550
Average GP Practice has ~2500 annual patients 400
200 72.6 27.6 0 Treatable with Invisalign
Top 1% GP Invisalign (12mos)
Source: NPD Tracking Studies 2008 and 2010 and Align Data 6 Align Technology, Inc. All rights reserved | 2010 Analyst Meeting
Top 10% GP Invisalign (12mos)
GP Challenges in Growing the Category Top reasons GP’s don’t start more patients: •
Not enough experience in selling and closing expensive elective procedures
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Don’t have clinical confidence in delivering orthodontic treatment
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Believe that Invisalign is only for simple cases and doesn’t deliver predictable outcomes
Source: 13 GP studies (April 2006 - June 2009), NPD Tracking Study 2008 and 2010 7 Align Technology, Inc. All rights reserved | 2010 Analyst Meeting
GP: Improve Selling & Closing Prospective Patients • Train Doctors and Staff - Engage with patients on the oral health benefits of straight teeth - Best practices for presenting and closing prospective patients - Remove price as a barrier - 3rd party patient financing • Invisalign Consumer Education - Oral health benefits of straight teeth • New Practice Integration course to be released in Q2 2011
8 Align Technology, Inc. All rights reserved | 2010 Analyst Meeting
GPs: Increase Clinical Confidence in Delivering Orthodontic Treatment • Help doctors get started and select appropriate cases • Create training pathways for varying clinical experience/needs • Offer more convenient online courses Online Courses (Improved) Study Clubs (Improved) Pre-Course (Improved)
CE I (Improved)
eConnect (New)
Gardner (Revised) Practice Integration Course (New)
New GPs • Getting started with Invisalign • Case submission
• Patient selection • Treatment planning • Patient education • Case review
9 Align Technology, Inc. All rights reserved | 2010 Analyst Meeting
• Reviewing treatment plans • Modifying ClinCheck plans
• Issues that come up during treatment • Finishing and refinement • Patient acceptance skills
CE II (Updated)
Experienced GPs • Advanced skills
New Rewards for Advantage 2011 Surveyed Doctors to Find What They Value Advantage Program Tier Levels
Tier Level Benefits
Elite Preferred
Preferred Provider
Premier Preferred
Elite
Super Elite
Eligible to qualify for Volume Rebates
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Doc Locator Position
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Invisalign Practice Development Materials
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Preferred Provider Consumer Marketing Materials
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Expert Marketing Advice
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Practice Integration Staff Training
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Dedicated Clinical Technician
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Free Align Clinical Education
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Personalized Plaque
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Elite “Peer to Peer” Event at Summit Free Summit Attendance (doctor only)
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Super Elite Community
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Invisalign owned URL license
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10 Align Technology, Inc. All rights reserved | 2010 Analyst Meeting
Marketing Strategy Framework Huge Opportunity GP Channel
Ortho Channel
• Improve Selling & Closing Skills
• Improve Outcomes & Scope
• Increase Clinical Confidence
• Prove Clinical Applicability
• Improve Predictability
• Drive Moms & Teen
Consumers • Shift Marketing Mix • Increase Awareness and Preference with Moms • Engage and Excite Teens
11 Align Technology, Inc. All rights reserved | 2010 Analyst Meeting
Large Opportunity Among N.A. Orthodontists Invisalign starts account for only 7% of all Invisalign applicable cases 2.5M 2.5 2.0 1.5
1.2M
1.0 0.5 88K 0.0 Total N.A. Ortho Case Starts
Applicable for Invisalign
Ortho Invisalign Case Starts (12mos)
Source: Align estimates, AAO Bulletin Dec 2007, 2006 AAO Patient/Member Survey, WW Population Data Sheet 12 Align Technology, Inc. All rights reserved | 2010 Analyst Meeting
Ortho Challenges in Growing Share of Starts
Top reasons Orthos don’t use more Invisalign: •
Confidence in outcomes and clinical scope in treating complex cases
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Need more clinical evidence of product applicability
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Believe that not enough teens/parents are requesting Invisalign
Source: 13 GP studies (April 2006 - June 2009), NPD Tracking Study 2008 and 2010 13 Align Technology, Inc. All rights reserved | 2010 Analyst Meeting
Invisalign Clinical Innovations Improve Outcomes & Expand Clinical Scope 2008
2009
2010 InvisalignG3
Invisalign 1.5 • Expansion of SmartForce™ – Improved and Expanded Rotation Attachments
• Expansion of SmartForce™
• Introduction of SmartForce™
– Improved and Expanded Power Ridge
– Optimized Rotation Attachments
• Precision Cut Aligners
– Optimized Extrusion Attachments
• New Invisalign Doctor Site
– Expanded Power Ridge
– Power Ridge
• Eruption Control • Compliance Indicator
14 Align Technology, Inc. All rights reserved | 2010 Analyst Meeting
• New ClinCheck Software
InvisalignG3 Engineered to Deliver Even Better Clinical Results Complex Cases Precision Cuts
InvisalignG3 Better Results SmartForce™
15 Align Technology, Inc. All rights reserved | 2010 Analyst Meeting
Better User Experience ClinCheck 3.0 & Doctor Site
Precision Cuts Easer to Treat Class II & Class III Patients BEFORE G3 • Very manual process where doctor/staff had to punch or cut every aligner
TODAY • Precise design integrated into the overall treatment • Customized for each patient
• Tools used often cracked aligners
16 Align Technology, Inc. All rights reserved | 2010 Analyst Meeting
SmartForce™ Engineered for Improved Clinical Outcomes
• Improved Rotation
• Improved Extrusion
• Better Root Control 17 Align Technology, Inc. All rights reserved | 2010 Analyst Meeting
InvisalignG3 Video
Clinical Evidence Invisalign Can Treat Complex Cases Class II Case Studies
19 Align Technology, Inc. All rights reserved | 2010 Analyst Meeting
Journal of Clinical Orthodontics – Jan 2010
InvisalignG3 Exceeded Doctor Expectations InvisalignG3 Ask the Expert Webcast Feedback 100% 80%
Excellent
44% 60%
53% Definitely Would Probably Would
40% 20%
47% 33%
0% Confidence in Invisalign 20 Align Technology, Inc. All rights reserved | 2010 Analyst Meeting
Recommend Invisalign More
Marketing Strategy Framework Huge Opportunity GP Channel
Ortho Channel
Consumers
21 Align Technology, Inc. All rights reserved | 2010 Analyst Meeting
Opportunities Vary by Target Segment North America Applicable Market Grow Category Get more adults into Invisalign treatment
Grow Share Increase preference for Invisalign over other treatments
5% Invisalign Cases (12mos)
