When I first lurched into the hearing industry in Chicago some 30 years ago, there were several major acknowledged impediments to the industry’s growth and success. Market penetration was 20% of potential. Today, most of those impediments have been rectified, and market penetration is still 20% of potential.
The Hearing Industry, Circa 1970
The U.S. market in 1970 was served almost exclusively by U.S. manufacturers who concentrated on retail distribution (hearing aid dealers) committed exclusively to a particular product line (e.g., Zenith, Radio Ear, Dahlberg, etc.). Although some states licensed retailers, there was generally no established technical skills or educational achievements required for dispensing hearing aids. Audiologists were university-trained with a masters degree and most were totally subservient to the American Speech & Hearing Assn.’s (ASHA) number-one commandment at the time: “Thou shalt have as little to do with hearing aids as possible, and to even contemplate dispensing hearing aids will cause the heretic to be turned to stone or stoned by his peers.” Both occurred sometimes.
Occasionally, the Federal government turned a dim light on the industry’s “darker corners”—generally when a politician was taking a run at the presidency and was looking for easy publicity. For the most part, these crusades stopped once the candidate’s high-office hallucinations evaporated.
Marketing in the 1970s
It’s important to recognize how marketing has changed, for better and worse, during the past three decades. In the 1970s, the manufacturers provided their specific dealers with products, advertising funds and ad materials which were spent locally on a 50/50 co-op basis. The manufacturers’ brand name was required to be prominent in all ads.
Every hearing aid user had to be registered with the manufacturer in order for their product warranty to be valid. These users’ names were retained by the manufacturer, and 2-3 mailings each year were sent to customers with advertisements on something “NEW!” in hearing aid technology, combined with some incentive to visit their local brand dealer. The majority of the manufacturers’ marketing revenues was spent in this manner. Exclusive market territory for dealers was protected, and the relationships forged between the manufacturer and dealer were often strong.
Within a decade, three important changes occurred that were the genesis of today’s market and industry:
- Manufacturer Change: Overseas hearing instrument manufacturers (primarily from Europe) sought entry into the U.S. market to supplement their more restricted sales within Europe’s socialized health care programs. They brought their products and philosophy (which tended to emphasize technology over marketing and retail advertising) to the U.S. Their concentration on influencing referral sources helped to break up the dealer/brand relationship by selling to everyone.
- Distribution Change: Some of the practical audiologists realized that they were not offering a complete service to their clients by sending them elsewhere to purchase a hearing instrument, and the revenue they received from hearing instrument sales was as good or better than that for testing fees. They started dispensing, and after some resistance, ASHA relented.
- Medical Change: The change in audiologists’ dispensing activities helped to make the dispensing decision easier for those medical practices employing audiologists.
Enter the Government
In the 1970s, both the Food and Drug Administration (FDA) and the Federal Trade Commission (FTC) began examining the hearing industry due to consumer complaints. The result was many pronouncements, but it was primarily two major commandments by these agencies that changed marketing in the hearing industry forever:
- The hearing aid users’ names were not the property of the manufacturers, did not have to be registered to validate their warranties and could not be utilized without permission of the selling agent (i.e., dealer/dispenser).
- The style and language of any advertising had to strictly conform to specific government requirements; most importantly, a hearing aid model could no longer be called “new” unless it was new according to the government guidelines.
These moves essentially removed the manufacturer from the direct mail advertising, education and retail solicitation business. Because point #2 above dealt with the message, and not the medium, the marketing money was simply not used and thus millions of advertising dollars were removed from the field.
The result is what we have today. The vast majority of U.S. hearing instrument suppliers are Europe-based, with great technology and little expenditure for effective retail marketing. The hearing aid dispensers of the past (many of whom devoted a lot of their resources to marketing) have increasingly been replaced by dispensing audiologists and medical doctors, some of whom feel that if the public could just be made to understand how well-trained and expert today’s hearing care professionals are, the hearing-impaired would seek them out like a pilgrimage to Lourdes.
Creative Benefit-Centered Messages Needed
Hearing instrument sales in the U.S. remain flat in spite of the growing elderly population. Manufacturers pour more and more resources into technology with miniscule overall sales progress. The government is now mostly uninvolved until the next zealot looking for a crusade comes along. We should be in the “golden age” of hearing instrument sales, but instead we are still stuck at 20% of potential. Why? Because our retail message to potential purchasers is either non-motivational or, more often, nonexistent. Our message is obviously not resonating with the person in need of hearing help, and even more importantly, those around them—the spouse, children, friends, business associates—who could be influential in their decision to seek help.
The pioneers of the U.S. hearing industry had several shortcomings. Certainly, this article does not suggest turning back the clock. However, the pioneers of the industry did understand the Law of Inertia: “A body at rest tends to stay at rest (usually on the couch) until some message moves them.”
Study after study has shown that an impressive technical message rife with numerical data does nothing to inspire a hearing-impaired person to seek help with a problem that causes emotional distress and has that very serious consequences for the family. We in the hearing industry apparently don’t understand how to turn a technical “feature” into an understandable “benefit” that strongly resonates with the concerned others in a hearing-impaired person’s life.
The “pioneers” understood that nothing happens until the client steps up and seeks help. Yes, they were overzealous, but they built an industry by devoting resources to retail marketing that utilized imagination, creativity and product benefits. Today, we have the resources—it’s just that the other qualities seem to be in shorter supply!
Steve Walsh is president of Dunhill Marketing, Orland Park, IL. Correspondence can be addressed to HR or Steve Walsh, Dunhill Marketing, 7833 E. Ponderosa Ct., Orlando Park, IL 60462; email: [email protected].
