The sky is not falling, but to extend the analogy, the weather for hearing healthcare is changing dramatically. In fact, digital momentum is changing every field and every industry, and it will especially threaten anything that is relatively easy to duplicate. Thus, the authors suggest that the future of hearing healthcare will hinge not on product types or even product categories, but rather on those processes that incorporate a wider and better scope of patient services and counseling.
Business Management | July 2017 Hearing Review
Is the sky really falling?
Worrisome chatter and panicky conversations have revolved around the dire consequences for hearing professionals from three emergent threats: Governmental deregulation, expansion of Big Box retail competition, and consumer direct access and control of hearing products (the latter represented by the singular term hearables). These issues buzz around us with the gravity of ancient Romans discussing Vandals, Huns, and Visigoths. Some of the catastrophes forecasted for the industry in the recent months include “Plundering profits as average selling prices plummet, third-party payers squeeze practices, disaster for improperly treated consumers, Big Box stores vacuuming up formerly loyal patients, consumer electronic giants launching evermore multi-purpose hearables, etc…”
As longtime professionals and stakeholders in this market, it seems to us prudent to consult a pretty good visionary in the intersection of technology and consumers. Kevin Kelly is the founding executive editor of Wired Magazine and former editor/publisher of the Whole Earth Catalog. He has two relevant books out currently: What Technology Wants and The Inevitable: Understanding the 12 Technological Forces that Will Shape our Future.”1,2 Both are well-informed and insightful examinations of the intersection of technology and society, but it is his use of the word “inevitable” that is perhaps most wrenching and simultaneously informative to Hearing Review readers.
“Inevitable” Doesn’t Have to Mean Giving Up
One doesn’t commonly encounter the word “evitable” very often. It suggests there’s a path of avoidance. Hence, Kelly’s use of the more familiar “inevitable” sounds rather ominous and fatal. But he chose that title term quite deliberately. It isn’t meant to imply a willful “cop out,” or a giving up, but rather an acknowledgement that some changes have a clear path of momentum. In this case it is a “digitial momentum” that cannot be deflected.
Figure 1. The IMHear app. Used with permission from IMHear Corp.
By all appearances, hearing technology and its distribution patterns fall within the realm of the inevitable changes described by Kelly. These may carry even greater gravitas than the perhaps more palatable term “disruption.” A compelling case can be made for how digitization reduces the fundamental significance of products, as they fade in focus and value, to be exchanged for processes and services. Kelly provides extensive evidence of how the primary forms of economic exchange are morphing and reordering. His recounting of the course of digital momentum over the past 30 years makes a persuasive case.
For example, consider just the explosion of e-commerce—let alone the prodigious impact of the Internet itself. In 1995 the headline of Newsweek read “The Internet? Bah!” The article arguing that online shopping (and communities) were “unrealistic fantasies that betrayed common sense.” The prior year Time Magazine declared that the Internet would never go “mainstream” because that wasn’t what its designers intended. But the momentum of this technology has pulled us all into its digital ubiquity. Therefore, as smart phone apps have begun to allow consumers to modify their hearing aid settings and professionals to monitor the hearing aid usage of their clients, it appears that notable changes in the consumer-professional relationship are inevitable. The hearing industry is in the early stages of morphing and reshaping, as the connective power and capacity of digital mobility further pervades our pockets and homes.
Fundamentally, digital momentum restructures trade from products to processes. In the digital universe, says Kelly, everything is easily copied and shared with minimal to zero cost. Applications—which now have an average life span of 30 days!—can be written in the air of information technology; no large traditional manufacturing structures and overhead are required.
However initially unsavory and wrenching these changes appear, acceptance of certain inevitabilities makes it easier to recognize the looming opportunities that also inevitably emerge. Recognition becomes a new crucial skill.
Kelly argues that, because duplication is exponentially easier in the “supersaturated digital free universe,” the only things that truly retain value are those that cannot be copied. And what is a preeminent component of the consumer-professional exchange that cannot be copied wholesale?
Trust! Trust is not duplicable. Trust cannot be faked; it must be earned from experience. That, of course, is the essence of branding and brand value. Every local market has a need for providers of empathetic, personalized guidance with whom they can secure a trusted relationship. Not for all, but for a significant portion of those consumers on a hearing help journey, there is a rock solid need for a trusted, locally-accessed brand.
Branded companies command higher prices and capture loyalty, which, of course, translates to renewable revenues. Local brands are just as important as national and global brands to the individual on the other side of Main Street—especially when it comes to the personal space that collapses as a consumer’s head is approached by a stranger who proposes to look or poke in their ears. It takes no small amount of trust to allow someone to insert technical equipment, earmold material, or products into one’s ear, and then to say “thank you” with a payment for that service.
Figure 2. The old version of the “Success Triangle” in hearing healthcare: Great products, counseling/patient care, and audiological services led to professional and financial success.
For many years, one of the authors (CS) taught courses on successful private dispensing practices in audiology. The geometry was simple: Equal amounts of diligent dedication to Great Products, Great Counseling, and Great Service (including hospitality). This formed a tidy Success Triangle shown in Figure 2.
Products Down, Processes Up!
We would argue that digital momentum has increasingly pressed and morphed the shape of those elements in Figure 2 to virtually squish down the significance of Products, while simultaneously inflating the Service and Counseling as subsets of Process (Figure 3). The shape of success in the future will be less clear-edged, more amorphous, and almost certainly dominated by the processes connected to service, with product becoming a shrunken component of the economic mix.
Figure 3. Pressure from the digital revolution has reshaped the old “Success Triangle” into a new form that is dependent on processes. In the new amorphous model, Great Products are a given and take a backseat to the services you and your staff can provide.
Services and processes can be expected to define and drive future growth of the hearing industry, just as it will many other industries. Services presently are related to assessment, hearing aid sales, and repair/maintenance. Devices will become tools necessary to deliver those services. Accordingly, practitioners may well select devices (and brands) on the basis of how well they fit within their chosen service model, rather than the other way around. Hearing care practices and audiology practices, as perceived by the public, will likely evolve from diagnostic and dispensing offices to communication optimization centers where expertise in personal connectivity solutions are provided in trusted relationships.
Hearing care professionals lamenting the dwindling average selling price for their “products” must recognize the increasing rarity, and hence high value, of trust in the provision of knowledgeable assistance. The opportunity for continued expansion of services (processes) associated with hearables must also be recognized. Those professionals who limit their “scope of activity” to the confines of textbook audiology will likely risk missing the growing potential for expanded access to non-otopathologic consumers of in-ear devices (hearables). Many of those consumers may need and appreciate consultations and guidance on the nuances of everything from simple telecom devices to the multipurpose chameleon products whose utility is determined on a purely situational basis.
“Not in my scope of practice” may likely be the natural response of many professionals, creating higher demand for those who are open to such an adjustment to the new market dynamic. Once such non-impaired consumers are connected to cradle-to-grave hearing care services and the professionals that offer those services, the opportunity to maintain continuous connection via mobile platforms is enormous, albeit not without new challenges.
Expected Changes in the Relative Value of Products versus Processes
Platforms, are “factories for services,” writes Kelly. Value will likely continue to grow in association with platforms, the “cloud” being a leading example. Platforms enable access, and barriers to access are a substantial component in the low adoption of hearing products.
For our increasingly internet-savvy seniors, negotiating travel across town, navigating parking lots, sidewalks, and elevators—or, in many cases, scheduling or coordinating travel assistance—to a local professional hearing center is substantially more daunting than using an app on the phone to get assistance with ear gear of any type. Accessibility is a no-brainer on a smartphone, and this leads to new expectations and demands. Practices willing to embrace cloud and mobile tools in their service model would do well to not just expand the existing clinic services to cloud and mobile, but to redefine it from a patient- centric perspective—and be flexible because they are likely to change rapidly.
The shift-of-value focus will accrue more rapidly to those who spend less time resisting digital momentum than understanding new ways to embrace it (eg, teleaudiology and remote adjustments and programming). But, to be sure, new problems will emerge in negotiating the widely expanded and diverse service elements that will become available to the modern practice.
This will be especially true for independents. Those practices owned or dominated by a large entity (eg, a hearing aid manufacturer or chain network) will have their platforms chosen for them to the exclusion of other rapidly expanding alternatives. If the service model is the dominant element that defines the modern practice and a more diverse mix of products is necessary to execute the desired service model, a problem looms on the horizon, especially for independents. Increasingly, cloud and mobile tools are being launched that are truly useful and very well designed. It’s just that they cover one service element (eg, testing) or are related to one type of device or one brand. Executing a consistent service model with a large variation of cloud and mobile platforms may prove challenging for a truly independent practice—the modern-day variation of the cabinet filled with fitting cables. (In a future article, we will describe a flexible and more universally accessible platform that we believe will solve a good portion of the adjustment challenges likely to emerge.)
Few traditional business sages could have imagined that the world’s largest taxi companies, such as Uber, would own no automobiles for revenue. Or that the world’s largest retailers, Alibaba and Amazon, would own no inventory. Or the world’s largest media company, Facebook, would own no content! The number of real estate properties owned by what is now one of the world’s largest rental/accommodations businesses, Airbnb? Zero! These are just a few prominent examples. Ownership, like products, is yielding to processes and accessibility.
It should be noted that, although this article recognizes the potential for hearables to reach a much wider audience of consumers embarking on their journeys for better hearing, hearables and hearing healthcare are currently a supply-and-demand mismatch. Hearable manufacturers—at this point still mostly startups—are virtually all releasing hearables that rely on self-service and hardly anticipate any distribution opportunity within the hearing healthcare market. Unfortunately, they are correct, as this market is not particularly eager or ready (in terms of current business models) to adopt the potential of hearables—yet. However, serviceable hearables (ie, devices that offer frequency-specific programming, remote tuning, etc) have the potential to be a strong driver for new groups of patients/consumers into audiology and hearing healthcare. On their journey, purchasing a hearing aid might very well be a future step. Taking that step with the comfort of an existing trusted relationship of a hearing healthcare provider makes this much easier.
All of these issues were largely unforeseen, but inevitable, due to the great digital winds that have been changing all fields and all industries. There will be a restructuring of relations between hearing care professionals and consumers that is also inevitable—ready or not. Those practice managers who are less resistant and more “ready” will enjoy enormous rewards from the restructuring of opportunities that will also be inevitable. It is not a “cop out” or a “giving up,” as mentioned earlier; it is a decision to thrive rather than just survive, and to find a path from victim to victory.
References
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Kelly K. What Technology Wants. New York:Viking Press;2010. ISBN 978-0-670-02215-1
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Kelly K. The Inevitable: Understanding the 12 Technological Forces That Will Shape Our Future. New York:Viking Press;2016.
Correspondence can be addressed to Dr Schweitzer at:
[email protected]
Original citation for this article: Schweitzer HC, Kaal MJA. With every ending is a new beginning. Hearing Review. 2017;24(7):14-16.
Thank you for an incredibly well written and considered article. As someone who’s livelihood depends on the willingness of audiologists and hearing aid dispensers to evolve I will be sharing this along with action items for change!