Growing Demand for Audiology Using a New Product Category – guest post by Brian Taylor

Segmentations2Any proficient business executive is likely to tell you that segmenting your potential customer base is an effective initial step when unravelling consumer demands. Once you’ve done some careful segmentation work, you can execute a strategy that caters to the exacting needs of a particular group (or segment) of customers.  Segmentation takes on many forms,  For example, you could slice and dice the market for hearing care services by examining median income, chronological age – even personality or social style of individuals within a segment.

Fig 1.  Hearing loss segmented by degree.  Data from Nash (2013), Lin et al (2011), Lin (2011), and Wallhagen & Pettengill (2008)

Fig 1. Hearing loss segmented by degree. Data from Nash (2013), Lin et al (2011), Lin (2011), and Wallhagen & Pettengill (2008)

With regard to hearing aid market penetration, the power of segmentation becomes apparent when hearing aid acquisition by degree of hearing loss is dissected as illustrated in Figure 1 to the right. Whereas 5% of the total hearing impaired marketplace has a profound hearing loss, 70% of that group possesses hearing aids or a cochlear implant.  In contrast, 20% of this same group has a moderate to severe loss with 50% of this group possessing hearing aids.  Finally, 75% of the entire population of people with hearing loss exhibit a mild to moderate high frequency variety with just 10% of this group possessing hearing aids.

Historically, the hearing industry has served the top 25% of patients in Figure 1. These are individuals, typically older in age, often with more complex problems, requiring more time and expertise to manage. Given these modest penetration numbers, one could argue that the business model we have created, one based on selecting & fine tuning hearing aids and predicated on multiple office appointments, is relatively effective at 75creating value for these two segments.  On the other hand, those in the bottom 75% of the pyramid – where the vast majority of adults with hearing loss reside –  are likely to have less complicated issues related to hearing loss, and probably don’t require numerous appointments for adjustments and counseling.  This segmentation analysis has uncovered a critical nugget of insight: Our profession has not created a sustainable value proposition for 75% of the hearing loss marketplace.

A sustainable value proposition

Rather than ignore this huge swath of the marketplace, which is rife for an outside company to capture and potentially cut the professional out of the equation, it is imperative that all of us find ways to engage these patients in the process of improving their communication.  Undoubtedly, we want these patients to seek the services of an audiologist or hearing instrument specialist, but we have to offer them something that they value, and, at the same time offer our practices a viable revenue stream.

In order to accomplish these important tasks, it is necessary to grow the market by engaging those with mild, situational problems while also creating sustainable revenue for our practices.  This will require the wide scale adoption of new product categories. One such new product category is directed audio devices, such as HyperSound System (HSS), which is a new technology for those patients that need improved communication while watching TV at home. HSS works by first electronically converting audible information onto ultrasonic frequencies, well-beyond the range of human hearing.  The acoustic signal is reproduced using an emitter and transmitted in a beam of silent ultrasonic energy.  The nonlinearity of air demodulates this acoustic signal, thus reproducing the audible information in a narrow beam, such that it is heard only by those in the targeted area. All the patient has to do to use HSS is to sit down in the beam as shown in Figure 2.  No hearing aids are required.

turtlebeach-2

 

Preliminary studies of HSS on a limited number of study participants indicate that the HSS may be a viable device for the hearing healthcare market, as one recent study showed that individuals with a range of hearing losses received significant improvement on a speech in noise task in the unaided condition when using HSS. Work is also underway examining how a directed audio device, like HSS, can be used as a gateway product to speed the journey for those who may transition into conventional hearing aids. Additionally, because the margins for the HSS system are substantial, it provides the practice with reasonably good revenue stream.

Directed audio, a new category of product, provides the profession with unprecedented opportunities to grow the market for our services by offering the mild to moderate segment of the market something of value, while simultaneously generating a new stream of revenue for practices. It’s truly a win-win scenario for those who embrace this new product category.  To learn more go to http://www.hypersoundhearing.com/ and enroll in the Innovators program.

briantaylor-unitron1Brian Taylor, AuD is the senior director of clinical affairs for Turtle Beach. Prior to joining Turtle Beach, he was the  Director of Practice Development & Clinical Affairs for Unitron.  During the first decade of his career, he practiced clinical audiology in both medical and retail settings. Since 2004, Dr. Taylor has held a variety of management positions within the industry in both the United States and Europe. He has published over 30 articles and book chapters on topics related to hearing aids, diagnostic audiology and business management. Brian has authored two text books Fitting and Dispensing Hearing Aids and Consultative Selling Skills for Audiologists, both published by Plural, Inc. He can be contacted at brian.taylor@turtlebeach.com.

References

1. Nash, SD et al (2013). Unmet hearing health care needs:  The Beaver Dam Offspring study. American Journal of Public Health. 103, 6, 1134-1139.

2. Lin, F. et al (2011). Hearing loss prevalence and risk factors among older adults in the United States.  J Gerontol A Biol Sci Med Sci. 66: 582-590.

3. Lin, F. et al (2011). Hearing loss prevalence in the United States. Arch Intern Med. 171.

4.Wallhagen, MI & Pettengill, E. (2008).  Hearing impairment: Significant but underassessed in primary care settings.  J Gerontol Nurs. 34:  36-42.

 

About AU Bankaitis

A.U. Bankaitis, PhD is a clinical Audiologist with extensive clinical, research, and business experience within the hearing industry. Dr. Bankaitis created this blog to educate her colleagues on viable product solutions for their patients and/or clinical practice.
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2 Responses to Growing Demand for Audiology Using a New Product Category – guest post by Brian Taylor

  1. Brian Taylor says:

    Thanks for your comments, John. Please note that Hypersound is not yet commercially available and Turtle Beach has several other products they manufacture for other sectors of the economy. Initial beta tests of Hypersound has been very positive, which suggest that after it becomes commercially available later this year it will be an effective device dispensed through the hearing healthcare channel.

  2. emailjz says:

    This HSS technology has not really “caught on”. The company shares peaked at over 22 dollars a little more than 2 years ago… and now trades for 2 dollars. Before entering the use of the technology be sure you properly investigate the companies potential for failure and your use of the product in your business. The market cap was 10 times higher than today only 2 years ago. Was 900 million and now is 90 million… and they are taking out loans.

    Turtle Beach has issued a $5 mln subordinated note to SG VTB Holdings, LLC
    7:04 AM ET 4/24/15 | Briefing.com
    The subordinated note bears interest at a rate of 10% per annum until April 20, 2016 (the maturity date of the subordinated note) and 20% per annum for all periods thereafter.

    One way to make sure you are making an informed decision would be to attend the company call….

    Turtle Beach Corporation (NASDAQ: HEAR), the leading-edge audio technology company today announced that it will report first quarter 2015 financial results after market close on May 7, 2015. On that same day, Juergen Stark, CEO, and John Hanson, CFO, will host a conference call and simultaneous webcast to discuss results at 4:30 p.m. EDT / 1:30 p.m. PDT.

    To participate in the conference call, investors should dial (877) 303-9855 (domestic) or (408) 337-0154 (international), passcode 34459650, 10 minutes prior to the scheduled start of the call. A simultaneous audio-only webcast of the call may be accessed on the internet at http://www.turtlebeachcorp.com.

    For investors unable to participate in the live event, an archive of the webcast will be available on the company’s website for approximately one year. A taped replay of the call will be available for one week at (855) 859-2056 and (404) 537-3406, passcode 34459650.

    John Zeigler AuD
    AuDNet
    emailjz@aol.com

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