Are You Locked In a “Race to the Bottom?” – guest post by Brandon M. Dawson

Manufacturers are competing with each other – and you – by offering the cheapest price on technology. What’s your next move?

path-successFor years hearing aid manufacturers have been telling you that branding yourself and your expertise as the value proposition of your practice is the path to success. Today those same manufacturers are directly contradicting their own advice – offering discounts directly to consumers and undermining your value proposition. Now the supplier – whose brand you’ve been advertising in your market – is saying to the consumer: “The independent professional is overcharging you.” Some suppliers are even brazenly offering you co-op advertising dollars to support the recognition of their brand, while simultaneously looking to undercut your pricing – and, ultimately, the viability of your practice.

you-decideWhat course of action do you take in this apparent race toward the lowest price? The manufacturer will always be able to offer the cheapest price on its products. These falling prices certainly put a great deal of pressure on independent practices, but it would be a tremendous mistake to overlook the power of your position as a private practitioner: You get to decide where your focus lies. Will it be on a low-priced widget? Or will it be on something only you, an experienced, respected professional, can provide: an attentive, patient-centered, legacy practice that patients depend on?

In this respect, the vision set forth by Audigy Group in 2004 is more relevant today than ever before. Elite independent practice owners can maintain their freedom if they stand together as a collective group. And the best way for them to do this remains the same: to own their own technology brand — one that supports their hard-earned reputations as experienced providers. More than 10 years of research and evaluations of the health of private practice have shown us that not only can private practices survive in an environment of falling technology prices, but they can thrive and flourish by offering something altogether different.

As an independent hearing care provider it is your daily challenge to out message, outperform, and, above all, “out value” your competitors who are, in most cases, selling products with the same name at a variety of price thresholds. Those who have succeeded in establishing a reputation for exceptional quality care and service have typically done so with many years of dedication, hard work, and commitment to their community.

big boxBut as our research shows, independent audiology practices on average earn more than two-thirds of their revenue (and 80% of their profits) from the direct sale and support of hearing technologies. In this, hearing aid manufacturers increasingly see an opportunity: if they can eliminate the high-value providers who have built their reputations on quality and experience, and replace them with corporate retail and big box partnerships, they won’t have to expend an equivalent effort to earn patients’ trust. In essence, they are trying to buy that trust with a low price.

So far, customers have remained skeptical. The manufacturer owned retail outlets have not yet become formidable competitors since they are staffing their locations with less experienced providers. But the challenge is mounting as manufacturers have started offering 50% off any and all hearing aids, and are even offering bounties on hearing priceaids that are out on trial—providing incentives for patients to return them and buy from manufacturer-owned stores. In this race to the bottom on price, the manufacturers are devaluing your service to your patients. And, in doing so, they are also devaluing your practice. If they can successfully change the retail landscape, they will no longer need to pay a premium to buy your practice – even if you have been selling their products and increasing the value of their brand for years.  In fact, lowered evaluations have already begun to contribute to the manufacturers’ success in acquiring private practices.

Audigy Group’s research into overseas markets shows the extent to which this strategy is playing out: according to our internal studies of over 100 independent practices in 8 countries, all face the same type of pressures. In Canada alone, for example, there were more than 1,000 independent private practices before manufacturer consolidation began in earnest—now there are 200.

Audigy’s strategy of building a consortium of elite, independent providers to support a premium private label technology brand has had two profound effects in counteracting the manufacturers’ direct retail efforts:

  1. As exclusive providers of the AGX Hearing brand within their geographic region our members present a technology offering that is truly unique in the market.
  2. Our members are not advertising the manufacturers’ brands in their market, driving interest in a brand that is ultimately competing against them

valueBy associating their unique AGX Hearing brand with expertise and an interest in forming lifelong relationships with their patients, Audigy members are building intrinsic value in a brand that they own, not one that they rent. It’s a strategy that has proven itself over and over again in the past 10 years of Audigy Group’s existence. As a result, we have seen our members grow both in Canada and the U.S. competing head to head with those same manufacturers. In 2014 alone, Audigy Group helped 51 established clinics achieve over 20% growth. These were not startup practices with no place to go but up – these were practices with an average of 23 years in business, who found a new, invigorating pathway to growth that has dramatically improved the future potential and value of their practice.

best practiceAudigy membership is comprised of practice owners who understand that value is measured by their ability to differentiate themselves in the marketplace by delivering the highest magnitude of impact for their patients. This is done through the ability to measure, hold accountable and leverage all aspects of best practices in real time and across all team members, creating an overall remarkable experience for their patients that transcends price. In fact, they understand something that manufacturers, big box retailers, and local price-based businesses don’t: that “price is only an issue in the absence of value.” These practice owners have aligned with Audigy to create the resources and structure to secure this market position.

Audigy members — 275 and counting — share their marketing techniques, business processes, and results with our team professional business analysts every single day. It is this kind of sharing that has made our membership of dedicated, independent hearing care providers a community of shrewd, uncommonly successful business owners who are supported by a hearing technology brand that accurately represents and successreflects the tremendous value these practices provide to their patients. And with over ten years of tracking and researching these results, Audigy members are able to learn from the successes and failures of practices that are just like their own. In this way independent business owners can experience the extraordinary benefit of learning how businesses of similar size, in a marketplaces with similar demographics, which are owned by individuals with similar objectives, have performed with each decision they have made.

At the end of the day, it’s important to ask yourself — just as we advise our Members to — if you don’t speak for your practice, your team, and your patients, who will?

Call our Membership Development team at 877.658.3602 or visit to find out how we support independent practice owners just like you.

brandon-blogBrandon is founder and CEO of Audigy Group and a sought-after lecturer and CEO advisor on entrepreneurship, leadership, and business-building strategies. Brandon created a unique, variable-expense shared services delivery model with the purpose and passion of supporting and preserving independent business owners who have the desire to become more profitable and to grow their existing business or expand to new markets.

Brandon’s success and entrepreneurial spirit have not gone unnoticed. Audigy Group has been honored as one of Portland Business Journal’s Fastest Growing Private Companies for six consecutive years, is a five time Inc. 5000 winner, and two-time winner of the Inc. Magazine’s Hire Power Award for outstanding success in job creation.  Additionally, Brandon has personally been named finalist twice in Ernst & Young’s Entrepreneur of the Year Award for the Pacific Northwest.


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 Are You Locked In a “Race to the Bottom?” – guest post by Brandon M. Dawson

  1. aubankaitis says:

    Just wanted to let everyone know that since this was published this morning, I felt it was necessary to slightly edit the original post to remove reference to a specific manufacturer that was used as an example. The edit was changed to refer to hearing instrument manufacturers in general. I regret not making the slight change prior to the post because, in retrospect, it may have left the impression that one manufacturer was being singled out.

    Guest posts are written by individuals other than me and may or may not reflect my personal opinions. Regardless, the intent of post is to generate what I hope is good, healthy discussion and professional debate.

  2. John Zeigler says:

    “Brandon created a unique, variable-expense shared services delivery model”. There are many services that some of the practices have found successful I am sure; however, the use of a Group Purchasing Organization (GPO) business model allows the exact same services while using a 3% margin. If the business model were a true GPO, as over 95% of hospitals in the USA currently follow; disclosure as to what Audigy management actually pays for amplification devices could be given to the membership. That disclosure would go a long way in instilling trust and sustainability of the business model. Secondly, as noted in the article, “Branding the AGX Hearing Brand” is vital and I applaud this effort as a David VS Goliath process, but “Branding” in this age requires mass National participation on the part of thousands of practices not just 2 or 3 hundred.

    Lets look at another choice, AuDNet has a pledge process in place to accomplish the creation of an Audiology based GPO honoring the 3% margin requirement with full disclosure (Open Book APO) called an Audiology Purchasing Organization (APO). The pledge allows all practices in Private, University, Medical and Hospital environments to simply sign a pledge to buy their hearing aids from the lowest bidders in a process similar to the “VA Industry days” process where all manufacturers are invited to bid. The pledges are autonomous and become effective when enough pledges entice a manufacturer to offer prices on parity with larger retail stores like Costco’s contract. The date the pledges become effective is based on when the manufacturers see enough pledges enticing them to the new business the pledges offer and is “ongoing”. Those who sign a pledge are to continue to “operate” as they currently do and their are no financial obligations to signing a pledge. Basically you sign and wait for AuDNet to do the negotiating once there are enough pledges that someone blinks.

    Obviously, the sooner Audiologists realize that nothing changes except an account number and prices that are on parity with retail (hundreds of dollars less) to eliminate the penalty of trying to avoid the dreaded “retail Audiology Job”, the better. Time is of the essence. – to sign a pledge and wait

    I greatly appreciate the Audigy effort and have been watching them since inception. I have some history with Sonus 10 or 15 years ago. Where I depart from this current thesis is that “Branding” in this age simply can not be accomplished with only a few hundred practices; transparency of a legitimate business model is missing hence only a few hundred will ever join; the prices paid for technology amplification devices will always be high and discriminate against the traditional Audiology venues as opposed to much lower pricing by retail because significantly large – mass – purchasing can not be achieved.

    I believe that those Audiologists still in “denial” after ten years of reading David Smirga’s “Are we Asleep at the Wheel?” articles will someday wake-up and smell the Roses and sign a pledge while we dance to the “San Antonio Rose” song at AAA in San Antonio TX come March 24th! See you there! Come and visit us in the exhibit hall. We need pledges to succeed!

    Visit for more details! John Zeigler Au.D.

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