The Truth About OTC’s and Your Practice
Every day we hear concerns from practice owners who are worried that the low-price over-the-counter hearing devices that are coming on the market will drastically reduce their sales of higher-end hearing aids.
Are you worried that:
- Once people have an $800 hearing device option, no one will want to pay more for a hearing aid?
- Instead of making a nice profit you’ll only be making a few hundred dollars per hearing device sale?
- And you won’t be able to pay your staff or your rent or make a decent living?
Before you move to full-on PANIC mode, it may be time to take a deep breath, look at the big picture, and ask yourself: could OTC hearing device sales actually be a good thing?
Seriously, will OTC really hurt your practice?
It may not. Consider this:
- Access to hearing aids is on the rise. The whole OTC movement is driven by a desire to make hearing aids more accessible. And that desire is also driving things like the Medicare Hearing Aid Act 2019 and other legislation to cover hearing aids. Who will want an over-the-counter hearing aid when they can get a better one through a professional at little to no cost?
- Patients love working with you! Studies show that hearing aid professionals enjoy a 94% high satisfaction rate. Your patients love coming to see you and prefer working with a professional.
- Patients don’t want to assess their own hearing. Studies show that only a small fraction of patients are comfortable taking on the tasks they’d need to do to make OTC work for them–things like doing a hearing test on their own or troubleshooting. In fact, more than 95% of people who had hearing aids (and 70% of people who don’t) went to a professional to get a hearing test.
Over-the-counter hearing aids are kind of like the reading glasses you can get at the drugstore. Sure, people buy them. But the majority of people who have trouble seeing will still seek out a professional.
False Assumption: If consumers have a lower-priced option they won’t pay more
This is utter nonsense, 100% false.
Every market has plenty of people who want the lowest cost, mid-cost, and high-end cost versions. In addition, the number of people in the higher end who can afford fully featured hearing aids is growing, not shrinking.
Over the last 40 years, the number of households earning over $100,000 a year has more than doubled to 34% and continues to increase. At the same time, the sale of luxury goods and cars has grown too.
In every market you will find people who are focused on paying the lowest price as well as people whose biggest concern is value and getting the best product money can buy. Of course there is a range of buyers in the middle too.
Every large corporation gets this. Take Kimberly-Clark, which makes Huggies diapers and also quietly produces lower-cost training pants for Wal-Mart. Procter and Gamble does the same thing, producing multiple detergents — Tide, Gain, Cheer and Dreft — to target different market segments. And then there is Kellwood Corporation who sews clothes bearing labels from Calvin Klein to Sag Harbor.
Having options that target different market segments and price points is just good business practice.
What we see with our practices here at MedPB is the new over-the-counter hearing enhancement devices are attracting a whole new group of patients. They’re attracting the people who know they need help with their hearing, but are too stubborn or cheap to get their hearing tested and don’t want to pay for a high-end hearing aid. OTC’s can be the catalyst to get them to take action.
With only 25% of the target market owning hearing aids, the new hearing enhancement devices, like ReSound’s Jabra, are attracting some of the remaining 75% of people who could benefit from hearing aids but just haven’t been a good fit for a high-end unit (no pun intended).
Can you increase your profits with OTC devices or will they undercut your sales of other units?
Admittedly you’d have to sell around 200 or more of these OTC hearing devices each month to make okay money if you only sold these OTC units. Which is unrealistic, unless you’re a national low cost retailer. So should you even bother?
The answer is YES, and here’s why…
- As we mentioned above, letting people know you have an affordable hearing solution for them won’t undercut your existing sales, but instead will attract those people who weren’t going to buy a high-end unit anyways. This will bring in a bit of extra cash. But that’s just the appetizer.
- You can’t sell high-end hearing aids to people who you don’t talk to and that you haven’t given a reason to visit your practice. For some, the promise of an affordable over-the-counter hearing device is what it takes to get them in the door. Then, you can help them make an informed choice and provide them with an OTC hearing device or a more functional and higher end hearing aid. Our research shows that when you get this untapped market segment in the door, 20% will choose the OTC hearing enhancement device. Which is good news. The even better news is 80% of patients will choose a fully functional hearing aid when they compare them side by side with the OTC hearing enhancement devices.
- Add increased revenue from OTC hearing devices and increased sales from higher end hearing aids and you could see your practice grow… by a lot. But to make it work you’ll need to modify your marketing plan. You’ll need to attract new patients with OTC hearing devices without undercutting your existing sales. Which sounds tricky, but we have a simple way for you to do just that.
You don’t have to fight the market or the inevitable. There’s a very simple way to go with the flow and grow your practice at the same time. Talk to us and discover what worked for Carl, one of our clients, who saw an 18% increase in sales.
Ready to profit from OTC? Let’s talk.
