Marketing advice on targeting a graying generation.

America is aging at an unprecedented rate, yet our industry—which largely depends on a market that is 60+ years of age—continues in the “market share doldrums.” True, unit sales have seen modest annual increases during the past 15 years, but the total number of patients fitted (1.056 million in 1990, 1.1 million in 2005) has remained largely unchanged during a time when the total hearing impaired population has increased by more than 20%. If we take this increase into consideration and factor in the steady rise in binaural fittings, one could argue the hearing industry in the United States is rapidly losing market share, despite a steady climb in overall patient satisfaction (77% per MarkeTrak VII).

As an industry, this level of marketing performance is unquestionably poor. Yet, there are hundreds of examples of dispensing practices nationwide with success rates and growth far exceeding these national averages. These firms vary widely in size, structure, and location—yet all share the common trait of steady growth from strong market penetration. In addition, each of these “overachievers” enjoys success in the area that best assesses marketing effectiveness—“new patient percentage,” or the ratio of first-time buyers fitted. One informal survey of more than 100 private practices and dispensing firms revealed new patient-fitting percentages that were nearly double MarkeTrak’s US average of 40%. So, how is it possible that some firms prosper, gain market share, and garner new patients, while so many others largely rely on sales to existing clients?

The typical first-time hearing aid buyer knows very little about the product. They certainly do not want to buy hearing aids, and many do not even want to acknowledge a hearing problem exists. However, the experienced hearing aid user can list every challenge, problem, and concern going back to the day they were fitted. From wind noise to poor battery life, from annoying feedback to difficulties in noisy environments, they can describe every objection that seems to be a focal point of many current marketing campaigns, promising: “advanced noise suppression circuitry,” “extended battery life,”“signal processing,” “programmable hearing, ” and “as low as $299.”

When considering the wants and needs of consumers, such as the expectations and experiences that vary so greatly between the first-time patient and the experienced user, it becomes a simple matter to analyze the potential impact of a given advertising message on your targeted market segment. Not only is the content of much of the industry’s advertising inappropriate for the new patient, in too many cases, the message plants questions in the mind and raises concerns that did not previously exist.

Of all of the misdirected marketing currently in use, price advertising, in the eyes of the new patient, is arguably the most counterproductive strategy. Extreme “lowball” tactics are often nothing more than thinly veiled bait and switch. Not only illegal in most states, this tactic does FAR more harm than good (since the aged 60+ market is possibly the most savvy of the demographic groups). Even legitimate discount pricing is largely a wasted effort since the average first-time buyer has virtually NO clue as to what a hearing aid costs. For most, any reasonable retail price—absent a clear understanding of the true benefits derived from your service—will trigger sticker shock.

Long before a new patient will consider the features and benefits of one product versus another, they need to be convinced that you, the professional, can provide the solution to the problem. Establish this level of confidence and trust, and the product recommendation becomes largely incidental.

The dispensing firms surveyed are an exceptionally diverse group, representing every conceivable profile of the modern retail practice. Spread across 26 states, their markets range from rural to urban, with office locations ranging from malls to medical buildings. They are audiologists, hearing aid dispensers, franchise operations, and small “mom and pop” firms. None fit fewer than 30 instruments per month; all fit more than 60% new patients. The following are summaries of the more frequently stated observations, techniques, and business practices employed by this highly effective group:

1. Define and Target the Market
At a minimum, two distinct marketing strategies must be employed by today’s retail practice. Owners of hearing aids (this includes competitive users) require a different approach than those who have yet to seek hearing help. For current hearing aid wearers, the message must be “service and value”—which is at best premature when communicated to the prospective first-time buyer, a person who has yet to be convinced of the extent of the problem, much less the rewards that accompany a solution. In this computer age, most practices have reasonable control of, and access to, their client database. Maintaining separate files of competitive users—even prior “no sale” evaluations—is relatively simple and opens the door for a highly targeted approach to these different groups.

Once a consistent and effective marketing plan that targets the specific needs of the different segments is in place, further success can be attained through even more advanced targeting within the prospective patient group. A good example of this is a focus on the lifestyle differences common to various age groups. Directing the proper message—ie, focusing on the unique needs of the more active 60- to 70-year-old group versus the less active 70+ group—can only increase marketing effectiveness.

Another simple, yet highly effective technique used in direct mail campaigns targets the family rather than an individual. For example, directing marketing material to “The Doe Family” accomplishes two key goals, for NO additional cost. First is the potential of placing the message in the hands of two or more prospective patients. Second is the possibility of involving family members in the decision-making process, as these individuals are often more affected by the problems associated with hearing impairment than the person with the loss.

2. Stay Visible
One effective ad or mail piece can generate an amazing response; however, it is the behind the scenes impact that is the most interesting and the hardest to gauge. While many hearing care professionals try to anticipate and prevent market saturation (that point at which response levels will drop off), consistent advertisers know this simply does not happen overnight. There is no way to know how receptive a person will be to a particular message on a given day, or time in their life. Some respond after months of contact, others the first time. Maintaining a presence in the market ensures you will have an opportunity when the time is right. Even the most aggressive “direct response” form of advertising will trigger feedback that is both unpredictable and difficult to track. It is not uncommon for a prospective patient to arrive for an appointment with several months’ worth of direct mail pieces in hand. Aside from immediate response, infrequent marketing, such as open house promotions, cannot build the sales momentum and capitalize on this long-term level of interest. Higher frequency advertising, even on a smaller scale, lowers risk while significantly improving sales volume. Phone directory (ie, The Yellow Pages) advertising does not provide the necessary market visibility, since few “fingers do the walking” uninvited. While it is a presence that most feel compelled to maintain, the true return on investment is among the lowest of all advertising media.

Discipline and Planning
Formulating and executing a consistent marketing effort often seems complicated. It is tempting to depend on large promotional campaigns, such as the open house, since one big splash often requires no more effort or planning than a far smaller scale campaign. Many practices throughout the United States have used this approach for years, often limiting company exposure to a few large campaigns per year. The promise of high sales volume that can result from large-scale advertising is an added temptation, though it comes at far higher risk (it is the “put all your eggs in one basket” approach to marketing). The biggest problem of large-scale advertising is efficiency. The average American dispensing practice fits 18 to 20 instruments per month, sold to 12 to 15 individuals. This equates to an average of three to five patients sold per week. This “average” office is structured and accustomed to handling this limited number of patients in all areas of operation such as parking, reception, call volume, evaluations, fittings, delivery, and patient follow-up. Even poorly designed advertising in sufficient quantity can too easily overburden every key area of a practice. Too many phone calls will result in a poor ratio of appointments being set. Too many appointments in a day will have the same impact on sales, resulting in a poor ratio of patients fitted. Rushed evaluations and deliveries result in higher than average cancellations. Many such campaigns will appear profitable despite chasing away more patients than they generate. This often contributes to a terrible cost in business efficiency, as well as performing a tremendous disservice to the prospective patients who failed to receive the hearing help they sought.

An Obvious Solution
The solution is obvious: spread out and control the response. Control of your patient flow is quite attainable through the use of consistent, more frequent, and smaller scale advertising exposure. With newspaper display ads, this usually means increased frequency, rather than large size reductions, since small ads typically lose too much visibility. With direct mail, smaller scale is simple—divide that 20,000-piece drop into four weekly mailings of 5,000. The total response will spread over 4 to 5 weeks, allowing office efficiency to skyrocket at all levels. With experience and tracking, advertising response becomes surprisingly predictable, and predictable response is marketing’s “brass ring.” The ability to trigger and generate the precise level of response adequate to the diverse needs of each office enables a practice to arrive at the pinnacle of efficiency. With this ability comes stability, controlled growth, even market dominance.

Don’t Fix It If…
Thanks to this industry’s poor market share—combined with the runaway growth of the hearing impaired population—market saturation is a practical impossibility, even in the most competitive markets. “Advertising doesn’t work in my area” is a surprisingly common belief by those who simply “don’t know how.” Consider the poorly crafted message that targets the wrong market segment. Poor results should be no more surprising than the patient who tells you, “Hearing aids don’t work,” then reveal they have purchased a $200 instrument through mail order. Effective advertising is surprisingly easy to find. That ad placed by your competitor (for the third time this month) works! That mailer that keeps showing up in the hands of your patients generates response. Not sure what or how to advertise? Adapt a design to your own needs, but pick one that works, one with a history of success.

Small business advertising demands results—it must produce or it will cease to exist. Modifying an effective approach to fit your own requirements is not difficult, and does not necessarily weaken (or strengthen) the response. Once a reasonable response is obtained, do NOT “tweak, alter, or modify” your approach. Leave it alone. Yes, a time may come when your design begins to lose effectiveness due to overexposure. However, this will happen gradually, not from one campaign to the next. Only then, once a proven and gradual decline in response is evidenced, should you consider a design change to “freshen up” the message. This often means simple modifications to color, graphics, or layout, which enhance the visibility of the ad or mail piece.

Change Is Good, but…
Radical change is both risky and unnecessary. The advertising design that gradually lost effectiveness last year will prove effective at a later date. The most effective firms make advertising decisions several months in advance, with contingency plans at the ready. Being unprepared in this area can yield disastrous results from impulsive decisions to employ unproven, expensive, or ill-advised advertising methods; the continued use of increasingly ineffective designs when no better alternative is readily available; and slashing a marketing budget out of fear of the unknown—fear of future losses. The only guaranteed return in advertising is the response derived from NO advertising.

Long-term commitment to a new or unproven marketing approach can prove costly, with an financial impact that can take years of recovery. Possibly more damaging than the lost revenue is the loss of momentum that is so difficult to regain. Maintaining flexibility in marketing means retaining the ability to constantly fine-tune one’s advertising approach to meet the demands of a changing marketplace, changing economy, and competitive atmosphere. The ongoing, small-scale testing of new marketing concepts ensures success with future marketing efforts.

Now or never
The hearing impaired population in the United States will explode during the next 10 years, increasing at an average of an estimated 400,000 individuals per year. At current binaural rates, this equals more than 600,000 potential new instrument sales each year—in an industry that currently fits fewer than 2 million. This vast potential for growth exists in every market area in the country. As it has for years, it will continue to be “opportunity lost” by firms that do not evolve, or fail to address the specific needs of this growing population.

Too many dispensing practices will continue to plod along, content in the knowledge they can “make a living” through reliance on sales to current patients, unwilling to direct resources and energy where they are most needed. The sad truth is “opportunity lost” is not limited to an industry’s lost economic and growth potential. We must also consider the potential “lifestyle lost” of the millions of hearing impaired Americans who have been, who will continue to be, condemned to live out their days suffering the isolation and social stigma so unique to those with hearing loss. For those firms that choose to break this pattern of complacency, those determined to communicate effectively to their local hearing impaired population, the rewards (personal, professional, and for the public we serve) are incalculable.

Robert D. Hodges is the president of Action Marketing, Spring Valley, Calif.