If there is one thing about battery sales that marketing experts in the field espouse, it is this: Like life, its what you make of it. There are seasoned hearing care professionals who make upwards of one-fifth of their gross revenues from the sale of batteries, while other dispensing professionals choose to eschew battery sales altogether. The determining factor in profiting from hearing aid battery sales is the amount of marketing emphasis you wish to place on them, says Kara Salzillo of Duracell, Boston; Angela Echele of Energizer Battery Co, St. Louis, Mo; and Tom Begley of Rayovac Corp, Madison, Wis.
Unpublished data from The Hearing Review 2004 dispenser survey1 suggests that battery sales account for about 5% of the total gross revenues of an average office/practice. In a typical dispensing office, this would amount to about $12,500representing the same sales as about six hearing aids. However, the potential of battery sales easily exceeds this amount by more than double, say the above experts. This assertion is also supported by HR survey statistics: dispensing professionals estimate that slightly more than half (51%) of the batteries purchased by their clients/patients come from their offices/practices. According to the battery manufacturers, dispensing offices constitute 39%-51% of all the hearing aid batteries sold in the estimated $160 million market.
Although the first generation of digital hearing instruments featured power-hungry circuits, todays digital aids are far more economical relative to battery drain, and the new product class has not substantially changed the consumption patterns of hearing aid users.2 Yet, the battery market has grown by about 10% in unit volume and 5% in dollar value over the last year, according to Energizers Echele, moving upward with the hearing instrument market which grew by about 7.5% in units. However, she is quick to note that much of the increase in sales can be attributed to Veterans Administration dispensing activity, a trend to larger packages sold in retail stores such as the 20-cell packs offered at Costco, and more batteries being sold (often as loss leaders) in retail promotions. Rayovacs Begley agrees that the battery market is trending upward, and adds that hearing aid battery units are not necessarily a reflection of last years hearing aid sales, but rather by the previous 5-7 years of sales which determine the active hearing aid user population.
Unfortunately, the modest increases in hearing aid battery sales in recent years have come primarily from the retail sectorsuggesting that hearing care professionals are losing out on this important profit center. In particular, the big box retailers (eg, Walmart) and drug stores have been gaining ground as they have come to recognize that the highly sought-after senior market is looking for a convenient place to purchase these batteriesoften during special promotions.
And there lies the rub. How can the average dispensing office compete against these giant retail and drug store chains?
The Best Offense is a Good Defense
All three experts interviewed for this article agree that hearing care professionals are in a unique position to lock up battery sales at the time of the hearing instrument purchase. But, if its true that hearing care professionals are successful in gaining only 51% of the battery sales of their customers, that means they are missing out on 49% of sales they could have. In contrast, about 96% of the hearing aid batteries purchased in Europe come from dispensing offices.
With consumers visiting grocery stores, drug stores, and mass merchandisers to fulfill a variety of needs on a regular basis, says Duracells Salzillo, dispensers need to work even harder to drive continued battery sales in their offices. In many ways, dispensers have an early advantage, because they are the first point of contact for patients and all hearing aid battery users. They need to use this as an advantage, actively reminding patients that they sell batteries. This can be achieved through soft-selling verbal reminders by audiologists and receptionists.
Locking up hearing aid battery sales during the clients hearing aid purchase has also traditionally been thought of as a defensive strategy to guard against the competition. Conversely, if one of your competitors does not actively promote hearing aid batteries, a possible marketing tactic might be to offer special incentives on your hearing aid batteries (eg, a special battery club offer), enticing them to try your products and services.
Positioning and Building the Image of Your Practice
While this article focuses on the marketing of hearing aid batteries by private dispensing offices, the aspects of product quality and reliability are inseparable from the marketing image that any dispensing office is trying to project to the consumer. Hearing aid batteries are really an extension of the hearing care professionals products and services, says Begley. [Hearing instrument users] really do care about battery quality. If youre a dispensing professional who offers a $2500 hearing aid, and its unwise to take the chance that the hearing aid isnt going to perform correctly in order to save a nickel on a battery. Once you get by all the fancy charts and graphics [on long-lasting performance] that we battery manufacturers like to promote, reliability is still the number-one issue…You want a reliable battery with great consistency and no problems. Lets face it: the dispensing professional isnt in business to sell hearing aid batteries; theyre in business to serve their patients needs, dispense hearing aids, and build their revenues. Saving a nickel by buying a battery brand that has a history of being unreliable just doesnt make sense. Begley also notes that companies who maintain dedicated sales forces to assist dispensing professionals, as well those who directly support the hearing industry, demonstrate a commitment to the overall field in general. He points out that Randy Raymond, Rayovacs general manager of global hearing aid sales, was elected in March as the incoming-chairman of the Hearing Industries Assn (HIA). Likewise, Energizer and Phonak (distributor of Duracell) have also been long-time members of HIA.
According to Sergei Kochkin of the Better Hearing Institute, says Echele, the top-10 correlates of customer satisfaction with hearing aids include perceived benefit, sound clarity, value (defined as price divided by performance), and reliability. Batteries can affect all four of these factors, and can have a direct influence on value and reliability. A bad experience can negatively influence the credibility of the dispensing professional. So, its important for the professional to ensure that the patient chooses the right brandas well as understand how hearing aid batteries work and function with their hearing aidsso the dispensing professional can increase customer satisfaction and have a lower return rate. Of course, the other reasons to promote batteries is to keep the dispensing professional top-of-mind with the patient, leading to additional services and new patient referrals. Finally, battery sales are a relatively easy way to grow the bottom line.
With customers, convenience is always key, says Salzillo, so its important to offer a battery that will deliver strong, dependable performance.
Many hearing aid battery manufacturers also have strong brand images that have been built with a lot of national advertising. For example, Rayovac promotes its national branding efforts by featuring golf-legend and hearing aid user Arnold Palmer, Duracell has joined with Phonak in producing a range of advertising in magazines and on television, and the Energizer Bunny has achieved the level of an advertising icon. The point, according the experts interviewed here, is that these are all instantly recognizable, established brand names that serve to reinforce a sense of security and product quality in an industry that oftentimes features products that are completely unfamiliar to consumers. Hearing aid battery displays in an offices reception and counseling areas can insert a familiar face into an otherwise unfamiliar decision-making process.
Essentials in Marketing Batteries
So what should every dispensing office/practice do to promote batteries? Salzillo offers four keys to battery promotions:
1) Remember to ask patients if they need batteries.
2) Place battery displays in highly visible discovery locations to serve as visual reminders to patients.
3) Get your patients in a battery buying cycle. Encourage them to purchase a supply that will last them through their next office visit.
4) Always remember to discuss batteries during the dispensing process. The patient needs to be educated about batterieswhat type of batteries they need, how often they can expect to change them, etcto set appropriate patient expectations and to generate battery sales at the outset.
If you could do only one thing in the marketing of batteries, says Echele, it would be to place a professional, eye-catching battery display in a prominent location where every patient can see it. Without question, battery clubs are also a great way to sell the products. For dispensing offices that do not have the resources to administer a battery club program, there are other tools…to help with consumer [purchasing] continuity and loyalty.
As an example of competing against the mass merchandisers and drug stores, Echele cites WalMart Founder Sam Waltons philosophy which he developed while working at a Ben Franklin department store.. There, he observed and adopted what worked well, and made improvements on other aspects of the stores retail model. Tactics that can be copied from mass merchandisers, says Echele, include displaying batteries at the point of purchase, featuring multiple national brands, and offering periodic promotions. Similarly, she says that mass retailers are often restricted by shelving and signage rules that cause products to blend together. In contrast, dispensing professionals have greater freedom in creating displays that are highly visible to patients.
Mass merchandisers are also prohibited from co-branding their products with the battery manufacturers, says Echele. But dispensing professionals can use custom-imprinting programs to gain from these companies that regularly invest large sums of money in national advertising campaigns. For example, she says Energizer spends over $100 million annually to promote its batteries, with a focus on quality and long-lasting performance. An office that places its name on a nationally branded product can establish greater credibility at no extra cost. Finally, in order for consumers to take advantage of a promotion on hearing aid batteries from a national retailer, they first must see the promotion in a newspaper, then drive to that store, and purchase the batteries. This is a fairly labor-intensive process. Dispensing professionals have a huge advantage: they can lock up battery sales, sending the products directly to the consumers homes for maximum convenience.
Begley says that the marketing of hearing aid batteries remains extremely important in private practice dispensing. If you allow your customers to go elsewhere to buy their batteries, youre in danger of not getting repeat purchases on a hearing device. Statistics show that 57%-65% of all hearing instrument sales are from repeat customers, so hearing aid batteries represent a great way to establish regular contact with customers and ensure they dont go elsewhere for their next hearing aid purchase. He believes that the most successful dispensing professionals understand the value of battery salesas both an excellent profit center and as a way to enhance customer loyalty.
Seasoned dispensing professionals generally point to a few additional battery basics: you need to provide fresh batteries that are exceptional in quality and consistent in performance; it helps to turn the batteries over frequently in inventory; there should be an absolute guarantee on battery performance for customers; one should develop a simple, efficient method for sending the batteries to customers on the proper days; and it should be instilled upon everyone in the office that battery sales are a basic component in a comprehensive aural rehabilitation program.
What is a reasonable goal for hearing aid battery sales in 2005? Rather than using a percentage of gross sales as a goal, suggests Echele, you may wish to set a goal that is relevant to the individual practice and each situation. For example, battery profits might cover the cost of a part-time administrative assistant, a years worth of marketing efforts, or pay for a new piece of equipment.
But clearly, according to the above experts, those dispensing offices who are ignoring battery sales are passing up an opportunity to establish a substantial, reliable profit and business building centerone that is theirs for the taking!
Building Loyalty, Spurring Business Growth
Its one thing to merely offer batteries to clients/patients, its another thing to market them in a consistent, conscientious manner with the aim of gaining revenues and building your business. The following are common methods used by dispensing professionals for marketing batteries, as well as ways to use batteries to gain more referrals, build customer loyalty, and protect your current patients from the competition!
Point of Purchase Displays. This is the essential promotional device that every dispensing office/practice should have, according to the battery manufacturers interviewed in this article. Batteries simply cannot be sold if your customers dont know that you offer them. Counter displays are provided by the major battery manufacturers, and its not uncommon to have several different brands represented in one dispensing office. Choice is important for consumers, and multiple displays show a willingness to offer the same variety as chain retailers and pharmacies.
In most cases, the front office staff is in charge of selling these batteries, and some offices even provide commission for these sales (often in addition to getting commissions on items like amplified telephones, home TV/stereo loop systems, alarm/alerting devices, etc). Many dispensing professionals have found that simply training your receptionist to say, Do you need any hearing aid batteries today, Mrs. Jones? can significantly increase battery sales. If pilferage by customers is a concern, the displays can be kept behind the receptionists desk.
Battery Clubs. According to the HR 2004 Dispenser Survey, 46% of dispensing professionals maintain a battery club. And with good reason: there are few better ways to secure battery sales and lock in patients to a business/practice. There are a variety of options for battery club programs, and the set-up of a battery club is limited only by ones imagination. Generally, battery clubs are sold on a subscription basis to the client, the batteries are mailed on a need-basis (ie, the client contacts the office via telephone or email), and there is a predetermined amount of batteries allotted to the customer over a period of time. This method has the additional benefit of monitoring the clients use of the hearing instruments and providing regular customer contact. If the client hasnt called for awhile, it may be a signal that something is wrong: they arent wearing the hearing instruments regularly, they are buying batteries from another source, they have fallen ill, etc. Whatever the case, this generally prompts a polite call from the dispensing professional or an office staff memberan excellent way to show concern for a patients general welfare.
Most of the major battery companies offer tools that help dispensing offices establish battery club programs. The complexity of battery clubs range from simple punch cards that keep track of battery mailings/pick-ups to software programs that are integrated into business software.
Free Hearing Aid Check and Cleaning with Purchase of Batteries. Another method of establishing close, personalized contact with your customer base as well as to introduce yourself to your competitors customers in the areais to offer a free, inexpensive service like a hearing aid check or cleaning with the purchase of batteries. This promotion can be advertised to your customer base, as well as in local newspapers, yellow pages, etc. These types of promotions provide the double bonus of enhancing customer service while gaining battery club enrollments or purchases.
Discounts on Future Purchases. Some dispensing professionals use a system of applying battery purchases against the cost of a future purchase of a hearing aid. For example, if Mr. Jones spends $200 over four years for his batteries, he could subtract this $200 (or a percentage of this amount) from the retail cost of his next hearing aids. Dispensing professionals who use this system often keep the amount visible to the customer on all invoices/battery club accounts, reminding them of this special discount. These programs can be an effective way of ensuring that customers return to your office repeatedly and buy their batteriesand their next hearing aidfrom you.
Direct Mail and Newspaper Ads. A direct mail campaign or newspaper ad targeted at seniors can include the extra incentive of free or discounted batteries.
Special Occasions/Thank You Cards. Many dispensing professionals mail free batteries to clients as a birthday/anniversary gift, and some battery manufacturers have these types of cards ready-made for use. A birthday, anniversary, or thank you for the referral card is a good way of letting the patient know that you care about them.
Karl Strom is editor-in-chief of The Hearing Review. Correspondence can be addressed to Karl Strom, The Hearing Review, 6100 Center Dr, Ste 1020, Los Angeles, CA 90045; email: [email protected].
1. Strom KE. The HR 2004 dispenser survey. The Hearing Review. 2004;11(6):14-32, 58-59.
2. Strom KE. Charging ahead: Technical advancements in batteries. The Hearing Review. 2004;(11)4:26-29, 67.