Hearing aid sales in Big Box stores like Costco are here to stay! While the hearing aid market isn’t growing very rapidly, the share that Big Box stores have is the fastest growing segment of the hearing aid market. The Hearing Review estimates Costco’s US market share to be around 11% of total sales, with the retailer’s year-on-year unit growth increasing at an estimated 20-25%. I don’t know about you, but I would do cartwheels if my practice experienced that kind of growth! What’s even worse is that Big Box retailers don’t have to invest money getting prospects for hearing aids because each store has thousands of prospects coming every day that is exposed to their hearing aid department.
So with the Big Box piece of the hearing aid market growing so fast, how is a private practitioner supposed to compete? The truth is there is NO WAY that an average practice can compete with Costco prices. I don’t care which buying group you belong to or what manufacturer you work with, it’s impossible to maintain a profitable practice and be able to sell hearing aids at Big Box prices. At Costco, the largest wholesaler of hearing aids, devices often sell for less than hearing healthcare professionals pay for similar products. I estimate that an average practice would need to see three times as many patients as they currently see to make up for the reduced margins of selling hearing aids at the dramatically discounted prices offered by Big Box retailers. Where will those additional patients come from? It’s already incredibly expensive ($300-500 per patient or more) to attract a new patient via traditional marketing. Few practices can afford to spend three times more on marketing efforts with the hope of gaining new patients.
Perhaps the answer is not in waging a price war, but in creating a practice that focuses on the providing the very Best in Hearing Healthcare. Not everyone wants Cheap when it comes to their hearing healthcare. At least in my practice, there are patients that are willing to pay for quality care – our expertise, an amazing experience, over the top service and a commitment to 100% patient satisfaction. A top quality practice and professional is still attractive to consumers who want “The Best”.
There is a strong relationship between excellence in hearing healthcare, benefit, and improvement in the quality of life derived from better hearing. Benefits always outweigh price in this industry, so instead of lowering prices, perhaps the focus should be on adhering to a protocol consisting of a comprehensive test battery including measures of loudness discomfort and speech-in-noise testing and in-depth real-ear measurements to ensure that patients are getting optimal benefit from their hearing aids. Price is what you pay but the value is what you get! My recommendation for 2017 is to focus on adding value to every patient encounter and Forget About Waging a Price War with BigBox Stores.