There is much talk on the internet of Costco and very low priced hearing aids. How to compete? Should we change manufacturers and only use those that don’t sell to Costco? Should we fight for lower prices? What is possible?
I have heard colleagues say that they are fighting the battle by price matching. A couple of years ago, I took my husband to three CostCos and had him fit with aids while I sat and watched. The pair of aids the CostCo salesperson recommended, and there were no choices, sold for $1,899.99 including a remote control and a 3-year warranty. I have done the math and I can’t see anyway that we can compete on price alone and still have money to run a profitable practice.
Others share that they are hammering the manufacturers for lower prices. A slightly lower price may be possible but remember that you can’t have it ALL. Some colleagues expect manufacturers to give them money for marketing, business management consultants, “closers”, free educational opportunities, and other business services. Remember these additional services cost money and add to the cost of the hearing instruments. Some colleagues belong to networks and purchase their hearing aids thru them. A middleman always adds to the price of the hearing aids. These networks may be providing business management services and advice but rest assured that you are paying for those services.
In my opinion, the best way to reduce the cost of hearing aids is to strip away all the other services that are often included and then negotiate based on price and price alone. BUT… don’t expect to get all the other business management services and marketing unless you pay additionally for them.
There may be another way to compete. The hearing aid department at Costco is typically sandwiched between hair care products and hot dogs. While this type of atmosphere may be appealing to some, it is not appealing to all.
The patient experience is certainly a place where independents can excel. Research has shown that patients are willing to pay more for a good experience.It is often the little details that patients will recall even more than the product they purchased or the service they received, and these details may be the reason a patient will want to continue doing business with you.
There is no doubt that competition for the sale of hearing aids is growing. I read an interesting study recently written by Audigy that investigated whether the presence of a nearby Costco influenced private practice hearing aid revenue. Results actually indicated that a nearby Costco had a slightly positive impact on hearing aid revenue and average selling price for other practices.
One thing is for sure, Costco hearing aids sales are increasing and they aren’t going away anytime soon. While we can’t compete on price alone, we certainly can provide our expertise, our education, an amazing experience, over-the-top service, and best practices that can’t be compared to low-cost Big Box providers. Perhaps we worry too much about Costco and their rock bottom prices and should spend more time worrying about how to make our businesses better and more patient focused.