Disruptors In Hearing Aid Market Shaking Things Up

Siemens hearing aid 150x150 Disruptors In Hearing Aid Market Shaking Things UpIf you’ve been following our series on hearing aids, you know that this is a huge market with skyrocketing growth potential.  Consider these stats; There are 35 million U.S. consumers that could benefit from a hearing aid, and only a quarter of them actually wear them.  (Why?  They’re darn expensive!)  Also consider that the first wave of Boomers (79 million strong) just started turning 65.  The walkman generation that started pluggin-in 33 years ago is going to turn this market… (get ready for it)… on it’s ear!

Kaiser Health News suggests that “Only a quarter of the 35 million U.S. adults who could benefit from hearing aids actually get them, and one of the main reasons is money”. – From The Senior List article “How To Choose A Hearing Aid

Newcomers To The Hearing Aid Market

There are some interesting challenges going on in the hearing aid space that could spark some disruption in this market.  First;  Costco saw the writing on the wall, and recently begancostco logo Disruptors In Hearing Aid Market Shaking Things Up selling hearing aids through Costco Hearing Centers.  This is great news for consumers.  When you combine Costco’s BUYING POWER with a committed focus on QUALITY CUSTOMER SERVICE, every market tunes-in (and subsequently tunes-up.)  This means everyone else that wants to stay in this game will have to sharpen their pencils, re-think their marketing strategies, and improve customer service in a big way.

The second big disruption in this arena occurred when two former Stanford classmates (Sam Tanzer and Ross Porter) formed an unlikely partnership.  These two entrepreneurs saw a stale market with a ton of growth potential and decided to form Embrace Hearing, a company “making high-quality hearing aids available at affordable prices”.  These guys seem to get it, and they’re applying start-up-muscle to solve the problems they see inherent in this space.  Embrace Hearing cuts out the middle man, and keeps it simple.  They offer just 3 options when ordering direct; a base model at $399, a mid tier model at $599 and a high end at $899 (*price per ear when ordering a pair).  The higher the price point, the more features in the hearing aid.

Embrace Hearing e1355787443123 Disruptors In Hearing Aid Market Shaking Things Up

Embrace Hearing – How do they do it?

Ross Porter (co-founder) tells The Senior List what he thinks is wrong with the current distribution model for hearing aids, and where he thinks it’s going; “Audiologists run loss-making businesses Ross Porter 150x148 Disruptors In Hearing Aid Market Shaking Things Upthat are subsidized by the sale of hearing aids. When a customer pays $5,000 for hearing aids, he’s paying perhaps $100 for the manufacturer’s cost, $900 for the manufacturer’s profit margin, $1,000 for the audiologist’s time, and then $3,000 to cover the overhead of an inefficient, legacy brick & mortar distribution system that will ultimately be made more efficient by the spread of online distribution. It’s important to understand that audiologists are not price gouging — but given their high fixed cost structure, they literally cannot make hearing aids affordable without going out of business.  But the world is changing, and patient needs – not audiologist needs – will determine how hearing aids are distributed in the future.  We believe that online hearing aid retailers, like Embrace Hearing, will soon dominate the hearing aid industry, leaving audiologists able to do the medical screenings and testing they are trained to do, and not the salesperson job that they are forced into.”

“A disruptive innovation is an innovation that helps create a new market and value network, and eventually goes on to disrupt an existing market and value network (over a few years or decades), displacing an earlier technology. The term is used in business and technology literature to describe innovations that improve a product or service in ways that the market does not expect, typically first by designing for a different set of consumers in the new market and later by lowering prices in the existing market.” – Wikipedia

bte hearing aid1 Disruptors In Hearing Aid Market Shaking Things UpThe Hearing Aid Market

The hearing aid market is past due for some disruption.  Make no mistake about it- there are some fantastic, extremely competent, and caring folks working in hearing loss centers (all across the U.S.).  The vast majority of these professionals go to work with one thing in mind.  To make a difference in someones life by improving problems caused by hearing loss.  Markets do what markets do… until they’re forced to correct, or to change course.  They don’t change course unless there is a compelling reason to do so.  This market is is a monster ($6 billion today & $8 billion by 2018 – CNBC reports) and there ARE compelling reasons for disruptive innovators to think about moving-in here…  John F. Kennedy once said “Change is the law of life. And those who look only to the past or present are certain to miss the future.”  Here’s to all the disruptive innovators out there looking ahead, and looking to shake things up a bit.       – Cheers –

Also Read:

How Costco is targeting boomers and seniors by moving into the hearing aid arena

What you need to know about hearing aids

How to choose a hearing aid

Related Posts:

Comments

  1. Dave says

    having dealt with Embrace I wish I never gave them 1898 $ from Aug -16 till December 23 2013 I have had 2 sets of aids and they lasted less than 3 weeks combined I still have no aids and Hansaton who took the last set of aids to get my problems fixed has handed it back to Embrace who allegedly has had the new set for weeks and hasn’t programed them or as always does not contact me. Neither company has an once of scruples. This is a rip that some class action suite should be filled heir an attorney interested.

  2. says

    Ultimately, consumers will decide what direction the industry goes. Ross only discusses the negatives of “legacy” bricks and mortar, yet omits the obvious advantages – local, professional care from someone you can see and trust.

    • says

      Stephanie is absolutely right, and makes a great point. We try to support local business whenever we can. In the case of hearing aids, having an expert consult on fit and function is a VERY important part of a successful hearing aid experience. There’s no doubt about it.

      In the case of technologies affecting the lives of seniors (like hearing aids and medical alert systems) it’s important that market forces help move these industries along. They’ve been pretty stagnant over the last several decades.

      By challenging market models, current business practices are questioned and conventional wisdom is challenged. Its evolution and it’s necessary. When these types of change agents compete in stagnant markets, innovation occurs and (usually) everyone wins… Including industry.

  3. mark says

    What these “stanford innovators” are doing is not innovative at all. It’s a simple e-commerce store. People have been doing this for a decade, and they are doing absolutely nothing new.

    • says

      While it may not be earth shattering, what they are doing is helping to provide a change in the hearing aid space Mark- Try buying a hearing aid for under $1,500 and you’ll see there’s need for even more innovators (and competition) in this space.

  4. Michael Dowd says

    Hearing aid BUSSINESS is out of control and hearing aids are not affordable to the majority of those who want and need them. Is it driven by greed please respond.

    • says

      Michael- Thankfully this market is beginning to come around a little. There were too few players controlling the market (including the distribution model). This led to a take-it-or-leave-it choice for consumers. This really doesn’t sound like much of a choice now does it?

      This market is changing before our very eyes… Companies like the ones mentioned above can (and will) have profound effect on shaping the future of the hearing loss market.

  5. Larry McClanahan says

    Don’t forget D.I.Y. Hearing. They not only fit your two “disruptions” above of affordable hearing aids and cutting out the middle man, but they also provide a third “disruption” giving you the option of easily programming your own hearing aids (using a professional audiogram) via computer software they provide.

    • says

      Thanks Larry you make a great point. DIY Hearing does look like another “disruptor” and/or “agent of change” in this space. Thanks for passing that along- AND for participating on The Senior List – We value your opinion!

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