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Hearing Care in the Age of Commoditisation & Information

Commoditisation of hearing aids

Traditional hearing care is facing unprecedented threat from increased commoditisation and accessibility of information.

These two trends are not unique to hearing care. Many industries and professions today face the same crisis, and some have not survived because they have been unable to adapt to the way the world is changing or because consumer behaviour has moved on and left them behind.

This series of three articles has been written to explain how these drivers are affecting traditional hearing care and their implications for the future of hearing aid provision. We will look at the different paths the industry and profession might take as a response to these changes in consumer behaviour and look ahead to see where each of those paths lead.

The mistake of many successful businesses since lost to the onslaught of progress has been to adapt "too little too late", imagining that the impact of the changes are a problem to be dealt with tomorrow as their effects begin to bite, rather than building the foundations necessary for sustainability now.

The underlying purpose of these articles is to make it easier for the hearing care industry to lay those foundations now.

Commoditisation: threat or opportunity?

Investopedia has a very helpful definition of commoditisation:

The act of making a process, good or service easy to obtain by making it as uniform, plentiful and affordable as possible. Something becomes commoditized when one offering is nearly indistinguishable from another. As a result of technological innovation, broad-based education and frequent iteration, goods and services become commoditized and, therefore, widely accessible.

Based on this definition, commoditisation is ultimately a good thing because it benefits a greater number of people. As consumers we have all benefited from commoditisation: just think of how many of us benefit from computers once only available to large corporations. Or how rarely food shortages affect industrialised nations.

Apply this to hearing technology and the advantages are obvious: more people hearing better – a goal few within hearing care would disagree with. Especially when current production of hearing technology only meets 10% of global need.

The downsides of commoditisation

However, commoditisation has its downsides:

  1. Differentiation becomes almost impossible
  2. Price tends to become the deciding factor
  3. The true value of something is overlooked or becomes irrelevant
  4. The original innovators very quickly become forgotten

If you are providing a product or service that becomes commoditised then your own role will become less relevant and less significant to the consumer. Commoditisation leads to the devaluing of personal attention and even redundancy.

This is the underlying threat feared by many hearing care professionals: where is their own place within a commoditised world? Hopefully this series will go some way to answering that question.

Accessibility of Information: threat or opportunity?

The Internet has changed the accessibility of information forever. Whereas in the past information was held by the few who made it available to others as expertise, now that same information is readily available for free via a quick search on the Internet. We no longer have to trust someone's word for it; we can check it out for ourselves.

Again, this revolution is hugely beneficial. We can quickly become experts (or give the illusion of expertise!) on practically any topic imaginable. It also brings people together that might never have encountered one another otherwise, so that experiences are shared across the world at breakneck speed. Whereas in the past news, both good and bad, may have been contained locally, now the global village knows within hours. And woe betide anyone who tries to pull the wool over our eyes; they're deftly exposed through a quick search online.

The downsides of the accessibility of information

But just like commoditisation, the accessibility of information comes with its own downsides:

  1. Information can be accurate or inaccurate
  2. Information can be confusing, particularly when there's no consensus
  3. Information can be unhelpful or even damaging
  4. Information can give the illusion of expertise which impedes recognition of true expertise

People's experiences very quickly become a substitute for "evidence-based" expertise and the role of the true expert devolves into one of facilitation. A good example of this is within healthcare: the patient no longer comes in with a list of symptoms, but their own diagnosis and ideas for treatment plan! The general practitioner may find themselves simply being expected to "make it happen".

Whereas in the past experts were seen as gatekeepers in a good way, carefully using their knowledge and experience to control what people were exposed to in the consumer or patient's best interests, now those same gatekeepers are seen as keeping a person from what is rightfully theirs. Why? Because the internet-honed consumer finds it difficult to know when to correctly apply their cynicism and when to trust. The relationship has changed forever. Until the death of the Internet, expect no turning back.

Of course once commoditisation meets accessible information a new dynamic arises. Commoditisation is about doing away with whatever is unnecessary in order to simplify the process and reduce costs. So suddenly the consumer is finding themselves equipped with what they believe to be the knowledge they need to replace the role of the expert: to cut out the middle man, so to say.

They believe that if they do their homework and read enough reviews, they'll know what's best for them. They can now simply look for the provider who can facilitate it for them with the lowest possible personal cost to themselves.

Note here the deciding factor isn't "price", as in a monetary value, but "cost". Cost is what someone has to personally "lose" in order to gain. For example, a product or service may be cheaper, but if the end result is inferior then the cost may be higher. How individuals make these judgements of "cost versus value" is a subject extensively explored in the field of Behavioural Economics, which applies the principles of psychology to economics.

(If you'd like to know more about Behavioural Economics, three good starting points are Thinking, fast and slow by Daniel Kahneman, Predictably Irrational by Dan Ariely, and Priceless by William Poundstone.)

3 reasons why traditional hearing care is vulnerable

1) Service being disguised as product

Traditional hearing care has tended to charge a single price that includes the product (i.e. the hearing system) together with the professional services necessary to prescribe and fit that hearing system. The hearing assessment, prescription, fitting, follow up and ongoing support all tend to be included in that single price.

Naturally this single price tends to be seen by many consumers and third parties as the price of the hearing aid itself because a product is something tangible, whereas the professional services are not. Consequently the professional services are typically viewed as the means to an end rather than having an intrinsic value of their own. Unless a consumer has experience or knowledge to suggest otherwise, why wouldn't they see the supply of a hearing aid as just another white good?

2) Free = No Value

Traditional hearing care has unwittingly encouraged this perception by offering "free hearing tests", "free fitting", "free trial" and "free aftercare and ongoing support".

All these are professional services that require expertise and ultimately separate the hearing care practitioners from "box shifters". Yet by making these 'free', traditional hearing care establishes a perception that these services aren't ultimately important, that the product alone is all that's necessary for a successful fitting. (Talk about shooting oneself in the foot.)

By devaluing the very thing that differentiates hearing care from a seller of white goods, it has left itself vulnerable to attacks from commoditising companies that know indeed how to "shift boxes". Is it any wonder that supermarkets, Internet sellers, multi-service health providers and other discount retailers have been slowly but surely gaining ground over traditional hearing care?

But more than this, because the average consumer doesn't understand the difference between traditional hearing care and the commoditisers, traditional hearing care is left looking overly expensive. How can they justify such high prices? the argument goes.

In the battle for the hearts and minds of the consumer, answering that question is key.

3) The expert being sidelined

As technology improves, the role of the hearing care practitioner changes. Many aspects historically considered a staple of rehabilitation become less relevant as technology finds a way to solve those problems.

Take for example occlusion, and the need to convince a wearer that they would "get used to their own voice", it now becomes a non-issue for many using open-fit. Or the historical need to build up their wear time gradually to increase their tolerance to louder sounds. Nowadays noise reduction and acclimatisation managers greatly reduce this need. Even the need for listening tactics will become increasingly reserved for those with "more difficult hearing losses" as technology invents clever ways to solve the challenges of hearing problems.

And think how in-situ audiometry has reduced the perceived need for probe microphone measurements for many wearers in recent years. Whether or not one approach is technically more correct or better than the other is not the point here; the point is the perception of the need for the expert and whether the additional cost in using an expert provides appreciable benefit over and above not using one.

This evolution of technology will only increase. Things considered impossible today will become a reality tomorrow. Taking technological innovation to its logical conclusion, what role will there be for the hearing care practitioner in the future? There are already hints of technology that the consumer can fit themselves, and with an increasingly computer-savvy generation, what is to prevent this from becoming reality if that's what consumers want? 

The Need for Personal Service… or Not

Many say there will always be a need for personal service. But such truisms are unhelpful if they avoid us facing the questions that need answering.

A more valid response is for us to ask:

  1. Who will need such a personal service?
  2. How does a personal service differ from that provided by commoditisers?
  3. Are there enough individuals out there to make a personal service viable for traditional hearing care providers?
  4. How can a consumer distinguish between those providers who offer a personal service and those that merely say they do?
  5. What value can be realistically placed on personal service?
  6. How can traditional hearing care maintain the margins it needs for personal service in an age of commotidisation?

If you can already answer those questions, then you are well on the way to securing your place in the future of hearing care. If you can't, then take a look at Part 2 of this series.

Because in Part 2 of this series we will be returning to these very questions. We will be examining the difference between true differentiation and 'theatre', and propose practical ways that those involved in traditional hearing care can respond and adapt in this age of commoditisation and information.

In the meantime, if you have any comments or question, please feel free to post them here!

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