MarkeTrak V Hearing Aid Industry Market Tracking Survey Sergei Kochkin, Ph.D. Knowles Electronics, Inc. June 1999.

MarkeTrak VHearing Aid Industry Market

Tracking Survey

Sergei Kochkin, Ph.D.

Knowles Electronics, Inc.

June 1999

MarkeTrak Topics

• Demographic indices & trends

• Customer satisfaction revisited

• Hearing aids in the drawer

• Subjective benefit

Demographic Indices

• National family opinion panel

– 80,000 households

– 13,492 hearing-impaired households

• Detailed questionnaire 2,720 hearing aid owners.

• Response rate 83%

• No new survey to non-owners in MarkeTrak V.

Hearing Aid Market Penetration

23.8

22.9 22.6

21.3

20.4

18

19

20

21

22

23

24

25

1984 1989 1991 1994 1997

% P

enet

rati

on

Hearing-impaired User & Non-user Population

0.8 0.7 1 0.9

4.9 5.1 4.6 4.7

19 20 20.621.7

0

5

10

15

20

25

1989 1991 1994 1997

Mill

ions

Non-users Users Non-owners

Hearing Loss Population by Age GroupOwners versus Non-owners

0 1 2 3 4 5

Millions

<18

18-34

34-44

45-54

55-65

65-74

75-84

85+OwnersNon-owners

Clinton Announcement Spurred “Baby Boomer” Potential Market Growth

3

3.5

4

4.5

5

5.5

Mil

lio

ns

34-44

45-54

55-65

65-74

75+

19941997

• Clinton news release 10/97.

• Survey taken 11/97.

• Age 45-54 hearing loss growth =23%

• $60k growth =35%

• Some college growth = 30%

Physician Screening for Hearing Loss During Physical Exam

15.116.3

18.820.2

1816.6 16.6

0

5

10

15

20

25

Perc

ent s

cree

ned

May-89 Nov-89 May-90 Nov-90 Jan-92 Jan-92 Dec-97

HIA Targeting with Physicians

Binaural Penetration Trend

22

37

51 52

60

25

47

6165 65

70

79 79

0

10

20

30

40

50

60

70

80

90

1984 1989 1991 1994 1997

Total Owners

Total Owners - Current

Bilateral loss Ss - Current

Hearing Instrument Fittings by Perceived Profession

0

10

20

30

40

50

60

70

Per

cent

of

fitt

ings

Audiologist Physician H.I.S Other

1984199119941997

Hearing Instrument Fittings by Source of Distribution (1997)

0 10 20 30 40

Audiology office

Hearing aid store

ENT office

VA

Home

Family Dr.

Other

Hospital

Department store

Clinic

Military

Mail

% purchases

1997

1994

Perhaps one to watch

Third-party Payment Trend

20.4 22.2 21.116.2

2327.5

0

5

10

15

20

25

30

1984 1984 1989 1991 1994 1997

% o

f sa

les

Average Retail Price to Consumer

0100200300400500

600700800900

1000

Total BTE ITC ITE

Dol

lars

1989199119941997

+24% +11% +30% +12%

Age of Hearing Instrument

05

1015

20253035

404550

% o

f sal

es

<2 yr 3-4 yrs 5-6 yrs 7-8 yrs 9+ yrs

199119921997

Mean age of instruments:

1991 = 3.1 yrs

1994 = 3.7 yrs

1997 = 3.8 yrs

First Time User Rate

53.4

40.5

29

39

0

10

20

30

40

50

60

Per

cen

t of

sal

es

1989 1991 1994 1997

FDA/FTC

Eddie Albert Ads

Factors Influencing New First Time Users to Purchase

• Factors less than 10% mentions:

– Free HA (7%)

– Price (6%)

– Ad-magazine (5%)

– HL Literature (3%)

– Boss/co-worker (3%)

– Newspaper (2%)

– Direct mail (2%)

– Ad - TV (1.5%)

% New users

63

53

26

13111110

0

10

20

30

40

50

60

70

H.L. worseFamilyAudiologistH.I.S.ENTHA OwnerFamilyDoctor

Physician Recommendation Trends

0

5

10

15

20

25

30

% o

f n

ew u

sers

89 91 94 97

Family

ENT

• 1989 - HIA advertising to physician.

• Current initiatives:– Mfg. screening kit– BHI - physician

handbook– BHI - Academy of

Family Physicians– AAA Best Practice

• Family doctor (Positive)• ENT (Negative)

Key Trends

• Negative trends

– hearing aid penetration

• Static trends

– hearing screenings by physicians

– distribution penetration

– Binaural penetration

Key Trends

• Positive trends

– third party payment

– first time users

– repeat purchase

– retail price (??)

– Clinton - motivation of “Baby Boomers”

• 1 million new potential customers

Customer Satisfaction Revisited

Topics

• Trends 1991-1997 (1-5 years old)

• Segmentation (1-5 years old)

• Publishing of new research norms (3-12 months old)

• Hearing aids in the drawer (total)

Method

• MarkeTrak Survey– 4 behavioral items (hours, repurchase)– 1 Quality of life– Likert Satisfaction Scale

• 8 Product features • 12 Performance/value• 13 Listening situations• 6 dispenser attributes

– Modified APHAB (21 point scale = 5%)

Customer Satisfaction by Age of Hearing Instrument

7363 60 59 58 53 53 53

43 42

010203040

50607080

<3 mo. 4-6 mo. 7-12mo.

2 yr. 3 yr. 4 yr. 5 yr. 6 yr 7-9 yr. 10+ yr.

Age of hearing aid

% S

atis

fact

ion

Amount of Time Spent CounselingNew Users of Hearing Instruments

2.611.5

29.423.3 20.1

7 6.10

5

10

15

20

25

30

35

None 0.25 0.5 0.75 1 2 3+

Time spent in counseling (hours)

% n

ew u

sers

Customer Satisfaction as a Function of Time Spent with New Users

13

4555 59 65 68

0

10

20

30

40

50

60

70

80

None 0.25 0.5 0.75 1 2

Time spent in counseling (hours)

% s

atis

fact

ion

Multiple Environmental Listening Utility (MELU) is Critical to Satisfying Consumers

0102030405060708090

100

0 1 2 3 4 5 6 7 8 9 10 11 12 13

Number of listening situations satisfied

Ove

rall

sat

isfa

ctio

n

Perceptions of Benefit as a Function of Multiple Environment Listening Utility (MELU)

0102030405060708090

100

0 1 2 3 4 5 6 7 8 9 10 11 12 13

Number of listening situations satisfied

Sati

sfac

tion

(%

) w

ith

Ben

efit

Quantifiable Client Oriented Scale of Improvement (COSI)

• MarkeTrak measures satisfaction in 13 listening situations (5 point scale).– Very Satisfied (+2) to very dissatisfied (-2)

• Also “Importance” of hearing in these 13 listening situations (0-3 point scale)– Not important (0) to very important (3)

• Score = Satisfaction x importance• Total score = Sum (all situations x need)/Total

possible score

Quantifiable COSI - Strong Predictor of Perception of Benefit

0102030405060708090

100

% Very satisfied

-50-100

-1-49

0 10 20 30 40 50 60 70 80 90 100

COSI (% Need Met)

U.S. Customer Satisfaction TrendsNo significant differences (H.A. 1-5 years.)

60 57 59

18 17 15

0

10

20

30

40

50

60

70

1991 1994 1997

% S

atis

fact

ion

PositiveNegative

U.S. Customer Satisfaction New Hearing Instruments (<1 year)

• Declines (+5%)– Battery life– Adjust. V.C.– Value ($$/performance)

• Gains (+5%)– Visibility– Localization– Outdoors– Place worship– Telephone– Post fitting service

66 7163

12 7 100

10

20

30

40

50

60

70

80

1991 1994 1997

% Sa

tisfact

ion

Positive Negative

Customer Satisfaction Trends

• MarkeTrak V significantly higher than:

– MarkeTrak IV (1994) :

• 23 of 33 items (p<.01)

– MarkeTrak III (1991):

• 4 of 33 items (p<.01)

Customer Satisfaction Trends

• Key improvements (1997 vs.1991 & 1994):

– Outdoor enjoyment

– Phone usage

– Value

– Explain care of hearing aids

• Visibility ratings are lower than in 1991

The introduction of CICs Probably Caused Post-purchase Cognitive Dissonance with Visibility of Instrument

62

7379

5760

67

86

30

40

50

60

70

80

90

BTE ITE ITC CIC

% S

atis

fact

ion

19911997

Satisfaction Segmentation

• by type of hearing loss• by style of hearing aid• Programmable/non-programmable • Telecoil• Hearing aids without volume controls• New user versus repeat user• Binaural versus monaural

Overall satisfaction by Style of Hearing Aid

61

58

57

56

66

50 52 54 56 58 60 62 64 66 68

BTE

ITE/Full

ITE/Partial

ITC/Visible

ITC/Invisible

% Satisfaction

Satisfaction by Style of Hearing Aid

• CIC rated superior on 15 attributes.

– Visibility

– Comfort with loud sounds

– Listening situations (7 of 13)

• Telephone, Outdoors, workplace, Groups, restaurant

• CIC rated lower on battery life, V.C.

– 34% w/o a V.C. want one

Satisfaction by Style of Hearing Aid

• BTE rated significantly lower:– Ability to hear soft sounds– Difficult listening situations – Tell direction of sounds

• BTE rated higher– Hours worn– Battery life

• Are lower ratings due to degree of loss?

Customer Satisfaction by Perceived Level of Hearing Loss

48

60

58

66

0 10 20 30 40 50 60 70

Mild

Moderate

Severe

Profound

Deg

ree

of H

eari

ng L

oss

% Satisfaction


• Mild loss significantly lower on 13 attributes

– Quality of life

– Likelihood of repurchase/recommend HA

– Wearing of aids

– Perception of benefit

– One-on-one communication


• Profound lower on 15 attributes:– Perceived benefit– Fit and comfort– Ability to hear soft sounds– Localization– Whistling/feedback– Nearly all listening situations

• Yet, they give the highest overall rating.

What about the volume control?

• 9% report they have none.

• 37% want one.• Big differences on

satisfaction.• Should make sure

consumer can live without a volume control.

Overall Customer Satisfaction

82

52 49

0102030405060708090

100

Don’tNeedVC

Notsure

NeedVC

% S

atis

fact

ion

The Binaural Advantage(Rated higher on 15 attributes)

3

14

11

11

9

9

8

8

8

0 2 4 6 8 10 12 14 16

Overall

Localization

Able to hearing soft sounds

Small groups

Outdoors

Car

Sound of voice

Church

Concert/movie

% Satisfaction (Difference score)

The Telecoil Advantage(Rated higher on 8 attributes)

2

18

12

11

10

9

0 5 10 15 20

Overall

Telephone

Whistling/feedback

Quality of life

Outdoors

Recommend HA


The Programmable Advantage(Rated higher on 37 attributes)

10

16

16

16

15

15

14

14

13

0 5 10 15 20

Overall

Comfort/loud sounds

Whistling/feedback

Small groups

Place of worship

Warranty

Noisy situations

Telephone

Car


New Users More likely to be Dissatisfied with Their Experience

• 54% overall satisfaction new users – versus 63% for repeat users

• New users rate 16 items lower– Quality of life (-21)

– Recommend hearing aids (-12)

– Repurchase , reliability (-10)

– Battery life (-8)

• New users rate 5 items higher– Able to hear soft sounds (+10), Large group (+7)

Key Findings• Modest improvements since 1991• Major improvements since 1994• Strong advantage in favor of

– Programmable– Telecoil– Binaural – CIC

• Mild hearing loss & new users less satisfied

Key Findings• CIC introduction - probable negative impact on

larger instrument satisfaction.

• Lack of a VC could depress satisfaction for some segments of users.

• Importance of:

– Counseling time spent with consumer

– Multiple environmental listening utility (MELU)

– Volume control to some users of CICs

Hearing Aids in the Drawer

Methodology

• Consumers who own a hearing aid but NEVER wear it = hearing aid in the drawer.

• Hearing aids in drawer = 16.2% respondents.

• Told to explain why non-use in MarkeTrak survey.

• Received 348 letters.

• Content coding yielded 567 comments.

Hearing Aids in the Drawer are Related to Age of the Instrument

5 8 14 15 20 23 20 29 36 320

5

10

15

20

25

30

35

40

1 2 3 4 5 6 7 8 9 10+

Age of hearing aid (years)

Per

cent

in d

raw

er

907,120 Customers do not Use Their Hearing Instruments

0

20

40

60

80

100

120

Volume (000)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Age of hearing aid (years)

325,000 1-4 years

Reasons for Non-Use

• Poor benefit (30%) - 268,507

Reasons for Non-UsePoor Benefit

• “I threw it away it was worthless to me”

• “I don’t see much difference with them. I feel I was sold one under false pretense. Don’t feel I really needed one”

• “There is no improvement in my hearing with the aids. Where there is a slight improvement in my hearing, it is minimal.”


• “I don’t wear the aids at all. The problems appears to be clarity of words. Volume is OK but I can’t distinguish words”

• “I have not been able to wear the H.A. since the day I received it. It was made wrong and the Company said there was nothing wrong with it.”


• “It is not worth the trouble or expense for the small difference in hearing. I wish I had my money back.”

• “_____ aims at taking old people’s money for little value.”

• “All the aids do is amplify the sound that I can’t discriminate with an aid in the ear.”


• “When ______sold me the H.A., I was confident it would help me hear better. When I received it and wore it every day, it did not make my hearing any better. So, I don’t wear the HA and feel like I wasted my money. I tried to return it and the person did not seem to want to help me. I am quite dissatisfied with the whole experience.”


• “I can’t hear high pitch sounds with the behind the ear model.”

• “H.A.s amplify everything but human voices which is what you need to hear.”

• “____plugs are not worth the price.”

Reasons for Non-Use

• #1. Poor benefit (30%) - 268,507

• #2. Background noise (25%) - 229,383

Reasons for Non-UseBackground Noise

• “I will not wear my H.A. because it increases background noise. And therefore, after a while I get a headache and get somewhat nervous.”

• “It catches all the sound on the road, TV, etc at the same time.”

• “Background noise is distracting.”


• “H.A.s don’t work when there is a lot of background noise. This is when you need them to work.”

• “Background noise really drives him crazy.”

• “My problem is with background noise. All my H.A.s do is amplify so they are of little help.”


• “I don’t wear my H.A. because I need it at a dance, restaurants, and large groups. All the H.A. does is increase all sound including background sounds. No help.”

• “Sudden loud noise is a killer.”

• “H.A. amplify other sounds so much that I actually feel pain.”


• “If someone drops a spoon on the table it is like a rifle going off.”

• “Hate them. They don’t work for me. All sounds are amplified. Never knew there were so many. I can’t adjust the H.A. constantly to every noise.”

Reasons for Non-Use

• #1. Poor benefit (30%) - 268,507


• #3. Fit & Comfort (19%) - 169,431

Reasons for Non-UseFit & Comfort

• “My hearing aids are too big for my ears.”

• “It is uncomfortable and my wife says I don’t listen to her anyway.”

• “It hurts my ears.”

• “I do not like the feel of it in my ear.”

Reasons for Non-UseFit & Comfort

• “I don’t wear my H.A. because they plug up my ears and feel uncomfortable.”

• “My H.A. has the tendency to fall out when I am working hard in hot weather.”

• “It’s hard to keep it in my ear. I travel for business a lot and can’t risk it falling out of my ear.”

Reasons for Non-Use

• #1. Poor benefit (30%) - 268,507• #2. Background noise (25%) - 229,383• #3. Fit & Comfort (19%) - 169,431

• #4. Negative side effects (11%) - 99,048

• Ears that hurt

• Too much pressure in the ears

• Blisters in ears

• Rashes in ears

• Itching ears

• Dizzy

• Nervous

Reasons for Non-UseNegative Side-effects

• Ears that sweat

• Builds up wax in inner ear

• Headache

• Hair gets caught in hearing aid

• Infections in ear

• Problems chewing or swallowing

• Plugs up ears

Reasons for Non-UseNegative Side-effects

Reasons for Non-Use

• #1. Poor benefit (30%) - 268,507


• #3. Fit & Comfort (19%) - 169,431

• #4. Negative side effects (11%) - 99,048• #5. Price & cost (10%) - 93,839

Reasons for Non-UsePrice & Cost

• “I bought the H.A. when I was teaching. I had trouble hearing student’s questions. Since retiring I have stopped using them. They were costing too much for what good I was able to get from them.”

• “Programmable H.A. would be desirable but they cost too much.”


• “My current H.A. are broken & I am unable to afford the cost of a replacement. They are too old for service.”

• The expense of owning and maintaining are too great.

• HMO does not cover for HA. Price is high.


• “I enjoyed my H.A., but they burned up in a house fire and I can’t afford another one.”

• “I wish an aid would be developed to allow us to hear natural sound and an aid with a reasonable price.”

• “If I could afford it, I would buy a different brand.”


• “My H.A. was never dependable. Taking it in for an adjustment was only a headache as it never performed very long. Had to be looked at again. The last time I had trouble, the office wanted to send it to _____ at $200 & just to check it, plus another $200 to repair it.”

Reasons for Non-Use

• #1. Poor benefit (30%) - 268,507


• #3. Fit & Comfort (19%) - 169,431


• #5. Price & cost (10%) - 93,839

• #6. Don’t need help (8%) - 72,987

• “I work and live alone and do not need the aid most of the time.”

• “I had an operation on my right ear and I can hear better again.”

• “I don’t talk to anyone during the day.”

Reasons for Non-UseDon’t Need Help

Reasons for Non-UseDon’t Need Help

• “I can hear most everything without H.A.s”

• I feel I was sold under false pretense. I don’t feel I really needed one.”

• “Don’t wear very often since my hearing loss is only 35 degrees.”

Reasons for Non-Use

• #1. Poor benefit (30%) - 268,507


• #3. Fit & Comfort (19%) - 169,431


• #5. Price & cost (10%) - 93,839

• #6. Don’t need help (8%) - 72,987• #7. Broke or does not work (8%) - 68,814

Reasons for Non-Use Broke or does not Work

• “After a year, the H.A. is down. I can’t afford to repair them.”

• “Because it doesn’t work. ______ refused to do anything. The man that sold it to me has been fired.”

• “It does not work right.”


• “I don’t wear it because after the warranty expired it got broken. It would cost $1,200 to replace it, so I quit wearing it.”

• “The housing is currently broken and will have to be glued back together. This is the fourth time it has broken.”


• “It seems as if the aids were in the shop for repair more than in my ear. They are still not adjusted correctly for my comfort level. The cost of the repairs were too much. It is easier to go without them and have everyone speak louder.”

• “I have 2 H.A.s that don’t work. It costs $200 a piece cash to have them fixed.”

Reasons for Non-Use

• #8. Sound quality (6%) - 57,329

Reasons for Non-UseSound Quality

• “Never got true sound clarity I wanted”• Uncomfortable sound• Sound of crickets• Unnatural• Distorted• Slight hiss• Tinny• Picks up wind

Reasons for Non-UseSound Quality

• Chewing and swallowing noise

• Poor fidelity

• “Can’t stand sound of my voice”

• Hollow sound

• Aversiveness of sounds (running water, sharp sounds)

Reasons for Non-Use

• #8. Sound quality (6%) - 57,329

• #9. Won’t wear - unspecified (6%) - 57,556

• #10. Volume control adjust. (5%) - 44,314

• “I have trouble adjusting the sound.”

• “Hard to adjust. Every time the phone rings I have to adjust the volume.”

• “They need adjusting, because the background noises are annoying.”

Reasons for Non-UseVolume Control Adjustments

Reasons for Non-UseVolume Control Adjustments

• “They are a bother having to turn up & down too often.”

• “The volume never stays at setting.”

• “I can’t adjust H.A. constantly to every noise.”

Reasons for Non-Use

• #8. Sound quality (6%) - 57,329• #9. Won’t wear - unspecified (6%) - 57,556• #10. Volume control adjust. (5%) - 44,314

• #11. Whistling & feedback (4%) - 39,100

• #12. Nuisance / hassle (4%) -38,371

• #13. Poor service (3%) - 28,673

• #14. High frequency Loss (3%) - 26,067

Reasons for Non-Use

• #15. Stigma of wearing (3%) - 26,037

• #16. Profound hearing loss (3%) - 23,460

• #17. Work in limited situations (3%)-23,460

• #18. Uncomfortably loud (2%) - 27,114

• #19. Battery life (2%) - 19,186

Reasons for Non-Use1% or less of mentions

• Does not work on phone

• Monaural aids inadequate

• Expectations not met• Has Tinnitus• Manual dexterity• Forget to use

• Family pressure• Feels like ear plugs• Poor directivity• Low gain• Lost hearing aids• Ear wax problem• Rare social user

Key Findings• 907k inactive hearing aid owners• Key reasons:

– Poor benefit– Background noise– Fit and comfort– Cost– Negative side effects– Hearing aids broke

MarkeTrak V - Conclusions• Significant opportunities for improvement.

• Encouraging positive trends.

• Huge opportunity still waiting to be tapped.

• Need to find new marketing methods to reach “Baby Boomers”.

MarkeTrak V Hearing Aid Industry Market Tracking Survey Sergei Kochkin, Ph.D. Knowles Electronics, Inc. June 1999.

Documents

yrs slide

drawer total slide

utility melu slide

perceived profession

importance of hearing

hearing aid owners

hearing loss growth

hearing instrument fittings