By David H. Kirkwood
The controversy over Phonak’s decision to sell hearing aids through Costco heated up last week when Starkey Hearing Technologies told its customers that the decision by Phonak and its parent, Sonova, “does not align with Starkey Hearing Technologies’ values and principles.”
In an April 10 e-mail addressed “Dear Valued Customers,” Brandon Sawalich, senior vice-president at Starkey, drew a contrast between his company and Phonak, which is one of Starkey’s main rivals in the hearing aid industry. He said that Starkey, the only U.S.-based company among the “big six” hearing aid manufacturers, “supports the American spirit of the independent entrepreneur.” For that reason, he said, it will not sell its products through “big box” stores like Costco.
Sawalich also told customers that effective April 28 it will quit allowing the distribution of its products through HearingPlanet.com, a Sonova company that sells hearing aids directly to consumers, though the consumer does see an audiologist or hearing aid specialist in the Hearing Planet network for a hearing evaluation and to have the instrument fitted.
Sawalich added that Starkey will no longer do business with Right Hear Network, another Sonova company.
Starkey Won’t Sell Hearing Aids in Costco; “The Wrong Direction”
Sawalich, who has been with Starkey since 1994, spelled out the case against doing business with Costco, as three other members of the “big six” also do—GN ReSound, Siemens (through its Rexton brand), and Oticon’s sister company Bernafon. Widex is the only other major hearing aid manufacturer that does not sell products to Costco.
Sawalich wrote, “It is our belief that we sell better hearing, not hearing aids, and we know that supporting hearing aid distribution through big box retail is a path toward the further commoditization of hearing aids. This commoditization is not the right direction for our industry, and most importantly, is not beneficial for the patients we serve.”
Hearing Aids and Big Box: A Continuing Debate in the Industry
Starkey’s letter to some 5000 customers is the latest in a series of statements and comments made on this issue since Hearing News Watch first reported Phonak’s agreement with Costco. Since then, many independent practitioners have written to this blog and other online sites expressing concern that they will lose patients to Costco because it will charge much less for Phonak (and other leading brands) of hearing aids than they can.
Others have counseled that independent practitioners will succeed not by competing on price with Costco but by offering more personal attention and professional services than big box stores do.
Among the industry figures who have expressed diverse opinions about this issue at HearingHealthMatters.org are Jeff Newnham, president of Phonak LLC, Ed Keller, president of EarQ, and Terry Ross, vice-president of MedRx.