commoditize_people

Commoditization – New/Old Kid on the Block

By Angela Loavenbruck, Ed.D.

Commoditization is one of those words you suddenly realize you are hearing over and over in convention presentations, white papers, letters to the editor and other commentary. Commoditization refers to the process by which buyers of products and services reduce their buying decision to price alone.

Audiology is most certainly not the only profession concerned about this problem.

Engineers, lawyers, architects, information specialists, radiologists, hospitalists, anesthesiologists and ER physicians are among the professions bemoaning the commoditization of their services.

Many physicians believe that the entire practice of medicine has been commoditized, as evidenced by the drastic reduction in the number of physicians entering private practice in the last 20 years.

In audiology, however, we have a special problem. Not only are we affected by the commoditization of hearing aids – we are also very much affected by the commoditization of our professional services. To paraphrase an old comedy line – everybody wants to get in on the act!

Commoditizing the Industry…

cloud-cookie-cutter-1With commoditization, both products and services appear indistinguishable to consumers, and therefore they make their buying decision based on price alone.

Every hearing aid manufacturer makes essentially the same claims about its products and many are now marketing directly to consumers. I can’t count the number of times a patient has asked me whether a particular manufacturer’s hearing aid claim about eliminating background noise was true. I also can’t count the number of times I’ve tried to explain the difference between the hearing tests I administer and the ones administered by a hearing aid salesperson.

The Crabby Audiologist has often been exceedingly crabby about being referred to as a Hearing Health Professional by manufacturers, rather than as an Audiologist. We now have young audiologists spending enormous sums to get an AuD only to find themselves lumped together indiscriminately with individuals with far less education and training. And, unfortunately, we have audiologists who gladly leap into the lowest common denominator price competition by playing the discount game in their advertisements.

Who Controls Your Destiny?

Commoditization of audiology services might also be easier because many of us work in settings where we are not in control of how our services are described and delivered to patients.

A sizeable number of audiologists are employed in ENT practices or in hospital settings as part of an ENT department. As employees, they are often not permitted to discuss test results with patients; the audiologists do basic audiometric tests and then it is the physician who speaks to the patient about the test results and makes a recommendation for amplification.   We have all heard of hospital settings where the ENT physicians do not permit audiologists to use the title “doctor.”

How do consumers differentiate the hearing aid related services obtained in these settings from those obtained in commercial settings?

image commoditizationIn these settings, is the consumer able to distinguish the audiologists’ role from that of technicians?

Taking a Closer View…

In the next several posts, I’d like to examine the notion of commoditization in audiology from several vantage points, such as:

How does the recruitment and education of new audiologists contribute to the problem? Are academic programs helping students to understand the value and scope of their work in various practice settings? How do academic programs approach the notion of autonomy? Do accreditation standards include knowledge and expertise in this area? How are manufacturers influencing students and practicing audiologists? If audiologists use marketing techniques identical to those used by commercial entities, does that contribute to commoditization?

Additionally, how do licensure laws affect consumers’ perceptions of the participants in hearing health delivery systems? How does Medicare law contribute to our ability to differentiate ourselves from other providers? How can audiologists differentiate themselves to educate consumers about the value added by their unique expertise? What can our professional associations do to assist us? Are there creative innovations in our approach to audiology practice that will lead consumers to us?

I think a lot of crabbiness is about to follow…

*featured images courtesy venture beat and smallbusinesssolutions.blogs.xerox.com


4 Comments

  1. I’m sorry, but for for many of your Customers Price is the deciding factor.

    For me as a scientist it’s price and a feeling of control.

    I’m not shelling out £1000’s on some “professionals” say so. I want data sheets, technical info and real end user reviews.

    If I was buying a TV, a phone, a lap top I’d be snowed under with information. For state of the art hearing aids costing 6x what an iPhone does I’m expected to trust someone in a shop and the makers information free glossy brochures.

    Sorry it’s not happening, I’ll stick to my free, totally adiquate NHS aids, £10 neck loop and £15 living room loop (EBay plus a geek husband).

  2. Dr. L and Dr. F

    Your comments are so noted and this is the “hot topic” of the day. Dr. F’s response quoting Simon Sinek are in my opinion “Spot On” regarding the promotion or why we do what we do and not what we sell.
    Dr. L’s commentary on the History of all this is a good review of basically what has happened to our profession as it continues to evolve. A good knowledge of history should help us from re-creating our mistakes. Regarding Dr. L’s comment about the travesty of newly minted AuDs with all the commitment and student debt that this entails being lumped into the broader category of “hearing health professional” is true enough but I have to say that much of what is now happening to this profession we just did to ourselves. I think we sometimes see ourselves as a higher form of life in this “food chain” and although our education should account for something, the business models we emulate are holdover from the days prior to Audiology’s entry into the dispensing of hearing aids and continue to drive how we do business today. This is not meant to assign blame because God knows there is enough of that going on amongst us, but when we did finally free the “shackles” of trade restraint by our then only professional organization, we moved en mass to dispensing and we just adopted a sales approach that was product centric and discounted our value as rehabilitation experts in disorder auditory systems instead of selling the why of our existence.

    So I guess that the only way to reverse is to do those things that Dr. F talks about in his post going forward and work hard to “change tack” because if we don’t may lose the regatta?

    Thanks to Dr. L for her commentary and insight. I look forward to more installments.

    1. “I think we sometimes see ourselves as a higher form of life in this “food chain” and although our education should account for something, the business models we emulate are holdover from the days prior to Audiology’s entry into the dispensing of hearing aids and continue to drive how we do business today.”

      Couldn’t have said it better myself. This was a self-induced scenario, which took many years to build, and now we’re all paying dearly for it. Unfortunately, the students graduating with new AuD degrees and $100K+ in debt will be the ones paying the biggest price in the long term.

  3. Dr. Crabby (Angela!):

    You nailed it. This is a very important topic and I’m glad you raised it.
    In a classic TED talk, Simon Sinek describes the “Golden Circle of Success.” Too often businesses use their marketing to describe “What they do” rather than “Why they do it.” In Audiology, for example, a practice might promote the sale of hearing aids (“What they sell”). They do this by offering free hearing tests, free batteries, or by promoting small invisible sizes, certain features, or wireless connectivity. The marketing becomes all about the product and not about the “why of our existence.” We often hear our manufacturing partners tell us the key to our success is to promote their products.
    Sinek would describe this as a formula for failure. Customers want to know the “Why” of your business—why do you do what you do, rather than what you sell. Once you explain the “Why”, you can promote how you do it, and, then, the “What” becomes the offer of audiologic management and treatment programs rather than a single focus on product sales.
    This is an approach taken by other professions such as Optometry and Dentistry. They exist to provide hygiene, prevention, diagnostic, and treatment services. They differentiate their practices based on quality of care, professional credentials, and building relationships of trust with their patients. They understand that professions relying on product sales can easily be cannibalized by industry.
    We, in turn, are being commoditized by our manufacturing partners who are telling the public that it doesn’t matter where you purchase products (e.g., big-box, dispensing offices, audiologists, on-line), as long you buy their product. We need to end the commoditization of our profession. It’s our professional responsibility…
    • To assure that we educate patients about the benefits of our diagnostic, management, and treatment services rather than making everything we do about the products we may sell.
    • To focus our promotional materials on the “Why we exist” and not “What we sell.”
    • To focus on marketing the benefits of audiologic care rather than products and prices.
    • To make our Key Performance Indicators (KPIs) reflect audiologic practice by tracking KPIs such as our clinic populations, audiologic services performed, contracts negotiated, and referral sources rather than solely tracking sales opportunities, close rates, average selling prices, and levels of technology sold.
    • To attend professional conferences that are “of, for, and by” audiologists rather than sales and marketing conferences sponsored by industry and often requiring a quid, pro, quo in order to attend.

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