Future of Retail Hearing Care: Interview with Beltone President, Mike Halloran

Bob Traynor 0:10
Welcome to This Week in Hearing. Hi I’m Bob Traynor, your host for this episode. And I have an interesting guest today, the President of Beltone. And Mike Halloran is the new president of Beltone. Well, not exactly new, but pretty new, less than a year is new I guess. And he’s a veteran of more than 20 years experience in the hearing healthcare field. And many of you know, Mike from his time at Audigy, where he was directing as a as a general partner, and the chief financial officer as well. Welcome to This Week in Hearing, Mike, and thanks so much for being with us today.

Mike Halloran 0:53
My pleasure. And thanks for thanks for inviting me, Bob, I appreciate it.

Bob Traynor 0:58
Well, can, even though I gave a little bit of an orientation, can you give our listeners where you kind of came from and how you have the perspective now, that’s unique to Beltone. And, and its owners, and patients and so on?

Mike Halloran 1:18
Yeah, that’d be great. You know, it’s interesting, when I got a call from Scott Davis, who runs GN North America, and he asked me if I was interested in being president of Beltone. And you know, with Beltone’s rich history, it’s been a over 80 years now. The brand, what an opportunity for someone to take a brand that’s been in business for so long. And it’s and people recognize that brand, to be able to build off of that I thought was really special. The other piece is, you know, when you look at Beltone, for me, I have a background in that, as you mentioned, I was at Sonic, and I was the Chief Financial Officer at Sonic. So I’ve grown up in finances, my background, but at Sonic, we were a manufacturer. So I had the perspective of manufacturing. And then also at Sonic, we purchased retail. So I had the perspective of how to run a retail operation, which frankly, as we all know, is not easy. And then in addition to that, I spent five years at Audigy. So I have the perspective of a practice management. So when Scott said, Mike, you look at your background manufacturing, which is important for Beltone. It is a manufacturer, practice management. And that’s something I’ll get into a little bit later. But we are clearly bringing in as part of our our service offering to our owners. And then lastly, retail, and we do have a level of retail here, it’s pretty low, it’s not going to be our focus. But it’s also important to know how to run a retailer. So you know, when you look at the by background, I was well suited for the job. And with the Beltone brand, I thought what an opportunity to do something in the industry,

Bob Traynor 3:15
you know, with, with the, in some respects tainted kind of reputation that Beltone had years ago, and the modification of those that reputation within the last 10 years or so, now with someone who has huge industry experience in all the different areas, this should make a major difference. Now I’ve had the opportunity to speak to a number of the presidents of companies about the possibility and that we’ve been talking about for quite a long time these days in the in the industry, the OTC market. And where where do you see that as the President sitting on top of one of the main 80 year kinds of companies at this point in time?

Mike Halloran 4:08
You know, it’s interesting, probably 15 years ago, when we were raising money on Wall Street, we talked about the opportunity in this industry and with you know, we’ll say worldwide one out of every five who has hearing loss uses a hearing device. I’ve always felt you know, how do I get it those four out of five it’s kind of a key piece, and some will be product to a certain degree, but really the the movement will be distribution and I do think OTC while recognizing we haven’t seen the final regulations, it will give us that chance to a certain degree to get at that four out of five and have people start what I’ll call the journey earlier, because I’m a believer. I’m a believer that you really need to experience In that once you start to go down a path and you start to get some form of hearing device, I think you’ll want more and more. And that’s really where the professional will come in. Because you know, we’ve been in this industry for a long time, the professional component, I really think is going to be critical, and it will continue to be critical. So having someone start the journey earlier, they’ll recognize they need that they need more, and they also need the professional support and help. So I’m excited to get people started earlier, and then ultimately into what I’ll call the medical grade. And the professional component, because I think that’s key, you know, you still look at all of the people we deal with today. You know, most of our patients are older, and they really need that support and help from a professional. So I don’t think that’s going to go away. Having people start the journey earlier with a device that may not be that professional, great, I think will help a lot and expand the market. And that’s what I’m looking for is expansion to the market.

Bob Traynor 6:06
So and when you’re talking about people that are older, you mean older than us. Right.

Mike Halloran 6:11
Exactly Bob. Exactly. You know, it’s interesting, though, you do find clearly, situationally at restaurants and things of that sort. And I’m sure you do, I start to struggle. And and I could see where a OTC device in those situational opportunities will make sense.

Bob Traynor 6:31
Yeah, I actually see some of my colleagues at AAA that were using hearing aids and they weren’t using it the last time I saw him. So my guess is we’re getting to the point where it may be either is time or close to time, or it should have been time a long time ago. So anyway, so the so the deal is now with your perspective, and with Beltone is there going to be a particular way in which you’re going to approach this OTC market?

Mike Halloran 7:02
Yeah, it’s interesting, you say that, because we recently launched a product, Jabra Enhance Plus, which is a self fit, but it’s through the professional channel. And the beauty of one it’s a good product, but but more importantly, what it did do is it gave the Beltone network an opportunity of how to place it, you think about marketing, how to place it, how to price it, how to market it, when do I pull it out? Do I put it on the shelf? Do I Do I tested not treated where to use it? And it’s early days, so we launched it probably about a month and a half ago. And really for me in the next six to nine months. It gives us an opportunity a head start to a certain degree, to say how do I how do I place this in my practice that makes the most sense? Because frankly, I think we’ve all do I sell it, put it on the shelf, do I advertise it? Do I only tested not … Where do I use it? When do I use it? And how do I use it? And I think we all have those those questions and I think this will give us an opportunity to test some of those before we actually see an OTC device, a full OTC not going through the professional components.

Bob Traynor 8:21
You know, I, having been an independent practitioner for many, many years. I always thought that I knew more than most of the manufacturers did, whenever it came time to market myself my practice and products. Now, having having done that, there’s always work now when when manufacturers are represented by colleagues that we’ve worked with on the business side of our practices, and so on for so many years, plus learn from us and we’ve learned from them, it could be quite a different experience when we when we take what we know about our practice, and couple that with a manufacturer who has had those kinds of experiences with us over a period of time at least that would be my my assessment today anyway, as opposed to my assessment five years ago. So

Mike Halloran 9:17
it’s interesting Bob, we we’ve got a group of owners who are very successful good business guys, very good audiologist and good fitters. Okay. And we get together with them probably about once every four or five months. And we walk them through the Jabra Enhance Plus product. And we talked to them about how do you market it, what do you do and because they’re with the end consumer, and patient, they know. And so their ideas were enlightening, frankly, for us on the manufacturing side, as to your point so working with them, we really learned a lot about where to position it. How to position it how to sell it. You know, when does it make sense for a patient? And when doesn’t it make sense. So it was really helpful to your point you need, you need everybody in the room, you really understand what makes the most sense.

Bob Traynor 10:14
And you need everybody in the room with the right background, because because with without that background on the business side, you end up on a focused on an a widget kind of thing. Whereas instead of being focused on the patient side, and, and that was what, where I thought manufacturers always kind of were a little bit shy for so many years. Now we’re seeing again, colleagues like yourself and others, that have had lots of experience with the hearing impaired, and that’s the big difference there. Well, um, now, so, so then, I guess if I’m a independent clinician, and I have my own practice, and so on, I might be doing okay. Why might I want to change into being a Beltone? franchisee?

Mike Halloran 11:02
Yes, yeah, it’s interesting. You know, to your point, the industry is clearly changing. And I can give you three or four examples why I think Beltone makes a lot of sense. One of them is just what I mentioned, with Jabra Enhance Plus, you know, you you, you get a technology leader in GN, exclusive to you. But more importantly, as an example, we’ve launched Jabra Enhance Plus, and we’re selling it through the Beltone network, and we get an advance peek as to how OTC will impact us how to sell how to market it. So I think that that’s number one. Number two is being part of a network being independent. And being an independent business guy, I think is super important. Because that local feel and understanding of the market, it’s awful hard for me to feel that in Chicago. So I think being an independent owner is really beneficial. But yet being part of a network, there are so many benefits. As an example, with the brand of Beltone, we have a beltone.com and we have a lot of traffic that comes to our beltone.com website, because first the name and two we advertise. So we have a scheduler, we have a you can take a test online, you can schedule an appointment directly from our beltone.com. So we flow all of those leads out to our owners. The other thing is we have everybody in Beltone is on the same platform. So there’s a lot of marketing tools that we use, to generate one to get traffic in and then to to lead that traffic into your offices. And so as an example, we launched marketing automation, if you go out and price out marketing automation at as an individual owner, and let’s say you own two or three stores, try to market a try to pay for marketing automation. Is is brutal and very expensive.

Bob Traynor 12:55
Try to pay for any marketing, by the way is you are correct. Yeah, you are correct.

Mike Halloran 13:00
So part of the beauty of being a network is one we all share and share alike. Okay? Meaning that if I have an ad that’s working, let’s say and I live in Albany, New York, and I have an ad that’s working, we will gladly share that ad with someone in Chicago or in Los Angeles, because we all have, we’re all working together in one network. So there’s all sorts of sharing going on. And it’s not like, I’m not going to give you that because I’m afraid you’re going to use it against me. So there’s a real beauty and that being able to share. So as I say marketing automation, our marketing automation platform, everybody’s on the same platform. So we’re able to offer that to all of our network owners at a at a literally a fraction of the price that you would pay if you were an independent owning. And frankly, you can’t even afford it. If you own two or three stores, where it’s being part of the Beltone network, you get that we have a part of my background, as I mentioned is practice management at Audigy, retail, corporate retail, and then also manufacturing. So when I look at that background, I see kind of what we need. We are adding a lot more practice management into Beltone. Probably 15-20 years ago, you may have come into a Beltone being what a whole more of a general business guy. Okay. Today, we’re recruiting much more audiologists hearing care specialists who’ve been in the industry because, you know, it’s awful tough to come into this business and expect to know, just it’s a medical device. So we are recruiting much more on the medical device side. And but but there’s also a part of being part of that network. We’re Office offering services to help support them, accounting services, HR services, marketing support, right. So we have a whole marketing team of 30 people that that’s all They do is support our owners on things that are out of market. And all of this is free. Right as part of the Beltone, network finance, you need financial analysis, we do financial reporting. So everybody’s on that common platform and system, we now have good financial reporting, you have metric reporting, to you can see kind of where you are in relation to the network. And I’m a believer Bob, what gets measured gets improved. So if everybody sees, hey, this is what somebody else is, you know, and it’s anonymous. So it’s not like, I know, this owner is doing this, or that owner is doing that. But it kind of brings it all together and gives you best practices. And we report on that. So everybody kind of gets a feel for where they are in relation to everybody else. And as a result of that, when you know, hey, you know, my close rates 60% And, and the averages, say, 65, you kind of know where you stand. And I think that’s helpful for everybody. So there’s a lot of benefits to having that background and seeing what we need.

Bob Traynor 16:02
You know, that’s been one of the having taught practice management in universities for many, many years. And one of the big frustrations is that there are no things like, like industry comparisons, how is my practice doing relative to his city in the size that I’m in? Now at Audigy, I know you guys had some of those kinds of things. Also, the dashboard kind of a thing for practice management that you guys were talking we were talking about a moment ago. But one of the major concerns is we had no, no yardsticks by which to measure our independent practices, because we were independent. And, and we didn’t have anybody kind of watching markets and so on for us now. I think at one time Phonak had a some sort of a yard stick thing, but it was a pretty loose kind of a cannon. But and the practice, the practice, buying groups have had some things like that in the past, but to know how a practice exactly like yours, in armpit Egypt is doing would be really helpful along along management type terms. So

Mike Halloran 17:17
Bob, I think our guys find it very helpful. And they understand kind of metrics and KPIs. And back to we do train them on that. I feel very fortunate in that when I joined Scott Davis, who was my boss, he brought in a team of industry people. So you know, we’ve got Ron Gleitman who runs our operations and our and our, what we call our elevate team, our practice management, he’s been in the business for many, many years. He’s own practices, he’s run practice management groups, he’s run business development, I mean, so I, you know, I’m blessed to have a guy like him, I’ve got Kevin Connors who’s been, you know, VP of sales at Signia, for many years, super smart guy knows a lot of people, you know, so when we’re trying to recruit owners, obviously, somebody who’s had industry experience, it really does help I so I’ve been blessed, Scott hired a really good team to surround me with and it’s really made a big difference in the company, and kind of where we are and what we’re planning on doing.

Bob Traynor 18:20
Well, now, you mentioned some things about Beltone, that might be real advantages to individuals who might want to change their practice into a bell tone franchise, but what’s the difference between the bell tone franchise and some of the other ones that are out there that, that people might be considering at one time or another, you know, not necessarily a sales operation kind of thing. But, but but one of those things that kind of is a true like, Okay, well, those other the other guys kind of do it this way. And we do it this way. And you’ve kind of touched on that a little bit, but maybe some of the differences between general franchising in the industry, and maybe some differences between, since Beltone is a manufacturer, some of the differences between that and, and manufacturer sales operation kinds of systems.

Mike Halloran 19:11
Yeah, you know, it’s interesting. We are a network of distributors, whereas some of our competitors would be a franchise, and in a franchise, it’s, you know, that that that picture goes to the left side and not to the right, right. Whereas a we have independent owners, and as a distributor network, meaning about every five to 10 years, you’d sign an agreement with us every five to 10 years. You have the option to renew that agreement, or go independent, you could do whatever you want. There’s a beauty in that, and that is you’re not married for life, you do have an option to get out at some point. If you’re not happy. Our our re-sign rate frankly is very good. I think once they’re in, and I’ll tell you, what really helps is the Beltone brand. When you look at our net promoter scores, you know, we measure how happy our patients are. And when you look at our net promoter scores, they’re typically in the 60s to 70s. And we’ve even almost touched 80. That’s a, I mean, that’s Starbucks is generally a 60-70-80. Amazon’s a 60. So our net promoter scores from our patients are very high. So it tells you the Beltone brand, at the consumer, it’s clearly heavily recognized at 60 plus age group. And then secondly, our net promoter scores are very good. So I mean, I think that helps differentiate us to a degree plus all of that network that we have that we’ve built out to support the owner. I think it’s a really, frankly, a good value proposition for someone to consider joining us.

Bob Traynor 20:56
Well, it almost sounds like rather than a brand that’s been around for 10 years or so then the 80 year kind of a thing has not only mom and dad, but grandma great grandpa, a great great grandpa is is part of it. So so so that could that’s one of the one of the main kinds of kinds of things that would be of real benefit. So what do you think the future of these franchises might be? You know, so we’re, we’re today in 2022, we’ve got we’re on the on the verge of OTCs, we have all this fabulous technology that’s out there. So what do you think the the future of franchise operations will be over time?

Mike Halloran 21:50
Well, I’ll say I like my distributor network, because it does give you some flexibility as a owner. But I do think I’m, I’m bullish on the industry, I believe the professional component will be more and frankly, more important in the future as people try and OTC device, and they realize that having some benefit from amplification, but you think about a lot of times being able to go somewhere and help and get support on what and how and how to improve, I think is going to be critical. So I’m excited to have the the what I’ll call that network that we can advertise and support and drive traffic through because it’s one of the, you know, you think about this industry, the hardest thing is driving traffic through the store. I mean, it is by far the hardest, and everybody’s

Bob Traynor 22:41
keeping it as well, you know, and deeply in there. Yeah, that was one of the things that we always always worked hard for was, first, your work for the referral sources, then you work to do a good job for them. And then when that referral source gets old and retired, then hopefully the new guy that comes up will send you patients, as well as the friend of the friend of the friend that got the got the products from you, all three of those will begin coming in as well. And so, you know, I think I think in and I think in retirement areas to where is where Beltone has maybe one or two franchises at some of these areas. The brand is really well known in those areas, it’s interesting

Mike Halloran 23:27
to zip up you know, with our net promoter score as I mentioned earlier, we measure that because to me, that’s really important for our brand. But I will say one of the things I did do is I added resources to what I’ll call our training department. In that is I believe if someone comes in and sits in our office, we need to provide them one great service but also make sure our product is appropriately fit. To me that’s a critical component is yeah, when you get them in the door but one you better service them really well in today’s environment but to you better be able to know how to fit a hearing aid and do a really good job because you know that that level of quality, the fit is going to be really important. It always has been so we added resources in our in our training department so that we would improve our fits because to me that’s that’s part of all the competitive advantage is that you want to treat them well and you want to have a really good fit for that hearing aid.

Bob Traynor 24:26
Well it’s one thing to get up there with the reputation and and and the marketing and the various things but to get them a satisfied satisfied satisfaction area and then keep them there to send our friends and to have them keep coming back. That’s that’s the whole that’s that’s the whole round robin through the whole process of working with our with our patients and so on. So,

Mike Halloran 24:53
yeah, I will say, you know, I look back and I’ve been in the business for 20 years, I feel blessed Just in that you think about in this business, it’s, it’s, we are lucky to be able to see that changing of lives of what some of our HCPs are it, you know, and you’ve been on the frontline, you’ve seen what a really well fit, professionally done hearing aid, what it can do for people. And, you know, I, I feel lucky, I, I have employee meetings every two weeks. And every employee meeting, we end with a video of a patient who’s experienced of hearing, and what it’s done for their life. Because you know, what, every day, we can look at spreadsheets, we can look at, you know, manufacturing, we can do all that, at the end of the day, we are really blessed to work in an industry where we we change lives, and I always want everybody to remember, forget everything else. At the end of the day, we are lucky, we were changing lives. And it’s really important in this industry. And so, you know, and I think people appreciate that.

Bob Traynor 26:07
Well, the patients appreciate it every single day. Their families appreciate it. And And if indeed a physician sends their patients to a particular practice, the physician gets that person out of there out of their hair. Plus to get the guy’s wife off their case, or where are other spouse or family members. And and they appreciate the fact of having a good place where they feel comfortable sending their patients. And now Now the I think, as I understand it, you’re you you have been kind of a spearhead at Beltone for expanding some of the kinds of services that franchisees offer, what kinds of services would those be? And where do you see that going?

Mike Halloran 26:55
Yeah, you know, I mentioned a few of them earlier. One is the Elevate team. So when I think about it as a business owner, I mean, I think about me, and that if I started a business tomorrow, I wouldn’t know how to advertise on Facebook, I wouldn’t know if I’m struggling with a paid job with a employee, what what’s legal and what’s not, I wouldn’t know where to begin to do a,

Bob Traynor 27:24
well you could take my practice management class at one of the universities where I’m an adjunct or something, and we’ll charge you for that we’ll charge you a pretty good for that. So or read or read read the book called strategic practice management. I’m just throwing some stuff.

Mike Halloran 27:42
There you go. But But in all seriousness, it’s having that level of support for an owner, I think, you know, like said, I, if I started my business tomorrow, I wouldn’t, I mean, I’d be able to do the accounting for sure. But some of the other pieces. So I think having that. And so we started that about about a year and a half ago before just as I started, and that’s going really well. Okay, and I think the support of the owners has been very much appreciated. And we also have marketing automation. As I mentioned, we’ve got a system that we started if the decision to roll out one common platform was before he started. But as we’ve rolled it out, we’ve added a lot of things like scheduling, right, we’re adding a call center, where we’ll have we’re going to be a part owner of a call center. And you think about you can go on any call center, but this one’s going to be special. And I’ll tell you why. This one is only going to handle hearing, I means it’s you know, as they call in because it’s such a specialized area hearing that I don’t want it next to a Comcast agent who’s answering the phone. I want somebody who understands that what they’re faced with and how. So we’ve got a we’re building out, we’ve got a call center coming online here, we’re actually testing it now. So really, that to me, and joint venturing with someone on a call center, I think will be huge, because you pay so much to get that phone to ring and not to have somebody who really knows what they’re doing, and is not stressed about taking the patient back to see the HCP or, you know, calling about someone’s insurance. They they that’s all they do is they focus on talking to that potential patient to get them in and get an appointment so we can get them helped. Marketing automation, I mentioned podium, we’re using podium and we’ve connected that all into our systems, all of the reporting. We’ve built out reporting in the last year on all of the KPIs that somebody would really want to know and understand, to be able to manage their business and back to what we talked about to compare so and we’re just getting started. There are so many things we’ve got going at Beltone that seriously that I’m super excited about what I’m seeing

Bob Traynor 29:59
why I’ve done Just a couple more questions for Mike. And one of them is, with the huge lag, we’ve had a 300+ and some percent increase in the insurance benefit through Medicare Advantage. How do you perceive that working into the Beltone franchise system? If at all, by the way, you know,

Mike Halloran 30:21
no, no, we, we obviously have, you know, if you think about it, if you’re one person sitting in Albany, New York, I’ll say, okay, and I grew up in Albany and you are calling a Nation’s Hearing or a United or trying to get some activity, you’re gonna have a lot more benefit, and support being part of a Beltone network than you will be in alone. And so for one that will help number two is there’s a lot of areas that we’re supporting our owners, so let me give you an example. There’s a lot of unions that have smaller plans that need and want to have a hearing benefit. So we have a group that that’s what they do is the work with the unions to set up a plan to support that owner. So that in that Albany, New York market, that owner has a relationship now with the unions in that area, and then can support. So how would I know as an owner to do that, I wouldn’t know. But I have a group of five people, that’s all they do all day long is to work in that and work with that owner to get that union into that contract. So it’s just so much it’s such a benefit, being part of that network, that we have the support to be able to do those things that you wouldn’t know how to do. And you wouldn’t even think to do because you’re working 9 to 5 seeing patients. And frankly, a lot of these guys are working 9 to 8, nine to nine because they’re running their businesses, they’re seeing patients. So having a support team, I think is really helpful in critical to grow their business

Bob Traynor 31:56
No, I certainly understand that. It’s not a 9 to 5 business, when you own your own clinic, that’s for sure whether it’d be a Beltone franchise or an independent one for sure. You know, and I just got done at AAA doing a short talk on on managed care and how you go about doing those things. But the the main deal was with all about people were saying about every other patient that comes in is looking for some sort of a of a quote deal or something. I have insurance and so on. And so that that becomes an important concern. Now, my last question for you Mike might be what other procedures in addition to hearing loss are you guys considering at Beltone, such as, you know, tinnitus, and some of these other things that go with or going into the marketplace these days?

Mike Halloran 32:53
Yeah, it’s interesting you say that. Ron Ron Gleitman is he started up a group about a year ago. And we’re looking at a number of other avenues of support and service. And you mentioned one of us. We haven’t done anything yet, because there was, frankly, I felt a lot of opportunity before we start looking at other things. But Ron is kind of in the process of building that out now. And I would I would say is more to come on that. I think we’ve got a couple of opportunities. I think you and I chatted about one before we even got on, you know, before we started recording the call. So we’re looking at him. nothing definitive yet, but but I clearly believe adding a book of business through other avenues will be important as well. So more to come on that runs working on that as we speak.

Bob Traynor 33:49
Well, I hope as as you progress with all the things and changes that you’re, you’re you’re in the process of doing at Beltone that you’ll come back and give us a little update here over time. And I want to thank Mike Halloran for being with us today on this episode of This Week in Hearing