Sony OTC Hearing Aid Partnership with WS Audiology: Interview with Maarten Barmentlo, WSA Chief Marketing Officer and President OTC

Amyn Amlani 0:10
Last week, Sony Corporation and WS Audiology announced that they have entered into a partnership collaboration with the intent of supplying new products and services in the over the counter self-fitting hearing aid market in the United States. Here to discuss this partnership is Maarten Barmentlo, chief marketing officer and president of the OTC segment for WS Audiology. Before we dive into the specifics of this partnership, Maarten, Could you kindly share your background in current role?

Maarten Barmentlo 0:43
Yes, and thank you very much for giving us the opportunity to give you our perspective on this exciting partnership. But my name is as you said, Maarten Barmentlo, I work for WS Audiology, overlook all marketing activities for the group worldwide and also have had the honor to lead the efforts in OTC I have been in the industry, I think now in total for about 10 years. I have I have a background before that in various consumer healthcare industries where, you know, we sold consumer products through healthcare professionals, like the hearing care professionals are of course extremely important in our industry.

Amyn Amlani 1:28
Yeah, and more before we move into the conversation on the partnership, if I can ask the question, what is WSA’s position on the recently passed OTC bill?

Maarten Barmentlo 1:41
As you may know, right, our purpose is to bring wonderful sound for all. And if you look at the worldwide population, as a total industry, right, so industry together with our hearing care professional partners, we are not addressing all consumers. In fact, only 15%, worldwide approximately, and in the US, where audiology is, of course, very well developed. There’s still about two out of three consumers that will benefit from a hearing aid right, do not get one today. So there is a big opportunity out there for all of us to bring, you know the miracle of hearing back to more consumers in the us this opportunity to now augments, right the distribution of hearing health solutions to consumers via more channels, that is being enabled by this by this new law is therefore something that is good for the consumers. I can also explain why we believe it is also a good opportunity for the hearing care professionals. And it is also a good opportunity for us to deliver on our purpose.

Amyn Amlani 2:59
Yeah, the OTC bill was designed to to help the entire market, not just the consumer, but also the providers. And as we discuss this partnership will get into, you know, the discussion of how this is going to help the providers because I think it’s it’s critical that they understand that their role in this in this whole process is still very much paramount in the success of the individual. So so this partnership that is now taking place and that has now been announced. I know there’s YouTube videos of news clips, and it was interesting to me to learn that Sony approached WSA. I mean, I’m not surprised that they approached the hearing care market and that they approached a well, one of the better hearing aid companies in the in the marketplace. But can you talk a little bit about why they approached you and how this partnership kind of developed?

Maarten Barmentlo 3:59
Yeah, so I think it is it’s good that you think in a partnership where there’s two parties that come together. And it is interesting, right? Let me let me discuss this with with Sony. They looked at the opportunity and looked, of course first have you know, can we do it ourselves? Or are there essential elements of what it takes to be successful, that we can do faster or better by partnering up with somebody else? In parallel, we did the same, we did quite a bit of market research in the US to see what will be the expectations of consumers when it comes to the emerging OTC category. And then we learned that, you know, a trusted brand, I think was was something that was quite essential for for consumers in this in this emerging space. And of course, the availability of the product in channels that are different than the professional channels on top of getting it through the professional channels and And then we realized, right that, that teaming up with a partner that has a heritage in sound, has a strong consumer brand that is related to sound is as committed as we are to innovation, and has access to distribution channels where we are normally not operating with would actually augment what we see as success criteria as well. So I think it was a bit of a process of the two parties doing things in parallel. And then I think we did in the end meet and started to talk. And I think that’s also why fairly quickly into the discussions, parties recognize that, that the two companies together, could actually really help right this category become a success.

Amyn Amlani 5:52
Yeah, it’s one of the interesting things that I’ve read is the the quote, it says the technology needs to catch up to serve the new consumer market. And so I think as both parties were looking at this partnership, it led to this whole discussion that there’s a gap, and each party could bring a certain aspect in order to close that gap, and improve not only the, the technology, but the service delivery aspect as well.

Maarten Barmentlo 6:21
Exactly. And I think it is important, right? When we when we look at the opportunity space, that we also recognize that where we are today, right, I think in particular, in the US market, there is a you know, a good network of audiologists and hearing care professionals that deliver outstanding service right to those customers that they serve. And we also believe right, that the best hearing care that any individual worldwide would be able to get is through an audiologist, right? I mean, that is not – the reality is only that a lot of consumers today do not yet do that. Now, in order to still deliver a good level of care, we need to develop new solutions that do not only have the component of delivering right, the amplification that the patient’s needs, but also help the consumers through the process of adjusting the hearing aid right to their individual needs. Again, the best way to do that is to go to the audiologist. But for those consumers that don’t do that we have to offer in the solution, not only the hardware, but also, you know, a workflow where where we take the consumer to do the self fitting. And that is what I was referring to in the in the interview when I say the technology needs to catch up.

Amyn Amlani 7:50
Yeah, so just just so that I’m understanding this, you know, there’s there’s two segments, there’s going to be it looks like a provider assisted segment. And then there’s going to be a self fit segment where the consumers do it yourself. Am I Am I understanding that correctly?

Maarten Barmentlo 8:06
That’s That’s correct. I think the other aspect that I think is worth mentioning here, right, and in particular, for the audience is, in the research we did, we asked consumers, where would you expect to find OTC solutions. And it is encouraging, right that a lot of consumers said we expect to find OTC solutions in the professional channels, but they also expect it to be available online. They also expect it to be available in big box retailers, but also expected to be available in the professional channels. And that’s why we believe right that also for the existing customers, of our brands, this is an opportunity, right, they can offer a broader palette of solutions to the people that walk into into their door. And it can make their business grow faster and and then serve more consumers, which is what drives right all the hearing care professionals to their clinic every day.

Amyn Amlani 9:13
Yeah, and as you’re talking and as I was, you know, watching some of the the media that was out, what really strikes me is this balance or this partnership between the two companies. You know, although it’s dealing with the hearing impairment and the loss and the provider in the patient’s difficulties, it’s also expanding in the needs of communication and wellness and health in some of these other categories by potentially making devices smaller or making them more unique. Can you talk a little bit about that piece of that partnership?

Maarten Barmentlo 9:47
Yes. I think we’re very pleased, right, that it is a partnership that is more than simply, you know, a brand license or a distribution agreement, right. It’s truly a partnership. We’re both parties bring all of their strong assets. And the technological element is very important. I think we all know that in the last decades, miniaturization has brought a lot of benefits to the healthcare market. And this is something we’re very good at. But obviously, our partner Sony is also extremely good in miniaturization. And miniaturization gives also the opportunity to augment the offering right to bring new benefits. And one of the big new benefits, right that we have recently brought into the category is rechargeable – rechargeable hearing aids. In the beginning, they were bigger than non rechargeable. But now they are also very, very, very tiny and small. I think another element is the connectivity right to the cell phones, which basically connects the hearing instruments to the outside world of the of the of the consumer. And when you when you start to think about the things that our partner Sony can bring to bear, being also very strong in entertainment, and in wellness solutions, etc. I think there we have a world opening up of opportunities, of course, right? That is longer, longer term, right. But it gives a lot of opportunities, right to continue to make these devices and solutions. Be more and more something that consumers really want. Right? Because that’s one of the challenges in hearing care, consumers need hearing aids, a lot of consumers don’t want them. And we see that, you know, by bringing the strengths of both parties together, then make these devices and solutions also more desirable, right for more consumers. And with that, we want to contribute to a higher penetration right of hearing care solutions amongst those consumers that need it.

Amyn Amlani 12:00
Yeah, and that’s one of the questions I was going to ask you is, it sounds like there’s an opportunity here to lessen barriers, whether it’s accessibility, whether it’s stigma, whether it’s a generational differences, where the younger generation is more apt to streaming versus the older generation, it just sounds like this partnership is going to cast a wider net. And as you pointed out, we’ll find out down the road, how much of an increase that’s going to be in the in the penetration of these devices, and how much the benefit of these devices that these individuals are going to gain over time.

Maarten Barmentlo 12:34
Yeah, and you know, I told you in the beginning, right, that I have a background in consumer healthcare industries, and I’ve also been in an industry that that used to have very low penetration and has very high penetration today, that is power toothbrushes. And there we also saw right that opening up new channels, broadening the scope of the solutions in the end drive penetration, and I think it is our joint responsibility to make sure that we convert this opportunity that is out there now, into an opportunity to serve more consumers, right, if the only thing we managed to do is to not grow the market and just have more options, I think then we have not delivered on on not on our own purpose, not on the purpose of why this law was passed through US government and also not on you know, the purpose that all the hearing care professionals right in the US have, they want to serve also as many consumers as they can. So, it is a bit of a joint responsibility, but I think the data also show that there is growth opportunity, right a big survey done in the US shows that of those consumers that have hearing loss have not yet decided to buy hearing aid a lot of them would actually consider buying it if OTC devices would be available. Right. So, there is clear indication in the research that we will expand the market and pull more consumers in that today for for various reasons right, are not yet being served. Now, you mentioned barriers, I think that is very important element right there isn’t there is an access awareness and affordability. Right when you when you look at the big barriers, and and of course stigma. And, and I think, you know, with this partnership, I think we can address quite quite a number of those of those barriers. You know, stigma I think the Sony brand will also make you know the solution more desirable from you know, and more appealing to a younger audience. But certainly also right to to talk to elderly And I think the form factors that we are going to offer are going to play an important role there, right. And I think we’ve all learned that that is important in this industry. And we have the plans to continue to evolve in that area. And then, of course, the availability through different sales channels, right, that works on the access, it makes it easier to enter the category. And, of course, right is for some consumers, affordability is also an issue, and the OTC category is also right, supposed to help and will help in that aspect as well. So I think I see that we can really help work on these barriers, I think we should also realize that, you know, with, with one or two months into it into into a new world with this category, or maybe a year, when we haven’t solved all the problems of all the consumers, right, that are today not entering the category. So it will take some time for this to grow. But I think it is a great opportunity. And as I said, for consumers, absolutely. Also for the existing hearing care professional channel, and of course, right for for us to deliver on our purpose.

Amyn Amlani 16:19
And just to clarify on the brand, and I really appreciate your commentary here. But on the brand, my understanding is is the initial brand is going to come out under the Sony marketing brand, is that correct?

Maarten Barmentlo 16:30
Correct. The devices will be Sony branded- Yes.

Amyn Amlani 16:35
Okay, but WSA will also continue to function in the prescriptive realm for the providers, is that correct?

Maarten Barmentlo 16:43
Yeah, as you, as you may know, right, is we have a portfolio of brands, and our brands have their own product portfolio, and, you know, their own go-to-market and operate, you know, fairly independently. And, and that we continue, right, this is also a new channel. And that is Sony branded, we will not bring Signia branded or Widex branded OTC solutions to the market.

Amyn Amlani 17:15
Yeah, yeah. So, as we, as we kind of think about this, the significance of this partnership. You know, we’ve talked about it from the consumer standpoint, and we’ve kind of touched on it from the providers standpoint. So as you’re communicating here with the audience, which is primarily the providers, what can you share with them, as they start to think about offering this in their practices? Or if they should see these patients? I know, the product is not out yet. But as they start to think about these patients coming into their practices? Yeah, I

Maarten Barmentlo 17:47
think, as you said, right, we’re not yet in a position to talk about the specific solution that we’re going to offer. So you know, I want to try to limit these to a bit more high level direction, but I think when you look at the opportunity space, from a hearing care, professional point of view, I think the first one is, as I said, the research indicate that a lot of consumers expect these types of solutions to be available at the at the hearing care professional. So with new entrants, right, there will be more noise, there will be more communication around hearing care, which will lead to more consumers right shopping for solutions, and they expect to find them in in their stores. So I think that’s one opportunity where they probably don’t need to do anything, right, but will benefit. I think the other element, which is there, if you if you make a OTC solution, part of your solution, portfolio of solutions, I think you can, you can make sure that you use that in your advertising, to specifically drive consumers to your own franchise. So I think that’s the second element. And then the third element, and I’m sure all hearing care professionals right, that are that are watching this will will recognize is it happens a lot that consumers make an appointment, you spent your time you know, doing the the examination, the consultation, and you even the people experience the benefit, right in everything. And then consumers decide not to buy, right and for some of them that might be for reasons that it is too costly, or or that they you know, find this not cool enough or that stigma still plays a role. I think for those consumers, right, that basically who would otherwise also walk out right without being served. There is a great opportunity to settle but we also have a solution that gets you a lot of the benefits you know and is of a brand you know and more affordable. So you could also at the end of the of the sales cycle, of course right offer that. And I think the other part, which is also not an important, right is this will bring consumers earlier into the category. And as we all know, your hearing loss progresses over time. And so many consumers for whom OTC solutions will bring good benefits and their happy consumers. Over time, we expect that a lot of them will also start to seek, right professional support, and professional solutions that are being coming to be fitted by the hearing care professionals. So, I think there are quite a number of angles, where we see that this could benefit the healthcare professionals.

Amyn Amlani 20:50
More than it sounds like it’s a win win not only for the consumers, but also for the providers. And as you pointed out, I think it’s going to open up a catalyst of new and younger generational users. Because you’ve got, as you pointed out different form factors, you’ve got different, you’ve got different offerings within the technology itself. Some of these younger folks are gonna be more tech savvy, they should be able to help themselves. But there’s also a need for the provider to take care of individuals who you know, recognize in realize that they need a professional services. So it’s a, it’s a product mix. And just as the industry is changing, the providers also have to be able and willing to move as the market is moving. And so as we you know, as we wrap up this interview, you know, I’ll be curious to see in a couple of years, hopefully, we can get you back on the see what those trends are, and how much we’ve actually moved that needle. Because we’ve been looking at this market here for 30 years or so, in the middle has moved slightly each year, basically, based on organic growth. I’ll be very, very curious to see if we exceed that, and how much we exceeded by and where those expectations are being met.

Maarten Barmentlo 22:03
Yeah, I know. And I will gladly take you up on that invite to come back. I think we all want the same, right, because we want to convince consumers in earlier because we know it. It’s good for preservation of hearing here by starting early. But it’s also you know, making consumers life better, right, and they’re going to be happier people. I think the other part is that we bring in more consumers, right, because there’s also still a lot of quite old consumers that would benefit from hearing aids that are not being served. And I think we would all be proud, right? The both parties in the partnership, but certainly also, you know, our partners in in the hearing care professionals, if we would be really able to show the average age of the first time user right has really moved down. And if the penetration would not be around 30%. But let’s say more around 60%. I think then then we would all be could be that we could all be very proud of ourselves.

Amyn Amlani 23:08
Maarten, I really appreciate the time you’ve taken I’m really interested to have you back on down the road as the market evolves and we start to see the technology evolve the industry evolve and of course consumers be helped. And wishing you guys all the best of luck and again, we’ll we’ll chat again in a few years here.

Maarten Barmentlo 23:31
That’s great. Thank you very much.