Interview with David Sawyer VP of Marketing, Siemens Hearing Solutions
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AO/Beck: Hi Dave. Nice to speak with you again.
Sawyer: Thanks Doug, good to spend time with you too.
AO/Beck: Let's start by reviewing a little bit of your professional history, I know it's colorful and I know you have criss-crossed the country a few times!
Sawyer: Sure, well right before I became involved in the hearing industry I operated a small advertising business in northern Colorado some 20 years ago. Back in 1980 I met the owners of the Beltone dealership in Denver and a little while later I sold my business and went to work for Beltone as a field representative, repairing hearing aids and operating service centers in northern Colorado. Later I helped manage a Beltone center in Colorado Springs for 3 years. From 1984 through 1992 I worked for Dahlberg/Miracle-Ear, first as a regional manager in the mid-west, and then as Director of Franchising and Retail Operations in Minnesota. Then I joined up with GN Danavox for 5 years as Director of Marketing, and then spent two interesting years at Lori Medical Labs as Director of Marketing and Assistant to the President. Since 1999 I've been in the best place of all - Siemens - with the best job in the company - heading up the marketing, product management and diagnostic systems/software support groups as Vice President of Marketing.
AO/Beck: What are your thoughts as an "industry insider" regarding the national sales figures?
Sawyer: I can recall a few years back we all used to think our industry was somewhat "insulated" from the economic swings. That is, we used to think that because the primary consumers of our products were seniors who were often retired, they generally were not subject to shifts in employment and they usually had savings set aside to take care of important needs, such as taking care of their hearing. At this point however, more than ever before, people are tied to the stock market through their own direct investments and their retirement accounts. So basically I think the industry is truly entrenched in the global economy, and it is likely to rise and fall accordingly.
AO/Beck: And of course people are far more aware of financial issues such as the stock market, their mutual funds, the status of their retirement accounts etc, than they were 10 or 15 years ago.
Sawyer: Of course. Not a bad financial day goes by without everyone hearing about it, and that impacts the attitudes of consumers regarding what they purchase.
Another issue that is that as an industry, we are reluctant to change. Although we are being pulled toward change, we're trailing other medical-related industries regarding how products and services are sold. If you look at the pharmaceutical and the optometric industries, they have changed the way they market and distribute products more dramatically than we have. I'm not saying we want to look at those industries as our "ideal," but there are lessons to be learned. The hearing instrument industry is still doing business the way we've been doing business for many years. It's the same old thing we've heard before...if you keep doing what you've been doing, you can expect to get what you've always got. I think we might benefit from a few modifications. For example, if you look at the number of chiropractors and dentists that are advertising heavily in the newspapers, the numbers have declined during recent years. Of course if you look at the number of ads for hearing instruments, they are just about at the same level as they have been, or actually increasing. It appears that the other professionals have changed the way they are attracting new business. They seem less dependent on their own advertising, and they rely more on relationships with associations, third-party or insurance companies, and perhaps referring physicians.
AO/Beck: So in other words, because we are so dependent on retail advertising, we lock ourselves into the financial ups and downs of the retail market issues.
Sawyer: Absolutely. If we market, advertise, and promote only through retail venues, we will get retail trade results, for better or for worse. However, we know that we can't stop advertising. One thing Siemens is planning is to increase the level of "direct to the consumer" marketing to grow the market by increasing the awareness and importance of hearing care. Hopefully, if we do a good job, we can motivate the consumer/patient to seek hearing instruments, rather than the more traditional approach of the professional "selling" the products. So basically, the new approach might be to have the consumer "pull" the hearing instruments through the distribution chain, rather than having the manufacturer and the professional "push" the products through the networks.
AO/Beck: That would be great. If we can do a better job of establishing the "demand" for the products, everyone would benefit. Of course, that's a difficult task, and it certainly won't happen overnight. Nonetheless, the paradigm shift could be a real turning point for the industry and the profession. Let me switch the focus a little and talk about two new Siemens products. The first is the new hearing aid shell process that I'm very impressed with, the LasR system. I learned about this system back in April at the Siemens Business Development meeting in Chicago, and frankly, I was surprised to hear that it was already up and running.
Sawyer: Yes, LasR is a new shell technique that we have developed, and the process is up and running in our New Jersey facility, and will be in our Georgia facility within the next 6 weeks or so. I remember talking about the concept of scanning the ear and creating shells electronically without an impression way back in 1984 with Ken Dahlberg. Of course, someone probably thought of it before that time, but that was the first time I heard about it.
I consider the current LasR system to be "phase one" in terms of reaching the objective of not needing to take ear impressions. In phase one, we are still depending on the earmold, but the earmold is not dipped in wax and made via the traditional method we've been using for years; it's scanned with laser light to create an electronic, three dimensional image, and the shell is produced from that electronic image utilizing the LasR process. As you can imagine, the LasR shell better replicates the physical characteristics of the ear. As a result there are fewer returns for credit, better retention of the shell in the ear, a more durable shell, and better fitting shells with less feedback. Of course it will be even better when we remove the need for impressions entirely and go straight to obtaining a scanned image of the ear by inserting a probe or a light stick in the ear to gather an electronic impression, or an e-impression, as the case may be. When we reach this objective, we'll no longer be dependent on receiving traditional ear impressions in order to build instruments that fit well the first time.
AO/Beck: That is an amazing thought. In fact carrying it a step further, I can imagine that if I saw a patient today, and took an e-impression using my light stick, I could transmit it via the Internet, and you could produce a shell the very same day I see the patient. Looking into your crystal ball, what's your best guess as to the timing of the availability of the e-impression light stick and the related technology?
Sawyer: First we have to complete the next phase of development - phase two of what I see as being three phases. This phase will include developing a scanner that can scan impressions at the audiologist's office that can then be sent electronically to the manufacturer along with an e-order. Having this process available for audiologists is probably closer than you think. We will have a few dispenser test centers up and running by Spring, 2002, with more general availability later in the year. Another e-business protocol which is up and running right now is ordering custom hearing instruments electronically through our website, Online@SHI. Basically, you can go online, select the style and the options for the hearing instrument, click on the options you want, receive validation that your selections are compatible with the technology, and then print a bar coded order confirmation form that's placed in the impression box to be mailed. When the impression and form arrive at our facility, the form is scanned and the impressions are matched with the order that's already in our system. It still involves paper and mailing the impression, but it does reduce errors by letting the audiologist know that their orders can be built as ordered before they leave the office. Developing this e-order technology has been an important step to prepare for really taking advantage of the scanning technology associated with LasR. The combination of these technologies (e-order and LasR) will totally change the industry in terms of how we see patients, how we take ear impressions, how we send orders to the factory, and the time lag between the ear impression and the fitting. And best of all, the final product fit and quality will be vastly improved.
AO/Beck: I think these shell technologies really are important and I agree, they will tremendously impact the way things are done on a day-to-day basis. However, as you mentioned earlier, people are hesitant to change and I think that although e-business is growing, it'll be a while until it is the standard of care. You know, although most people have computers on their desk at home and in the office, about ten years ago, almost nobody had these things. Over a couple of years it skyrocketed, after people realized the advantages, the speed, the efficiencies and the relative low cost of the new technologies.
Sawyer: Yes, it'll definitely take a while. But as you pointed out, it's like the computer industry, we have to prepare the technology, show everyone the advantages of the better mousetrap and then the dispensing offices will ultimately find they can't get by without it.
AO/Beck: The other new product that I would like to mention is the Noiser, which is the new digital tinnitus instrument. I've seen that a few times and I think it's very useful. In particular, I like the digital control of the instrument.
Sawyer: Yes, it's different from other tinnitus technologies that are available. As you know, this product is for tinnitus patients, with or without hearing loss. So there are two versions, they are both digital, and they both work off the Signia Select platform. We have the noiser by itself, and the combined hearing instrument/noiser device. The issues related to diagnosing, managing and treating the tinnitus patients are similar to, but in many ways very different from hearing loss patients. As you know, counseling and therapy for tinnitus patients is very important. We have started offering training programs for the audiologists on this product, and I anticipate this will have a big impact. In addition, the number of people with tinnitus is enormous, perhaps 50 million people in the USA, so it has enormous potential to impact everyone's practice. Talk about a new source of patients to grow our business - a lot of people need help with this problem.
AO/Beck: Dave, I'd like to schedule a follow-up interview with your in-house experts regarding the tinnitus instruments, but in the meantime, I'll insert some hyperlinks here to the tinnitus information on Audiology Online.
The American Tinnitus Association: A Resource for Enhancing Tinnitus Patient Services
/newroot/resources/Article/article.cfm?tid=111
Managing Chronic Tinnitus As Phantom Auditory Pain, /newroot/resources/Article/article.cfm?tid=59
Tinnitus Retraining Therapy: An Update,
/newroot/resources/Article/article.cfm?tid=37
Tinnitus: It Has a Certain Ring to It. /newroot/resources/Article/article.cfm?tid=35
AO/Beck: Dave, thanks very much for your time today. We've covered a lot of important information and I appreciate your insight, thoughts and observations.
Sawyer: Thank you too Doug. It's always interesting to see what's happening at Audiology Online.
Click here to visit the Siemens Hearing Instruments website.
Sawyer: Thanks Doug, good to spend time with you too.
AO/Beck: Let's start by reviewing a little bit of your professional history, I know it's colorful and I know you have criss-crossed the country a few times!
Sawyer: Sure, well right before I became involved in the hearing industry I operated a small advertising business in northern Colorado some 20 years ago. Back in 1980 I met the owners of the Beltone dealership in Denver and a little while later I sold my business and went to work for Beltone as a field representative, repairing hearing aids and operating service centers in northern Colorado. Later I helped manage a Beltone center in Colorado Springs for 3 years. From 1984 through 1992 I worked for Dahlberg/Miracle-Ear, first as a regional manager in the mid-west, and then as Director of Franchising and Retail Operations in Minnesota. Then I joined up with GN Danavox for 5 years as Director of Marketing, and then spent two interesting years at Lori Medical Labs as Director of Marketing and Assistant to the President. Since 1999 I've been in the best place of all - Siemens - with the best job in the company - heading up the marketing, product management and diagnostic systems/software support groups as Vice President of Marketing.
AO/Beck: What are your thoughts as an "industry insider" regarding the national sales figures?
Sawyer: I can recall a few years back we all used to think our industry was somewhat "insulated" from the economic swings. That is, we used to think that because the primary consumers of our products were seniors who were often retired, they generally were not subject to shifts in employment and they usually had savings set aside to take care of important needs, such as taking care of their hearing. At this point however, more than ever before, people are tied to the stock market through their own direct investments and their retirement accounts. So basically I think the industry is truly entrenched in the global economy, and it is likely to rise and fall accordingly.
AO/Beck: And of course people are far more aware of financial issues such as the stock market, their mutual funds, the status of their retirement accounts etc, than they were 10 or 15 years ago.
Sawyer: Of course. Not a bad financial day goes by without everyone hearing about it, and that impacts the attitudes of consumers regarding what they purchase.
Another issue that is that as an industry, we are reluctant to change. Although we are being pulled toward change, we're trailing other medical-related industries regarding how products and services are sold. If you look at the pharmaceutical and the optometric industries, they have changed the way they market and distribute products more dramatically than we have. I'm not saying we want to look at those industries as our "ideal," but there are lessons to be learned. The hearing instrument industry is still doing business the way we've been doing business for many years. It's the same old thing we've heard before...if you keep doing what you've been doing, you can expect to get what you've always got. I think we might benefit from a few modifications. For example, if you look at the number of chiropractors and dentists that are advertising heavily in the newspapers, the numbers have declined during recent years. Of course if you look at the number of ads for hearing instruments, they are just about at the same level as they have been, or actually increasing. It appears that the other professionals have changed the way they are attracting new business. They seem less dependent on their own advertising, and they rely more on relationships with associations, third-party or insurance companies, and perhaps referring physicians.
AO/Beck: So in other words, because we are so dependent on retail advertising, we lock ourselves into the financial ups and downs of the retail market issues.
Sawyer: Absolutely. If we market, advertise, and promote only through retail venues, we will get retail trade results, for better or for worse. However, we know that we can't stop advertising. One thing Siemens is planning is to increase the level of "direct to the consumer" marketing to grow the market by increasing the awareness and importance of hearing care. Hopefully, if we do a good job, we can motivate the consumer/patient to seek hearing instruments, rather than the more traditional approach of the professional "selling" the products. So basically, the new approach might be to have the consumer "pull" the hearing instruments through the distribution chain, rather than having the manufacturer and the professional "push" the products through the networks.
AO/Beck: That would be great. If we can do a better job of establishing the "demand" for the products, everyone would benefit. Of course, that's a difficult task, and it certainly won't happen overnight. Nonetheless, the paradigm shift could be a real turning point for the industry and the profession. Let me switch the focus a little and talk about two new Siemens products. The first is the new hearing aid shell process that I'm very impressed with, the LasR system. I learned about this system back in April at the Siemens Business Development meeting in Chicago, and frankly, I was surprised to hear that it was already up and running.
Sawyer: Yes, LasR is a new shell technique that we have developed, and the process is up and running in our New Jersey facility, and will be in our Georgia facility within the next 6 weeks or so. I remember talking about the concept of scanning the ear and creating shells electronically without an impression way back in 1984 with Ken Dahlberg. Of course, someone probably thought of it before that time, but that was the first time I heard about it.
I consider the current LasR system to be "phase one" in terms of reaching the objective of not needing to take ear impressions. In phase one, we are still depending on the earmold, but the earmold is not dipped in wax and made via the traditional method we've been using for years; it's scanned with laser light to create an electronic, three dimensional image, and the shell is produced from that electronic image utilizing the LasR process. As you can imagine, the LasR shell better replicates the physical characteristics of the ear. As a result there are fewer returns for credit, better retention of the shell in the ear, a more durable shell, and better fitting shells with less feedback. Of course it will be even better when we remove the need for impressions entirely and go straight to obtaining a scanned image of the ear by inserting a probe or a light stick in the ear to gather an electronic impression, or an e-impression, as the case may be. When we reach this objective, we'll no longer be dependent on receiving traditional ear impressions in order to build instruments that fit well the first time.
AO/Beck: That is an amazing thought. In fact carrying it a step further, I can imagine that if I saw a patient today, and took an e-impression using my light stick, I could transmit it via the Internet, and you could produce a shell the very same day I see the patient. Looking into your crystal ball, what's your best guess as to the timing of the availability of the e-impression light stick and the related technology?
Sawyer: First we have to complete the next phase of development - phase two of what I see as being three phases. This phase will include developing a scanner that can scan impressions at the audiologist's office that can then be sent electronically to the manufacturer along with an e-order. Having this process available for audiologists is probably closer than you think. We will have a few dispenser test centers up and running by Spring, 2002, with more general availability later in the year. Another e-business protocol which is up and running right now is ordering custom hearing instruments electronically through our website, Online@SHI. Basically, you can go online, select the style and the options for the hearing instrument, click on the options you want, receive validation that your selections are compatible with the technology, and then print a bar coded order confirmation form that's placed in the impression box to be mailed. When the impression and form arrive at our facility, the form is scanned and the impressions are matched with the order that's already in our system. It still involves paper and mailing the impression, but it does reduce errors by letting the audiologist know that their orders can be built as ordered before they leave the office. Developing this e-order technology has been an important step to prepare for really taking advantage of the scanning technology associated with LasR. The combination of these technologies (e-order and LasR) will totally change the industry in terms of how we see patients, how we take ear impressions, how we send orders to the factory, and the time lag between the ear impression and the fitting. And best of all, the final product fit and quality will be vastly improved.
AO/Beck: I think these shell technologies really are important and I agree, they will tremendously impact the way things are done on a day-to-day basis. However, as you mentioned earlier, people are hesitant to change and I think that although e-business is growing, it'll be a while until it is the standard of care. You know, although most people have computers on their desk at home and in the office, about ten years ago, almost nobody had these things. Over a couple of years it skyrocketed, after people realized the advantages, the speed, the efficiencies and the relative low cost of the new technologies.
Sawyer: Yes, it'll definitely take a while. But as you pointed out, it's like the computer industry, we have to prepare the technology, show everyone the advantages of the better mousetrap and then the dispensing offices will ultimately find they can't get by without it.
AO/Beck: The other new product that I would like to mention is the Noiser, which is the new digital tinnitus instrument. I've seen that a few times and I think it's very useful. In particular, I like the digital control of the instrument.
Sawyer: Yes, it's different from other tinnitus technologies that are available. As you know, this product is for tinnitus patients, with or without hearing loss. So there are two versions, they are both digital, and they both work off the Signia Select platform. We have the noiser by itself, and the combined hearing instrument/noiser device. The issues related to diagnosing, managing and treating the tinnitus patients are similar to, but in many ways very different from hearing loss patients. As you know, counseling and therapy for tinnitus patients is very important. We have started offering training programs for the audiologists on this product, and I anticipate this will have a big impact. In addition, the number of people with tinnitus is enormous, perhaps 50 million people in the USA, so it has enormous potential to impact everyone's practice. Talk about a new source of patients to grow our business - a lot of people need help with this problem.
AO/Beck: Dave, I'd like to schedule a follow-up interview with your in-house experts regarding the tinnitus instruments, but in the meantime, I'll insert some hyperlinks here to the tinnitus information on Audiology Online.
The American Tinnitus Association: A Resource for Enhancing Tinnitus Patient Services
/newroot/resources/Article/article.cfm?tid=111
Managing Chronic Tinnitus As Phantom Auditory Pain, /newroot/resources/Article/article.cfm?tid=59
Tinnitus Retraining Therapy: An Update,
/newroot/resources/Article/article.cfm?tid=37
Tinnitus: It Has a Certain Ring to It. /newroot/resources/Article/article.cfm?tid=35
AO/Beck: Dave, thanks very much for your time today. We've covered a lot of important information and I appreciate your insight, thoughts and observations.
Sawyer: Thank you too Doug. It's always interesting to see what's happening at Audiology Online.
Click here to visit the Siemens Hearing Instruments website.
