Interview with Kathy Foltner, CEO of AuDNet, Inc.

Topic: AuDNet Overview and the Branding of Audiologists

Dr. Paul Dybala: Hello everyone, this is Dr. Paul Dybala with Audiology Online, and today, I am talking with Dr. Kathy Foltner, who is the CEO of AuDNet. Kathy, thank you for speaking with me today.

Dr. Kathy Foltner: Glad to be here!

Dybala: Could you start by telling us about yourself and your professional background?

Foltner: I feel like I am going back a 100 years, but it is actually about 30 years. I graduated with a master's degree in 1976 from Michigan State University and immediately went to work for an ENT physician. I had a great job and I learned an unbelievable amount about otology as well as head and neck surgery. I started as a part-time audiologist; however, I advanced to a full-time position and even employed another full-time audiologist.

The ENT actually fired me after 3.5 years for violating office policy when I wanted to attend a seminar on in-the-ear hearing aids with the other audiologist. I informed the ENT that this other audiologist and I would be leaving a few hours early to drive to the seminar; however, there was an office policy that there always had to be an audiologist available, and we were going to be leaving at three o'clock in the afternoon, meaning for 2 hours an audiologist would not be available

It never dawned on me that pursuing continuing education was not the right decision. It was not only important for me to attend as the director of audiology, but I felt it was also important for the other audiologist that worked in the practice to attend. And I, from day one, always believed that audiologists should practice autonomously and have a responsibility to complete continuing education. I thought it was important for both of us to hear about this new technology firsthand.

This was the straw that broke the camel's back. The ENT refused to allow both of us to leave the office early, so I sent the other audiologist to the seminar and remained behind in case a patient needed a hearing test even though none were scheduled. I think I completed four hearing evaluations that afternoon, all of whom had normal hearing.

Later, the ENT walked into my office, gave me 30 days pay and basically said my services were no longer needed. My favorite part of the story is that the next morning I woke up, put on my suit, because back then that is what I had done every day for three-and-a-half years, and instead of going to the office, I went to the unemployment office. This was in 1980, during one of the biggest recessions America had experienced. I was living in Lansing, Michigan, which was in the middle of the auto industry, and needless to say, there were a lot, literally thousands, of auto workers in these unemployment lines.

I stood in this unemployment line for about 3 hours. I was literally the next person in line, and I chose to walk away. I realized that I did not want to collect unemployment. I wanted to practice as an audiologist, and I had just spent three and half years building a solid practice; therefore, I went back to the ENT and offered to buy the audiology portion of the practice. Several months later, after much negoitation that is exactly what I did, and that is how I started in private practice.

Dybala: That is amazing. You went from being fired from a practice to owning that practice, which says a lot about you.

Foltner: Well, I truly believe in the quote, "in adversity lies opportunity." I think that under the same circumstances not everybody would have necessarily made the same choices, which is not right or wrong. For me, I felt that I already owned the practice even though I did not physically or literally. I was an employee of the ENT; however, for me, it was already my practice, it was just a matter of formally making it my practice. I think a lot of audiologists are in the same position today and I wish more would make the decision to become an owner, since ownership is important to autonomy and autonomy is important to our profession overall.

Dybala: Fast-forward to today, you are now the CEO of AuDNet. Tell us about the organization and what you do?



Foltner: Well, AuDNet is an independent national network or group purchasing organization owned by and representing independent audiologists nationwide. Our mission is to unite audiologists nationwide to achieve brand recognition and create demand for audiology care. There is certainly more public recognition of what audiologists do today than there was 30 years ago. With that said, I am not sure that as a profession audiologists have done a good job distinguishing their services from other providers within the hearing healthcare industry.

Dybala: This reminds me of a recent ask-the-expert question you wrote for Audiology Online discussing the private labeling of hearing aids. More manufacturers are working on getting brand awareness of their products out in the general marketplace through national magazine ads, newspaper ads, etc. What is your view on audiologists privately labeling these brand hearing aids? What do you think are implications of this?

Foltner: The manufacturers of hearing aids know that branding is a powerful business tool and it is in their best interest to have consumers requesting their product brand. Historically, two companies in our industry have done an excellent job branding their name and educating consumers to inquire about their products. At the very least, consumer awareness and inquiry forces audiologists to discuss the pros and cons of hearing aid brands those consumers identify or request. Why else would any manufacuturer spend millions of dollars promoting their specific brand to consumers? They want consumers requesting their brand and they want to sell hearing aids both of which are reasonable for a manufacturer.

There are several inherent problems for audiologists with this. Most glaring is the competive price shopping that manufacturer branding generates, including price comparisons to internet sales. It is not uncommon for a consumer to take a recommendation for brand X hearing aids and to investigate competitive pricing from various local retail or professional outlets or the internet. Many consumers do not understand that professional care and service including how the hearing aids are programmed is at least as important as the hearing aids, in my opinion, even more important. Most of us in the hearing industry know that hearing aids are only as good as they are programmed, but unfortunately that is not common knowledge among consumers.

Private labeling can reduce price shopping and depending on the label and corresonding marketing can also take the focus off the product. For example, the AuDNet brand was designed to educate consumers about the importance of audiology care, and focus on professional audiology care inlcuding diagnostic testing as an important component in the entire fitting equation while at the same time giving audiologists the option of choosing from many high quality products and manufacturers. In our case, the AuDNet brand positions audiologists as "THE hearing experts". We're trying to shift consumer thinking from, "I can't understand, I need a hearing aid" to "I can't understand, I need to see an audiologist".

I feel that audiologists should control their marketing and use branding to their benefit. When you promote or market a manufacturer, you suggest it is the hearing aid and that manufacturer that is the most important part of the transaction. In addition, by promoting a product brand that any hearing healthcare provider can provide, audiologists are missing an opportunity to position themselves as unique or as reprenting a quality brand that only audiologists can secure and sell. Manufacturer's customers include audiologists, physicians, dispensers, internet providers, big box stores, and more... they sell their products to all of their customers, as they should. The AuDNet brand can only be purchased by audiologists, which is something unique.

Part of an audiologist's professional responsibility is to stay up-to-date on technology including the various different product manufacturers, and part of our job, I think, is to make sure that we are always dispensing the best products. That may be from manufacturer X today, from manufacturer Y tomorrow, and manufacturer Z in the next 5 or 10 years. When you promote a specific manufacturer, it can put you in an odd position of continually justifying your hearing aid recommendations. Of course that can be done, but why propagate the conversation? To me it makes more sense to focus on the professional, the audiologist who does the testing and programs the hearing aids. It is those skills that can truly make or break the fitting. Why not promote a professional brand that represents audiology care and promotes audiologists as THE Hearing Experts? That starts to take the focus off the product and puts it on the professional.

I personally would never promote or market a manufacturer or include a manufacturer in my marketing. Audiologists use the "free" or "co-oped" marketing as a reason to promote a manufacturer, but that is being very short sighted. In the long run, it will always be better to promote the professional and develop that personal relationship. In fact, that is something that is very difficult for the larger corporate competitors who tend to have high employee turn-over.

Dybala: What are some examples of things that audiologists can do or what you are doing with AuDNet to facilitate audiologists branding themselves as unique.

Foltner: There is no doubt that one of the qualities of branding is uniqueness, to be able to provide something that is unique and consumers desire. Of course, I personally believe that audiologists are the most qualified professionals to diagnose and treat hearing and balance disorders, and provider credentials, including the Doctor of Audiology degree, is something that is unique in the hearing industry.

Audiologists are also unique through the comprehensiveness of the testing they provide, including a complete medical case history, full diagnostic testing, treatment and rehabilitation that might include hearing aids, reporting to primary care and other physicians using appropriate medical terminology codes, and being part of the patient's healthcare team. Certainly, being licensed as an audiologist is something that is unique. The licensing requirements in most states differ for audiologists than they do for hearing aid dealers. Audiologists are licensed to not only fit hearing aids in many states, but also to complete diagnostic testing for all ages.

Preventive care is also something that audiologists should embrase as part of their scope of practice that can provide an element of uniqueness. Our practice should not just be about hearing aid sales. Our practice should be about total audiology care.

Audiologists must promote the importance of professional audiology care, since no other group of professionals or manufacturer is going to do that for us, nor should they. The one common denominator in every audiology practice year after year, especially for those in private practice, is the professional, the audiologist. It is our job to make sure we are keeping current on appropriate diagnostic procedures and products that will best meet our patient's needs. Audiologists must generate a sense of trust. When a patient comes in thinking that they want product X, but we tell them that product Y is a better product to meet their needs and solve their problems, it is more likely they will follow our recommendations if they have a strong sence of trust in the audiologist.

In addition, there can be ethical and legal consequences for audiologists who accept "free" marketing from manufacturers. Fortunately, AuDNet resolves many of the assoicated issues by making many of the major manufacturer's products available under the AuDNet brand. Marketing under the AuDNet brand leads patients to say, "I want to see an AuDNet audiologist." In essence, we take the focus off the hearing aid and put it on the professional. Only audiologists can dispense the AuDNet brand.

We private label our hearing aids and of course we are going to suggest that AuDNet audiologists promote the AuDNet brand, but it goes beyond the product. In fact, it is more about the professional. It is guaranteeing that the person is seeing a licensed audiologist, who has malpractice insurance, an advanced degree in audiology, a license to practice audiology, no active complaints against their license, membership in at least one professional audiology organization and follows the codes of ethics of the organization, completes continuing education, and functions independently in the practice of audiology and educating consumers on those facts.

When I say an audiologist functions independently, that obviously includes audiologists in private practice, but also audiologists who function independently in school systems, at university clinics, in physician offices, and in hospitals. What is important is that the audiologist functions autonomously and does not have a non-audiologist dicating audiology, vestibular, and hearing aid protocols.

All of those things and many more are what go into the AuDNet brand. We currently have seven or eight major manufacturers that produce and private label products for AuDNet, and that is always expanding. We have more and more manufacturers that want to do business with us, which expands the audiologist's product options, but also keeps all manufacturer's products contained within one professional brand, AuDNet.

Dybala: To conclude our discussion today, can you tell us some of the issues an independent practitioner might face with branding?

Foltner: Anybody, if they have a large enough practice, theoretically could private label their hearing aids, as well as hearing aid batteries and ancillary supplies. Many audiologists do in fact private label batteries. The problem is that most audiologists do not buy enough hearing aids to justify private labeling for the manufacturer. Private labeling seems simple enough, but does create production, labeling, inventory, packaging, and cost issues for manufacturers.

Not only that, there is only so much that you can do locally. One good example of independent businesses that united under a common brand is FTD Florists. The reality is FTD started when a small group of 15 florists who united in the early 1900s because they realized that if they banded together, they not only could service their local communities, but they could also service out of town people through their network. They realized they could create synergy by uniting and banding together; which they did to develope a national brand that we all know today, FTD.

Local branding will always be limited in comparison to what a national brand can accomplish. Certainly, for those of us who live in the north, we have the snowbirds that go south in the winter, and for those who live in Florida, their patients come north in the summer. There can be a synergistic and promotional effect of helping each other's patients under a common brand.

Another thing to consider is how our industry is promoting hearing healthcare providers. Audiologists, as we mentioned earlier, are at the top of the education totem pole when it comes to hearing healthcare providers. Yet, the manufacturers as well as many publications and websites and different areas in our industry homogenize all providers as "hearing healthcare" providers, in essence devaluing an audiologist's education and license as well as what we offer. It is not in audiologists' best interest to allow themselves to be called hearing healthcare providers. We are audiologists and doctors of audiology.

We expect consumers to demand our care, to ask to see an audiologist; therefore, when we talk about branding nationally as a profession, we need to make sure consumers understand why what we do is unique, our unique credentials, and our ability to properly diagnose and treat hearing and balance disorders.

Dybala: Thank you, Kathy. If anyone needs additional information, I would encourage you to visit www.NowIHear.com and www.aud-net.com to find out more information about AuDNet. We also have an AuDNet web channel on Audiology Online www.audiologyonline.com/channels/audnet.asp where there are several e-seminars on various topics related to branding and marketing as well as news and ask-the-expert items.

About Kathy Foltner and AuDNet

In addition to 30 years as an audiologist, Kathy Foltner is a professional speaker, author, business consultant, and the CEO of AuDNet. She is a co-author of the book, "Success is a Decision of the Mind," which provides stories and strategies for professional and personal success. As CEO of AuDNet, Kathy strives to unify audiologists across the nation to attain improved patient care and public awareness for the field of audiology. AuDNet allows members to be a part of a national network of licensed audiologists, provides training and support, and gives audiologists access to an audiology brand and reduced hearing aid prices. From audiology students to established professionals, AuDNet can help audiologists through every walk of life. For more information on what AuDNet offers, visit www.NowIHear.com or www.aud-net.com.