Interview with Steve Eagon, M.A., CCC-A, Director of Business Development and Doug Hudson MBA, President and CEO, HearingPlanet.com
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AO/Beck: Steve and Doug, thanks for your willingness to speak with me tonight about HearingPlanet.com. I know very little about HearingPlanet.com, but like many audiologists, I am curious to learn what you do and how you do it. Let me start with, who are you guys and where did you come from?
Eagon: I got my masters in audiology in 1990 from Ohio University in Athens, Ohio and was most recently working as a dispensing audiologist for a Nashville ENT before joining HearingPlanet.com.
Hudson: I got my MBA from Vanderbilt University in 1994. I started my career working with an investment bank in Nashville. While I was there, I developed two web-based properties for the bank. The first was their flagship site, and the second was for an institutional fixed-income group. So basically, I have developed web-based businesses prior to HearingPlanet.com and that experience has proven to be very helpful.
AO/Beck: How did the two of you get together?
Hudson: Actually, a manufacturer's rep introduced us. I came up with the idea in October 1999, but didn't go 'live' on the Internet until February 2000. A few months later it was apparent we needed to find an audiologist who could head up the professional development pretty quickly. We were fortunate that we were able to meet each other's needs at the right time. Steve joined us in July 2000.
AO/Beck: How many employees do you guys have at hearingplanet.com?
Hudson: Currently we have 8 full-time employees dealing with customer service and signing up new clinics.
AO/Beck: Where is the office physically located?
Eagon: Nashville, Tennessee.
AO/Beck: All right, with that as background, please tell me what is HearingPlanet.com?
Hudson: HearingPlanet.com is basically a branded network of hearing care providers across the country.
AO/Beck: How many clinics are working with you across the USA?
Hudson: We have about 950 independent, stand-alone clinics in our network. 85% of all offices are audiologist based. Geographically, by zip codes, we cover about 70 percent of the zip codes - so out presence is substantial. We operate in 49 of the 50 states.
Eagon: For some reason, we don't have anyone in Alaska - yet!
AO/Beck: Very good. So what is it that HearingPlanet.com offers that is unique and different from what is already out there?
Hudson: Great question. You are probably familiar with the vision model of 1-800-CONTACTS, whereby an individual can go online and purchase contacts. That's a little bit of a template for us. However, the hearing industry is quite a bit more complicated. Therefore, we are basically a referral engine. Hearingplanet.com refers patients (who have contacted us) to a provider in their area. That's the basic deal. We refer patients who have expressed an interest in buying hearing aids to a provider in their area. But we are also the collector of the transaction. That is, the transaction happens at our level. The patient pays us for the instrument and we pay the professional for their time, diagnostics and expertise to fit the instrument.
AO/Beck: How do you get to the consumer and why do they buy hearing aids from you?
Hudson: We have a very visible presence online. Our only marketing so far has been online. We are very aggressive and Lycos, Alta Vista and others send quite a bit of traffic to our site.
AO/Beck: Is the professional net traffic separated from the consumer net traffic on the website? And what will the audiologist find on the website?
Eagon: The sections of the site are separated. The professional needs to have special codes to access their side of the website. The professional side of the site has information about how to enroll as a provider, we have FAQs (frequently asked questions) and they can check out other professional benefits and referrals through us. For the providers who join us, we grant an exclusive territory in their area, which depends on rural, urban or suburban settings and we generate traffic to audiologists, which they wouldn't otherwise get.
AO/Beck: Is there an enrollment fee or any sort for an audiologist to become a provider?
Eagon: No, there is no fee; no charges go to the audiologist.
Hudson: It's also important to realize that we only send patients to credentialed, qualified professionals. We are not only selling based on price, although price is very important, but we help the consumer to know that their hearing health care provider is an approved provider. We offer a live chat for consumers during the day and that also helps the consumers feel comfortable with HearingPlanet.com and the professionals we refer to.
AO/Beck: So let's say a patient wants XYZ hearing aid at the best possible price, what happens?
Hudson: The patient decides on the hearing aid they desire, with or without our help, and then we will give them a price quote. The price includes the testing, the fitting, the instrument(s), a one year standard warranty with loss and damage, a one year supply of batteries, impressions and follow-up care for the 45 day trial period. We do not charge a return fee if the patient returns the instrument. They get a one hundred percent refund.
AO/Beck: What is your return rate?
Hudson: We are substantially below the national average. Our return rate is about 6 percent. We think it's lower than the national average for a few reasons. Our patients find us on the net, they are younger than the average clinic patient. Our patients are about 45 to 60 years old. Additionally, they have often worn hearing aids before, so they know what they're getting and they have reasonable expectations. Of course, they are usually receiving a lower price through HearingPlanet.com than they can get locally, so that too helps motivate the patient to keep the instrument.
AO/Beck: What about 'quality control' for the audiologists you work with?
Eagon: We definitely try to observe and verify the quality of our providers. In fact, we watch new providers closely to be sure our relationship is what we think it is and to be sure we're all on the same page. We'll speak with manufacturers, the consumers, other audiologists who are familiar with them, and sometimes we'll do so to locate a new provider in an area where we have an interested consumer. In that case, we'll follow-up with the patient to be sure the relationship was everything we had hoped for. But the bottom line is, we need to have excellent audiologists associated with us and of course we do what we can to assure that. Again, as I've been dispensing for ten years prior to working with HearingPlanet.com, I want to be sure our providers are doing everything they ought to be doing to maximally address the needs of the patients.
AO/Beck: OK, let's go back to pricing. Suppose the patient purchases a hearing aid that you guys charge $2345.00 for. Who pays whom?
Hudson: The patient pays us their entire fee. The fee they pay us is their total expense. We refer the patient to the local audiologist and we pay the audiologist directly. The fitting fee is a fixed fee per fitted ear and we pay it to you on the 45th day, which again, is the end of the trial period.
AO/Beck: What technologies and what manufacturers do you work with?
Eagon: Probably only 5 percent of our business is standard, non-programmable hearing aids. The vast majority is 85 percent digitals and the rest are programmable. We work with most of the major manufacturers. However, there are two or three out there who will not do business with us at this time, but we're hoping to overcome their objections in the near future. Basically, those companies have said they prefer not to deal with online hearing aid dispensing models, and we respect their viewpoint.
AO/Beck: All right gentlemen. Thanks for the explanations and your time this evening. I think you have an interesting idea. How do the audiologists get in touch with you if they want to learn more about the specifics about hearingplanet.com?
Eagon: They can certainly call me or anyone in professional development at 1 800-866-6240, or they can email me at seagon@hearingplanet.com, or they can visit the website at https://www.hearingplanet.com/provider.html
Eagon: I got my masters in audiology in 1990 from Ohio University in Athens, Ohio and was most recently working as a dispensing audiologist for a Nashville ENT before joining HearingPlanet.com.
Hudson: I got my MBA from Vanderbilt University in 1994. I started my career working with an investment bank in Nashville. While I was there, I developed two web-based properties for the bank. The first was their flagship site, and the second was for an institutional fixed-income group. So basically, I have developed web-based businesses prior to HearingPlanet.com and that experience has proven to be very helpful.
AO/Beck: How did the two of you get together?
Hudson: Actually, a manufacturer's rep introduced us. I came up with the idea in October 1999, but didn't go 'live' on the Internet until February 2000. A few months later it was apparent we needed to find an audiologist who could head up the professional development pretty quickly. We were fortunate that we were able to meet each other's needs at the right time. Steve joined us in July 2000.
AO/Beck: How many employees do you guys have at hearingplanet.com?
Hudson: Currently we have 8 full-time employees dealing with customer service and signing up new clinics.
AO/Beck: Where is the office physically located?
Eagon: Nashville, Tennessee.
AO/Beck: All right, with that as background, please tell me what is HearingPlanet.com?
Hudson: HearingPlanet.com is basically a branded network of hearing care providers across the country.
AO/Beck: How many clinics are working with you across the USA?
Hudson: We have about 950 independent, stand-alone clinics in our network. 85% of all offices are audiologist based. Geographically, by zip codes, we cover about 70 percent of the zip codes - so out presence is substantial. We operate in 49 of the 50 states.
Eagon: For some reason, we don't have anyone in Alaska - yet!
AO/Beck: Very good. So what is it that HearingPlanet.com offers that is unique and different from what is already out there?
Hudson: Great question. You are probably familiar with the vision model of 1-800-CONTACTS, whereby an individual can go online and purchase contacts. That's a little bit of a template for us. However, the hearing industry is quite a bit more complicated. Therefore, we are basically a referral engine. Hearingplanet.com refers patients (who have contacted us) to a provider in their area. That's the basic deal. We refer patients who have expressed an interest in buying hearing aids to a provider in their area. But we are also the collector of the transaction. That is, the transaction happens at our level. The patient pays us for the instrument and we pay the professional for their time, diagnostics and expertise to fit the instrument.
AO/Beck: How do you get to the consumer and why do they buy hearing aids from you?
Hudson: We have a very visible presence online. Our only marketing so far has been online. We are very aggressive and Lycos, Alta Vista and others send quite a bit of traffic to our site.
AO/Beck: Is the professional net traffic separated from the consumer net traffic on the website? And what will the audiologist find on the website?
Eagon: The sections of the site are separated. The professional needs to have special codes to access their side of the website. The professional side of the site has information about how to enroll as a provider, we have FAQs (frequently asked questions) and they can check out other professional benefits and referrals through us. For the providers who join us, we grant an exclusive territory in their area, which depends on rural, urban or suburban settings and we generate traffic to audiologists, which they wouldn't otherwise get.
AO/Beck: Is there an enrollment fee or any sort for an audiologist to become a provider?
Eagon: No, there is no fee; no charges go to the audiologist.
Hudson: It's also important to realize that we only send patients to credentialed, qualified professionals. We are not only selling based on price, although price is very important, but we help the consumer to know that their hearing health care provider is an approved provider. We offer a live chat for consumers during the day and that also helps the consumers feel comfortable with HearingPlanet.com and the professionals we refer to.
AO/Beck: So let's say a patient wants XYZ hearing aid at the best possible price, what happens?
Hudson: The patient decides on the hearing aid they desire, with or without our help, and then we will give them a price quote. The price includes the testing, the fitting, the instrument(s), a one year standard warranty with loss and damage, a one year supply of batteries, impressions and follow-up care for the 45 day trial period. We do not charge a return fee if the patient returns the instrument. They get a one hundred percent refund.
AO/Beck: What is your return rate?
Hudson: We are substantially below the national average. Our return rate is about 6 percent. We think it's lower than the national average for a few reasons. Our patients find us on the net, they are younger than the average clinic patient. Our patients are about 45 to 60 years old. Additionally, they have often worn hearing aids before, so they know what they're getting and they have reasonable expectations. Of course, they are usually receiving a lower price through HearingPlanet.com than they can get locally, so that too helps motivate the patient to keep the instrument.
AO/Beck: What about 'quality control' for the audiologists you work with?
Eagon: We definitely try to observe and verify the quality of our providers. In fact, we watch new providers closely to be sure our relationship is what we think it is and to be sure we're all on the same page. We'll speak with manufacturers, the consumers, other audiologists who are familiar with them, and sometimes we'll do so to locate a new provider in an area where we have an interested consumer. In that case, we'll follow-up with the patient to be sure the relationship was everything we had hoped for. But the bottom line is, we need to have excellent audiologists associated with us and of course we do what we can to assure that. Again, as I've been dispensing for ten years prior to working with HearingPlanet.com, I want to be sure our providers are doing everything they ought to be doing to maximally address the needs of the patients.
AO/Beck: OK, let's go back to pricing. Suppose the patient purchases a hearing aid that you guys charge $2345.00 for. Who pays whom?
Hudson: The patient pays us their entire fee. The fee they pay us is their total expense. We refer the patient to the local audiologist and we pay the audiologist directly. The fitting fee is a fixed fee per fitted ear and we pay it to you on the 45th day, which again, is the end of the trial period.
AO/Beck: What technologies and what manufacturers do you work with?
Eagon: Probably only 5 percent of our business is standard, non-programmable hearing aids. The vast majority is 85 percent digitals and the rest are programmable. We work with most of the major manufacturers. However, there are two or three out there who will not do business with us at this time, but we're hoping to overcome their objections in the near future. Basically, those companies have said they prefer not to deal with online hearing aid dispensing models, and we respect their viewpoint.
AO/Beck: All right gentlemen. Thanks for the explanations and your time this evening. I think you have an interesting idea. How do the audiologists get in touch with you if they want to learn more about the specifics about hearingplanet.com?
Eagon: They can certainly call me or anyone in professional development at 1 800-866-6240, or they can email me at seagon@hearingplanet.com, or they can visit the website at https://www.hearingplanet.com/provider.html
Steve Eagon, MA, CCC-A
Director of Business Development