The Discipline of Market Leaders and the Independent Audiologist

Author:Brian Taylor, Au.D.

If the energy displayed at the recent ADA meeting is a good proxy, we are poised for some significant growth in the near future. The advancement of our profession depends a lot on the success of independent audiologists, who are the leaders of the ADA and it’s 18 x18 movement. Our entire profession stands to benefit from the courageous leaders at the forefront of this movement. Beyond the politics of change, however, I’d like to plant the seeds of a business strategy that could transform the role of the independent within the marketplace.

Big-box retailers and other large corporate entities are formidable opponents for the independent audiologist. Their high in-store foot traffic, economies of scale and buying power allow them to excel operationally. This has proven to be a highly successful business model that certainly has a place within the hearing care marketplace, if for no other reason, there is a segment of the market desiring this type of delivery model. The operational advantages of the big-box retailer, however, may also be its Achilles heel, as it is nearly impossible to deliver an extra-ordinary level of personalized care & service in the relentless pursuit of low-price leadership and efficiency. It is the ability of the independent audiologist to make deep and lasting connections with patients suffering the long-term effects of hearing loss that differentiates an independent practice from big-box chains. Experts agree there is always a substantial number of consumers in any market desiring highly personalized service and an independent practice – who truly understands the delicate needs of the individual suffering from hearing loss is the best equipped to deliver it.

As Figure 1 shows, businesses can create customer value and create a competitive advantage along three distinct dimensions: product leadership (the best product), operational excellence (the best total cost) or customer intimacy (the best total solution). This theory is known as the discipline of market leaders and it has been incredibly influential in a number of industries. It’s time for independent audiologists to apply this theory to their businesses. Research has shown that market leaders make a deliberate choice to be the best at just one of these three dimensions, while offering an acceptable level of competence along the other two dimensions. The most successful businesses make a conscious decision, after carefully assessing their marketplace, to offer unprecedented and unique value along one of these three dimensions. Regardless of your chosen discipline, customer satisfaction, word-of-mouth referrals and profits are the by-product of the execution of this strategy.

Figure 1. The three dimensions of customer value according to the discipline of market leaders theory of business. Source: Treacy and Wiersma, 1997.

In order to compete in win against the growing presence of big-box retail chains, it is imperative for the independent audiologist to put customer intimacy at the center of their value proposition. After all, it is the personal guidance and expertise, tailored to each individual that you see that sets the independent apart for others offering a similar service. In order to bring to life the customer intimacy value proposition, practices must provide a more compelling patient experience that stands out from the din of ordinary. A systematic review of several businesses1 – many of them outside the hearing care marketplace, reveal that the most significant driver of a customer intimacy strategy is the ability to achieve pillar-of-community status.

Independent practices are uniquely qualified to become known in their marketplace as a pillar-of-community. A pillar-of-community means that three distinct and vital groups of individuals look to you for insight, support and wisdom for all matters related to hearing and communication. These three groups are shown in Figure 2. Rather than building your brand around the delivery of hearing aids, practices that have achieved pillar-of-community status are known for their high level of professional engagement with patients, key influencers such as primary care physicians as well as the general community. Let’s look a little more carefully at those three distinct groups.

Regardless of the size of your market, there are likely to be several other independent businesses. The pillar-of-community mindset allows you to reach out and establish a network with all small, independent community businesses, from the local flower shop to the local barber. All independent business have more than a few things in common. Unlike big-box retailers, independent businesses are involved in all aspects of service delivery, from the negotiation of price with their vendors to interaction with customers to washing the floors. This level of involvement is a natural path to developing a support system with other likeminded independents. This support system is often an avenue for receiving word-of-mouth referrals because independents are naturally inclined to support their fellow independents.

Figure 2. The three groups an independent must know in order to achieve pillar-of-community status.

One important core group of community members are primary care physicians (PCPs). Given the rise of Accountable Care Organizations, PCPs are playing a more active role in orchestrating the care of patients. This is especially true of patients who are more likely to need the services of a hearing care professional; those that are elderly or suffering from a co-morbid, chronic medical conditions. Independent hearing care providers have the agility to foster deep, long-lasting relationships with PCPs, and this advantage will only become more pronounced as healthcare policy continues to rapidly evolve. Every business enterprise must make conscious decisions about their competitive advantage, quality of their service and price. Big-box retailers tend to pursue a competitive advantage through scaling and buying power. In their pursuit of scale, quality of service is achieved through standardization, while buying power is used to optimize their profits. Independent practices, on the other hand, must operate differently. The natural advantage of the independent is their holistic approach to running their business and the heart of a holistic approach is the ability to form deep, long-lasting relationships with these three groups.

If independent audiologists wish to differentiate their businesses from big-box retailers, it is imperative that they do things differently. It is no longer enough to simply be an expert at dispensing hearing aids. Although that is certainly a critical task, independent audiologists are urged to step away from their audiometer and get into the community to work directly with the three core constituents listed above. Our profession depends on it.    
1 Treacy, M & Wiersma, F. The Discipline of Market Leaders. Basic Books: NY, NY, 1997