MarkeTrak VII 21 Year Trends in the Hearing Aid Market

1
MarkeTrak VII21 Year Trends in the Hearing Aid
Market
2
Method

• National family opinion panel
• 80,000 households
• Balanced to 9 key census variables
• Used since 1984 starting with HIA survey.
• MarkeTrak I Knowles 1988-2003
• MarkeTrak VII - Sponsored by Knowles Electronics
  at BHI 2004.
• Does not include institutional settings.
• Screening Question Phase I (11/2004)
• Does anyone in your household have a hearing
  difficulty in one or both ears without the use of
  a hearing aid?

3
Method

• Screening Questions
• Physician screening for hearing loss during last
  physical within last six months.
• Self, Spouse, Other, Child (Under age 18),
  Dependent 18-22.
• Hearing aid owner
• Non-owner
• 15,947 hearing-impaired individuals
• 66 response rate

4
Method

• Detailed Survey - Phase II (1/2005)
• 3,000 hearing aid owners
• 3,000 adult non-owners
• Response rate 75 77
• Detailed Survey Phase III (5/2005)
• 475 parents of children/dependents with untreated
  hearing loss
• Included essays from parents

5
Hearing Loss Population has doubled since 1984
and will reach 41 million by 2025
6
Hearing instrument adoption rates are improving
7
Hearing loss population 1989-2004. Active
hearing instrument users and non-owners.
Note Active user is defined as a hearing
instrument owner who uses their hearing
instruments even if only once a year.
8
Binaural penetration has nearly peaked
9
Physician screening for hearing loss is still
declining
10
Third-party payment trend is flat but VA is
growing
11
Average out-of-pocket retail price paid by
consumer (includes free, direct mail hearing
aids, all third-party discounts but excludes VA
fittings) --- close to inflation.
12
Some evidence that HIS fittings are increasing
(as perceived by the consumer)
13
Hearing instrument fittings by source of
distribution as perceived by the consumer ranked
in order of 2004 fittings
Note In the 2004 MarkeTrak hearing Aid store
was changed to hearing aid specialist office.
14
U.S. overall customer satisfaction trends for
hearing instruments 1-4 years old.
Note In 2004 the MarkeTrak scale was changed to
include somewhat satisfied and somewhat
dissatisfied.
15
U.S. overall customer satisfaction trends for new
hearing instruments (lt 1 year)
16
Average age of hearing instruments is increasing
Mean age of instruments 1991 3.1 yrs 1994
3.7 yrs 1997 3.8 yrs 2000 3.8 yrs 2004 4.5
yrs
17
First -time user rate is improving
18
Average age of new hearing instrument users is
increasing
19
And so is household income as digital sales
penetration passes 90
20
The opportunity is still below retirement age
21
Hearing instrument adoption rates highly related
to ageThis would make sense if hearing loss was
perfectly correlated with age.
Subject of special Childrens MarkeTrak
22
Trend Summary

• Population admitting HL grew to 31.5 million.
• Hearing aid adoption rate a stubborn 23
• Major increases in baby boomer and 75
  populations.
• Official Press Indices
• Generation Y Children (0-28) 2
• Children (lt18 ) - (1.4 million)
• Generation Xers (ages 29-40) 7.4
• Baby Boomer (ages 41-59) 14.6
• Silent Generation (60) 29

23
Trend Summary

• Physician screening 12.9 (declining).
• New User Profile
• New user rate still low (39 trending upward)
• Average age 70 years of age (trend toward older).
• Average income (56,000 trending upward)
• 6/10 people with HL are male though female
  population increased (15).

24
Trend Summary

• Binaural growth maxed out at 74 (86 for
  bilateral loss patients).
• 10 perceived reduction in use of audiologist for
  HA fitting.
• Highest growth segments
• Veterans Administration
• Internet and mail sales
• Out-of-pocket costs of HA to consumer at about
  the rate of inflation.
• Average age of instrument 4.5 years (trending
  upward) could reduce sales w/o new user rate
  improvement.

25
Trend Summary

• 1.23 million people with hearing aids in drawer.
• Customer satisfaction improving
• 73 for HI lt4 years
• 78 for HI lt1 year
• Due to 2 factors
• 50 digital penetration last 5 years
• Change in satisfaction scale (somewhat)