Podcast Transcription -Podcast Processing - The Monumental Marketing Swing Happening Right NOW

Hello and welcome to yet another episode of the Business of Hearing podcast and today I am probably tackling one of the juiciest, biggest topics that has been the most top of mind in my world for probably the last six months and I do believe once you understand what I'm about  to share with you in as much depth as I am, it will completely change the way that you look  at the future of hearing care where the industry is heading and where the opportunity is in order to dominate in the next 5, 10, 1520 years. Let's jump in.   

Welcome to the Business of Hearing podcast with me, Oli Luke, the podcast for entrepreneurial private practice hearing care clinic leaders, the ones who set benchmarks of excellence, build wildly successful businesses, grow their impact and navigate the choppy waters to spearhead the future of private practice hearing care. Thank you so much for joining us. Pour yourself a cup of tea and let's get stuck into this week's episode. 

So welcome along. Thanks once again for your ears and I've got stitches in my back as I'm recording this. I had, of all weird things, a mole removed earlier this week for hopefully nothing too serious but I completely underestimated what happens when a mole gets removed, especially of the size that it was. I've got six stitches across my back, which means every movement is obscenely painful right now so let me try and get in a comfy position for you because this is a big old topic and it's one that I've been talking to our inner circle members about for a long while now but I think the more you understand this and I think as a listener to the  business of hearing, you deserve the absolute best in terms of where the industry is heading. I think the more you understand what I'm about to share in as much depth as I'm about to share, the more you'll start to see the mass opportunity that the ones that get it have ahead of us. Many, many people in the industry are not seeing this wave coming, and as a result, they're going to be on the wrong side of it as I'll share in more details but if you can get ahead of this which I'm going to allow you to do in  this episode, I promise you, the opportunity that exists right now for any entrepreneurial clinic leader that understands exactly what I'm about  to share is monumental so let me walk you through this because I think there's a few key things to note. Now first of all, if you've been in the industry any amount of time, you'll notice that some of the traditional kind of marketing methods that have been around for a long time and have always traditionally worked have just changed over the past few years pretty dramatically. The obvious ones to go to are, is direct mail. Right?  Direct mail.  You used to be able to use a manufacturer, throw some mail at a zip code with some silly offer or an open house or something like that. You'd get phone calls, you'd sell units. It'd be ROI positive yet over recent years, that's become increasingly difficult, to the point that right now it's justifiably not the right thing to do like even just getting an ROI on it is hard. Knowing it's going to bruise your reputation locally is even bigger, but it's just not working the way it used to and similarly, coupons discounts like that used to be the thing that many practices used in order to get people through the door in order to sell them a set of units but once again, that approach is causing more damage than good and just not attracting people like it did lunch and learns. They just do not work anywhere near what they did. Just getting people to auto lunch and learn now is very, very difficult. I was having this conversation with one of our inner circle members yesterday. They've launched this very premium kind of dinner and demo set up for existing patients and they can't get anybody to attend. Nobody wants to attend yet. They have a great reputation, it's at a great restaurant, they have great relationships with their database and I think it's for the reason that I'm about to share with you but it feels like right now attracting private pay younger patients is incredibly difficult. Many clinics are relying on third party in order to bring people through the door or previous reputation, previous friend circles, referral circles and I don't know about you but the market feels like it's changed, right? Whether it's more competition, whether people are more hesitant to seek treatment, whether OTC did anything, probably not but something fundamentally has changed and I always find it interesting when I'm in conversations with practice leaders especially around kind of manufacturer marketing teams, because they don't quite know what to do because manufacturer marketing teams seem to have a playbook of certain manufacturer plays that they can do from a marketing perspective and it's usually direct mail coupons, lunch and learns and when those things no longer work the way they did, it's very interesting to see where the marketing skills really lie in order to navigate what is going on because the answer is not do more of it, do it different. As I'm about to share with you. It's not the actual modality of direct mail or newspaper or coupons or anything that's not working. It's a bigger, monumental shift that has happened. Now, let me share what that is with you, because this is a pretty big one so let me back up and tell you a bit of a story. Between 1923 and 1945, there was around 20 million babies born in the USA. That generation between 23 and 45 were labeled the silent generation and they had it really, really tough so from was it 1929? The Great Depression kicked in in that August, was it black Tuesday? Which triggered it so knowing that most children's views of the world and belief systems were adopted before the age of nine, you can understand why so many people between 1923 and 1945 grew up heavily influenced by the Great Depression. Many of them had to watch their fathers go to fight in the war, or even some of the older ones had to be drafted themselves and get involved in very, very messy, brutal wars as a result of a lot of this. As you can imagine, growing up in the Great Depression, there's a very much a financial kind of frugalness around this generation. They're the biggest user of coupons, and often they'll spend on necessity, but never or very, very rarely, on luxury. As part of once again, being so embedded in that war and the Great Depression and being brought up in that generation, there's a natural respect for authority unlike any more recent generation so what a doctor says is completely right. What the institution says is completely right. We'll trust the government, will trust the mainstream media. All that stuff is very true in that generation. Given much of this as well, there is a preference for more formal communications, whether newspaper phone calls, face to face and they've not particularly been technology adopters, right? They rely on children and grandchildren for research, help anything that way round when it comes to online but that generation between 1923 and 1945 have been your patients for the past couple of decades like that is the age of the people that predominantly need your services so it's not really a huge surprise, right, that many of the things that are not working as well as they used to are naturally aligned to that generation because newspaper advertising has traditionally worked well and of course, if the audience you're trying to reach being the silent generation, have a preference for reading newspapers and taking what's said in the newspaper as high authority, then that's going to make sense. Radio advertising, coupons and discounts, direct mail, many of these things that have worked so well in our industry, from a marketing perspective, to attract patients out of that generation. Of course, it makes sense, right? These are the things that go towards their set of preferences and their belief systems and these are the modalities in order to reach them. Now, many practices are continuing to do that stuff, seeing it not work as well and just think the market's changed, it's the economy, et cetera but that's the reason, right? It's the target has changed of who you're marketing towards. Not that anything else has changed but what's interesting is when you lay out this silent generation on a line graph for example, what we've got right now in 2024 is a pretty steep decline to there being next to non-people remaining of this generation over the next 15 to 20 years. At its peak, it was around 20 million people back in 2010. Right now, we're closer to about 17 million people in that generation that are still alive but if we jump ten years into the future, 15 years, we're going to be less than a few million existing. Now, for the practices that continue to market directly towards this generation via the methods that have traditionally worked then they're naturally going to be targeting a much smaller audience over the next 510 15 years but on top of that, they've got the dynamic that who they're caring for as their core patients are slowly going to diminish and they're going to struggle to get new people in order to replace them. It's going to put them in a very challenging position going forward as a business. Now, here's where this gets quite interesting because following the silent generation, we had the baby boomers, right? Born between 1946 and 1964. There's around 70 million of them in the US so that's a comparison of 20 million up to 70 million in the US. In the US, they grew up heavily during prosperity, right? It was post war, the economy was good, the world was good.  We had this natural big boom and that generation have been pretty instrumental in terms of quite a lot, as I'll come to in a moment but right now, if you look at the stats around them, it's pretty crazy so the baby boomers of the USA today hold 70% of all disposable income, which is huge. They currently own over 75% of all real estate wealth in the country and real estate. Estate wealth is like paid off houses, right? Mortgage cleared. They physically own the asset. They are very work centric. Many are defined by their professional career and are retiring far later than any other generation prior to them. One of their biggest category of spends is health and wellness especially right now. They're known to invest in experience and luxury so 88% of all premium travel purchased in the US is by boomers and they're big users of technology, right? Most use email daily, 82% are Facebook users, they conduct online research before buying online.  I suppose, similar preferences to you and I, regardless of your age, right? Like, they rely on their phones as much as us. They want to make a smart decision that aligns with their values and what they want from a customer experience perspective but this generation is dramatically different to the previous generation that we as an industry have been serving and it means the target of much of our marketing and efforts has drastically changed but let's just talk about the baby boomers for a minute because I just want to really force the opportunity here because they were born between 1946 and 1964 and what the baby boomers went on to do was pretty much turn everything that they touched into gold and I believe this wave is coming for the world of hearing care. In the 1960s, we had like Beatle mania, right? These were young baby boomers and music was their thing and naturally, the Beatles pretty much took over the world as a result of the huge number of boomers going crazy screaming for them. In the 1970s, we had the biggest used car market boom ever. 1973, seeing the most used cars ever sold in all records, it's still not been beaten as of today. In 1980s, there was a huge market boom in the housing market, even though interest rates reached as high as 18%. Naturally, the age of boomers meant a huge, huge housing market boom. In 1990s, consumers electronics went crazy so many boomers were at a stage where bought a house, having kids, two and a half kids, thirties, forties kind of age. Consumer electronics came out. They were big, big adopters of that and jumped straight on it. In the 2000s, we had the house renovation boom so the house renovation market went crazy. I think it was 2007 it reached its peak and it's only just been beaten now with a post covid boom of people spending money on their house following covid travel market went crazy so on average, boomers were spending, I think it was $4,400 for a memory per year on travel on a combination of three to four trips and once again, the big spenders on luxurious kind of premium travel were the boomers with 88% of all premium travel going through the boomer audience and then in the 2020s, what is interesting is by 2027, there's a prediction that the healthcare market is going to reach $7 trillion which is going to be a huge, huge boom but essentially everything the boomers have touched  has very much turned to gold and what's quite interesting is the line graph that I kind of shared with you of the silent generation diminishing once you lay the baby boomers on top of it. What becomes interesting is this boomer market is pretty phenomenal and 2024 very much is the crossover year so 2010, 2015, kind of next to no boomers then as soon as that's picked up from 2020 to 2025, all of a sudden the trajectory crosses over so there's more baby boomers right now than there is people of the silent generation in the USA and what's interesting, over the next five to ten years, that number is going to reach close to 70 million so the market is going to go almost 3.5 times the size than it is now of people who are potential candidates for hearing aids or over the age of 70 which is pretty, pretty crazy and where I think this is going, if I kind of lay out the opportunity that an entrepreneurial hearing care clinic leader has right now when they look at the market, I think we've got almost this trifecta of situations that have occurred that spell a huge, huge opportunity. First of all, we've got what I've just shared with you, right? The baby boomers. The market size is about to 3.5 x. This market that is coming into the market holds 70% adult disposable income. They invest heavily in health and wellness.  They invest in premium experience. They do their research online before making a smart buying decision that aligns to their values. That opportunity right now, in order to build a model that serves that market is huge and the market size is going to be huge if you can get it right and one of the most exciting things I think about that market size is you've got opportunity to charge and fee structure in a very, very different way than you have traditionally targeting a financially frugal audience. Boomers have been known to spend in unique ways, right? They'll buy obnoxiously premium items if it aligns to who they are or they're a member of the luxury market et cetera, as we've spoken about in previous podcast episodes but on top of that, they'll pay monthly for something.  They're open to slightly different fee structures that silent generation will have gone after where they just want to pay it upfront, pay it once, get it done, get it cleared, paying dollar bills et cetera, right? Very, very different. The other two dynamics which I think create this trifecta of opportunity is the significant transition of wealth that is happening right now so as of today in the USA, 10,000 people have retired or are retiring today and tomorrow it'll happen again and the day after, it'll happen again, because 10,000 people each day are reaching the age of 65 in the USA. What's crazy is 19% of these retiring baby boomers reaching the age of 65 are small business owners and small business owners, typically between one to $5 million per year in revenue. Now, here's where the big, big opportunity comes because we look at that and we've got 1900 businesses that are at a stage where the owner needs to retire at some point in the future but when their business is that big between the one to five no mark - very, very difficult to sell like no interest from “PE” funds, no interest private equity funds, typically no succession planning so there's nobody in the business that will buy the business and take it over and what the next kind of ten years really, really presents is this huge transition of wealth that is happening and the opportunity right now for entrepreneurial clinic leaders that will think big is they will be able to acquire many of their older competitors so if you've got competitors in your area that are at a stage where they're maybe sixties, seventies, at a stage where they're going to be looking to  retire but they're a relatively small clinic, one, two, three  locations, maybe less than five providers, and they have nobody in the business that wants to buy the business. That is going to be a very, very difficult exit for them to the point that you've got opportunity to create a creative structure in order to take that business off their hands. What does that mean? That means that you don't have to leverage a bunch of money. You don't have to go to the bank, you don't have to sign a big deal with a manufacturer like you could probably find a creative approach in order to take over that business whether it be an annuity deal whether it would be some form of way that you pay them on an ongoing basis so you pretty much bump up their pension in an agreement so let's say it could be, okay well, I'm going to give you 20% of the profits now for the next 20 years. It could be a case of I'm going to pay you X amount per month for the next X amount of years and you create an agreement that works to make their job of retiring easier, them feel good about it but you can essentially take on their business with no money down huge, huge opportunities around that, given this significant transition of wealth.  

The third dynamic in this Trifecta is the market consolidation that's happening right now.  Like manufacturer owned chains are acquiring so aggressively, practices are being pushed out of business who don't adopt and I think the opportunity to almost be unique in the marketplace now is greater than ever. Let me just give you a little more transparency on this because we know the likes of Amplifon are going aggressive. They leveraged €300 million in the summer of last year mainly for acquisition in the US and Canada and we've seen that a lot. I don't know about you if you've seen any of that but between them and WWS audiology, the gobbling up of practices is very, very interesting right now but there is being practices that are going to be pushed out of business as a  result of everything that's going on which I  think makes the market very, very interesting because once more manufacturer owned chains take over practices, more are pushed out of business, more in the  more generic practices are pushed out of business. If you look at a patient's decision, like when they look at the market, it's going to be like choosing between some dry crackers, some stale bread and a bowl of white rice, right? It's three very uninspiring options. The opportunity to stand out and be unique is so, so great in this and I think it's all around building a boutique practice is the way to go and take the lessons from the hotel industry, right? At some point, any independent hotel has had to make a choice over the past 20 years due to the consolidation in that industry. When the Hiltons and Marriotts want to buy hotels, buy hotels, buy hotels and create these monster groups that line the pockets of shareholders then an independent hotel has had to go okay well, I've got free options now. I can just sell to one of these groups and cash out. I can try and compete with the group at a similar price point. Similar price point, hotel but I don't have all the abilities that they have, all the economies of scale or the third one is I can be boutique, I can go premium, I can deliver a very unique experience that they won't touch and I'll attract some people who are right for me and I won't attract some people who are not right for me. I don't want to be the mass market model that a Hilton or a Marriott are and I think it's going to be much the same in hearing care, right? Especially when we look at these free opportunities market gets bigger, more disposable income people open to premium experience this transition of wealth if you do want to acquire practices or even asset strip them for their database and then the market becoming increasingly more bland through the market consolidation of manufacturer owned chains, the opportunity to stand out, pick your lane and be very, very strong in that lane and build a boutique practice is very, very exciting. I will add there is one big outlier here that we do need to keep a very close eye on and I believe that Costco has been preparing for this baby boom gold rush for a long period of time and the reason for that is the majority of their customers and what their value proposition's been around is pretty much high income suburban boomers. They've built trust with that audience for the past number of decades, right? It's like, come here, you'll get the things you need, we'll pass the discounts to you. We've got hearing aids as well. Costco have trained their customers to think they're the place to go for anything and feel smart about the decision and that includes hearing aids so that's the one thing we need to be careful of. I think Costco are so beautifully aligned for what's going on right now and I think the more education about creating a point of difference or the differences is so key but I think understanding what I've just shared all of a sudden changes your lens because right now I think there's a negative tone in the industry which is things are changing. Things aren't working as well as they used to and it's almost a blame on whether the economy or these factors are somewhat not within our control and that is not true. That's complete BS. What has changed is the market has changed.  Who you're targeting and who your potential patients are have changed and you'll speak a market to a 60-year-old or a 65-year-old or a 70-year-old, very different to a 90-year-old like we all know that but the difference between the silent generation and the boomers is night and day, the belief systems, the preferences of those two audiences. It's not the difference between marketing to a 20 year old and a 30 year old. It's the difference between marketing to someone with one strong set of beliefs and somebody else with one strong set of beliefs. Very, very different modalities require different messaging, different understanding of how they react to marketing, engage with marketing, make buying decisions, et cetera and this is a big thing that the inner circle and what we've been working on for a number of  years is very much building brands that are the natural  number one choice, that have a very, very strong value  proposition, that attract the right type of patients for them and we've pretty much mapped this out  now into a baby boomer blueprint and there's kind of six key areas that every practice needs right now.  In order to take advantage of this gold rush, you need to be very, very clear on why somebody should choose you so razor-sharp value proposition website with like a huge amount of evidence that you are who you say you are.  The very clear us versus them educational information and naturally all your online real estate secured.  You need to be able to create superfans so brand advocates people in the community that can share nice things about you and refer you within their friend circles so this is where social media and email newsletter, if applied with the right strategy, can work really well. You need that iconic local reputation so build referral partners with other local businesses through spotlighting them and many of the things we spoke about in the past positioned as the number one hearing care locally like being in the media, being press ready. Physician marketing needs to be done correctly, consistently, to position yourselves as somebody that touches on all their preferences of how they potentially refer and your website needs to really be that Wikipedia of local hearing care. That means that no matter what people go searching online around hearing care, hearing loss, hearing aids et cetera, you're positioned as the expert that is answering that question. The fourth big category that you need as part of the baby boomer blueprint is profit enhancers like you need to have treatment plans over hearing aids. You need patients to understand they need hearing care over hearing aids and ensure your pricing is set up correctly. Alternative pricing structures, kind of VIP clubs, monthly plans, adoption plans to acquire patients from manufacturer of their own chains or unsatisfied patients service plans for extra revenue so what happens when patients reach the end of their service plan with you, their warranty? What are the extra revenue opportunities?  You need to also consider convenience like how can you build your practice in order to attract boomers? There's a lot in that and then there's the areas where we've got the leaky bucket right. You need your automations to enhance patient journey. Strong tested, not sold process, continuous collection of evidence, all the never-ending story stuff to keep you front of mind with patients. There's so much in that and it's a lot of the work that we do with our members and it's not so much what you do, it's the way that you do it but these are the foundations that are needed right now. You cannot advertise yourself out of bad marketing. Throwing more money at Google Ads, throwing more money at direct mail, throwing more money at any form of magazine or newspaper insertion is not a way to get out of having bad marketing. You need to get your value proposition as sharp as possible and then prove it in all areas and get your foundations absolutely rock solid to attract the right types of patients because boomers are too smart to see through this. The silent generation, they seen a newspaper advert, they seen a direct mail piece. If it landed at the right time and you look somewhat trustworthy, you were their people. Job done. They'll call you up, they'll schedule an appointment, they'll come to you, and they'll pretty much eat out of your hands and do whatever you say. Baby boomers are very, very different, right? They see themselves as the smartest people on the planet and most of the evidence suggests they probably are. They want to do their own research. They're not going to contact you until they're confident that they've made the right decision and chose the right person. They're not contacting you for a chat. They're not going to respond to a newspaper advert because it's timely. They're going to do their due diligence, do their research, make sure you align to their values, what they're looking for, their buying preferences, et cetera. Only when they feel confident that you're their people will they call you, contact you, schedule and they'll probably come with many, many questions which means we need to get ahead of those questions, answer them  in advance, and have a good pre appointment process so I hate to break the bad news to you but none of this stuff is getting easier but the opportunity for the practices that want to do the work and the entrepreneurial leaders that can see the  opportunity and put the work in is monumental so, yeah, hope that's helpful. Hope it changes your perspective and view on what is going on. I'm so excited for the timing of our industry right now. I feel we're about to step into an absolute boom. I'm not surprised manufacturers are throwing money, acquisition and trying to buy their entire kind of supply chain from top to bottom.  There's so much in this right now. Expect more and more money to be thrown at our industry over the next several years because yeah, this baby boomer gold rush is not just a throwaway line. It's seriously, seriously huge. Not just more patience but more patients willing to spend more and willing to invest in unique and obscure ways compared to what we've been used to. So hopefully that's helpful. As always, if you ever listen to this stuff and you're like, I need help in order to get this stuff in place in my practice, I want to make this happen then you know where we are. We work with great clinics in order to ensure they're no longer the best kept secret and they've got a baby boomer blueprint very much implemented in order to take advantage of the mass opportunity that is coming but appreciate your ears as always, have a wonderful day and I'll speak to you again soon.   

And there we have it but before you head off to skip to the next episode or eagerly await for next week's, I have three things for you. First of all, if you've enjoyed what you've heard today and want to learn more about our exclusive inner circle to discover how 60 plus clinics are setting benchmarks of excellence in private practice, benefitting from a mastermind of North America's most successful practice owners and having an industry leading marketing team driving gold standard implementation, then go to www.orange-gray.com. That's orange-gray. There's not only a video there detailing how you can win in the next two decades in private practice but it also shares a downloadable PDF with no ask for email address or anything like that, that will explain exactly what becoming a member looks like. Second of all, I strongly feel that private practice is in a very challenging spot right now, where we're the David fighting against Goliaths, made up of large groups, manufacturer owned chains, Costco's and whatever the next heavily funded Whizbang online direct response consumer model will be. I'm a strong believer in a rising tide lifts all boats and the more private practice can fight back at scale, the bigger impact will make so please consider a friend, a colleague, or even a Facebook group, a LinkedIn group, etc. where you can spread the word about this podcast and third and finally, it may be a little thing but a five-star review hitting subscribe will ensure you automatically download all future episodes and help the algorithm to grow the impact of this podcast and at the very least, it will certainly put a smile on my face when I go and look at the numbers so I look forward to talking to you again next week. Thank you for your ears and I'll speak to you soon.