HearUSA Banks On Exclusive AARP Contract To Put Hearing Aids In Millions Of U.S. Baby Boomers’ Ears

HearUSA may have found its key to success in retail sales of hearing aids with its exclusive contract with AARP, the 40-million member organization for Baby-Boomer Americans aged 50 and above. In its second-quarter financial report this week, HearUSA said the nationwide roll-out to AARP members that began early this year helped account for a nine percent increase in sales over the first quarter of 2010.

In the 23 years HearUSA has been selling hearing aids through company-owned retail outlets throughout the U.S., the company has struggled along with the rest of the hearing industry to effectively reach the 30-plus million Americans with hearing loss, including an estimated 10 million or more who have never tried hearing aids. Since signing a deal with AARP to provide its members with hearing-aid discounts and other services in 2009, HearUSA has aggressively marketed Siemens hearing aids to the 50-and-over set of hearing-impaired consumers through a hearing care network of nearly 2,000 independently practicing audiologists and hearing care professionals and its more than 180 company owned hearing centers throughout the U.S.

“We have seen appointments grow at an accelerating pace since we launched our AARP national advertising campaign, and AARP included the HearUSA program in its publications and web sites in the latter half of the second quarter,” said HearUSA CEO Stephen Hansbrough in a news release reporting second-quarter sales of $21.4 million. Although the revenue total is an increase over the first quarter of 2010, on a year-to-year basis it is still less than the second quarter of 2009, a decline HearUSA attributed to managed care insurance programs cutting back hearing-health benefits to their members in the past year.

HearUSA’s AARP distribution program is not an insurance plan but does provide AARP members with benefits including:

• 20% savings on a range of digital hearing aids
• 90-day money-back guarantee
• 3-year manufacturer warranty
• Free 3-year supply of hearing-aid batteries (a $100 value)
• Free directional microphones (a $150 value per hearing aid) for models that use them
• 1-year extended follow-up care program at no charge to AARP members
• Exclusive 15% discount on hearing healthcare products including hearing aid accessories, batteries and assistive listening products from HearUSA’s online store

Since scoring the exclusive AARP distribution contract in 2009, HearUSA has invested heavily in a nationwide roll-out of the program. HearUSA reported a net loss of $1.9 million in the second quarter, attributing much of it to more than a million dollars spent so far this year advertising the AARP program to drive the increase in sales through its hearing centers. “We expect this momentum to continue and believe that center revenues will grow between 9% and 15% in the second half of 2010 when compared to the first half, and our target is to grow center revenues 15% to 20% in 2011 when compared to 2010,” Hansbrough said.

It’s probably too soon to say that HearUSA and AARP have cracked the code on getting hearing aids into all the ears of the millions of Baby Boomers who need them, as market penetration rates continue to be lower than one would expect given the need. But it’s a good sign they are demonstrating that the right mix of incentives and awareness can at least start the ball rolling.