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Invisible Eargo 7 OTC Hearing Aids Compete with Premium Prescription Products
What’s behind Eargo’s strategy to be the highest-priced provider of over-the-counter (OTC) hearing aids?)
Veröffentlicht am Jan 24, 2023
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A pair of Eargo 6 invisible hearing aids currently costs a cool $2,600, hundreds or thousands of dollars more than most other entries in the new over-the-counter (OTC) hearing aid market. And while Eargo hasn’t yet listed the price for a pair of its recently announced Eargo 7 hearing aids, they are sure to maintain the company’s unique position as the highest-priced provider of OTC hearing aids.
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In an interview with HearingTracker, Eargo CEO Christian Gormsen said the company competes with makers of more expensive traditional prescription hearing aids by combining a unique OTC product with extensive customer support. Rather than competing head-to-head with low-priced OTC hearing aid makers, Eargo competes with more expensive custom hearing aids sold in clinics by audiologists and licensed dispensers.
While its prices are higher than other OTC hearing aids, Eargo aims to offer a higher level of service, with lifetime remote telecare support from its own licensed audiologists and dispensers. At the same time, it undercuts the prices of the premium solutions sold by in-person clinics while offering competitive levels of remote professional support, Gormsen said.
“Eargo 7 is a high-quality product uniquely designed for the OTC era,” said Gormsen, noting that Eargo products recently received FDA 510(K) approval as self-fitting OTC hearing aids. “It combines the high tech and high touch of high-end devices at a more affordable price point relative to competing hearing aids purchased through traditional channels.”
Eargo is known for its hearing aids that sit deep within the ear canal, with patented soft silicon ear tips designed for a comfortable all-day fit. Invisible prescription hearing aids that fit completely in the ear canal (CIC) are among the most expensive custom hearing aids available from audiologists. The company has competed with those prescription solutions since 2018 by packing advanced technology and performance into an extremely small package that it sells directly to consumers from its online store and through retailers including Best Buy.
Gormsen said the company’s seventh generation Eargo 7 hearing aids feature significant improvements over Eargo 6. Powered by a new sound-processing algorithm that enables very fast-acting noise reduction and feedback cancellation, they deliver improved benefits to users:
“Eargo 7 hearing aids enable fast adaption for speech clarity and comfort in noisy environments,” said Gormsen.
Like other truly invisible hearing aids, the Eargo 7's are too small to include circuitry enabling wireless streaming of audio and phone calls. But they do feature a Bluetooth connection to the Eargo app on your smartphone for programming updates and volume control.
Gormsen added that their invisible CIC design provides further benefits. Unlike hearing aids with microphones and processors that sit behind the ear, they sit deep in the ear and take advantage of the cupped-shape outer ear, or “pinna,” which efficiently guides sound waves into the ear canal. By approximating more closely the natural functioning of the ear, the design helps you hear the person in front of you and more easily locate where sounds are coming from.
The Eargo 7 hearing aids come with four pre-set user-selectable programs tuned for different levels of mild-to-moderate hearing loss. Then, through the product’s Sound Match feature on the Eargo smartphone app, you can tune them more closely to your unique hearing profile. Additional tuning is possible by creating personalized “environmental programs” for challenging listening situations such as restaurants or using the phone.
The company's hearing professionals are available at each step to help users with their fittings. Gormsen said this extensive online and telephone support has been critical for customer acceptance and success. In addition to the initial setup of their self-fitting programs, customers often need help adjusting them to get the best results as their needs change over time. That’s why the company offers lifetime remote support from professionals who can talk them through the fitting process.
He also noted that professional support significantly cuts down on product returns. Like many companies, Eargo provides a 45-day trial period. Statistics indicate that traditional hearing aids dispensed by hearing care professionals have a return rate-for-credit of about 15-20%, whereas some estimate that return rates for OTC hearing aids may be as high as 30%—adding substantial costs to hearing aid manufacturers.
“Anyone who knows hearing aids knows the product is only 20 or 25 percent of the solution,” said Gormsen. “Appropriate ongoing support is what leads to success.”
Selling through retailers can make it more difficult to provide the kind of customer handholding that high-end hearing aids require. For that reason, Gormsen said Eargo encourages retailers to promote Eargo’s ongoing telecare support when they sell the hearing aids.
He pointed to the November announcement of Eargo’s partnership with Victra, a Verizon authorized reseller with 1,500 retail outlets. Victra provides trained sales personnel and a point of sale for Eargo hearing aid consumers who want a brick-and-mortar retail experience. Its stores include interactive displays enabling self-administered hearing screening, demo devices, and educational content. But after consumers purchase Eargo devices directly in store, they can immediately follow up with Eargo’s telecare support team.
In December 2022, Eargo also inked a deal with NationsBenefits, a leading provider of supplemental benefits, financing assistance, and member engagement solutions for health plans. The partnership will allow health plan members served by NationsBenefits to use their plan benefits towards purchasing Eargo hearing aids while getting telecare support from Eargo.
“We’ve done a tremendous amount of work to provide our retail partners with the tools they need to support hearing aid customers,” Gormsen said. “Consumers deserve a world-class in-person experience that includes education, expert sales consultation, self-administered hearing screening, and outstanding post-purchase support.”
Gormsen said the company has closely monitored pricing of competing OTC hearing aids as they have arrived on the market. Several quality offerings have become available in the $800-to-$1,200 price range. For instance, Sony collaborated with WS Audiology, one of the world’s top five hearing aid manufacturers, to develop its CRE-C10 and CRE-E10 self-fitting OTC hearing aids.
Like the Eargo 7's, the Sony CRE-C10’s are invisible, completely-in-the-canal hearing aids that provide high quality sound processing. Priced at $999.99, they are among the few invisible high-performance OTC hearing aids available on the market so far. Like Eargo, they come with a smartphone app that makes initial fitting and user tuning easy but don't offer streaming of audio or phone calls.
The Sony CRE-C10's are less than half the price of Eargo hearing aids. But they are not rechargeable, requiring disposable number 10-sized hearing aid batteries instead. And while Sony provides good telephone sales support, it does not offer the extent of ongoing professional hearing health support provided by Eargo.
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Gormsen said Eargo’s rechargeability and lifetime professional support are important distinctions. He said that in addition to truly invisible solutions, customers generally prefer rechargeable hearing aids. And many who have utilized Eargo's professional programming assistance and ongoing support have become repeat buyers who don’t balk at the higher price, Gormsen said.
Providing extensive remote customer support along with high-performance products is expensive. To help deliver on the promise of its high-end strategy, Eargo recently completed an offering of common stock that netted $32.3 million in new funding to support its operations in 2023. The offering was backed by Patient Square Capital, an investment fund which now holds a majority of Eargo’s outstanding shares.
The transaction helped Eargo move beyond last year’s US Department of Justice investigation of allegations that it submitted improper insurance reimbursement claims to various federal employee health plans to pay for customers’ hearing aids. Eargo denied the allegations and reached a financial settlement that did not require an admission of liability.
The financing puts Eargo on a more solid footing to compete in the increasingly crowded OTC hearing aid market. As an early provider of direct-to-consumer hearing aids, Eargo was a pioneer in the long-awaited transition of the industry to over-the-counter sales. Now it is investing in both product development and customer support to pursue its strategy to succeed in the emerging premium-priced segment of the brand-new OTC hearing-aid market.
“It’s still early days,” Gormsen said. “But so far we’ve definitely held our own.”
HearingTracker audiologist Matthew Allsop just released this new feature review of the new Eargo 7:
David Copithorne ist ein langjähriger Blogger zum Thema Hörverlust und regelmäßiger Mitwirkender bei Hearing Tracker. Im Jahr 2002 erlitt er eine plötzliche und schwere Hörverlust. Seitdem hat er sich der Weitergabe wertvoller Informationen gewidmet, die er auf seinem Weg gelernt hat.
