Strategy and businesses
Audiological Care business
Sonova’s Audiological Care business is a key contributor to the Group’s integrated business model, providing direct access to consumers and insight into their needs, elevating awareness of Sonova’s brands and their role in each consumer’s journey, and identifying potential candidates for Advanced Bionics cochlear implants. In return, Audiological Care benefits from the Group’s combined lead generation, marketing resources, and operational capabilities; it gains by being able to provide the full range of Sonova products and solutions; and it makes use of Sonova’s well-known heritage of audiological expertise to attract and retain the best talent.
Audiological Care represents the second-largest store network in the industry, with a clear path to further growth. We operate a global network of about 3,500 stores and clinics with more than 7,000 employees in 19 countries. Largely assembled through complementary acquisitions, the business is well advanced toward operating as a single platform with uniform best practice and globally shared systems, training, processes, and support functions.
Our market is evolving rapidly as a result of demographic changes and retail trends: we are seeing an acceleration of market consolidation, an increasing distinction between basic, high-volume solutions and high-value “medical” solutions, and further emphasis on the preferences of the baby-boomer generation for multi-channel access to services, advanced technology, and personalized care. Our strategy addresses these trends directly, opening paths to growth by anticipating and fulfilling changing consumer needs.
We differentiate our business through expertise: the skills of our audiologists, supported by a comprehensive product range and a broad service offering. We are able to offer exceptional expertise throughout the full network thanks to a cluster concept. This comprises excellence centers offering extended medical services – related, among other treatments, to tinnitus and balance therapy or cochlear implants – linked to satellite offices that provide quick, efficient standard testing and fitting, with straightforward evaluation for referral to the center.
Examples of excellence centers are our World of Hearing stores, already operating in the Netherlands and Denmark with additional countries to follow. They offer an immersive, information-rich consumer experience, backed by conversation with experts. The full range of Sonova products is on display and a specialist team is available to provide a range of medical treatments. The results justify the business case: higher conversion rates and premium product sales. We plan to open further World of Hearing excellence centers in selected markets in the future.
Key areas of activity
The continuing market success of Phonak’s Marvel technology has also been a success for Audiological Care, as its exceptional hearing performance and supporting apps give our consumers access to world-leading technology. With its immediate positive impact, “Love at First Sound,” Marvel is the ideal introduction to the full range of advanced Sonova solutions and a firm foundation from which we can prove our expertise. At the same time, we are aware of the demand for more accessible yet still fully featured products that allow us to serve the whole market; we have therefore introduced the AudioNova product range, exclusive to our store network, to complement Phonak’s premium brand value.
We have already set up a variety of channels for engaging consumers before the sale: social media and search engine marketing, self-screening kiosks at partner stores, online portals, and so on. Going forward, we plan to add additional tools to maintain engagement after the sale, including real-time personalized support anytime and anywhere for a seamless, omni-channel consumer experience.
Our consumers demand choice in how they work with us at every stage of their journey. The great majority wish to interact directly with a hearing care professional, whether in-store or by phone, at key points such as initial counselling or trying out a hearing aid. Some are comfortable with online resources, others prefer more autonomy and personal control – or are restricted to remote support because of COVID-19 related social distancing. That is why we have our omni-channel strategy: so that our consumers can enjoy a seamless and comfortable experience with us, regardless of how contact is made – and we can understand and anticipate changing consumer needs.
We are well along the way to full implementation of this strategy, building the necessary IT and data analytics capabilities. At the same time, we are in the fortunate position of having acquired in April 2019 a small company with a similar approach: Blamey Saunders hears (BSH), an Australian hearing health provider with a distinctive model that blends online, call center, and clinic. Acquiring BSH will give us valuable real-life insight into the omni-channel approach and marketing techniques for younger and for higher-spending consumers.
We have standardized our systems, training, and processes across the network – and in doing so, we have built in the means for continuous improvement. Our omni-channel model and the valuable data it generates will keep us flexible and responsive in our approach to the market. At the same time, we are taking the opportunity to optimize our structure, which still showed some of the after-effects of the many acquisitions that went into it.
We are committed to having a single store brand for each country where we operate, taking advantage of the “local champion” brand name to build awareness. Like our transition to uniform systems and processes, the now-completed transition to a single brand follows the same key principles in every country. We have also introduced the Phonak brand in all our stores and clinics, identifying our network with a highly respected name offering exceptional hearing performance.
We are completing this consolidation process in Germany, where we have gone from 25 brands and five legal entities in 2017 to one brand, one HQ, one ERP system and one local repair site in 2020, giving us market and brand leadership. The equivalent process in Belgium has delivered growth in net sales and operating margin while confirming our leadership in this market.
