June 2009 – Case Study: The Sights and Sounds of Multichannel Marketing

Songbird Hearing Inc. finds success the second time around through multichannel marketing. The disposable hearing aid company uses DRTV, online and PR to reach its target customer base.

By Vitisia Paynich

Sometimes, finding a fresh perspective might be the best solution for revamping a company’s marketing strategy. It also doesn’t hurt to have additional investment capital to help fine-tune the business model–just ask disposable hearing aid manufacturer, Songbird Hearing Inc.

After a few years of sluggish business, the Princeton, N.J.-based company decided to redirect its energy toward direct response television, online marketing and public relations in order to appeal to a more targeted consumer base. The restructuring has paid off handsomely, making it a leading competitor in the hearing aid market.

Sarnoff Corp. (formerly RCA Labs) invented the first disposable hearing aid in the late 1990s. “The mission at the time was essentially to take all of the hassle, inconvenience and expense out of purchasing a hearing aid,” explains Christopher DiCostanzo, president and CEO of Songbird. Thus, in 1997, Sarnoff launched a new business called Songbird Hearing Inc.

In its DRTV spot, making certain that the testimonials are authentic is very important to Songbird’s creative.

However, DiCostanzo says the new venture proved challenging. “At the time, the management of the company thought they would follow the disposable eye contact lens playbook,” he says. That plan, unfortunately, failed to deliver stellar results.

DiCostanzo, who previously worked for Johnson & Johnson, joined Songbird in 2002 as its vice president of marketing. And over the next couple of years, he saw the writing on the wall. The company generated fairly good business with the first version of the product–an inexpensive inner ear-style hearing aid–the problem was that Songbird lacked proper financing.

He explains that there just wasn’t enough profit margin. What’s more, the company had difficulties convincing consumers about the convenience of using disposable devices. “Buying a hearing aid back then was considered like buying a car,” DiCostanzo says. You’re going to buy some fairly expensive piece of merchandise in which a salesperson would need to navigate you through the process, especially if you’re going to invest anywhere from $2,000 to $5,000. “And then on top of that,” he notes, “you need scheduled maintenance, batteries and you’ll need to buy insurance–much like buying a car.”

In 2004, Songbird took the product off the market and went to work with some additional funding to “build a better mousetrap.” That meant bringing in a group of new talent to help improve the product and overall business model. DiCostanzo led the efforts to reposition Songbird Hearing Inc. from a professional to consumer products company.

A NEW DIRECTION
With the additional investment capital, Songbird developed a new disposable hearing aid, a behind-the-ear version, which is something DiCostanzo says the company wanted to bring to market for quite some time but didn’t have the funding. So the company launched the Songbird 400 Hour Digital Hearing Aid in August 2008 but this time with a more advanced direct response playbook.

“The big shift for us back in ‘04 was realizing that consumers don’t look at hearing loss as a medical condition,” says DiCostanzo. Instead, consumers merely consider it as just part of aging. He also points out that the hearing aid industry looks at fulfilling a medical need, as opposed to the consumer need.

DiCostanzo adds that the Songbird product is targeted to first-time users who aren’t ready to commit to everything that goes along with hearing aids. These are people with mild to moderate hearing loss who may not want to utilize the device on a full-time basis, much less pay an exorbitant amount of money for it. “Our product and the way that we now market it is uniquely positioned to communicate to those consumers and say: ‘It’s perfectly okay to come into hearing aids only wanting to use the product on a situational basis.’”

Ease of use was another selling point. The disposable digital device features a patented design that provides 400 hours of active use, and it can last up to six months. Customers can then just replace it with a new one. In addition, there are no in-office fittings, no maintenance and no batteries to replace.

Songbird later appointed DiCostanzo as its president and CEO. This gave the new executive an opportunity to surround himself with the people who could help him develop a sound multichannel marketing plan and build the Songbird brand.

“The successes and failures of ‘03 and ‘04 really helped us to hone in on the things that are the most important,” he says.

GOING MULTICHANNEL
One important goal for the company was broadening its marketing through a variety of channels. “DRTV is incredibly important to us to generate demand and drive sales, but we also market online and in print. PR is also an important part of our marketing mix,” says Ben Quigley, Songbird’s vice president of marketing.

When it came to the creative for its DRTV spots, Quigley says the company made sure it was transparent, straightforward and authentic. “So if you look at our DR spot, particularly the testimonials, we took great pains to make sure that the people giving testimonials spoke in their own words without prompting from the director,” he notes.

Quigley also contends that there are low-quality hearing products currently marketed via DR that might make others wary of the Songbird product, which has a hard offer of two payments of $39.95. To lower those barriers, the company is promoting a free trial (soft offer) so that people who may be skeptical about the technology can try the hearing aid without making a big commitment.

In late 2008, the company launched its short-form spots on various cable networks. Although Quigley says they have tested a little bit in the broadcast space, cable has been a better fit. “The nice thing about cable is that it’s pretty fractured–there are lots of channels that we can test without making a big investment.”

Songbird is currently working with New York-based ConvergeDirect to handle its DRTV media buying. The company has also aligned itself with other supporting partners such as The Logical Step of New Haven, Conn., which consults with Songbird on the backend; and Datapak Services Corp. in Michigan, which handles the fulfillment part of the business.

So, has DRTV been working for the company? “This has been a really tough economy, and there have been a number of prominent hearing aid companies that have had tough quarters,” explains Quigley. “But since we launched in October, we’ve been successful in growing the business. And in May, we exceeded some of our sales records.”

BUILDING AN ONLINE PRESENCE
Songbird hopes to keep up that momentum by continuing to focus on each of its respective marketing channels, especially on the web. Video streaming is very important to the company’s website. In fact, visitors can view the DR spot right on the homepage, as well as watch video testimonials.

The Songbird 400 Hour Digital Hearing Aid is disposable and lasts up to six months.

Another way in which Songbird is utilizing video is as an instructional tool. As Quigley explains: “Most people trying the product have no experience using a hearing aid. So, if you’re going to the sub-pages of the site, you’ve got video that’s coaching people on how to put the product on, how to adjust it; we want to arm people with that kind of information.”

Prospective customers can also access additional information about the hearing aid device by clicking the company’s FAQ page.

Quigley says Songbird also concentrates on pay-per-click and search engine marketing. In the online space, “we’re also doing e-mail marketing both as an acquisition tool for prospects and also for cultivating the relationships with our customers.”

He adds that because this is a considered purchase, prospects may need to think about the product in a couple of different ways and see Songbird several different times before they actually are ready to order. “And we use e-mail for what we call chase programs. These are programs where some people have called in but they are not quite ready to order; or they’ve come to our site but they’re not ready to buy, but they’re willing to sign up for our newsletters and to get updates. We use e-mail and offline mail to send them more information and give them discount cards and things like that to try to get them over the hump.”

PR GETS THE WORD OUT
Public relations is another channel that Songbird has actively utilized. The company currently works with Paramus, N.J.-based Rosica Strategic Public Relations.

“We’re using PR for two reasons: to try to drive sales and to drive credibility,” says Quigley. “We’ve been able to get reviews in The Hearing Journal and Prevention magazine. And we just got a really great hit on New York Newsday that was picked up by The Los Angeles Times and The Chicago Tribune.”

Quigley makes certain that any publicity that they receive in print is then brought back into the company’s marketing and advertising. For example, consumers can go to the Songbird site and access clips from publications and other media.

“So, being authentic and transparent by bringing elements in that can really support the fact that this is a high-quality product are really important in our creative,” says Quigley.

STAYING THE COURSE
With a new perspective and a marketing plan that seems to be working, DiCostanzo realizes that Songbird has a ways to go before it can achieve the type of success and notoriety that Apple and Sony have enjoyed. But for now, the goal is to simply be a key player in the hearing aid market. As DiCostanzo explains: “We’re trying to bring to the hearing-loss space what reading glasses brought to the eye care category.”