Hearing-aid specialist turns up the sales volume
FUTURE PROOFING - Bonavox:WHEN DANISH company Widex acquired Dublin hearing-aid specialist Bonavox in 2009, it decided against launching its own range of branded products into the Irish market.
Instead it held on to the company’s original name, which means “good voice” in Latin. After all, it has a brand recognition that money can’t buy, having been appropriated by singer Paul Hewson of U2 in the late 1970s. And it’s still attracting attention.
“We get about five people every day standing outside getting their photographs taken, and we give them out pens as souvenirs,” notes business development director Mark Campbell of their North Earl Street outlet. “It does give us international recognition but I’m not sure if it leads to any business,” he adds ruefully.
The company, which provides advice and treatment for hearing loss, tinnitus, ear-mould fittings, and rapid hearing-aid repair, has a long history in Dublin city centre. It was founded in 1967 by Bill Hennessy, who left the business in 2009 when it was acquired by Widex, one of the world’s top six manufacturers of hearing aids. Since then Bonavox has embarked on devising a new strategy, which it began implementing earlier this year. The concept is to sell the brand on a national retail basis, rather than via a wholesale/distributor route.
Bonavox will open a store in Dundrum in June, and has just opened a franchised licensee in Waterford. It’s also planning to open 25 outlets in association with local opticians and chemists around the country. Bonavox will run clinics in the outlets, offering hearing services and prescriptions carried out by its audiologists. “We would expect to double sales this year compared to last year,” notes Campbell.
This would represent significant growth for the firm, which expects to take on 15 people, from trainees to experienced audiologists, as well as marketing and back-up staff, to bring its staff up to 30.
Given inelastic demand, turnover for Bonavox was “constant” during the boom and bust, selling about 20,000 units per year. For Campbell, who joined the firm six months ago, it was this that attracted him, having spent 11 years building up Remax’s 82-branch real-estate franchise network here. “It was very attractive to me. It’s recession proof in the sense that people will need a hearing aid regardless of the economy,” he says.
But while Bonavox may have a strong brand name in Ireland, it is up against tough competition in the form of Hidden Hearing and, more recently, Specsavers. “They came in about four years ago and stole everyone’s lunch,” says Campbell, noting that Specsavers used its “very successful spectacle model” and applied it to hearing aids.
The outlet has also been impacted by the reduction in the PRSI grant. Up until last year, a grant of up to €760 was available for the purchase of a hearing aid every two years. Since January 1st however, it has been decreased to €500, and is now only allowable every four years. While it might be too early to ascertain how this will impact on future purchasing patterns, it has had an impact.
“People came in before the end of the year and we saw a big influx of customers,” recalls Campbell, as people rushed to avail of the higher grant level.
But the fact that it is now part of a multinational like Widex does offer another string to its bow. As Campbell notes, having the “very solid financial base”, as well as the “new technology” offered by Widex, will help position the company for further growth.
Indeed much like Bono and U2 have embraced the digital revolution in their music, so too has Bonavox in its technology.
“It’s all become digital and is all programmed on computers. It’s incredible the level of technology in the devices. Forty years ago hearing aids would have been just amplifiers, but now they are very, very advanced and offer a much more natural sound,” notes Campbell. Hearing aids have also become a lot more discreet, with the new “invisible in the canal” devices invisible to the naked eye.
However, one technological advancement that has not yet been reached is the ability to disregard batteries. As Campbell points out, they still need to be replaced every five to seven days.
And while the digital revolution may have enhanced the products Bonavox offers, it has yet to adopt the internet as a distribution channel. “I don’t think it would be possible to sell online. It wouldn’t be in our duty of care to sell it online because sometimes patients come in that have other issues, such as a tumour in their ear, and we have to refer them to their GP,” says Campbell.
“The end user of our products is also probably not the biggest internet user,” he adds, but concedes that “it is an area we need to develop a lot”, given that it is often younger people who take care of getting their elder parents hearing devices.