1. Customer Satisfaction with Single and Multiple Microphone Digital Hearing Aids Sergei Kochkin, Ph.D. Knowles Electronics January 9, 2001

2. Strategic Objective of Knowles Participate with the industry in a continued dialogue on factors impacting customer satisfaction. Customer satisfaction improvement - critical to growth of the market. Knowles conducted research on 25,000+ consumers. Customer satisfaction Subjective benefit Publication of journal dedicated to customer satisfaction: High Performance Hearing Solutions.

3. Previous MarkeTrak Customer Satisfaction Research Advanced technology enhances customer satisfaction: Programmable (digital or manual) Multiple memories Multiple channels Multiple microphones – directional hearing instruments (strongest factor) Non-linear signal processing (e.g. WDRC)

4. Previous MarkeTrak Customer Satisfaction Research Other important factors Volume control (some segments) Telecoils Completely in the canal instruments (CIC) Binaural hearing aids But what about Digital Hearing Aids? Now 18% of the market Smaller clinical studies generally positive

5. Digital Study Multiple manufacturer products were studied. Results of first large-scale study on satisfaction with DSP hearing aids: Single European based manufacturer 200 single mic (44% ITE / 56% ITC) 296 multiple mic (69% BTE / 31% ITE) Compared to 418 MarkeTrak (analog) norms Average age of instruments 7-8 months Consumer completed Knowles MarkeTrak survey 45 ratings of hearing aid and dispenser

6. Top ten correlates of overall satisfaction (in rank order) 1. Perceived benefit 2. Sound clarity 3. Value (price/performance) 4. Reliability 5. Use in leisure activities 6. Natural sounding 7. Use in noisy situations 8. Use in large groups 9. Use in restaurants 10. Use outdoors

7. Factors showing at least 10% improvement in customer satisfaction

8. Significant Differences Overall, Consumer Behavior & Dispenser Factor Single Mic & MarkeTrak Multiple Mic & MarkeTrak Multiple mic & Single Mic Overall satisfaction  Quality of life  Recommend HA  Recommend HHP  Repurchase HA  Wear hearing aid  Dispenser service 

9. Significant Differences Product Features Factor Single Mic & MarkeTrak Multiple Mic & MarkeTrak Multiple mic & Single Mic Fit/comfort Ease VC adjust.  Visibility  Packaging Freq. Cleaning Warranty Ease Battery Chg.  On-going expense  Factor in yellow denotes top ten correlate of overall satisfaction.

10. Consumer Need for a Volume Control

11. Customer Satisfaction is related to Need for a VC

12. Significant Differences Performance Factors Factor Single Mic & MarkeTrak Multiple Mic & MarkeTrak Multiple mic & Single Mic Benefit  Reliability Sound clarity  Natural sounding  Sound of voice  Soft sounds Loud sounds  Whistling/feedback  Factor in yellow denotes top ten correlate of overall satisfaction.

13. Significant Differences Performance Factors (Cont.) Factor Single Mic & MarkeTrak Multiple Mic & MarkeTrak Multiple mic & Single Mic Value (price/perf.)  Directionality Use in Noisy Sit.  Battery Life  Factor in yellow denotes top ten correlate of overall satisfaction.

14. Significant Differences Listening Situations Factor Single Mic & MarkeTrak Multiple Mic & MarkeTrak Multiple mic & Single Mic One-on-one  T.V. Small Groups  Listening to music Place of worship Outdoors  Leisure activities Factor in yellow denotes top ten correlate of overall satisfaction.

15. Significant Differences Listening Situations (Cont.) Factor Single Mic & MarkeTrak Multiple Mic & MarkeTrak Multiple mic & Single Mic Car Restaurant  Concert/movie  Workplace  Telephone Large group  Factor in yellow denotes top ten correlate of overall satisfaction.

16. Summary of Key Findings Single Mic DSP Multiple Mic DSP Overall customer satisfaction improvement (vs. MarkeTrak) +3%+17% Factors with 10%+ improvement (vs. MarkeTrak) 414 Top ten consumer factors improved (vs. MarkeTrak) 06 Net listening situations improved (vs. MarkeTrak) 4 Net performance/value factors improved (vs. MarkeTrak) -26 Significant differences (single vs. multiple microphone DSP) 114

17. Conclusions Performance in noise: Key reason why hearing-impaired do not buy hearing aids (MarkeTrak). #1 hearing aid improvement sought by hearing aid users (German study). #2 reason why 907,000 of our customers place their hearing aids in the drawer (MarkeTrak).

18. Conclusions Consumer studies now demonstrate the superiority of multiple microphone hearing aids over omni- directional only aids: Kuk (Hearing Instruments, 1996) - analog Kochkin (Hearing Review, 1996) - analog Schuchman, Valente, Beck, Potts (HR, 1999) – analog (double blinded study) Kochkin (Hearing Review, 2000)- digital Consumer research supportive of dozens of small clinic/lab studies or theoretical papers.

19. Recommendations Fit all qualified candidates with directional hearing aids (BTE, Full concha, half shell). Ask manufacturers to extend directional feature to lower priced product (not just high end programmable.) Completely automatic aids are tremendous feature for some, but not all, consumers: Make sure your patient can live without VC or directional/omni-directional switch. Lack of control could dramatically impact satisfaction.