3 Ineffective Strategies Used to Increase Net Operating Income

As a senior living CEO, the pressure is always on to increase net operating income.

Ensuring robust numbers means you’re always on the lookout for strategies that will improve efficiency, cut expenses, and boost top-line revenue.

However, it’s all too easy to choose the wrong—rather than the right strategies—to bring your numbers up.

What appears to be a solid strategy might merely be a quick fix, and that targeted solution can do little to address the real reasons behind your mediocre (or slumping) figures.

The secret to growth and stability lies in selecting the strategies that promote long-term success.

And, if you’re looking to increase net operating income over the long haul, you’ll want to avoid these 3 ineffective strategies that can look tempting, but lead to poor results…  

1. Overemphasizing Lead Generation

If you want to drive better net operating income, you know how critical it is to get the revenue flowing. And better lead generation is one key way you achieve this goal.

However, be sure you don’t overemphasize senior living marketing and outreach efforts.

If you’re the head of a larger operation, you might be tempted to focus heavily on email blasts, Facebook ads, and complex messaging strategies. Or, if you run a smaller operation, multiple outreach events and direct mail campaigns can appear to be the ticket to more leads.

While attracting leads is the first step to increasing revenue, don’t be fooled.

At Bild & Company, we’ve seen countless portfolios falter when it comes to managing and converting potential residents.

(Be sure to check out how we discovered 73 of 200 sampled communities had failed to follow up with phone inquiries in two weeks or less.)

If you want to improve your net operating income, you’ll need to avoid concentrating too much on generating leads. Instead, refocus your efforts on ensuring each community properly manages the prospects that come through their doors.

2. Focusing Primarily on Operations

Investopedia plainly states that net operating income…

“can only be increased by raising rents and associated fees or by decreasing reasonably necessary operating expenses.[emphasis added]

But while increasing efficiency across your properties has a direct impact on your NOI, don’t think it’s the magic bullet.

Improving operations can never compensate for poor top-line revenue growth. And no matter how much your executive directors save on operating expenses, you’ll eventually reach a point where you can no longer cut costs without sacrificing quality care and resident services.

Don’t merely focus on operations—be sure you select strategies that give equal attention to revenue growth.

3. Relying Heavily on Discount Strategies

But even if you’re a senior living CEO who recognizes the importance of increasing top-line figures, that doesn’t mean you’re boosting revenue in a way that supports long-term stability.

All too often, we see senior living CEOs endorse a revenue strategy that’s a temporary fix to deeply rooted problems—discount offers.

Don’t get us wrong.

Discounts and financial incentives can strategically support the value your properties offer and drive better net operating income.

However, you’re in dangerous waters when you rely heavily on financial incentives, such as…

  • Waived or discounted community or entry fees.
  • Delayed rent or free month(s) options.
  • Long-term or lifetime rate locks.

Any strategies that emphasize price—instead of your operation’s value—cheat your portfolio of profits and don’t address the underlying problems behind your occupancy struggles.

However, when it comes to increasing net operating income, it’s not enough to avoid these 3 ineffective tactics.

You need a comprehensive plan with the right strategies that drive long-term revenue and meet your growth goals.

And that’s where Bild & Company comes in.

With our expertise at your side, you’ll avoid pitfalls and chart a clear path toward occupancy growth.

To improve your NOI across your properties and gain a proven infrastructure that supports growth for years down the road, contact us online, or call us at 1-800-640-0688.

When you call, ask for Liz Simpson, and she’ll schedule a time when you can talk strategy with our CEO, Traci Bild, so you work on, rather than in, your business.

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