CH11. Is Seniors Housing Turning Male Buyers Off?

Is Seniors Housing Turning Male Buyers Off?

Why our core value today, performing the activities of daily living is what drives the business, could be our undoing with the baby boomer and beyond.

As I worked through Chapter 11 of Blue Ocean Shift, something kept bubbling to the top of my mind, MEN – WHY DON’T THEY BUY? 90% or more of residents within seniors housing communities are women, that’s staggering. Where are the men?

 

This leads me to challenge you, the executive who operates, invests in and develops seniors housing communities.  “Why do men fail to move into our communities?”

 

My gut tells me that the reason men don’t move into independent or assisted living communities is the fear of losing their independence. As I stewed on this a bit more, it created even more concern. Both the Greatest Generation and Silent Generations took pride in their traditional family roles where men were the breadwinners and provided for the family while women stayed home and cared for the home and family. In a way, women of past generations were used to being taken care of by men (or their husbands) – just don’t’ want to end on the word ‘of’.

 

COULD THIS BUBBLE OVER INTO A GENERATION OF INDEPENDENT BOOMER WOMEN?

 

If men don’t move because they wish to remain independent and only moving when medically necessary, HOW DO WE REINVENT THE SENIORS HOUSING DELIVERY MODEL TO MAKE IT APPEAL TO MEN AND HOW DO WE DEMONSTRATE INDEPENDENCE ISN’T LOST?

 

As we court baby boomers, my bigger concern when we try to fill the communities is that women are as independent as the men of this generation! Many have spent a lifetime pursuing careers and building companies. Like their grandfathers before them who worked outside the home, they will not want to give up that independence either.

 

Will the women buyer who consists of 90% of our customer base today make the same buying decisions as their mothers? I DARE TO SAY, MAKING THAT ASSUMPTION IS A BIG RISK.

 

Read any blog, article or whitepaper in our industry and it’s made clear that the boomers won’t be as compliant as the generations before them. We are ill prepared to sell to the female baby boomer and even more unprepared to sell to the male boomer. The good news is we have time and a decade to get this right.

 

 

DISRUPTION IS CREATED BY UNDERSTANDING HOLES IN THE MARKET AND A NEW POTENTIAL BASE OF CURRENT NON-BUYERS THAT COULD BECOME RAVING FANS

 

Blue Ocean Shift is about creating new market space, outside the current sea of competition; it’s about getting current non-buyers to gain interest and buy. How do we reinvent independent, assisted living and active adult communities in a way that screams independence, and that removes what I see as the single greatest barrier to getting people to buy?

 

As I ponder my 77-year-old father-in-law who once considered downsizing from his 5,000 square foot home, ultimately deciding against doing so, I pondered his life:

 

He works out every day. As a retired surgeon it’s critical he do so due to his back and all those years of bending over doing surgery.  He doesn’t work out in a small fitness gym with one person in it; he goes to LA fitness where there are lots of people. He also swims at the YMCA and in his own pool depending on what’s going on in his day. My husband and I always joke that he’s busier than we are and he’s fully retired! He also goes on 30-mile bike rides on the Pinellas trail several times a week, stopping for a delicious lunch before heading back; and he always has a friend ride alongside him for good conversation. My father-in-law goes on several trips a year, just getting back a couple weeks ago from Ireland where he did a seven-day driving tour with his wife and her daughter as well as my brother-in-law. He loves to go out to eat, visit the theater, play cards with friends and watch the nightly news.

 

The question to ask as an executive in seniors housing, whether you operate, invest or develop, is how do you get someone like my father-in-law to buy your product?

 

HOW DO WE GET OUR DREAM CLIENT, A 77-YEAR-OLD MAN AND HIS 75-YEAR-OLD WIFE WHO ARE HEALTHY AND VIBRANT TO MOVE TO OUR COMMUNITIES BEFORE THEY HAVE TO?

 

This is the real constraint of our industry. Once upon a time we had true independent living. There is a big hole where this used to be as we all know that it really is assisted living. What we see slowly taking hold in its place is active adult and luxury 55+ communities. Even so, will someone like my father-in-law make such a move? I still believe we have a lot of work to do; not just on the communities themselves but on the overall resident experience and lifestyle component.

 

There is no way that my father-in-law is going to give up what he sees as his freedom- to go biking, swimming, walking, tinker in his yard, mow the lawn, travel, go to concerts and the theater; to move into a one or two bedroom apartment in a senior living community with 99 other people over the age of 75 who rarely leave the community grounds.

The future may look very different, let’s face it!

 

THE TRUTH IS… OUR COMMUNITIES, DESPITE ALL THE COMMON SPACE AND THE ACTIVITIES OFFERED, IS NOT ENOUGH FOR THE NEXT ROUND OF BUYERS.

 

I can tell you without a doubt, true or not, it is PERCEIVED THAT SENIORS HOUSING IS RESTRICTING  – We do EVERYTHING for our residents!

 

How do you take an independent individual and say, “guess what, you are now retired, and we will do everything for you? We will cook, clean, transport and even plan your activities. No more yard to mow, repairs to fix, or big house to clean.” Is this what the customer REALLY wants?

 

SAYING THIS TO AN INDIVIDUAL, NO MATTER THEIR AGE, IS INCREDIBLY UNAPPEALING BECAUSE IT’S THESE VERY THINGS- COOKING, CLEANING, MOWING, FIXING, AND DRIVING THAT MAKE UP THE DAILY FABRIC OF ONE’S LIFE!

 

LET’S LOOK AT OUR MALE BUYER, SO MUCH INCREDIBLE OPPORTUNITY.

 

Take these activities of daily living away and ask what purpose is left for a man who has worked his whole life, raised a family, been active in the community and provided; only to see it go away slowly over the years as time marches on and his career winds down, his kids go to college, perhaps move away and start a family of their own. What he once knew is gone as he finds new purpose in his routine and instead, we offer to perform these daily activities on his behalf for a fee? I now get why men don’t move to our communities. It’s taken awhile but undertaking this Blue Ocean strategy has shifted the way I think; I’m seeing our industry from an entirely different lens than ever before.

 

While I don’t yet have the answers, I feel like I’m finally understanding the fundamental problem as to why 90% of people who inquire ultimately decide NOT TO BUY AND WHY MEN, IN PARTICULAR, RARELY DO.

 

Like men, I imagine women don’t want to give these things up either. My mother-in-law is as active, if not more, than my father-in-law and my own mother loves to clean her home and cook her meals. In the past, women were more accommodating. I don’t think we are going to see that with the boomer female.

 

 

HOW DO WE TAKE OUR SINGLE BIGGEST SELLING POINT AND LIMIT OR REMOVE IT FROM OUR SERVICE OFFERINGS? IT’S SO COUNTER-INTUITIVE!

 

Imagine if we demonstrated freedom and independence at every turn rather than dependence and a fear of losing one’s freedom. Would people move in sooner? Could we get back to a three to four year rather than a 12-18-month length of stay, effectively doubling our per resident revenue?

 

Let’s take a look at these ideas:

 

Idea #1

What if the activities of daily living (ADL) were the exception rather than the norm and it was the goal of a community to keep residents as independent as possible for as long as possible? Meaning every apartment came with a kitchenette, washer and dryer, dishwasher, pets of all sizes were welcome with lots of walking paths (none of my family members would give up their pets to move), tools could be checked out and even gardening tools for people wanting to work in the yard to spruce up the community!

 

Idea #2

What if there were sign-up sheets with projects residents could take part in from planting in the garden to assisting with dinner preparations from cooking to setting the tables?

 

Idea #3

Imagine if your residents could check out a community car for a block of time rather than taking the bus?

 

Idea #4

What care possibilities exist to where residents can use technology to take their own medications error free rather than having it administrated to them?

 

Idea #5

Imagine if, rather than touring a community and seeing that everything you currently do daily will be done for you, that life will continue to go on as it is in your own home? Could we even use these concepts to reduce overall staffing needs due to the facilitation of greater resident independence?

 

Idea #6

 

Taking it one step further, what if we dramatically reduced community living spaces and those unused gyms and private dining rooms; instead putting more apartments in the building with the ability to add more monthly rental income without taking any value away from residents?

 

CHECK OUT THIS REAL-LIFE EXAMPLE OF HOW A HOTEL, citizenM, TAPPED INTO AN ENTIRELY NEW, NICHE MARKET DISRUPTING THE SPACE AND CREATING RECORD BUSINESS PERFORMANCE

 

Among the Accolades Bestowed Upon citizenM’s Hotels, thanks to their Blue Ocean Move are:

“Stylish, high-tech and cheap!”

“An Overnight Revolution!”

“A Form of Religion!”

 

This Chapter presents a case study of citizenM Hotels (starting on page 222). As we all know, hotels are in very red oceans, with competition much fiercer than in seniors housing. In 2007, Michael and Rattan Chadha, the CEO and co-founder, and lead investors set out to open up a new value-cost frontier that would capture the growing mass of frequent travelers, mobile citizens, whether they were traveling for business, on a weekend shopping trip or to explore a new locale.

 

They wanted to create a new kind of hotel chain with a big blue ocean. To make this happen, they first had to understand why frequent travelers chose luxury hotels over three-star hotels and vice versa. They used the blue ocean Four Action Framework below to dive in and learn why mobile citizens made the buying choices they made.

 

FOUR ACTION FRAMEWORK QUESTIONS TO ASK

 

  1. Which factors does the industry take for granted that can be eliminated?
  2. Which factors should be reduced well below the industry standard?
  3. Which factors should be raised well above the industry’s standard?
  4. Which factors that the industry has never offered should be created?

 

The big question they took a deep dive into is “Why do travelers choose a five-star hotel over a three-star hotel?” After lots of discovery, despite all the factors the hotel industry competes and ranks itself on, it turned out that only three factors stood out as DECISIVE in determining why frequent travelers traded up to five-star hotels over those rated at three-stars: The meta-feeling of luxury and beauty they experienced there, the more luxurious sleeping environment and the hotel’s prime location. You’ll notice they didn’t say room service, the door man, front desk or concierge.

 

To turn these insights into clear actions and a concrete strategy, the team challenged itself to translate them into specific factors to eliminate, reduce, raise and create; pulled from the four-action framework, the very competitive hotel space.

 

Because the front desk, concierge service, bellhop and doorman were not important they could potentially eliminate those factors with little to no real impact on value for most frequent travelers.

 

Room size could also be reduced without a real impact on value as people rarely stayed in their rooms. Smaller rooms also meant being able to have more rooms per square foot of real estate space; creating greater yield. The team realized that to frequent travelers, luxury is a great sleeping environment not room size.

 

If they raised the quality of the sleeping environment by furnishing rooms with king-size beds, fine linens, good sound insulation, big fluffy towels and amazing showers (another big draw they found) then they could wow guest while keeping their cost per room much lower than the industry average.

 

They recognized new kinds of value they could create by eliminating the front desk entirely and using self-check in kiosks instead; eliminating lines. Without a front desk, concierge or bellhop, they realized there was no longer a need for a traditional lobby. Without a lobby, they had an abundance of empty space (sound familiar)?  Instead they created a communal living space where guests could eat, drink, meet, work and play 24/7 just as they do at home and made it incredibly beautiful and inviting.

 

In 2008, citizenM opened their first new value-cost frontier of affordable luxury hotel for frequent travelers in the Amsterdam’s Schiphol Airport. Soon after they began opening hotels in major cities like London, Paris and New York.

 

WHAT’S THE PAYOFF?

 

citizenM hotels:

  • Earn the highest guest rankings in the hospitality space, placing them in the fabulous and the superb categories, right along five-star hotels; yet they’re priced to be affordable to three-star hotels
  • Average occupancy is 90% and its total cost per room are 40% lower than the average four-star hotels
  • Its staff cost is a staggering 50% lower than the industries
  • They outperform all traditional players and its profitability per square meter is twice that of comparable upscale hotels

 

Just like citizenM Hotels, you too can use these blue ocean strategies to create a new niche within seniors housing – tapping into buyers who otherwise would not consider ever making a move. Take time to work ON versus IN your company this week. Never has it been more important.

 

One great idea to get engaged in the conversation and learn new strategies is to join the Bild Mission and Margin monthly newsletter and stay in the know. Also, register for our upcoming webinar Exclusively for Executive Directors and Asset Managers. We are offering 50% off for a limited time ONLY.  GET STARTED TODAY :

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