The Secret Movement Evolving In Seniors Housing That Market Leaders May Not Want You To Know
How a global trend, the experience economy, can transform and inject massive growth and profitability into the Seniors Housing Industry
As you may have read in my recent blog or as featured in Senior Housing News, I recently visited Israel with my husband David. While there, I spent eight days on a bicycle riding along the Syrian, Jordan, and Lebanon borders, went to mass at the Church of the Holy Sepulcher, literally sitting in front of the tomb of Jesus. I spent a Friday night Shabbat with a family in Jerusalem and stayed two nights in a Kibbutz! I even spent an evening listening to an Israeli and a Palestinian share their differing points of view as it relates to the West Bank and Israeli citizenship while remaining champions of peace.
I’m part of a growing trend that is happening all over the world; the quest for a great experience. I don’t want to just travel; I want to immerse myself into the culture I’m visiting. While I could have went on a bus tour or cruise seeing all the top travel sites, there was something magical about riding my bicycle along the backroads, cruising in a jeep along the Syrian border with the top off, standing on the seats and listening to the stories of our local guide, who was barefoot and had so much passion about his country that it oozed from his soul. I didn’t want to visit Israel, I wanted to experience it!(By the way, Dave and I were the youngest people on this trip, the rest were Boomers)
Many people, of all ages, choose to spend their money on experiences over things. People want to feel something and experience all the world has to offer and with the rise of social media, they want to share those experiences with the world. Seniors housing must begin to adapt to gear independent and assisted living as well as active adult and life plan communities to today’s modern customer. They value experiences over things and expect the businesses they frequent to empower and assist as they navigate modern life. While seniors housing has yet to do it; those who do so in both the sales process and customer journey, will transform the industry!
The experience economy is the idea that products and services can outcompete by creating an experience that customers value. In an economy where many products and services have become a commodity, experience is a valuable competitive advantage.
WHAT’S AN EXPERIENTIAL WORLD LOOK LIKE AND HOW CAN SENIORS HOUSING DELIVER ONE?
The world is chock full of products. With the click of a button you can purchase anything you want which has essentially driven down the value of “things.” Every age bracket and socioeconomic class has moved toward offline experiences for personal fulfillment and it’s affecting traditional business models all over the globe. Experiences help us learn, grow and connect with each other, so it’s no surprise we choose to spend our money and time on them.
Take these examples for instance:
- Red Bull built its global empire on allowing people to experience the personality of its brand (surfing, air racing, bullfighting…).
- Lululemon builds community by offering free yoga classes in its stores.
- Patagonia and REI both focus on experiences – trips, hikes, and classes – as core parts of their business.
When I was in NYC, I was invited to see the play, Sleep No More, an award-winning theatrical experience that tells Shakespeare’s Scottish tragedy. Surprisingly, I didn’t sit in a seat and watch the play, I was literally immersed into the play itself and at times felt humor, fear, disgust and sadness. I was literally thrust off an elevator and trapped on a floor of a “hospital ward” by myself for an hour, until I found my way out! I experienced this play firsthand and it will forever be imprinted on my mind. Not because I loved it, but because of the experience itself. I still talk to people about this because I’m unable to get it out of my mind. Talk about brand impact!
These experiential initiatives create emotional bonds between consumers and brands, frequently having ten times the return on investment compared to digital marketing and building measurable loyalty.
TIME TO PIVOT: WHAT IS SENIORS HOUSING SELLING?
We must start with the question of “What are we actually selling?” because it’s changed. It used to be skilled nursing care, where people had to move; then it became residential assisted living where people needed but didn’t have to move.
Today, we are at a crossroads; Boomers don’t have to move, nor do they need to. With the rise of technology, many can age in place within the confines of their own homes. In the next five to ten years, they will have more options than ever.
Seniors housing must focus on creating an environment where people want to move because the experience of doing so far outweighs that of not doing so. The question we must ask is WHAT’S IN IT FOR THEM?
I believe Experiential Living can give seniors housing operators an edge. It’s something tech and even home health really can’t do. We have the infrastructure in place from the physical plant space and staff to transportation and deep community connections. Every great thought starts with an idea.
The question to answer is,
How do we leverage our assets to grow market share through experiential living?
YOU NEED TO ASK: WHAT IS IT OUR COMPANY IS SELLING?
Think carefully when answering this question and then ask, how can we deliver what we sell differently than we are today, in a more experiential way? How can we open this experience up to individuals outside our community and in turn create a feeder within a 15-mile radius?
While I don’t have the answers, I believe the experience needs to be around preventative health and socialization based on where I’m seeing the research move. The answers will come by asking the right questions.
Here are a few I’m pondering:
- Why would my mom, who falls regularly and is in consistently declining health leave her beautiful home, where she lives with her cat and dog and loves her neighbors; is five minutes from my home where my kids can ride their bikes on the trail to see her whenever they want, move? What’s in it for her to move to your community? While I know it would be a brilliant move for her, there is no way she will even consider it. What type of experiential living would entice her and make her say yes?
- Our dear friend Warren passed a year ago (I often spoke of him in my seminars) and we tried diligently to get him to move to an assisted living community. He was 87 years old, a former navy pilot (and badass) who had lost his wife of 50 years, loved war movies, red wine and cruising in his red convertible. He was lonely and would at times drive to our home and ring the doorbell out of the blue because he knew he was always welcome. Why is it he didn’t move until he had to and then it was to a skilled nursing and rehab where he spent the last month of his life. What type of experiential living would have caught Warren’s attention and perhaps even extended his life?
- My mother-in-law is interested in a life plan environment, but my father-in-law is not. In their late seventies they are avid theater goers, into health and fitness, foodies, love a good bourbon and to travel. What type of experiential living would make them reconsider together the value of making a move?
This is our barrier. Not only do we have to deliver it, but we must learn how to communicate it in the sales process, in our marketing and in customer journey. This must begin with your employees first, then trickle over into the buyer experience and ultimately the resident delivery experience. That’s a lot of work but the rewards are tremendous especially in an industry like Seniors Housing which is ripe for disruption, innovation and change.
REVENUE MEETS EXPERIENTIAL LIVING FOR A WIN-WIN
One of the fastest ways to grow your revenue and NOI is to upsell existing customers. I’m certain most of your residents and their adult children would happily spend more on curated experiences that enhance their quality of life if they were available. While they may not want to spend more on monthly rent, it doesn’t mean residents don’t have disposable income to spend on events and services offered through the community.
I live in Clearwater, Florida and we have a historic hotel, the Fenway that was recently renovated. Built in 1924, Fenway Hotel is an icon of the jazz age. Throughout its time as an operating hotel, the Grand Lady of Dunedin hosted explorers, artists, politicians, musicians and more.
They have nailed the art of transforming a standard hotel, where guest come to stay – to one where guest also come to have an experience by immersing themselves into the hotel’s historic environment. If you look at their calendar, people can choose from Afternoon Tea Service (which I signed up for along with four friends) at a cost of $30 per person, a Book Club on the Veranda which is free, and Tasting Notes with Wine and Cheese for $35 per person. All events, if you review them are experiential and while some are free, most are not. If just 200 people signed up for any of these events, it’s $6,000 in ancillary revenue per month going straight to the bottom line or another $72,000 per year. Being that most of these events are sold out, I imagine the impact is must more. They also transformed their roof top space into a speakeasy where patrons can order cocktails from time past while watching the sun set on the Gulf of Mexico, adding yet another revenue stream. Think about the possibilities for your community!
TRANSFORM AN UNUSED SPACE INTO A REVENUE PRODUCING EXPERIENTIAL OPPORTUNITY
Consider what underutilized space you have that can be transformed into an experiential environment for residents and that generates additional revenue for the community. Would a revenue producing spa be more useful to residents than a gym that sits empty?
Could you create non-revenue producing walking trails inside (and outside) the community with mile markers that motivate residents to keep going and even offer rewards along the way with the goal to facilitate a community walking club simply by leveraging existing floors?
Imagine the impact of this on the buyer experience as you tell stories of residents who couldn’t walk a mile upon starting and that now are up to five miles a day?
What about rooftop space? Is it possible to convert it into a social environment where residents can listen to local musical artist, hold poetry readings, stargaze and drink cocktails (perhaps your own speakeasy)? Truly, the sky is the limit and you have a blank slate with a tremendous number of assets to leverage in a way that can forever transform lives sooner in the aging process.
Lots to think about and we will dive in with our next executive book club study to begin in December as we learn more about the customer of the future. We will be launching our strategic retreats in Q1 next year where we invite a small group of executives and leaders to strategize their goals, initiatives and market positioning. We’ll discuss pricing, marketing, customer experience, sales strategy and innovation during a two-day strategic retreat. There’s absolutely no other event that will walk you through the strategic process like this one!
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Traci Bild is available to keynote at your next event or to facilitate an executive master mind retreat for operators and investors, bringing alignment where it may not currently exist. Click here to book a call to discuss your future needs