I was sitting in my office recently after being on the phone most of the day with industry executives and had an epiphany- “I’m right back where I was 15 years ago.” Literally!
Indulge me as I travel into the past– When I first started training in senior care, occupancy was hovering at 92-93%. New to the industry, but an entrepreneur for many years, I couldn’t wrap my head around the fact that executives were complacent with losing millions of dollars annually due to vacant apartments. It wasn’t uncommon to speak with an operator who had ten communities, each with 5-8 vacancies, that was losing over $2.5M per year as a portfolio.
When having these conversations, I would feel an intense sense of urgency to fix the problem by closing the revenue gaps…which of course put my company on the map and fueled its growth over the past two decades. In speaking to people I would put those dollars in front of them and challenge executives on their lack of urgency to recapture that lost revenue. Well, it worked and Zero Lost Revenue (the name of my book), became the norm.
Flash forward to the recession. Total panic! Occupancy dropped to 89% across the board and in some cases, much lower. I’ll never forget talking to leaders and my trainers who shared that traffic had come to a halt- with one; maybe two leads a week at most- it was a scary time.
I dug my heels in and hit the phones harder than ever, making a case for occupancy; despite the economic woes we all faced. In my gut I knew people still had to move. During this period of 2007-2010, we grew at crazy pace, adding trainers, coaches, speakers…helping as many organizations as we could to survive the Great Recession. Even more amazing? We proved our case…that people still moved in a recession. I was so tired of hearing that winter was hard on occupancy because people “don’t move during snow storms or the Holidays”…we had always proven that indeed, with hard work and follow up…they do.
During the recession we were able to maintain the same average client occupancy growth of 9.3% that we averaged prior to the recession (it dipped to 9.3% from 10%). This built my fortitude more than ever- we had a system that was weather and recession proof– further validating that with a great sales and coaching system, any community with a strong operation could get to and maintain full occupancy (without discounts) and most importantly change many lives.
So here we are, out of the recession and right back to the beginning, where we started all those years ago. Operators are once again complacent with 90-92% occupancy. In truth, I get the sense that they are just happy to have investors off their backs and their bills paid. It’s time to rest and recover. Really? It makes me nuts! Operators have systems for every department in their company- Dietary, nursing, the business office and maintenance; but sales, the engine that drives the business is left to chance. Meanwhile, capital is flooding our market, 100+ new projects are underway and rather than preparing for an influx of new competition, we are still recycling sales people who have been in the industry for decades and hoping they have what it takes to sell apartments. This is incredibly risky.
Every vacant apartment cost you at least $50K in annual revenue and worse, it means one more senior at home- who could be thriving at your community! How can you settle for mediocrity? Sense my frustration? Shop any community- we are right back to feature dumping or what I call “Show and tell.” Furthermore we are about to make the disastrous move of putting apartment prices on our websites, reducing our services and the work we do to a commodity you can pull off a Walmart shelf. We are more than that; we are true life changers for the seniors and families we serve. Isn’t it about more than price? Where’s the value? Or is it easier to just put prices on a website and set up call training centers- rather than invest in training sales teams for the long haul? We are in a people business- where families buy YOU and your promise, not the brick and mortar itself.
I was proud of the work we contributed to the industry, in really teaching the power of relationship selling, creating customer experiences and elevating the role of professional selling. While I’ve not ranted publically, after just speaking with Angela Neale, Divisional VP of Sales for Holiday Retirement, and hearing her exact frustration after mystery shopping a large portfolio, I couldn’t hold it in any longer. Your job of differentiating in a crowded market place is only going to get more difficult. If the focus is on holding at 90-92% while squeezing expenses to further drive the bottom line, you are going to find yourself blending in with the crowd- versus standing out and being a market leader, your sales team is going to continue to feature dump and give deals- because there is no need to really know how to build relationships and sell- to them it’s a simple numbers game, and your NOI is going to decline.
Look to the future…healthcare as we know it is changing. Hospital penalties are up to 3% for readmissions and trust me; this is causing them great pain. As a result, their leadership is beginning to get serious about setting up their network of care, to include post-acute providers (like you) who are the best at what they do, who can provide incredible service from first contact with the family all the way through to the care provided- ensuring those patients don’t return to the hospital.
The sales skills your team is using now when engaging families are what they will use to engage hospital leadership. Will feature dumping be enough to find the hospitals core needs and build value as to why your community- versus your ten competitors should be their exclusive IL, AL or SNF in their network? Think again. You will either be in the network or out and if your out- your business is going to suffer for it financially.
Competition, as stated is only going to be more fierce. Relationship selling, not feature dumping, is what’s going to set you apart and ensure you fill to capacity with a wait list- if you dare invest in your people.
Is this a wakeup call? Yes! As an industry, we can’t afford to go backward, we need to progressively go forward and that means making the sales experience one that is unforgettable, where wants, needs and desires are discovered, value built and move ins generated in high volume. This is a people business where relationships matter and we get to make a real difference.
I challenge you to pick up the phone and shop your own communities…if you dare. Discover for yourself what type of experience prospective residents and their families are having. In fact, contact me and I’ll mystery shop one of your communities, pro-bono, to give you much needed insight as to what’s really going on at your communities. If there’s one thing I know for sure, sales solves all problems. Want to sleep better at night- reach out to myself tbild@tracibild.com or Jennifer Saxman jennifer@bildandco.com to review your metrics and shop- let us challenge you and show you a better way to grow your business.
For more information on how Bild & Company can help advise with your sales strategy, please contact us →
To Your Success,
Traci Bild
