The decisions you make in the next six months for your seniors housing operation will determine your future viability. Never has our industry been in such turmoil with occupancy at record lows, staff shortages at historic highs, expenses off the charts, and operator-investor tension at its peak.
A single resource can solve these problems: cash.
Improved cash flow allows operators to pay more and attract quality employees, offsets expenses, and takes the edge off anxious owners and investors who have infused more than their fair share of cash the last 18 months to keep operations afloat. Operators have an abundance of revenue they have failed to tap into and in this blog, I’ll show you where it’s hiding.
Over two decades of advising seniors housing operators, developers, and owners on sales and marketing there has been one consistent truth: assisted living operators have an aversion to investing in sales.
Operators will dump hundreds of thousands into marketing and lead gen, drastically cut rates, pay third party referral agencies ten percent of first year revenue, and use costly call centers; diminishing per resident move in margins, but they won’t teach their salespeople to properly sell. The result is leads fall through the cracks, delayed decisions, and sales lost to competitors further diminishing your return on investment for those marketing funds spent.
In all my years of seniors housing sales and marketing expertise, I’ve never understood why operators have not made selling a priority. In study after study, it’s a game changer and the difference between a thriving or a failing organization. Sales is the engine of any business with revenue a reflection of the focus a company puts on selling. I understand that training employees to sell takes work and costs money. That you are fearful that once trained, those people will go to your competitors but that’s par for the course and a reality every great business must face. In today’s blog, I will show you the impact of that decision and provide the evidence needed to pivot fast. The year isn’t over; there is still time to net up and grow occupancy, revenue, and net operating income; and it all starts with your CRM.
When digging in to help an underperforming assisted living community turnaround, the first thing we do is dive into the database. We want to see what the real problem is first: is it lead gen or the ability to convert leads to move ins? Most often it’s the latter; lead traffic has been stable and for many operators higher than years past, with web leads off the charts. What’s problematic is how those valuable leads are managed or should I say, not managed at all, leading to millions in lost revenue annually.
Here is what we found in evaluating operator CRM systems in the U.S. the last six months of 2021:
Half of the people who inquired to assisted living communities, either online or via phone have not toured. The big question to ask is, “why not?” Without a site visit, those leads are not going to move, and even worse if they don’t tour, rarely if ever will they receive any follow up from the community resulting in a substantial number of lost leads.
When is the last time you picked up the telephone or inquired online to purchase life insurance, just for fun? Meaning you had nothing better to do with your time, so you googled life insurance and started making calls and inquiring via company websites for fun? I imagine your answer is, “never, are you crazy?”
Like life insurance, assisted living or memory care is a product (apartment) and service (healthcare) that people don’t want to buy, especially our customer, seniors, who see it as a loss of independence. When a caregiver or prospective resident decides to pick up the telephone and call or inquire via your website, it’s serious. Every lead is a hot lead and should be categorized as such until all efforts are exhausted, and it’s been verified the resident is not qualified due to care levels or true financial shortfalls, not assumed. While it seems this would be common knowledge, it’s not. The first thing salespeople do when responding to inquiries is attempt to qualify in hopes of vetting out who is worthy of their time. If it’s quickly deemed (meaning assumed) the lead is not qualified, the call will be rushed with an offer to send information via email.
Rather than diving in to find needs and build value regarding an on-site visit, sales and marketing staff perpetually seek out the quick, easy sale, leaving a substantial number of otherwise hot leads on the table. Every other lead is lost not because it’s unqualified, but because the people responsible for advocating for a move are not doing so and if you don’t get at least 75% of all inquiries to tour, you are missing revenue potential that is right in front of you. Without a tour, those leads are lost as you will see in the remaining statistics to be covered.
IMMEDIATE ACTION: Pull all inquiries year to date that have not toured at least once and invite them to visit, attend an event, or offer to drop off a meal. Click here to download our Established Relationship Community Connection Sheet and properly re-engage with people in your database with purpose.
Unless a prospective buyer in your database has moved to a competitor, there is still a good chance you can re-engage them and even advance a portion of those leads to close.
Contrary to what we see, it’s not the job of prospective buyers to court you; it’s up to you to pursue them. Vetting out assisted living or memory care is extremely complex and costly resulting in confusion and inaction on the part of buyers. That’s why it’s more important than ever to drive the process and demonstrate your expertise as a seniors housing operator. Every conversation with a prospective buyer must end with a defined next step: a second tour with another decision maker, financial review, or assessment; something that will keep the sale moving forward. Most importantly we want to make it easy for people to buy and driving the process is vital to this effort.
Buyers will do anything to avoid moving their loved one to a senior living community. There are so many emotions involved and complexities like sorting and packing a household, physically moving, and paying upwards of $5,000 per month. People will stall the process in any way they can- waiting for mom to improve, bringing in home care, or even moving her in with them until she turns a corner.
It’s up to you, the seniors housing operator, and your sales and marketing staff to advocate for seniors and to drive the process so leads advance to close rather than stall as half currently do. Of every 100 leads, 26.8 have no next step set in the CRM which means they will go cold or ultimately be lost. Unless there’s a crisis and those people take the initiative to call again, they are not going to move in.
With proper focus, you can reactive many of those leads and re-engage them in the conversation by reaching out and establishing that vital next step in the sales process. While it may be too late for many, if just two of those leads moved in, the effort will result in an increase in annual revenue of $240K over a two year stay. Have ten locations who concentrate on this effort and the impact is 20 new residents or $2.4M in increased revenue and cash flow over a two year stay, simply by focusing on the leads you already have.
ACTION: Pull all leads in your CRM that do not have a scheduled next step and schedule one. The same Established Relationship Community Connection Sheet can be utilized for these calls to improve outcomes and this must be a company-wide initiative.
Despite sales and marketing staff going through the motions and scheduling that next crucial step, 62.2% are not executed meaning those valuable leads are further ignored. While 26.8% of leads in an average operator’s database don’t have a next scheduled step, the 73.2% that do are all smoke and mirrors.
Seniors housing salespeople struggle with execution of follow up on leads they’ve already invested time with, instead focusing on the next person walking in the door. It’s a vicious cycle because those leads end up in the same situation; being ignored because well, the next lead just came in. If there was enough value to schedule a next step with a prospective buyer without question, that lead should be followed up with and nurtured. It’s frustrating because prospective buyers who reach out to assisted living communities are serious and in need of care.
Lack of lead review and consistent training designed to advance leads are evident in these numbers. Someone must own the database and stay on top of these holes or else they will only grow and fester. Imagine the move in impact on your portfolio if each community took the next thirty days and followed up on every single overdue task? There would be increased move ins resulting in increased cash flow.
ACTION: Immediately create a plan to block time out in each individual salesperson’s calendar to complete overdue tasks.
This must be the most frustrating statistic of all. Of 100 leads, 59.4 are coded as cold, are you kidding me? That means the person who inquired for themselves or their loved ones, who clearly had a need because no one calls assisted living for fun, have been determined to be unimportant and not worthy of consistent follow up. This is the result of salespeople who have not been trained to do proper discovery.
When prospective buyers call assisted living, most often they are on a fact-finding mission: what’s it cost, what is covered, and is there availability? Salespeople will provide this information along with current discounts and end the call with an offer to send information by email. If the person calling didn’t sound interested enough or lay all their financial cards on the table to a stranger they met just two minutes ago, marketing directors quickly code them to cold or not-qualified due to finances. There are an abundant number of leads in your database right now that are tagged as cold that are viable buyers who are financially qualified.
It’s more important than ever to keep all leads viable and active. No lead should ever be closed out unless it’s first discussed at standup or with an executive director who can challenge that assumption and offer alternative ideas. Unless they died or went to a competitor (and even then, a call in three months could result in a move in if that individual is unsatisfied where they are) they should remain an active lead with a confirmed next step. Being afraid of someone saying, “I’m not ready,” is simply not a reason to push follow up out for six to twelve months.
It’s fruitless to drive new leads if your sales team can’t close the leads they already have. This data is disturbing and before another dime is spent on marketing, you should stop and analyze your database. I am confident you will find similar trends and discover that there is gold if you are willing to mine it!