Leverage Weekly Data Findings to Enhance Your Business Performance.
We are in an industry that is obsessed with data. I must admit, I love consuming and digesting it too! To see where and how seniors and their families find our communities, from independent and assisted living to life plan and active adult- to how long it takes from the moment an individual visits a website, to scheduling a tour, or moving in; it’s all valuable information. Yet what perplexes me is that we know everything about our consumer except how to get them to make a move into our communities. The fact that just two out of ten inquiries result in a move in should set off alarm bells. Even more disturbing is the buyer experience and the subpar service provided to people who inquire to learn about our communities.
Does that concern you? While occupancy rose from 78.6 % in 2Q21 to 80.1% in 3Q21, at this pace seniors housing owners aren’t going to see margins for sometime. In fact, according to G5, out of 34,789 senior living communities, 19,456 operated at a loss; that’s 56% of all communities. While the impact of the pandemic is very real, so is the pent-up demand that owners and operators seek. Operators have done an incredible job pivoting and responding to the pandemic, to meeting the needs of its residents; saving a lot of lives. Now it’s time to focus on recovery and rebuilding occupancy, revenue, and the valuation of our seniors housing communities. The single most direct path to success is to grow move ins and top line revenue. While lots of people are scratching their heads, trying to figure out how to gain momentum, it’s pretty cut and dry: Help seniors and their families get what they want and to understand what that is takes skill.
Each of your seniors housing communities is its own business asset, generating $5,000,000 plus in annual revenues. For this reason, it’s vital that the individual responsible for sales and marketing outcomes manages the sales and marketing department in conjunction with operations. Farming this critical responsibility out to a regional sales director who is in another state and overseeing ten to fifteen other communities is a big mistake. Historically regionals have been stretched incredibly thin and not given the authority needed to drive results. While there are great regionals, effective ones are exceedingly rare. Most are set up for failure due to the size of their region and scope of responsibility. Add to this a tenure of just two years or less and it’s impossible to get traction.
A bigger concern is that on average, seniors housing communities are losing $1.2M per year due to vacant units. This is your margin and the engine of your business, that no one wants to manage. Something must change because doing more of the same is going to keep our industry in a fiscal crisis for years to come. Can you imagine a hotel general manager being responsible for every department except sales, occupancy, and revenue or sales directors responsible for booking corporate events that generate $50,000 to $100,000 in revenue who fail to return inquiry calls, talk to prospective buyers who have a date and budget but never follow up, and then at the end of the month state that the leads that came in weren’t qualified? What we do is more important and lifesaving for seniors yet owners and operators continue to ignore the failures at the site-level within the sales function and buyer experience.
A core business service we provide at Bild & Co is the training and education of executive directors; teaching them to be self-sufficient in leading the sales and marketing department. Our findings prove that executive directors are more than capable of leading this department and when given the skillset to do so, do it well. Being that most are incentivized on net operating income, it’s a win-win to have their finger on the pulse of sales daily. With expenses higher than ever, the best way to grow NOI is to positively impact top line revenue.
Just as an executive director learns to manage care delivery, housekeeping, maintenance, and dietary; they can learn to manage the sales and marketing function of the business they manage. This one pivot is a game changer for your seniors housing communities. Not only will you see increased sales at market rate rent that is monitored daily rather than monthly, but you’ll also save on payroll funds needed to support a regional sales director role. Additionally, when done properly an executive director can invest just ten minutes a day in sales and marketing management and see powerful outcomes.
At the end of the day, it all comes down to move ins. That means sales and marketing directors need clearly communicated goals that take move outs and death into account (based on individual community trends) so they know what’s needed daily and weekly to net up and grow. While this seems like common sense, it’s not uncommon for executive directors, sales directors, and even regional managers to be surprised that they failed to net up due to unexpected outs. The executive and sales director need to sit down each week and evaluate progress toward move in goals, reassess, and agree upon areas of opportunity. While salespeople seem independent, most need direction and positive reinforcement from their leaders; it’s part of their DNA and when effectively managed will perform to meet or exceed expectations. You can’t leave sales directors on an island by themselves, they need to be an integral part of the community team, included in morning standup, and held accountable to results like all other department heads.
Each day your executive director should sit down with their sales and marketing director and review the following:
Keep it simple, don’t drown your site level teams in data or reports that overwhelm. Visibility into the metrics listed, daily accountability, and coaching can move you from operating at a loss toward zero lost revenue in less than six months.
People buy people. You can have the best website, most savvy virtual sales assistant to capture leads and tours, but if a real person doesn’t step up and emotionally connect with that prospective buyer, the move in is not going to happen. Short of our kids, our parents are some of the most important people in our lives. Adult children are not going to entrust their parents to people they don’t trust or feel they know. While a prospective buyer can book that critical tour online and even take the tour online, at some point, a real person that represents the community must step in. This is where we see the breakdown begin in the seniors housing buyer journey.
The most difficult parts of closing a sale include competing with low-cost providers (31%), positioning value propositions (17%), and combating the status quo to avoid a no-decision state (17%). Lack of effective training and education within the seniors housing space is having an incredibly adverse effect on revenue and net operating income. With assisted living being such an emotional buy, those owners and operators who invest in sales training for their marketing directors have an incredible advantage over operators who leave sales directors to their own devices. Proper understanding of how to find needs and build value, demonstration that a community can meet and exceed those needs, and effective follow-up eliminate all three barriers to closing. Much of this hinges on the fact that when a lead inquires, it’s hot- no one calls assisted living for fun, something is driving that action. However, closing the sale takes incredible skill. Making a move to a seniors housing community is costly, emotionally taxing, and permanent. It is vital in 2022 that you invest in the training and education needed to equip sales and marketing directors to close sales and change lives while positively impacting revenue and NOI. Part of your training effort must be educating the executive director on sales leadership and having the buck stop at the site level.
Here’s the impact: The ROI for sales training stands at 353%. Roughly speaking, for every dollar a company spends on training, it receives about $4.53 back. Companies that provide sales coaching increased revenue by 8.4% year-over-year, which is a 95% improvement over companies that do not provide this kind of coaching.
What’s your intention for 2022? Is it going to be more of the same or are you ready to pivot, to step into your full potential as a seniors housing organization operating at peak performance? There is so much opportunity! Imagine the impact of equipping each of your senior living communities with sales directors that fully understand how to find prospective buyer needs, to build value, and create urgency regarding a move; emotionally connecting and establishing trust within the first conversation and confidently moving the buyers to the next step in the process. Imagine having a solid sales team that advises rather than pleases and that produces three to four consistent move ins per week? With proper execution, that can be your reality. Make a plan, work the plan, and change the trajectory of your business in 2022.