Selling is Hard, Execution is Harder: Seniors Housing Operators Face Increased Complexities That Few Fully Understand and It’s Crippling Revenue and Cash Flow with No End in Sight
Expect to see seniors housing operators focus on the complex operational aspects of assisted and independent living communities while sales and marketing experts take on the critical task of driving occupancy, revenue, and net operating income on behalf of owners and investors.
If you have not read part one in this blog series, click here , and read it first, then pick up with this blog, the second and final in this series.
Here at Bild & Co, , once our engagement commences with a new client and we dive in headfirst- meaning we get on-site, assess the team, the database, marketing strategy , competition , reputation in the market , sales , the customer service experience and more; eight out of ten times our initial strategy changes.
Either the sales director or executive director is completely checked out and not a fit at all, the reputation is damaged in the market, there are operational barriers such as the nurse failing to admit residents who are a fit or there is a back door problem; among many other potential barriers new to the table.
In most cases, these newly identified challenges need to be prioritized and moved to the top of the list. Let’s just say a turnaround is always more complex than it initially seems. The good news is we know that before we ever sign on the dotted line; we’re prepared as it’s our norm.
When taking on an underperforming assisted or independent living community , we expect it to be hard and if it weren’t our clients would fix the problems themselves. We are brought in for our expertise, to do what others simply can’t. Our work is hard, requires many great minds, lots of travel, digestion of data, extremely tough conversations with people used to being told “yes, yes, yes” and it involves a lot of out of the box thinking. We don’t have an option, we must get results, no matter what and it’s not always so easy.
Contrast this to your sales process. The better job your salesperson does up front in their discovery and then the communication of that information to the operations team; the better experience a new resident will ultimately have once moved in. The dots will be connected, the new resident will feel important, heard, and understood!
IT’S NOT THAT ASSISTED AND INDEPENDENT LIVING SALES AND MARKETING IS HARDER; IT HAS COMPLETELY CHANGED AND MOST OPERATORS HAVEN’T HAD THE TIME TO ADJUST AND MOST LIKELY WON’T AS OPERATIONS CONSUMES 100% OF THEIR TIME
FIRST THE BUSINESS OF SENIORS HOUSING
Seniors housing has become incredibly complex. There are many players with stake in each different deal, community, or asset which means lots of egos and people looking out for their own best interest. Our industry has been essentially trashed by the media and lumped into skilled nursing although it is not the same; and COVID-19 has taxed operators like no other time in history. Communities are bleeding cash due to increased wages, PPE, and reduced revenue due to a record low occupancy.
Owning, operating, or developing independent, assisted living, memory care, life plan or even active adult communities is not for the faint of heart. This business is amazing and incredibly rewarding, but it is hard and not everyone is cut out for it.
Just because “it’s the way it has always been done” doesn’t mean it’s the way you should continue to proceed. Seniors housing has a long history of being slow to change. We’ve seen more change in the last five years to last a lifetime and it’s time to adapt and fast!
With these changes have come incredible complexities. Operators have leaner corporate staff than at any other time yet twice as much work. With our industry in the media due to COVID-19 and fighting to get a piece of the financial rescue package, we can expect to see increased regulation and scrutiny as well.
There is more litigation, documentation, training, and procedure to follow than ever. Just as the name implies, being a senior living operator is all about operations, more than any other time in the seniors housing and care business. While new development has slowed, it has not by any means stopped. The industry is still preparing for Boomers to hit (within the next five to ten years). Competition is fierce and prospective buyers are overwhelmed with information as each operator tries to position themselves differently. Consumers are shocked by the high price of seniors housing and will call upwards of seven or eight assisted living communities that span a ten-mile radius hoping to find a solution they feel good about.
Operators must be allowed to focus on what they do best; operate.
We have a wonderful client Pilar Carvajal, Founder and CEO of Innovation Senior Living who is a McKnight’s Women of Distinction 2019 Award Winner and all around incredibly smart operator. I was on the phone with her today discussing a project in Florida and ego aside she said, “Okay, I need to do my job which is operate this community and there is a lot of work to do. I need you to focus on sales and marketing, so we deliver a home run for our owner-investor and the residents.”
Pilar is a realist and is straight with her owners. She knows that operations is a full-time job and isn’t afraid to tell her investor groups that. Here at Bild & Co we are sales masters – we know what it takes to generate and convert leads to residents and how to do it at market rate rent without using third party paid referral sources. We protect both the top and bottom line. We are sales experts just as Pilar is an operating expert.
If you want SEO, a new website, or logo we are not the team to deliver it. Instead I’m going to point you to the exact person or group who can do those three things right rather than half ass. What’s important to understand is that the group who is strong at building a new website probably isn’t the best group to create a new brand. Just as the person who is a guru at pay per click probably is not the person or group to do the website or the rebrand ! My goal is to educate you and while it sounds overwhelming, I would rather be direct and encourage you to do things right the first time so you don’t have to hire someone else to do what you already paid another to do for you- and that requires expertise when it comes to seniors housing and care.
IT PAYS TO SPECIALIZE
Just like there are specialties in medicine, you too must laser in on the specific problem and apply the exact remedy that will deliver results for your senior living business quickly. The business of healthcare and real estate conjoined into a senior living community has become so complex that no one person can do all things and if they say they can, be weary.
Operators need to be able to focus on operating the senior living community whether it’s assisted living, independent living, or memory care. Between the complexities of getting the care, food, activities, maintenance, transportation, and housekeeping right; to hiring and retaining great talent , there is little to no time left to give to sales and marketing . It isn’t intentional, it’s reality. Asking them to do both in a COVID-19 world is like asking someone to learn both English and French fluently in just a matter of months. They might be able to piece words together, to speak or read it to some degree but not with fluency and confidence!
WHY OCCUPANCY, REVENUE AND NET OPERATING IS TAKING SUCH A BIG HIT & IT’S NOT COVID-19
If you are pulling your hair out, feel as if your operator isn’t listening or doesn’t care, please know that in most cases that simply is not the case. Even stabilized assisted living communities are struggling to gain traction in occupancy and revenue and it’s challenging for operators because there simply is no time to do the work required to effectively market and sell the community. Then consider adding a new development to the portfolio. Many have little to no experience with a lease up and believe they can take on the new asset without a hitch. Only when it starts to stall do operators realize they are in over their heads and by that point some just check out, hoping the problem will turn around on its own.
Pre-leasing a new development is not an easy task . We are experts and still find it challenging but we have the systems, processes, people, and expertise to know how to pivot and get results. Operators who typically are involved in stabilized communities would have no way of knowing how difficult the lift is.
THE BIG DISCONNECT BETWEEN SALES AND OPERATIONS THAT YOU CAN FIX TODAY
A resounding red flag we see in most senior living communities is the lack of communication between sales and operations. Despite operators being accountable to owners for operations, sales, and marketing; there are still major silos. Imagine how powerful the buyer and customer delivery experience could be with better communication between sales and ops with proper training in place ?
Imagine a world where your senior living site level leadership team was involved in the sales process just like my team is when working with investors, developers, and operators? There is nothing worse than salespeople making promises to families that the operational team simply can’t deliver upon. As seniors housing grew more complex, my leaders came to me and said that they needed to be involved in the scoping of services on new contracts to ensure that the solution I proposed was actually going to work because there had been so much change.
That move drastically transformed our business. I find the client needs and together with my team brainstorm the solution and everyone then has a vested steak in results and can’t point fingers but must own the result because they helped craft them. This move took our business to a whole new level and it can yours too.
Rather than looking for a quick, easy, sale; involving leadership in the solution offered to a family considering a move allows the focus to stay on the problem and how best to solve it for prospective assisted or independent living buyers. It also ensures that the execution will be there by the ops team because they too had a part in determining everything from levels of care, size of apartment, location, types of services that would be beneficial and more. It’s a true win-win.
IMAGINE THE FOLLOWING
- Each morning, current leads are shared at stand up with specific questions for the team to help troubleshoot, offer ideas and resources that would dramatically build the value of the community in the buyer’s eyes
- Instead of offering deals and discounts, prospective buyers were presented with two different options that they could pick from and that were put together with thought by the site level leadership team whose top priority was resident satisfaction and affordability for the family
- Having every detail of each prospect documented, understood, and agreed upon by the leadership team who is excited to see the prospective resident move in and become a satisfied resident
- The executive director was looped into the sales presentation where prospective solutions are presented because the family and their loved one is that important and the executive director cares enough to be there too whether on the phone or in person
- The sales process involved just two to three meetings that lead to a close 50% or more of the time rather than a long, arduous process that spans months, if not years
- The impact on revenue and the resident delivery experience that could occur if salespeople stopped giving discounts. Meaning when families asked for them, the salesperson had the confidence to say, “while I would love to, we set our rate in a way that allows us to deliver everything I have laid out for your family, to ensure your mom has an incredible experience at our independent living community. How about we sit down and walk through your mom’s finances together and see where we can find some savings as many of her personal expenses will go away once she moves in?”
- Upon move in, the core leadership team already knew the resident because they had been looped into the sales process, introduced in many cases, and were a part of curating a viable solution that is life changing for the resident
- If the director of nursing, chef, and housekeeping director all knew how much Cookie (remember the dog?) meant to Bea and understood her depression over leaving her beloved dog and companion…how might they respond differently upon engaging with her in contrast to engaging with a new resident they know little to nothing about?
YOUR OPERATING POTENTIAL IS LIMITLESS
We have the potential to completely transform the seniors housing industry and rather than trying to model the hospitality space or come up with something innovative and new, simply make the experience so incredible that people are blown away and become raving fans?
That delivery starts with the sales process and carries through every aspect of the resident lifecycle. If operators are able to focus on that delivery, with a roadmap provided by sales and not stretch themselves so thin that it’s one or the other- meaning sales or operations; everyone wins- owners, investors, developers and operators; each feels successful. Most importantly, the resident wins because so much thought is put into the process and ensuring it’s the right fit.
Operators are some of the hardest working people I ever meet. Most work non-stop and while they may have one title, they perform the job duties of three people; they really care about the residents and staff they serve. The financial demands of the seniors housing business has added tremendous stress to operators who want to perform but are being set up for failure by the pure nature of how the business has evolved.
We need to pivot; operators must be freed up to do what they do best; operate the community and care for the seniors and staff they serve. That is no easy task in a world that’s in a pandemic, experiencing social unrest, and in an election year! We need to allow operators to pick a lane or provide them the resources to staff up and get the expertise internally or externally they need to get the job done right.
I’ve given you a lot to think about and if you’re wheels are turning, if you see the business of seniors housing even a little bit differently than you did before reading this blog series , I will consider the time spent in writing it a success.
Have questions, want to discuss a strategy to equip your salespeople and executive directors to sell in a COVID-19 world where everything is done virtually? Email firstname.lastname@example.org , text me at 813.390.3349 or schedule time to talk here .