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Let’s talk about the business of seniors housing: You have a 100 unit assisted living community in an affluent market that cash flows $7,300,000 per year with a $1,440,000 net operating income and the asset and operation is valued at $23,000,000.
Your operator hires a salesperson for that asset with a compensation plan of $65,000 per year- all in, provides basic onboarding and sets them loose. When he or she fails to perform, despite having lots of assisted living sales experience and blames lackluster performance on fierce competition or COVID-19, the operator concedes and fails to push back because those are valid excuses. Everyone holds their breath and waits…and waits…and waits for things to turnaround.
Tensions rise as investors push back and demand action. Operators insist it will get better with more time and that competitors are experiencing the same thing so not to worry. When the conversation turns to training implementation and investing in professional development to improve skill set and performance , executives balk. Invest in salespeople? I don’t think so.
A high performing, profitable assisted living community can be a cash cow; yet a scarcity mentality for talent keeps operators, investors and many developers from maximizing revenue potential out of fear they may invest in someone only to see them leave and go to a competitor.
Can I remind you of the numbers? A business valued at $23,000,000…and if you have five of them that’s a $115,000,000 valuation, cash flowing $36,500,000 with a net operating income of $7,200,000 per year! I’m a small business owner with just 11 employees and I invest more in professional development, employee retreats, maternity leave, gifts, perks and bonuses each year than many operators do in an employee’s lifetime. I can tell you without a doubt that the investments made have paid off tenfold in employee performance, satisfaction, retention, and business outcomes.
Investing in people, particularly as it relates to your assisted living communities and your salespeople who are the engine of your business, is critical. Unless you are willing to pay to attract top talent and incentivize them well enough that they will perform on their own merits, you have no other options.
Senior living sales professionals are seriously undervalued and it’s a shame. So here’s my point: If you hire someone who is inexperienced in sales or experienced but “cheap” (great talent know their worth) and not true sales talent with a track record of results, you are going to have to invest in their sales training to create the sales talent needed to maximize the value of your seniors housing asset. These are your options my friends.
I’m a seniors housing expert and entrepreneur who has been selling my entire life, has access to incredible customer relationship management software, a proven and effective sales system, and an entire team to help me ensure nothing falls through the cracks; ever.
Even with all that in place I struggle to keep up with the many details.
On the same note, developers are juggling many moving parts, such as-
I’ll be frank: Most seniors housing salespeople are minimally paid and clearly not in it for the money, but the difference they make in seniors’ lives. In most cases:
These are serious, life altering problems with no clear-cut solutions. When families like this call your community to get information, their first experience is typically with an individual who is untrained in sales , who talks more than listens, is distracted, trying to qualify the “lead” and fails to exhibit empathy. They tend to commoditize assisted living as if it were a product on a shelf rather than a life extending, enhancing move.While the salesperson thinks it’s all about price, for the family, it’s about their mom or dad; it’s about finding someone who hears what they are saying, who has expertise and can advise them what to do because they simply don’t know.
Do you see how serious this is? It is so troublesome to think that we plug people into such a vital role in our senior living communities, with little to no training. From a business perspective, we charge them with the sole responsibility of generating the revenue and cash flow needed to run operations. Ten years ago, this was okay to do because there were fewer options for the consumer. Today, it’s unacceptable.
The bigger issue is that operators know their salespeople need significant training , coaching and support but they don’t have the time nor the funds to get it done. They are in a tough situation and there is no easy answer.
The goal of this blog is to help you grasp how serious this situation is. I have clients in the seniors housing space with thirty years of experience, who are incredibly good at developing and operating communities; yet are concerned they may not be here in two years due to current occupancy challenges, increased expenses, development cost and pricing thresholds for the consumer.
I started this blog off with a developer with three locations coming out of the ground. Now, take this one scenario and multiply it times thirty different organizations with all different types of product, portfolio size, management experience and stages of development.
Your salespeople are working with many prospective buyers. I shared just two scenarios- now multiply that times ten or twenty depending on the size of your community. Yet rather than sharing each lead and working through it with the leadership team at morning stand up, brainstorming solutions, introductions to key residents and staff, identifying strong next steps to convey value and demonstrate your community’s expertise; leads are left to sit with little to no thought at all. In most cases if a lead is not deemed “hot” it’s:
When you start to see each lost lead as $120,000 in lost revenue (over a two-year stay), because every lead is hot, you will see the magnitude of my frustration. Those two leads I used as an example, who called with a need and who were essentially blown off resulted in over $200,000 in lost revenue. Even more important, the senior and his or her family is left without a solution to their life-altering and very real problem.
I made this a two-part blog series because I can’t educate you without helping you understand the why behind properly training the individuals responsible for the sales and marketing of your senior living communities. Once you get it, you will never see this aspect of your business the same.
Today we looked at the complexities of the sales process within the independent and assisted living, memory care and life plan communities. In part two of this blog series, we are going to dive into the very difficult task of delivering on the promises made by your sales and marketing people as well as the site level leadership team.
Think selling is hard? Once you see what’s involved in the service aspect of seniors housing today, you will see exactly where the disconnect is and what to do about it. Ultimately that will be a win for investors, developers, and operators because alignment is vital to 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 revenue@bildandco.com , text me at 813.390.3349 or schedule time to talk here.