Seniors Housing Operators Are Failing the Single Most Important Step in the Marketing Process
Hitting the easy button is resulting in millions of lost revenues in independent living, assisted living, memory care and active adult communities; that otherwise would go straight to the bottom line
Without fail, when occupancy is flat or in decline most operators and investors of independent living, assisted living, memory care and active adult communities do the same thing: Invest more in marketing!
9x out of 10, this is the wrong move!
Let’s be honest, it’s easier to spend money to fix a problem than to invest quality time on a permanent repair. The later requires elbow grease, change management and the difficult task of holding people accountable. Most managers, particularly in seniors housing, will do anything to avoid this type of conflict. Instead, they blame poor sales on over development, high rental rates, and poor lead traffic.
Investors, not knowing better, acquiesce and sign off on increased marketing spend that results in little to no impact. It’s a viscous cycle that plays out again and again and again. You can’t keep doing the same thing and expect to get a different result.
Historically, real estate investors have seen success in investing money into marketing. In the world of multi-family and commercial real estate, more traffic leads to more sales, it’s a numbers game and all about exposure to prospective buyers.
Seniors housing is an entirely different buyer.
More leads will NOT equate to more move ins, revenue or net operating income. Unlike traditional real estate, seniors housing is a highly emotional sale, perhaps one of the most emotive ones an individual can make equal to childcare.
A BIG DISCONNECT CONTINUES TO CREATE PROBLEMS FOR OPERATORS AND INVESTORS MARKETING OBJECTIVES
The fundamental problem we see today is a complete disconnect between operators and investors and lack of transparency. Operators have poor data and, despite most having invested in CRM software, few use it properly and are unable to derive accurate insights which otherwise would pinpoint the real sales problem. It’s systemic in seniors housing.
Investors do not fully understand seniors housing and its complex sales process; thus, return to their tried and true tactics of the past – more marketing. In most real estate sectors, pushing the marketing easy button typically works. A millennial who has recently moved to a new city and needs an apartment will respond to an ad, visit several locations and pick a spot in the span of a week. Ultimately, they know they will move again and again and again. Their only questions are, “Is it in my budget, close to my office and do I like it?”
For a senior, this will be their final move most likely. They will be asked to sell everything they own, to leave their home, friends, church, neighbors and even pets…to move to “an old folk’s home.” Think about that for a moment. This is an entirely different sale, that requires emotional intelligence that most salespeople simply don’t have.
By the time a family member makes that first inquiry, whether over the phone, a website or walking in, they are ready to make a change. Clearly, they won’t say so, but no one visits an assisted living community for fun.
While seniors housing marketing leads and referrals are VERY important, what’s happening to the lead traffic you are paying for is even more devastating.
Herein lies our single biggest failure. As an industry, seniors housing operators are not getting the very first step in the sales process right – and that is, Properly capturing that first inquiry when a family decides it’s ready to take action. In fact, we are utterly failing.
5 out of 10 TIMES A PROSPECT WILL BE UNABLE TO CONNECT WITH SOMEONE WHO CAN HELP ON THEIR FIRST CALL
As you read this next paragraph, you will find it difficult to believe. In fact, you’ll try to convince yourself that it’s not happening in your communities, but it is.
As soon as you are done reading this blog stop and call three to five or your communities and pose as buyer. Whether its 10 am, 1 pm or 6 pm, you’ll find a similar scenario that will leaving you fuming.
Upon calling a senior living community of any kind, prospects are consistently told to call back later, sent to voice mail or even disconnected during the transfer to sales. If the call is after five or on a weekend, there won’t be any assistance from sales. For a multitude of reasons, prospects will not reach anyone who can speak with them about the community on their first attempt.
For example: In one of our Mystery Shopping calls, the line just rang repeatedly with no answering service or voicemail. In another example, one of our Mystery Shoppers placing a call on the weekend and this is the response they received:
90% OF THE TIME, LESS THAN TWO QUESTIONS ARE ASKED OF PROSPECTIVE BUYERS
This will infuriate you. I’ve seen the look of shock on thousands of faces over twenty years of speaking across the country upon playing countless mystery shops to stunned attendees. Yet it happens, again and again and again. Once a prospective buyers call is successfully connected to a salesperson, he or she will ask on average two questions and spend two minutes on the call; quickly qualifying the prospect to deem if the individual is worthy of their time.
In those two minutes, prospective buyers are told about the community, its features, how great it is, and then offered on the spot pricing along with discounts. Rarely is contact information requested which means of course, no follow up and no sale.
In this call, the salesperson was so focused on the price and discounting of the call. Instead of having, “fee integrity,” the salesperson immediately offered the discount. Listen to the call and think about how you would have handled it differently
In another one of our Mystery Shops, the salesperson advised the customer they had no apartments available but could be put on a wait list. The salesperson even offered a tour BUT they didn’t schedule it! They let the a potential customer off of the phone without locking in a tour or even adding them to the wait list:I guarantee, you will experience this same scenario when making your own calls. Only then, will you understand why I am so passionate about your potential to achieve zero lost revenue days. Executives have their heads in the sand because the very thought of driving the type of change needed within their sales organization is overwhelming. And even then, it’s a quick one and done when it comes to recurrent training and we know that training is the key to long-term consistency and success.
Not to make matters worse, but…
50% Of THE TIME, YOU WILL NOT BE ASKED FOR YOUR CONTACT INFORMATION
This is simple, without contact information, you won’t close a sale. It’s impossible to follow up without a telephone number or email.
95% OF THE TIME THERE WILL BE NO FOLLOW UP EVEN IF A TELEPHONE NUMBER IS COLLECTED
Yep, it’s difficult to believe right? Even if the salesperson asks for your telephone number, they won’t do anything with it. You can shop 50 communities and if you receive one or two follow up calls you will be lucky. Ask any DVP or RDO who has shopped a region of communities, and they will concur; follow up doesn’t happen. Once again, if there is no follow up or if that follow up consists of a “how you are doing?” or “Are you ready yet?” there will be no sale. Seniors housing sales requires strong sales skills, particularly in the competitive environment we are in.
IT’S PRETTY SIMPLE – START WITH THE BASICS
Stop falling for excuses and start doing the work. Invest in training that empowers your communities to properly answer, transfer and respond to inquiry calls from your prospective buyers whether via the telephone, email or walk in. Conduct recurring follow up training every quarter to ensure it stays top of mind.
Can you imagine reaching out to a dealership to buy a new car only to find no one available to speak with you? The annual rent at a seniors housing community far exceeds that of a new car! Yet we neglect the importance of a properly trained and reinforced sales system.
Like all mature businesses, seniors housing operators and investors must put a sales system in place that is designed to find needs, build value and move prospects forward in the sales process; starting with that first inquiry. All data must be put into the CRM 100% of the time, no exception for proper benchmarking and reporting. This simple process will make a world of difference to your bottom line.
BEFORE YOU SPEND ANOTHER DIME ON MARKETING, FIX YOUR INTERNAL SALES PROCESS
The first step is to pull the data and look at it. Utilize our Revenue Growth Calculator to make this process easy.
- ASSESS WHAT’S DRIVING THE INQUIRY: Do you have lead traffic, at least five leads a week? If so, what are the lead to appointment conversions? If they are not at least 40%, you don’t need more leads, you need more sales training. People don’t call senior living communities for fun. There is always something driving the inquiry and don’t let salespeople tell you otherwise. At Bild & Co we believe every lead is a hot lead!
- DETERMINE SALES SKILLS AND ABILITY: If your sales team doesn’t have the ability to find need and demonstrate empathy, the prospect will remain guarded and fail to reveal details of what’s really happening due to lack of trust. As a result, they will be regarded as cold when the reality is, the prospect was more than ready!
- BENCHMARK DATA AND MEASURE RESULTS: In as little as 90-days you can have this first sales problem fixed. Those leads you are already generating will be converted at 60% or more to an on-site visit with a confirmed next step. In as little as 180 days, you can grow your tour to move in conversion ratio from a weak 22% (industry average) to a solid 50%. While that may not be fast enough and you want results now, it’s the reality. People don’t pull senior living off the shelf. This is an emotional process with lots of decision makers and can oftentimes require eighteen follow ups, over a span of three months to close the sale. Yes, you will have those quick easy sales in the meantime, but the flood gates of revenue can be opened with proper training and accountability to execution, close monitoring of data and patience!
Rather than spend more money on marketing, which provides false security, look at the big picture and see what the data says before you write that check. Is it really a marketing problem, which means the need to generate more leads? Or is it a sales problem, which means you have leads, yet lack the ability to convert them into sales? Not sure where to start? Fill out our form to get access to our Revenue Growth Calculator, start designing your growth strategy and see for yourself.
HAS THIS HAPPENED TO YOU?
Two scenarios stand out in my mind that demonstrate the depth of this problem. One, an assisted living community in Iowa, way off budget that was spending $60,000 per quarter on marketing. Rather than looking at the evidence, their numbers, they pushed the easy button: More marketing.
In looking at their data, the community had plenty of traffic, so we cut their marketing spend by 75% and assessed the sales and leadership team. Upon review, the community didn’t have a marketing problem; they had a people problem. Their Executive Director was hyper focused on operations and cost controls; refusing to engage with the Sales Director in any capacity. Isolated, the salesperson was demoralized and going through the motions as an order-taker; unable to move prospects through the sales cycle and ultimately leaving millions in lost revenue on the table for competitors to freely take. Sales conversion ratios were dismal and no matter how much was invested in lead gen, this community was not going to see more sales in its current environment. Sound familiar?
The second project that lurks in my mind consisted of three independent and assisted living communities that were under-performing. Upon plugging in our Revenue Growth Calculator, the evidence was clear, sales conversions were unusually low, and leads were consistently falling through the cracks; all repairable.
The investor group wanted immediate results and insisted we take $80K and devise a marketing expenditure plan to spike lead traffic in hopes of quickly bumping sales. We pushed back and expressed this was a waste of funds. It was clear they had a sales skill set problem, not a lead traffic problem. They didn’t need more leads, their sales team needed proper training on how to work the sales cycle and emotionally connect with prospective buyers. Against our advice, the funds were spent, and nothing improved. We exited the relationship early as we were not aligned. If they had trusted our advice and looked at the data, put in the time, invested in their people; the outcomes would have been different.
Here at Bild & Co we are knee-deep in turnarounds every single day, it’s our passion. It’s not rocket science, but there is absolutely a formula for success — there are no shortcuts or easy routes. The work must be done, and a commitment made for the long haul. You must look under the hood, find out where there are gaps and put a stronger growth strategy in place. If you would like to understand how to get back in the driver seat and create success for your organization now, before the new year rolls in, BOOK AN APPOINTMENT with myself or Jennifer Saxman, expert Senior Housing Marketing Experts.
To Your Success,