Fourth quarter was a transformative time here at Bild & Co! Not only was Jennifer Saxman promoted to CEO but we earned the coveted Great Places to Work designation and I published my fourth book, The Short Cut to Sales & Marketing Success, that premiered at number one on Amazon in Customer Relations and Selling and Sales Presentations. Talk about an exciting period!
Yet as I sat down to write today, I found my inspiration in an upcoming presentation I’m preparing for NIC’s Future Leader’s Council. I have one hour, to motivate, educate, and inspire tomorrow’s leaders and for me that’s exciting because these people are here to learn. So, I stepped back and looked at the seniors housing landscape to best convey what I felt could make the biggest impact on operator performance right now.
I’m all about impact. What efforts will yield the best financial results quickly? My objective is to help you as a life plan, assisted living, memory care, or active adult owner or operator drive results faster than your industry peers. Yes occupancy has seen a steady incline, rates are increasing, and revenue is at an all-time high; but net operating income has yet to recover. While a segment of senior living investors are weary, others are certain the worst is behind us. Only time will tell and I’m confident we will continue to see solid growth and a strong recovery. But is it possible to see it faster than our current pace of growth?
Seniors housing occupancy rose from 78.7% in 2Q21 to 81% 4Q21. Keep in mind this is from a 1Q21 low of 75.4% so that is great traction! We still have a way to go as operators strive to return to pre-pandemic occupancy of 84.9% (NIC) and I ‘m confident we will get there before the year is out. My challenge is to raise the bar higher, to set your intention toward 92% or higher, where the impact to the bottom line is substantial. The demand is there! The gap is equipping our valuable sales and marketing directors with the skillset to close a high dollar transaction steeped in emotion; to pivot from order-taking to personalized selling that builds value and creates urgency to move now, not later.
The market is hot, the leads are there, and seniors housing has become mainstream. It’s the moment we have waited twenty years for!
The question is, “how will you respond?” As with anything in life or business- you get what you put your focus on. You can grow slow with relief that you are trending up or you can seize this moment.While operations is knee deep in staffing and the ongoing pandemic; it’s time for salespeople to hone their skills, hyperfocus on move ins, and to make a big push toward shortening the period of recovery. Seniors housings sales professionals are the most underutilized asset in your arsenal.
If there was ever a moment to grow, it’s now. As an industry, lead generation is at its highest point ever, there is pent up demand, a hot housing market to fund a move, less new development inventory, an increase in social security payments, and operators have proved their ability to care for seniors in a pandemic. Never has there been as much value to seniors for life plan, assisted living, memory care, or active adult than there is today. This is your moment and in twenty years of business advisory services to seniors housing owners and operators I can tell you; if you want it bad enough you can make it happen and much faster than we are seeing right now.
If you aren’t satisfied with the status quo, meaning incremental occupancy and revenue gains and want to jumpstart the New Year, scaling smart and profitably; this blog is for you. Here are six steps you can take that will impact revenue and net operating income by second quarter 2022.
Hidden in the details of your data and metrics are telling conversion ratios, which indicate the skillset of your salesforce. While we slowly watch the industry recover, the single most impactful action you can take is to find the breakdown within your sales cycle and fix it. In implementing customized training programs for hundreds of seniors housing operators and coaching their sales teams to success, we consistently find that the greatest area of missed opportunity is inquiry to tour conversion ratios. This conversion rate is at historic lows and it’s limiting your ability to scale move ins.
Fixing a broken inquiry process is transformative. Teaching salespeople to be curious, to listen, and personalize their conversations and to show empathy can drive inquiry to tour conversions from an average of 22% to upwards of 75%. Imagine the impact of six on-site visits per week compared to just two or three. If close conversions stay the same, this improvement alone will yield three times the move ins.
I know it’s elementary but nothing speaks louder than simple math. One strategy, with laser focus can yield an increase of 69 move ins, an increase of $300,000 in annualized rental income at one location. Odds are you are seeing much higher traffic than this. Double these numbers and it’s closer to a $600,000 revenue impact. Have a portfolio of ten locations and it’s a $6M plus impact. All from improving one sales conversion stage.
While it sounds too good to be true, it’s the most underutilized solution to driving occupancy and revenue: maxing out conversion ratios. Move ins sold at market rate rent and in volume solves most revenue problems. It’s simple and that’s exactly why sales execution and accountability is over-looked, yet a game changer.
Where there’s activity there is success; it’s a sales truth. The more time your sales and marketing directors spend in the selling zone the more sales they will have; it’s a direct correlation. That means keeping sales out of operations and in the sales zone. Teach your sales and marketing directors to chunk their time, to better manage their day or week, and to push back when pulled into operations.
Despite staff shortages, sales and marketing directors must not be pulled into operations but instead laser focused on move ins. Salespeople need to get into a cadence and that means getting organized, prioritizing leads, following through on critical sales activity, and monitoring conversion ratios daily. Bouncing back and forth between sales and ops sends a message that sales is not a priority and disrupts focus on selling.
We must move beyond net one or two per community per month to net four or five so we can accelerate revenue and net operating income. The lead volume is there and tours are converting into move ins; we now need to increase our sales activity to get to the next level of occupancy recovery to impact net operating income.
Operators understand they can no longer discount. The lag is teaching sales and marketing directors how to sell value. For two years operators have allowed incessant discounting that devalued seniors housing; from independent and assisted living to memory care and active adult.
As operators now pivot to sell at market rate rent with a big push to move in a younger resident; they must teach their sales and marketing directors how to do it. We sell a product people don’t want and it comes with a substantial price tag. Add on a slew of competition not only from seniors housing competitors, but active adult, co-ops, and manufactured housing; all heating up as viable options for boomers and you understand why recovery is so slow. We are capturing quick, easy sales; those people that have few other options. When we start to convert those who are in search of viable solutions and get them to move before they need to is when we will see the velocity of move ins increase. It’s creating value for seniors through deep discovery, personalization, and strategic selling that will create lift and close the gap faster.
People can’t do better until they know better. It’s your job as a seniors housing owner or operator to provide the skillset needed to a salesforce that is demoralized and exhausted, to show them how to accomplish what you ask them to do. Operators must align their priorities with proper training and education of their sales force.
The ability to shorten the sales cycle has incredible repercussions for seniors housing operators. Closing a new resident who inquires within thirty days compared to six or nine months dramatically impacts the length of stay and revenue cycle.
As an industry, senior living operators are still taking orders; moving in people who have few other options. These tend to be those seniors who are older and frailer, who stay on average just twelve months; yet realize upon move in that they should have moved in far sooner!
Operators must move beyond taking orders; to actively working every lead based on personalized selling and creative problem solving will see occupancy and revenue grow at a much faster rate. Every lead is a hot lead; no one calls our communities just to check it out.
With proper training, customized to your culture; sales and marketing directors will pivot quickly from pleaser to advisor and advocate for seniors considering a move. When trouble shooting and problem-solving existing leads that are in the pipeline becomes a priority, we will see a shortened sales cycle and increased move ins. While it seems strange to professionalize selling in healthcare; life plan, assisted living, and memory care is private pay and customers have many options.
To shorten the sales cycle, your marketing directors must learn to slow down, dig deep, and emotionally connect with prospective buyers early in the sales cycle and personalize their offerings. They must also drive the sale by being an advisor, not a pleaser. Making a shift from order taker to sales advisor will grow the velocity of move ins, shorten the sales cycle, and attract younger residents who will stay in your communities longer. The leads are there and we have pent up demand; what we don’t have is skilled sales professionals who understand how to sell an emotionally charged, high dollar experience to the very people interested right now.
Salespeople are burnt out and exhausted. Before the pandemic length of stay was two years while today it’s just a year. That means a sales and marketing director must work twice as hard for the same result they had before the pandemic, while juggling operational demands and the ever-changing sales policies based on whether covid is spiking or not.
Selling to a younger resident is transformative and an efficient way to gain traction in occupancy and net operating income. A two-year stay compared to a one-year stay is a game changer. Yet selling an 80-year-old on independent or assisted living compared to an 86-year-old is quite different too. Sales and marketing directors must slow down and learn to do proper discovery- diving in to understand what it is that prospective resident wants and needs; what’s in it for them to move now rather than later. In short, “the grass must be greener on your side of the fence,” or else that senior will stay put.
My own mom made a move at 75 to a life plan community and trust me, it was no quick, easy sale (although she signed a contract within 30 days) as she was very much against the idea of leaving her home. Sound familiar? What made the difference is the sales strategy and effort put into the sales process: finding like minded residents who showed my mom their apartments and discussed their own community experiences, attending evening functions to get a glimpse of community life and what she was missing by staying at home alone in isolation.
Judy was our salesperson and the community she moved to is a LCS life plan community who implemented a sales training program just before the pandemic hit called SalesFirst. Oddly enough, until I signed the contract I had no clue it was a LCS community. Even more interesting is that we partnered to create this sales program with them. How odd to personally experience a program you helped to create and to see someone you love benefit from its impact? It was a surreal moment and one that has transformed my mom’s life!
The most impactful sales activity a community can take is to create a circle of influence, ten to twelve deep; of professionals who can refer seniors to your life plan, assisted living, or memory care community weekly. There is tremendous opportunity here. Most senior living communities stopped outreach when the pandemic began and have not returned to this effort.
Hospitals in particular need partnerships that allow them to refer patients that are at risk of returning to the hospital and deemed unsafe to stay at home alone. Keep in mind that boomers like my own mother, who are on the younger side have recurring hospital stays just as their older and more frail counterparts. Her frequent hospital visits is what led my husband and I to start a search into seniors housing. As we started to consider senior living options, her isolation became more evident and the decision more pressing.
The good news is that hospitals are referring to assisted living over skilled nursing due to the lower cost model. Your timing is ideal to begin a push to build strong referral networks in each of your market service areas. As an industry we are not courting these referrals near enough, meaning lost opportunities to gain valuable leads that are qualified and close four times faster than non-referred leads. Salespeople must be trained on professional outreach and begin to tap into this incredible bank of leads. Another strategy to increase the velocity of move ins faster!
Communities that invest 90 days in establishing clear communication strategies with key referral sources, who help solve their discharge problems, and keep residents healthy and from returning to the hospital will see a steady flow of quality referrals from people who have endorsed you and built value with prospective residents before they ever step foot in your door.
Recovery is in full swing and it’s an exciting time for those operators who have just gone through an incredibly difficult two-year period. Those owners and operators who implement a solid sales strategy, who equip their sales and marketing directors with the skill set needed to convert leads into move ins now, not later are going to see accelerated revenue and net operating income growth. With an investment of less than one move in you can see rapid occupancy gains of upward of 10% in as little as six months. You’ve cut cost and raised rents, now it’s time to arm your salesforce with the tools needed to accelerate move ins and tap into a younger resident population that is primed and ready to experience all seniors housing has to offer.