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The Relationship Economy: Chapter 7

ASSISTED LIVING OPERATORS MUST MAKE PRICE IRRELEVANT AND COMPETE ON THE RESIDENT EXPERIENCE

THREE STRATEGIES SENIORS HOUSING OPERATORS MUST IMPLEMENT NOW

I’ve been in business for 20 years and being a remote organization that works globally, the one barrier I had early on was finding a resource to properly answer our phones. No one was sitting at their desk but instead in the field, working on-site with sales and marketing directors, department heads, and line staff at the assisted living and skilled nursing communities we served. We were, and still are, knee deep in client execution.

 

After many failed attempts to find an answering service that could take those incoming calls, I stumbled upon Call Ruby. I don’t just like Call Ruby, I love this company! Bild & Co can’t properly operate without them and they’re worth the premium we pay to have them serve our clients trying to get in touch with us.

 

I love when a prospective client calls and is transferred directly to me. When I say, “Hello, this is Traci,” they’ll oftentimes say, “This is Traci Bild? Wow I didn’t expect to get you!” I think to myself, “Why not?” Nothing is more important than you, our customer!

Call Ruby receptionists aren’t just answering our phones, they are our customer advocates, who go out of their way to protect our business interest. Since partnering, outside of a recent incident related to the pandemic, I haven’t had to worry about missing important calls because Ruby vets them out and transfers them to the right team member consistently. More importantly, they answer the phone and deliver the experience the way we ask them to every time.

 

The effort Call Ruby has put into our relationship not only earns them referrals from the Bild team but has literally saved our alliance. Just last month our service essentially went off the rails due to barriers with receptionists working remotely and a workforce shortage. I was devastated at the thought of replacing them because it was so difficult to find a service that met my expectations. Thank goodness our issues were resolved by none other than the CEO herself and I’m proud to say I’m still a raving fan. 

If we didn’t have the relationship that’s been curated over the last decade and a true connection with this company, we would have changed vendors in a heartbeat. Call Ruby has done a phenomenal job collecting what chapter 7 refers to as customer equity.

Customer equity is a result of customer relationship management,

the more loyal a customer, the more is the customer equity.


What is your assisted living operation doing to empower your own employees to be customer advocates with the autonomy to wow residents, prospective buyers, and referral sources? When is the last time you heard a story from an employee that wowed you, making you proud to be part of such an amazing organization particularly as it relates to the buyer experience?

If nothing comes to mind, it’s time to pivot and fast.

 

THREE STRATEGIES TO PUT IN PLACE RIGHT NOW:

 

1.  MAKE PRICE IRRELEVANT

Every assisted living or skilled nursing operator, owner, or developer has competitors that offer identical services for less. Yet in each market service area, there is typically one senior living community that is full with a wait list. What is it these communities have done to make customers feel they are the only option worth waiting for?

It’s brand loyalty and that is power (aka my Call Ruby story). The more people feel they cannot live without your brand, or in our case, your assisted living or life plan community, the closer you are to making price irrelevant.

As a business leader  you must decide where to compete, in the price or experience wars. Here at Bild & Co, we compete based on experience and doing so puts us in a category of our own; we have no competition for what we do and how we do it and it’s something I’m incredibly proud of.

When a prospective buyer complains about price, price is something you offer when you have nothing else.

Chapter 7 introduces us to a blog post titled “Don’t Wage a Price War,” by Jeff Shore that presses for a paradigm shift from selling a commodity a buyer can get anywhere to an experience customers can only enjoy with your company. Everyone in your organization Shore says should have this mentality: “We are the premium experts and ultimate experience provider, which is why we command the rate we charge, no exception.” Eating into your profits is an endless game that usually ends with you losing. Create value by framing your business as the superior option.

 

Shore goes on to say that eliminating your competition starts with a comprehensive understanding of your product/service and a die-hard conviction about your own value proposition.

The questions you need to answer are:

  • What makes you stand out?
  • Why should a customer pay more for your product or service?
  • I’ll add a third, what is it that you offer that your competitors can’t claim?

 

If you cannot answer these questions, then you lose the right to ask for a higher price.

There are two defining constraints to address here as it relates to assisted living and skilled nursing specifically:

2.  WE ARE SELLING OUR COMMUNITIES NOT AS AN EXPERIENCE BUT A COMMODITY

 

We have a massive research division here at Bild & Co and each month do hundreds of competitive analysis to understand MSA pricing and mystery shops to gauge the buyer experience. This month, July specifically, we’ve had an incredibly difficult time completing client projects. It seems the sales and marketing directors hired to sell are on vacation along with their back up. We have been unable to literally purchase what communities are trying to sell because no one is there to sell it to us. This is insanity. Upon reaching someone who can help whether it’s a day or week later, the assisted living community or skilled nursing facility is sold to us (aka verbal vomiting) rather than letting us, the prospective customer, buy because we see value.

 

Meaning sales and marketing directors are listing off amenities, pricing, and other useless information that has no correlation to what it is the buyer is looking for. After rattling off everything that comes to mind, prices are dumped on prospective buyers with no attempt to frame value first. Most often calls end with an offer to send a brochure and for the buyer to call when they are ready.

Are you kidding me? Let’s not forget that the average purchase price for assisted living is $5K per month or $60,000 per year and skilled nursing can easily run $8K per month or $96K per year and customers are expected to reward your organization with their business because you are nice and finally took their call?

 

This is why just 9% of all inquires in assisted living result in a move in. The value simply isn’t there for buyers and operators are doing nothing to change it. Not only is it bad customer service to make people call back two to three times or more to speak to someone who can help, but it sends a clear message that you don’t matter. “If it’s bad when I’m trying to buy, how bad is it going to be when I move in?”

 

This is a real problem and if you have not mystery shopped every single community in your portfolio, I can guarantee it’s happening at your individual properties. I’m so confident, that I will pay for the first three mystery shops on your organization because when you see in writing and hear firsthand what the current buyer experience is, you will take massive action. Click here to claim your first sample of shops now.

If buyers can’t reach people who can sell what they are trying to buy, how will you net up and grow occupancy, revenue, and net operating income in this pivotal quarter that is the only one historically shown to grow over the past twelve years?

3.  WHILE OPERATORS MAY HAVE A UNIQUE VALUE, THEIR SALES AND MARKETING DIRECTORS DO NOT KNOW HOW TO COMMUNICATE IT.

 

You may have an assisted living with an incredible preventative health care program that is unlike anything in your market service area, but most likely, prospective buyers and valuable referral sources know nothing about it. Operators have failed to equip their sales and marketing directors with the skillset needed to sell value. The result is selling assisted living and skilled nursing as if it were a mere commodity. That means feature dumping. You can’t learn what your customer wants or needs if you are talking and without those important details there is no way to build value particularly regarding a $60K to $96K buy.

The biggest constraint our industry faces right now is operator’s aversion to investing in the proper training and education of its salesforce. Leads are there and pent-up demand is real. The problem is operators are not capturing or converting these leads to move in.

  • Just 22% of all inquiries are converting to a tour, compared to 45% pre-pandemic.

 

  • 35% of total tour visitors are moving in, compared to just 20% pre-pandemic.

 

  • This is evidence that when a prospective buyer comes in and visits the community, they move in at 57% more often than they were before the pandemic.
    • Example:

The challenge is sales directors are not even inviting prospective buyers in! To build value, a sales and marketing director must have the skill set to ask thoughtful, open-ended questions and have a curious mindset. When asking these questions, they must understand the why behind the questions, not just be told, “Here ask this list of questions!” Every single buyer has a story that is unique to them and what people want more than anything is to be heard, understood, and to know they are important. This is not happening in the assisted living or skilled nursing sales process right now and in fact, it’s the worse we’ve ever seen in our two decades of consulting to seniors housing operators and owners.

 

The bigger reality is that most prospective buyers don’t know what they want. They are emotional, guilt-ridden, exhausted, and most often alone in their quest to help their loved ones. A properly trained sales and marketing director understands that their job is to help prospective buyers process what’s happening, extract not just their story but the details around it, to give those individuals space to speak candidly, and to figure out through thoughtful questions, what is most important to them in a move.

 

We have proven through two-plus decades of laser focus on the sales and marketing process here at Bild & Co that when salespeople learn to do this, value is built regarding the next step in the sales process whether that be an onsite tour or requesting a deposit to secure a move in date. If your inquiry to tour conversion ratio is under 60% you are losing leads to competitors. It’s not that you need more leads, you need to train sales and marketing directors to better convert the leads they have. If you’re giving discounts and incentives that are diminishing margins, that is another indicator that your sales and marketing directors are failing to build value and the only differentiating factor they can come up with is a deal (and that is proven to drive more leads but not move ins).

 

Only when you change your approach to the experience provided at your assisted living or skilled nursing communities will you begin to see growth in net move ins, revenue, and net operating income. Sorry but there is no short-cut; you must do the work.

FAILING TO PIVOT NOW IS RESULTING IN OPERATORS SELLING ON PRICE AND KILLING THE BOTTOM LINE        

On page 126 DiJulius says, “Discounting is the tax you pay for being average.” Wow, wow, wow, that is so true. Are your prospective buyers an incentive away from going elsewhere and even more important, your employees?

If you feel your assisted living or skilled nursing communities are superior to the competition, then your prices should reflect that. Buyers expect to pay more when they are dealing with the best and likewise, when a community says they are “the best” but are similar in price or offering deals better than competitors, customers get suspicious, and the perception of excellence goes away. You are left with merely a commodity.

 

Are ready to demand a market rate rent you can stand by, even when people ask for a discount? Doing so requires investing in the buyer experience: What’s it like today, where do you want it to be tomorrow, and the willingness to inspect what you expect through recording all incoming calls or conducting consistent monthly or quarterly mystery shops. You must commit to train your salespeople to build relationships and true emotional connections with prospective buyers; it’s not an innate skillset people are born with.

 

We need to teach sales and marketing directors to be genuinely interested in the people inquiring about their communities. Nearly everything can be copied, the products and services you sell, your décor, activities, meal options, apartment sizes and layout, and prices. You must figure out what you have, that competitors do not and then teach sales and marketing directors along with your entire staff to communicate that value to prospective buyers in a personalized way. The more your employees learn the power of personal connection and understand how to communicate effectively and tie what has been learned to the benefits of the community, the less you will need to discount if at all.

 

We are in the relationship economy and the pandemic has driven that home more than any other time in history as people seek true connection and transparency. Please, take a moment and share this book club study with your entire organization and transform together. You can purchase a copy of The Relationship Economy here.

Closing Your Senior Living Revenue Gap Is A Phone Call Away.

Contact Bild & Co to grow your
occupancy now at (800) 640-0688

Use real-time intel to pivot your sales strategy. 

Understand your buyer experience and sales trends with a complementary sample of mystery shops on any three communities of your choice.