SENIOR LIVING OPERATORS ARE MARKETING AND SELLING ASSISTED AND INDEPENDENT LIVING COMMUNITIES WRONG AND IT’S SHOWING IN THEIR FINANCIAL PERFORMANCE
Waiting it out rather than enforcing change; senior living operators, investors and developers continue to see declining occupancy, revenue, and net operating income.
I just returned home from dropping my mom off at the Mease Surgery Center. It was against everything in my nature to just pull up curbside and leave my mother at the door.
I felt sick as I watched her walk in alone, scared and almost childlike…
In a world turned upside down by COVID-19, this same scenario is being played out every day and even worse, people are facing the end of life alone; unable to say goodbye to loved ones in person. It’s difficult to process the true impact of this pandemic, particularly on seniors who are the most vulnerable.
Post-surgery, my mom faces a six to eight-week recovery period. In the last year, she has had at least three serious falls. This last one resulted in three out of four torn muscles in her rotator cuff. As you can imagine, I worry about her every day.
The good news is I live just two miles from my mom’s house. My kids, Paris who is 17 and Noah 14, can easily ride the bike trail to visit and help their Grammy and she has wonderful Polish neighbors who bring her food and spoil her as if she were their own family. Yet not all seniors in my mother’s situation are so fortunate. Many are literally on their own, with adult children and family members spread across the country, or even world for that matter.
SENIORS HOUSING IS SERIOUS BUSINESS YET WE TREAT IT LIKE IT’S A HOBBY
All morning I couldn’t help but ponder how serious the business of seniors housing is and how vital independent and assisted living as well as memory care is to the well-being of residents and their family members. It is literally a lifeline, a means of comfort, support, and quality care for people in need. It’s a deep contrast to the isolation of living at home alone and at risk as many seniors do. Without an engaged family, many people are forced to recover at home alone from surgeries, strokes, cancer treatment and other conditions; it’s tragic.
Adult children who are not fortunate enough to live close to their loved ones will come to visit during these difficult times in their parent’s lives. It is then they will typically be referred to and call various assisted living communities as a prospective solution.
HEREIN LIES THE SOLVABLE BUSINESS PROBLEM
When prospective buyers inquire to an assisted living community whether for a short-term respite or a long-term move, this is what they encounter :
- Long hold times
- Communities with no one available to take their call
- Disconnection of call upon transfer
- Messages that are never returned or when returned, take upwards of 48 hours
- Confusing information on levels of care, ADLs, and monthly fees (for many it’s like another language)
- A fast-talking salesperson providing an overwhelming amount of information at a price that is more than most people make in a year
- Impersonal emails with canned video tours, attachments with floor plans, pricing, activity schedules, newsletters, and a request to call back when ready
IT’S NOT WHAT SALESPEOPLE DO, IT’S WHAT THEY FAIL TO DO THAT IS CAUSING PROBLEMS
What will be missing in nine out of ten conversations is any sense of compassion, empathy or attempt to learn about the prospective resident, who she is as a person, what’s been happening in her life, how she has coped with her many health changes, who is involved in her care and what alternatives the family is considering outside of assisted living.
In short, the heart-felt human side that a protective daughter like me craves to see when considering a major life change for her mother, is non-existent and there is no way I will visit, let alone move my mom to a place where she is nothing more than another head in a bed.
IT’S THE BUYER EXPERIENCE, NOT THE RESIDENT EXPERIENCE THAT’S THE PROBLEM
While this would not be the experience once moved in, it’s what’s implied on that first critical connection when someone like me, an adult daughter, finds the courage to call an assisted or independent living community. It’s the poor buyer experience, the sales process, where senior living operators are floundering. They are stretched incredibly thin and focused on operations and care, their zone of genius- with little to no time left to formulate a sales and marketing strategy that is sophisticated enough to net up and grow occupancy and revenue. This has become a true constraint over the last several years and now more than ever with COVID-19 in play.
A FUTURE WHERE OPERATIONS ARE SPLIT OFF FROM SALES AND MARKETING ENTIRELY
Just as third party operators are more difficult to find, in the near future, as we are seeing here at Bild & Co , senior living operators will focus exclusively on care and staffing- the operation of the community. Companies like mine will execute sales and marketing on their behalf; taking ownership over the numbers for owners and investors while removing a huge load off an already full operator’s plate.
There is too much risk financially to continue with business as usual and like anything, people need to specialize in what they do best and for most operators, it’s caring for staff and residents.
Seniors housing is a premium purchase, averaging $60,000 per year.
Most consumers are clueless as to what independent or assisted living is until they are referred to it. If the circumstances were different and my mom were in this same healthcare scenario and lived alone in Florida with me still in Ohio with two teens, a national business, my house on the market and another nearing the end of construction (which is the case right now) and I called your senior living community to explore options only to experience what I just laid out for you , I would most likely move her home to Ohio and care for her myself.
That means one less resident moving into your community due to a poor sales process and if done properly, would have resulted in a better solution for everyone.
IT’S ACROSS THE BOARD, AND EGO KEEPS OPERATORS FROM ASKING FOR HELP TO FIX IT
All over the country, this is happening every single day. People like me, who are caregivers for their parents, are calling and in need of your services yet unable to receive help.
We can’t reach anyone and when we do, there is zero empathy, no emotional connection and little to no compassion or education around what it is I need to do and how that will ultimately impact my mom’s life as well as mine as her caregiver.
We wonder why occupancy is at a 14 year low ?
It’s not just COVID-19; we have many problems and one of the biggest is our inability to properly communicate and build value with prospective buyers. Making a move to an assisted living community is easily a $120,000 spend over a two-year period. Yet we put people in the sales role who are experienced in senior living yet have no formal training in sales communication skills ; meaning:
- Asking great open-ended questions
- Listening and really hearing what people are saying
- Responding in a way that ensures people feel heard
- Digging into vague answers to help callers process their own emotions and what’s going on
- Advising what the next best steps are based on the specific situation just shared, showing empathy, concern, and advocating on behalf of the senior
We are not selling an apartment or a building, we are selling care, love, affection, concern, lifestyle, nutrition, security, peace of mind…an extended family of sorts and that is what the industry as a whole is missing. Senior living salespeople are far too busy selling real estate.
What we’re focused on selling is a product- an apartment; and it’s misrepresenting what makes senior living what is. So long as operators, developers and investors continue to underfund the sales department, from investing in true sales talent and compensation packages to formally training them on how to sell a complex, high end item with difficult family dynamics, we will struggle to see our communities fill at market rate rents .
While there are promises of vaccines to come and treatment of COVID-19 continues to improve, the reality is we are a good year away from seeing the stabilization of our industry. In fact, winter could prove even worse, we simply don’t know. Once again communities will be fighting over the same leads, paying the first month’s rent to third party referral sources, reducing rates, waiving community fees and more. This means your profit margins will be gone.
ALL YOU HAVE TO DO IS FIX THE PROBLEM, INSPECT WHAT YOU EXPECT AND WATCH THE GROWTH
The longer you delay fixing your sales problem , the worse it will get. Rarely does poor performance turn around on its own. With tours down 30% and move ins down 33% industry-wide, it’s only going to get worse. Like every other business, seniors housing has drastically changed and specifically the way we market and sell. It’s time to retrain those responsible for sales and regain your power to generate results. Here are four areas you can invest into right now:
FOUR AREAS TO FOCUS ON RIGHT NOW AS IT REALTES TO SALES PERFORMANCE AND RESULTS
Never have salespeople needed more accountability . That means someone who is inspecting what is expected as it relates to taking inquiries, conducting tours, and nurturing leads. For example, most operators expect a live virtual tour to be provided to individuals inquiring. Yet what’s happening in most cases is salespeople firing off an email with a pre-recorded canned video tour. If there is no accountability to expectations then people are going to do what they are comfortable doing whether it works or not.
2. INCREASE SALES ACTIVITY
It requires almost double the level of income producing activity to generate the same move in that it did a year ago. While Bild & Co is all about working smart, not hard; those days are gone. Your salespeople must work both hard and smart. That means they must be diligent to using their CRM, inputting all leads, using their follow up tools, keeping great notes, and working the database daily. When all leads have been worked and moved to the next step, salespeople need to be connecting with referral sources from their local ER doctor to geriatric physicians.
The only thing that is going to lead to increased move ins is income producing activity; calling and seeing people who can move someone in or refer.
3. IMPROVED SKILL SET
Operators tend to focus on the quantity, not quality of leads. This results in an enormous marketing spend with little information as to return on investment and a poor buyer experience. This is one area of focus you can quickly pivot to work smart, not hard.
While the industry sees an inquiry to tour conversion of just 25% right now, we still hold the bar at 50% at minimum. The difference in achieving this goal comes down to skillset. How good is your sales team at discovery, relating back customized solutions, firmly advising prospective buyers, and locking in the next step 100% of the time?
Working smart, means investing in your salespeople as any savvy business should do and that investment most often means better retention as well; less turnover and disruption of the sales pipeline.
CURIOUS AS TO YOUR SALES TEAM MEMBER’S SKILL SET? CLICK HERE TO UNLOCK THREE COMPLEMENTARY TELEPHONE MYSTERY SHOPS NOW.
4. OWNERSHIP OVER SALES
Someone must take 100% responsibility over sales and marketing and own it. That means being proactive, looking at what is working, what’s not, digging into the CRM to see if leads are being worked properly- if discovery is being done and the next action steps scheduled with prospective buyers. It means being proactive and not letting poor sales numbers percolate and get worse over time. It means role playing, addressing shortcomings and barriers head on.
I can’t tell you how many executives, upon asking for their marketing numbers state that they don’t have them or that if they do, they are inaccurate. How can something so important continue to not be fixed? This is the systemic type of problem we see every day in both assisted and independent living, life plan and diversified portfolios.
IT’S TIME TO ASK YOURSELF:
- Who owns the sales process for our community or portfolio of senior living communities?
- Who does the buck stop with?
- Who owns sales results day in and day out?
- What type of experience and track record does the individual in charge of sales and marketing have?
- Is this person getting the job done?
- Have I properly invested in and trained this person to succeed in a COVID-19 world?
- What is the next step I should take right now to proactively turn things around?
Next, prioritize what’s most important to accomplish first, second and third; and take action. You’ve got this!
Need advice on creating your 4th Quarter rebound plan? Let’s talk! Click here to schedule a call with Traci Bild and Jennifer Saxman.