By Steve Moran
It is insanely crazy that we keep allowing the lead aggregators to rip off senior living operators. I am baffled that operators tolerate it, that REITs tolerate it, that other capital sources tolerate it. They are sucking millions and millions of dollars out of the industry every single month.
That money could be used to pay higher wages, to spend on more fruitful marketing efforts, to increase profits for stakeholders. Worst of all, that money could be used to create much better experiences for residents.
Backing Up
We are collecting and being able to digest a lot more data about the work we do in senior living. One of the most aggravating, frustrating, and stupid things we are being able to see with more clarity is that most of the leads being sent to senior communities by lead aggregators are worthless.
What inspired this article was a slide Julie Podewitz presented at CALA showing that 6% of aggregator leads turn into move-ins. A few weeks ago, Foresight partner WelcomeHome released their Q1 Benchmark 2023 report showing that while on average, aggregator leads are 43% of the total leads coming into the community, they also represent 42% of all lost leads. … That’s most of them. One more perspective on this: Even though the percentage of good leads is tiny, for many communities, lead aggregators represent a substantial number of move-ins.
Thinking It Through
Imagine for a moment that you walked into your sales director’s office, handed them the phone book (I know, these don’t actually exist anymore), and told them to start calling everyone in the directory. They would quit their jobs, knowing it would be a total waste of time. It is not quite that bad when it comes to aggregator leads, but not that far off.
If only 6% move in, that means your sales teams are wasting dozens of hours each month on worthless leads. When they are working those worthless leads, that is instead of doing something more productive. I bet if you were to track the time wasted on those leads you would be shocked.
It’s Irresponsible
The lead aggregators are taking thousands of dollars from you for each of those move-ins that do happen. At the very least, they should be doing a better job — a much better job — of vetting those leads. It is never going to be 100% or even close to it, but it should not be nearly that indiscriminate.
I am not necessarily advocating aggregators go out of business, but if they are going to exist, if they are going to take all that money from from operators — residents’ money when you come right down to it — they have a moral and ethical responsibility to deliver leads that have value. Right now they are wasting the time of senior living leaders and of people who are interested in senior living.
The aggregators create massive amounts of disappointment for senior living pros are prospective residents.
My Dream
It would not take long to fix the problem. Imagine that senior living operators banded together to say “no” to all aggregator leads until they started delivering higher quality leads. 30 or 60 days would be all it would take.
“Lead aggregators” is a very general term and includes referral agencies and placement agencies. There are huge differences between the two. What you’re describing, when a company sends little more than a name and phone number and expects the community sales director to do all the work, up to and including qualifying the lead, is what referral agencies do. Placement agencies provide much more, and I assure you their referral to move in ratios are higher than 6%. What our communities have noticed is that our clients live in communities well above the average length of stay of organic leads. This is because they have been prequalified for suitability in areas of projected care needs and finances. I agree that if the communities would stand up to the referral agencies that waste their time and money, they would be the better for it.
Agreed, not all referral agencies are the same and I think the local agencies provide much more real value.