By Steve Moran

A few weeks ago, I made myself a note to write about how senior living is frustrating consumers by nickel-and-diming them in every way possible.

It starts with a significant community fee that, more or less, covers the initial one-time costs of moving a new resident in and leads to a much bigger fee that everyone charges because everyone else does.

Next come care fees, which, no matter where they start, almost always creep up faster than inflation and faster than the base monthly fee. What makes it worse is that the contracts are written to protect the communities; they contain language to the effect that the community doesn’t actually guarantee the number of minutes or services that the fees are based on.

It would be like airlines selling first-class seats, with a contract that says that maybe most of the time you will get a first-class seat, but sometimes you will get a mid-tier seat or even a basic economy seat … and actually the airline contracts do say that, but if you end up not getting what you paid for, the airline has to refund the extra charges; not so with senior living

All The Other Fees

The last bit of frustration is all the little fees for every extra thing …

  • Tray service
  • Family meals — even when the food and service are not so great
  • Extra transportation fees
  • Internet
  • Cable TV — which is often not great
  • Other care fees

Then we wonder why people are not falling in love with us, raving about how good we are.

Southwest Airlines

From the beginning, Southwest Airlines (SWA) was this quirky, weird airline where pilots and flight attendants were allowed more freedom to inject humor and make the customers happy. It was a no-frills experience with some great perks — like fast accumulation of miles, the first two bags fly free, and of course, a kind of “free for all” boarding experience. Simple to understand with refundable fares. They made this minimalist traveling into a luxury experience by actually caring about passengers.

Employees loved their airline and loved the uniqueness of it.

Some flyers hated it (like me), but they had a huge loyal customer base — people who never even bothered to shop prices because they were so loyal.

No More

They ran into some profitability problems, partly caused by their complete dependence on Boeing aircraft (not their fault, but Boeing’s) and partly because they did not continue to invest in their technology infrastructure like they should have.

The activist investors smelled blood, bought a bunch of shares, and demanded changes to make the airline more profitable. Their big idea was to nickel-and-dime passengers, charge for bags, create premium seats and charge for those, make the mileage plan less generous … a lot less generous.

I promise it won’t work. They will, in a few months, destroy all that customer loyalty and goodwill that took decades to create.

Senior Living

I am not sure senior living has ever had the kind of goodwill Southwest once had. I am not sure any senior living organization has ever had it, though maybe some local or regional organizations have.

I am pretty sure that charging for everything we can, al la carte, is not the way to gain more loyalty.

Instead of making residents and families love what we do — to the point of feeling like they are getting great value when they write those checks — getting that monthly statement becomes something to be dreaded, like opening your utility bill after a brutal weather month. The only thought is, “How bad will it be?”

We have this great opportunity to figure out how to create something that consumers will love, that will make people proud to be customers.

For more on the decline of Southwest Airlines, this article does a good job of laying it all out: https://www.fodors.com/news/news/what-happened-to-southwest-airlines-a-deep-dive-into-its-decline