There are ultimately two things that create value. The first is uniqueness (in a positive way of course) and the second is scarcity.
By Steve Moran
A few days ago Ahmet Kuyumcu, Prorize CEO, published a couple of articles titled, Pricing Your Senior Living Units for Optimum Revenue and Amenity Price Management and Value-Based Selling for Senior Living, where he explored the concept of Value-Based Pricing and Selling. These articles made me think about how you might increase the perception of value for your community.
Unique and Scarce
There are ultimately two things that create value. The first is uniqueness (in a positive way of course) and the second is scarcity. The key principal in being seen as the high value senior living community is uniqueness, because uniqueness is the one thing that no matter how crowded the market place, can always create scarcity.
Even at the property level, each unit has its own unique attributes, which makes it possible to do value-based pricing from unit to unit, wing to wing, and floor to floor.
Uniqueness also can largely be a matter of perception and messaging. For example, I stayed at a Ritz-Carlton Hotel in Southern California a few weeks ago while attending the Marcus Evans Post-Acute Care Summit. If I had wanted to stay an extra day, it would have cost me more than $400 per night. It was a nice room but if it had been my dime, I would have stayed someplace else that would have cost less than half that rate and would have been as good or just about as good an experience.
Even with their exorbitant rates, Ritz-Carlton has created this unique brand value for which many are willing to pay top dollar.
Being the Highest Value Community
It is possible for most any senior living community, in any marketplace, to become the value-based leader in their market segment; from the very high end to the more modest levels of care and services. Consider the following ideas as you prepare to become the value leader in your marketplace:
- Think about what makes your community the very best place for your target seniors in your marketplace.
- Find/develop stories that demonstrate the things that makes your community best.
- Think about and articulate the areas where you are not the best. Don’t be afraid to acknowledge those areas and even recommend other communities that are better in your “non-sweet spots.”
- In subtle but direct ways, communicate to your staff what makes your community the very best. Use stories to reinforce your message.
- Communicate that same information to residents and family members. Use stories to illustrate your message.
- Look at each individual apartment and determine what makes that unit unique and therefore, valuable.
Finally, as you become known as the highest quality senior community in your marketplace, don’t be afraid to increase your rates to reflect that quality. You might even set your goal to be the most expensive and, at the same time, highest value community in your marketplace.