By Joanne Kaldy
In a highly competitive senior living market, blending in may seem like a safe strategy. It’s tempting to play it safe by following what others are doing in terms of pricing and offerings. However, instead of being a copycat, your unique identity could be your ticket to higher profit margins.
Copycat Case Study: How Duplication Can Be Devastating
In a recent Senior Living Foresight webinar on “How to Increase Your Senior Living Margins,” Mark Anderson, Senior Vice President of Eldermark Senior Housing Software (a Senior Living Foresight partner) offered a case study to show how copycatting can cage your efforts to reach your goals.
In one community that didn’t want to risk standing out in the crowd, leadership adopted a model directly from competitors in the market, developed collateral materials based on this, and began trying to fill the building without testing their model. It wasn’t until later that they asked for an operational study on the model’s performance. The results left them in shock. In most areas, the true cost of care was significantly higher than what they were charging. Their copycat model was doggedly devastating. They were forced to make some quick decisions about pricing changes just to stay afloat.
Contrast this with the case of a provider who did the necessary homework and adopted a business model designed with real numbers for their operational expenses and margin goals. They tested it for market tolerance in price and did internal testing to ensure applicability and integrity. The result? The community became profitable by month seven, and the model was so successful that it is being integrated into the organization’s other senior living settings. The homework and the effort to establish an original identity paid off.
The Devil Is in the Data
Establishing your identity doesn’t require soul searching. Instead, dive into data. If you’re an established community, it’s not too late. Your EHRs, dashboards, eMARs, financials, and other data can provide insights on what you do well and where your strengths are.
“While you are doing good work, you are creating a lot of data,” Anderson said. “Take this data and compare it to where you started in the business model. Where it’s in alignment, fantastic. Keep doing it. Where it’s not, that is an opportunity to make some changes operationally and move forward.”
A good model will provide the data feedback and insights you need about how you’re doing on customer service, achieving your margins, and more. It also can give you insights into opportunities for niche growth, such as:
- Affinity-group housing for Chinese-American, Indian-American, or other ethnic groups;
- Bariatric care programs for morbidly obese residents;
- And high-tech buildings (featuring telemedicine, cutting-edge wifi, interactive tech, etc.).
If you’re not using data analytics to identify ways to distinguish yourself in your market, you’re missing out on an important opportunity. Data can show, for example, that your residents have a lower hospitalization or fall rate, which positively impacts quality of life as well as out-of-pocket costs—top priorities for seniors and their families.
Create a Customized Service Model
After you’ve done your homework and assessed who you are and where you want to go, use that to create your individual—not copycatted—service model and brand, whether your unique offerings involve cutting-edge technology, products and services, building amenities, and/or customer service. Of course, you don’t want to price yourself out of the market. However, when you’re not copycatting others, you also aren’t copying rates that are a mismatch.
To learn more about Eldermark, visit their website.