Getting your senior community full takes both short-term and long-term strategies. It is easy to get let short-term goals get in the way of the long view.
Senior communities frequently focus the vast majority of their time and resources on business operations and short term sales goals which means they fail to map out a long-term course for their business. This can be a deadly mistake.
The Big Picture
You need eyes and ears following the market’s trends, evolving demands and desires if you plan to survive and succeed over the long term. Been to a Blockbuster video store lately? Not likely. Remember regardless of industry, the consequences of not keeping pace with market trends will have similar results. Avoiding a similar fate requires long-term strategic planning based on solid market research and the ability to understand and translate the data into an actionable plan. Organizations can transform their services, amenities and even physical plant for an evolving market with a methodical, even-paced and deliberate process. Staying aligned with your customers changing demands and desires is critical not just to an organization’s success, but to its survival.
The Strategic View
According to Freddi Hoffman, Strategic Marketing, Sales & Fund Development Specialist at Sage Age Strategies, “Starting with a strategic vision and then testing it with research that looks at both data on demand and the actual wishes of prospects, is vital to goal setting and formulating an effective business strategy. Once you’ve determined the direction of your customer base, you can chart your businesses’ course in order to mirror it, repositioning – and if needed, rebranding – your organization for long-term success.” A Case Study During last month’s Leading Age Annual Meeting in Dallas, Texas, Sage Age presented a fascinating repositioning case study: McLean, a Connecticut CCRC partnered with Sage Age Strategies and SFCS Architecture to rebrand and reposition the community that had a solid reputation but was heavily healthcare focused.
- McClean suspected that although it maintained a good reputation in the area, its business model was becoming outdated and misaligned with the market’s demand and desires. By working with Sage Age Strategies to conduct market research they were able to confirm this suspicion.
- The data also revealed that the market consumer was seeking an upgraded physical plant, expanded levels of care and enhanced care services.
- McClean also sought to lessen their reliance on Medicaid and Medicare revenue.
The slow, steady evolution changed its challenged and unsustainable business model into a viable community redesigned to meet the demands and desires of their current market. Actions included:
- Building new villa homes upon contract execution
- Conversion of a significant number of Medicare and Medicaid apartments and skilled care units to private pay assisted living and memory care apartments.
- Conversion and upgrade of rental apartments to CCRC entry fee units turn over occurred
By converting and upgrading these units during the attrition process, a large capital outlay was avoided in favor of a slower paced but purposeful retooling beginning in 2008 that generated millions in cash for the expansion and upgrades. Slow, steady steps were taken toward repositioning resulting in minimal disruption of the existing operations, ultimately resulting in a newly rebranded and repositioned The New McLean. Along the way, McClean was able to lessen their dependence on state and federal revenue and increase private pay revenue from 35% to 45%. I had a chance to speak with Freddi Hoffmann, who elaborated on the project, “This tri-lateral approach works and is an effective way for non-profit as well as for-profit organizations to keep pace with the evolving market. An organized strategic vision is an essential first step, and one that all too often goes by the wayside in favor of putting out the day to day operational fires. That’s when a company like Sage Age can be invaluable; recommending repositioned physical plant elements, services and amenities to align with consumer demands and desires. The long term partnership is what really made McLean’s plan work. As each new project was envisioned, Sage Age Strategies tested it so it met the needs and wants of the consumer. ” “Today’s seniors are looking for more services than yesterday’s at the time of move in. The adult child is much more involved and looking for a more comprehensive solution to the present and future care needs of their parents. The gravity of moving mom or dad into a senior housing community is not lost on them, and they would rather not go through it more than once. As such, they are increasingly seeking environments that will provide expanded care and services so that a secondary move will not be necessary. We see a trend towards a broader spectrum of care and service such as independent with services and excellent rehab care right on campus.” Repositioning your brand and product is not just about physical plant. Restructuring rates and charges is a growing trend for companies looking to move with the consumer. One such strategy is to place greater emphasis on the entry fee versus the monthly rental rate. This approach capitalizes on the timing a majority of seniors experience when moving into senior housing: the sale of their home. This allows the bulk of a resident’s living expenses to be captured at the outset, and – because of the timing – psychologically softens the sticker shock of senior housing. It also alleviates consumer concerns of higher and ever increasing monthly rates. In McLean’s case, they were able to lower monthly fees by about $1500 when converting from rental to a fee-for-service CCRC model. The senior housing consumer market has changed markedly in the last 5-10 years. One of the unchallenged universal truths is that “change” is inevitable. With the right relationships, keeping pace with your customer base is possible. Are you ready?
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