Occupancy Matters Deborah Howard, Founder, Senior Living Smart Carlene Motto, Chief Marketing Officer, Belmont Village Senior Living
Trends affecting our business Conventional approach to occupancy Reframing the occupancy model Exploring the drivers Discussion 2
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Red Ocean or Blue Ocean?
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Think different: think Blue
Blue Ocean Opportunity
Red Ocean Reality • •
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Compete in existing market space Beat the competition Exploit existing demand Commodity/ Vanilla Operational model will not work for next wave of residents/ families Increased lead acquisition costs/ 3rd party
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Create uncontested market space Make the competition irrelevant Create and capture new demand Niche/ Specialty Personalization and choice of the prospect/ resident journey Organic lead generation
Churn: Occupancy is volatile
Move-ins are not always keeping up with move-outs
“With more volatility in the marketplace … remaining competitive means senior living companies must be vigilant with their strategies“ January 3, 2016
Source: NIC MAP 1Q2016
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Understanding move-outs: by the numbers
Death is not the only reason for move-outs.
92% cite resident health as leading reason for move-out (up from 72%) 22 months average length of stay in assisted living (down from 36 months) 54% annual resident turnover pressured by rise in acuity (up from 41%) $4,000 cost per resident turnover. $200,000 annual community cost to replace residents from turnover (100 bed community) Source: Illumination 2016 Analytics 10 year analysis
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New construction: Competition with new buildings
Source: NIC MAP
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Low penetration is everyone’s challenge
Source: The Scan Foundation, Data Breach
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Commodification: Crest or Colgate? We’re all selling the same things: Chef-prepared dining 24 hour clinical coverage Rehabilitation Fitness Computers Memory care Assisted Living customer decision making boils down to price and location.
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Pressure above and below the line
Shorter resident stays Increased resident acquisition costs Increased operating costs Reduced top line revenue Increased Risk and Liability
Revenue DOWN
Expenses UP
Reduced bottom line NOI
NOI DOWN 10
Conventional Thinking: Sales = Occupancy
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Conventional Sales Team
Inside sales
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Outside sales
Conventional Work Flow
Inquiries
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Tours
Closing
Move-in
Conventional Occupancy Model
Sales Fills Building Occupancy Declines
Sales Fills Building Repeat
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100%
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Busting the myth: driving sales will not be enough
New challenges thwart performance
100% The Occupancy Gap
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Blue Ocean Occupancy Equation
Stable Occupancy = Move-Ins +/- Service Delivery +/- Retention
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From Sales Team ‌
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… to Occupancy Team
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From sales plan ‌ to Occupancy Plan
Stable occupancy: Is the common goal. 2. Requires participation of entire staff. 3. Is supported by coordinated strategies for clinical, operations, sales. 4. Is supported by a culture of service. 1.
CLINICAL
SALES
OPERATIONS SERVICE 20
Exploring the Blue Ocean Drivers
Sales Operations Clinical
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Sales Drivers
Consumer
SALES Personalization
Drivers
24/7 22
Website
“You must know your customer if you want to sell to them.” – Margaret Wylde, ProMatura Group
Recent study by the ProMatura Group suggests spending more time on each senior living sales lead, as opposed to calling and giving tours to as many prospects as possible, could be the most successful way to convert leads into move-ins.
“Industry sales counselors generally focus on the product instead of the prospect,” Wylde said. “Then when confronted by resistance, which is predictable, most simply give up too soon. For prospects that ultimately closed and moved in, the salespeople on average invested almost 18 hours for independent living and approximately 10 hours for assisted living and memory care to learn about them, address their hesitation, and follow up with creative approaches that were personally relevant. If you get to know the user, you’re going to sell more product—period.”
Source: Senior Housing News, May 3, 2016, reporting on analysis of lead and sales data from 502 senior living salespeople using Sherpa during period 1, 2015 to Dec. 31, 2015, conducted by the ProMatura Group
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Jan.
Time spent with prospects pays off Average Time in Minutes per Prospect Worked in 2015 by Quartiles of 2015 Conversion Ratios and Level of Care IL AL/MC 126 112 98
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94 79 62 53
Quartile 1 (Top Performers)
Quartile 2
Quartile 3
Quartiles of Conversion Ratios
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Quartile 4 (Worst Performers)
Sales and Marketing Drivers
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Red Ocean Strategy
Blue Ocean Strategy
Transactional Measuring tasks & activities More leads, more leads! Focus on “Hot Leads”/ Urgent needs Website is the “all-about-me show” No effective after hours sales plan
Relational Measuring relationship building Work fewer leads deeper Focus on earlier stage leads Website is resource rich and focused on consumer 24/7/365 plan to manage inquiries and tours
Consumer – Stages of Readiness What are the options? What do I need to know? How can I make the best choice?
Timeframe, Funding Solutions, Transition
Awareness Research Planning
Action 26
Daily Life, Accommodations/ Amenities, Care, Cost, Floor Plans. Comparing other Options
Room Planners, Move-in Coordination
Consumer - Top of Mind Questions
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Where Will I Live?
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What Will I Do?
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Can I Afford It?
Will Take Care of 04 Who Me? 27
Your Website
87% of Prospects Research Online Before Contacting a Community 1.5 million Searches per Week
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45% of Your Website Prospects Will Make a Decision Within 12 Months
75% Will Buy From The 1st Person They Speak To
Your Website – Lead Generator
Live Chat Interactive Surveys Inbound Content Videos
Tracking Behavior 29
24/7/365 Response Plan
MOD
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Live Chat
Call Center
Marketing Automation
Personalization
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Conventional Industry Indicators
LAGGING
LEADING
? New Leads 32
Call Outs
Tours
Move Ins
PCSSM Leading Performance Drivers
LAGGING
LEADING
Total Time in the Selling ZoneSM
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Time Per Lead
Planning
Creative Follow-Up
Move Ins
Occupancy Optimization
Predicted Length of Stay
Likelihood of Conversion Ranking each prospect based on likelihood of becoming a resident
Ranking each prospect based on their projected LOS in the community
Prospects that OPTIMIZE ALOS Ranking each resident based on the risk of an unplanned move-out
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Move-Out Risk
Number of Call Outs/Tours - Correlation is not Causation
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Operational Drivers
Engagement
Operational Drivers Recruitment and Retention
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Surveys
Operational Drivers
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Red Ocean Strategy
Blue Ocean Strategy
Yearly surveys Hiring, firing and performance reviews Holiday family celebrations Set operational structure
Point in time surveys Pre-emptive recruitment, value recognition, and development Ongoing and proactive family communication and engagement Choice
PreMove-In
Clinical Drivers
Clinical Drivers Predictive Analytics
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ProActive Care
Clinical Drivers
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Red Ocean Strategy
Blue Ocean Strategy
Clinical intervention starts at move-in Reactive approach to care Care Plan No “ownership� of residents in acute settings Not utilizing data
Clinical intervention starts pre move-in Pro-Active approach to care and wellness Personalized Care Plan Protocols for MLOA residents Utilizing predictive analytics
Short Length of Stays: a Real Problem! Move outs in 90 days
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Difficult to catch and monitor Very costly to maintain and operate Creates a vicious cycle… 1. Sales constantly trying to fill beds 2. Focused on quantity of leads over best match 3. Quantity and quick leases result in even shorter length of stay
Familiar pattern with many clients 40
What’s the Solution? Focus on… Smaller number of qualified leads; identify the best candidate Actively monitor and manage resident health and satisfaction This is difficult to do and nearly impossible without tools: Spans sales and clinical staff Large data set, key info not captured or recorded on paper ALIS and Life2 have teamed up to do just that. We have developed tools that… Select prospects based on likelihood to move in and predict length of stay
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Identify current residents at risk of move-out in the next 90 days
Suggest actions that staff can take to improve outcomes
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