Senior Living Sales: How To REALLY Build Stabilized Occupancy
In the bestselling book Blue Ocean Strategy, authors W. Chan Kim and Renée Mauborgne compare “red ocean” markets (where companies compete in an already crowded space) with “blue oceans” of uncontested market space. These so-called blue oceans have untapped demand and the opportunity for highly profitable growth.
As you probably already know, the water is very red in the senior living space. Senior living sales reps are constantly trying to outperform their rivals to grab more market share, all while using similar strategies. As new product enters the market, existing operators are competing for a share of a contracting market, and, as a result, occupancy rates are stalling. This situation pressures operators to “go beyond competing and create blue oceans.”
Senior Living Sales in a Red Ocean – Increasing Price Wars, Shrinking Profit, & Becoming a Commodity
The pressure to get quicker move-ins to satisfy the “we need occupancy today” mantra has resulted in a feeding frenzy for urgent/crisis-driven prospects. These prospects represent only 10% of the total market. We win them because they are private pay and because we are “better than a nursing home.”
These residents bring with them high acuity, declining length of stays, greater risk and liability, increasing worker’s comp claims, and dependency on third party lead generation. The impact of this reality is higher resident acquisition costs and declining revenue. Many providers report that by the time they pay room turn expenses, sales commissions, incentives, and the move-in transaction fee, they do not show a profit until month six.
Consumers researching senior housing options are faced with the same messaging and value statements from every community: “We have the best people.” “We offer the best care.” “We offer great food, activities, transportation, housekeeping, laundry, maintenance.” Blah, blah, blah.
For the most part, providers withhold basic pricing information. What is revealed is often confusing—levels, points, packages, all-inclusive, some utilities, no utilities, some meals, no meals—help! Since we have created this commodity mentality, the only differentiator left for families to consider is price.
Senior Living Sales in a Blue Ocean – Reaching the Untapped Market
“Blue Ocean Strategy” offers insights on how companies find their untapped markets. One principle is to “Reconstruct Market Boundaries” to break from the competition.
Here’s a real-life “blue ocean” example to consider. David Smith owns three communities representing independent, assisted, and memory care lifestyles. He found his blue ocean by focusing on the 90% of the market that is “not ready” for community living. With his prospect-centered approach to sales, he created strategies to engage and nurture prospects who identified themselves as being in denial and in “thinking and planning” stages rather than in an “action” stage.
His communities consistently maintain waiting lists of residents who are not “ready”—with the highest rates in his markets. And it goes beyond a sales approach. His communities actually deliver a resident-centered lifestyle. He built a better product than his competitors, and he always finds a way to deliver what he promises. The Gatesworth has won numerous local and national awards, including being named one of the “Nation’s Top 10 Retirement Communities” by Forbes Magazine.
Here’s another example of a blue ocean in action. Zeke Turner of Mainstreet remade his market boundaries by finding a gap between the hospital and skilled nursing space and defining a new transitional care market focused on hospitality, amenities, and more services and attention while providing an unmatched level of post-acute care and accommodations in a state-of-the-art medical resort setting. Mainstreet has also been recognized by Entrepreneur for “creating an exceptional culture that drives employee engagement, exceeds employee expectations and directly impacts company success.”
Senior Living Sales Teams: Wondering How to Find (or Create) Your Own Blue Ocean? We Can Help.
Set sails for your “blue ocean” by remaking your product, amenities, service, and culture or by focusing where your competitors are not to stabilize your occupancy and make competition irrelevant. We work closely with senior living sales and marketing teams to accomplish this. Let us help!
