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sales tools

Putting the Right Tools in Your Sales Toolbox

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It is always tricky creating the right Sales Toolbox – one that creates urgency without eroding revenue.  Used correctly, incentives can be used to shorten the sales cycle and achieve move-in targets but they can also be overused leaving money on the table.  Choosing the tools that are right for the job of occupancy & revenue growth requires good analysis and the flexibility to make changes as occupancy fluctuates.  Here are a few things to consider:

Customize the Toolbox for the Size of the Job

Different tools are needed to boost occupancy by 20% than by 5 % so create different toolboxes for communities at various levels of vacancy.  This can be accomplished by simply using the same incentives but with different values (dollar amounts or percentages) or by sweetening the incentives when the occupancy drops to a certain level.  For example, communities above 90% occupancy may be able to offer a variety of incentives up to a certain dollar amount (reimburse moving costs, apartment upgrades, etc.) or use discount percentage (discount community fee by x%, etc.) but if occupancy drops below 90% the dollar amounts and percentages increase.

Short Term vs. Long Term incentives

Some incentives are short term as the incentive is applied once, usually upfront, and other incentives are applied on an ongoing basis.  This is where the revenue vs. occupancy growth must be considered and balanced.  Waiving or discounting a month’s rent or community fee is a short term incentive that erodes revenue for only the month the incentive is applied; discounting rent or offering rent locks erodes revenue over a longer period of time.   Operators and sales leaders have to work together to determine what the goals are in order to create the right toolbox.

Inspect, Analyze and Adjust

There are certain trends to look at in creating the right toolbox.  The first is the average length of stay by lifestyle (IL, AL, ALZ), which helps to project the impact of long-term incentives.  There is a difference in offering a two-year rate lock when the average length of stay is 18 months then when it is 48 months.   Also, the average rate per unit by type of your current residents is helpful to consider ensuring that new residents are not paying less on average than your residents who have lived in the community for years.  Once the sales toolbox is created and approved, an approval process must be established for transparency and to track the success of each incentive offered.  If families show no interest in one of the offers, change it up!

Best Practices

Here is what I have learned in building sales toolboxes over the years:

  • Have a sales toolbox for the Sales Team and another one for the Executive Directors.  I like to give the sales team the short-term incentives and empower them to use the toolbox to shorten the sales cycle and reserve any incentive that impacts ongoing revenue in the hands of the Executive Director.
  • Get feedback from the community and regional teams while creating the toolbox and be willing to adjust the incentives based on individual market differences.  Everyone likes to be part of the process and collaboration increases buy-in.
  • Make sure there are good systems to track the impact of the incentives.  Knowing the historical move-in numbers, market rates and actual collected rates will help evaluate the impact of the program.  The purpose of a sales toolbox is to increase the move-in volume by empowering community teams to overcome objections and shorten the sales cycle.  In six months the trend should show a correlation of incentive dollars relating to increased move-in volume.
  • Evaluate which incentives are working as it may reveal an underlying issue that can be addressed.  For example, if most families are choosing a 5% rent reduction, you may have a pricing issue or if they are choosing an apartment upgrade (a studio deluxe for the same price as a standard studio), you may have a barrier based on the size of your apartments.

Are there any other tools you would add to your sales toolbox? Let’s Chat

information

Maximize Your Senior Living Resources: Information Management

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Blog Provided By Joan Bachman, RN, HNA, RHIT, BSBA, FCN

Maximize Your Senior Living Resources

The Only Place You Find “Success” before “Work” is in the Dictionary. Survival and growth of an organization rely on the effective use of available assets.

Senior Living Resources: Information Management

A successful organization maintains accurate business records and promotes healthy communication.

Legal Documents

  • Describe legal documents and authority for access.
  • Maintain legal documents securely, whether hard copy or digitized.
  • Establish and implement policies for retention of records.
  • Comply with regulatory and insurance carrier suggestions for backup and audits.
  • Limit access to legal documents based on authority and responsibility.

Communication Systems

  • Communication may be spoken, written, computerized, or pictorial/graphic.
  • Establish and implement policies and responsibility for each segment of communication
  • (Business, Client, Public, and Advertisement/Promotion) based on regulatory requirements.
  • Communicate openly with staff. Secrets breed distrust; informed staff supports the Mission.
  • Describe confidentiality requirements.
  • Define how social media may be used for business and personal purposes.

Physical Messages

  • Maintain your capital assets to demonstrate self-respect and contribution to the community.
  • Expect clients and staff to be clean and neatly dressed.
  • Control noise levels within the building.
  • “What you are doing speaks so loudly I can’t hear what you are saying.”

Is there information that your community needs to improve on recording? Let’s Chat

pricing strategy

3 Pricing Strategies to Grow Rate, Grow Occupancy – or Both!

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There are many traditional pricing models offered by senior living operators in an effort to grow rate and increase occupancy.  There are no right or wrong answers as long as the strategy is in alignment with your goals.  Generally, pricing strategy is directly related to the stability of occupancy.  With a higher occupancy, operators can push rate. When occupancy declines, incentives may be offered to boost occupancy and that erodes RPU.  The balance is in knowing when to turn the rate and incentive levers and to be flexible and proactive enough to make regular adjustments.  Pricing is not something that operators can do once a year during budget season and then forget about.

Pricing That Offers a Greater Price Range for Prospects without Eroding Rate

Value/ Premium Pricing

This strategy allows a pricing spread throughout the community that offers greater pricing elasticity to meet a wider range of financial options for prospects without eroding rate/ RPU.  Apartments with a premium location (near an elevator, on the first floor, near dining room etc.), premium view or with premium amenities (upgrades, closet space square footage) are priced at higher rates.  Apartments with undesirable locations (end of long hallways, upper floors), undesirable views (parking lot, dumpster, mechanical units) or with a lack of amenities (dark, small, limited closet space) are priced at lower rates.  This strategy allows 3 price points for each apartment type – standard, premium, and value so the overall community still achieves the average rate while offering a greater range of pricing options.

Variable Pricing

Much like paying points on a mortgage, the greater the upfront move-in fee, the lower the monthly base rent.  For example, for every $2000 more paid up front, the resident base rent is reduced by $200.  This gives the community good cash flow up front, and the advantage for the resident is that the investment is paid back within 10 months. Then all future increases are based on the lower rate.

This strategy provides solutions for prospects who:

  • Have good liquidity from the sale of their home or from strong investments, but they do not have much income (they can put up a large move-in fee and buy down their monthly price that is within their income range).
  • Have a strong income, but do not have upfront cash (waiting to sell their home, money tied up in annuities, CDs or other investment).

Companion Living

In addition to “purpose built” companion apartments, this strategy creates companion living apartments out of studio, alcove, and traditionally private one  &  two bedroom apartments.  The companion price is set between 55 – 65% of the private rate for each resident.  It creates a very low price point, which is attractive to residents who would traditionally be financially disqualified.  It provides the community with 110 – 130% of the private rent revenue and two LOCs.

To be successful, the community needs to set up companion model apartments to show how a small space can work for two unrelated residents.  It may also require some form of divider for privacy.

There are probably many other great ideas out there! Are there other creative pricing strategies you have used successfully to balance the growth of both rate and occupancy? Let’s Chat