Occupancy MattersDeborah Howard, Founder, Senior Living SmartCarlene Motto, Chief Marketing Officer, Belmont Village Senior Living
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Trends affecting our business
Conventional approach to occupancy
Reframing the occupancy model
Exploring the drivers
Discussion
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Red Ocean or Blue Ocean?
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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
• 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
Red Ocean Reality Blue Ocean Opportunity
Think different: think Blue
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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
Reduced bottom line NOI
RevenueDOWN
ExpensesUP
NOI DOWN
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Conventional Thinking: Sales = Occupancy
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Conventional Sales Team
Inside sales Outside sales
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Conventional Work Flow
Inquiries Tours Closing Move-in
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Conventional Occupancy Model
Sales Fills Building
Occupancy Declines
Sales Fills Building
Repeat
100%
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Busting the myth: driving sales will not be enough
New challenges thwart performance
The Occupancy Gap
100%
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Blue Ocean Occupancy Equation
Move-Ins +/- Service Delivery +/- Retention
Stable Occupancy =
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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:
1. 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.
CLINICAL
OPERATIONS
SALES
SERVICE20
Exploring the Blue Ocean Drivers
SalesOperationsClinical
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SALES
Drivers
Consumer
Website
24/7
Personalization
Sales Drivers
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“You must know your customer if you want to sell to them.” – Margaret Wylde, ProMatura Group
Recent study by the ProMatura Group suggests spending moretime 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 Jan. 1, 2015 to Dec. 31, 2015, conducted by the ProMatura Group
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Time spent with prospects pays off
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126
9794
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112
98
79
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Quartile 1(Top Performers)
Quartile 2 Quartile 3 Quartile 4(Worst Performers)
Quartiles of Conversion Ratios
Average Time in Minutes per Prospect Worked in 2015 by Quartiles of 2015 Conversion Ratios and Level of Care
ILAL/MC
Sales and Marketing Drivers
Red 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
Blue Ocean Strategy
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
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Action
Planning
Research
Awareness
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
Daily Life, Accommodations/ Amenities, Care, Cost, Floor Plans. Comparing other Options
Room Planners, Move-in Coordination
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Consumer - Top of Mind Questions
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01
03
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Where Will I Live?
What Will I Do?
Can I Afford It?
Who Will Take Care of Me?
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Your Website
87% of Prospects Research Online
Before Contacting a Community
45% of Your Website
Prospects Will Make a Decision
Within 12 Months
75% Will Buy From The 1st Person They Speak To
1.5 million Searches per Week
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Your Website – Lead Generator
Live Chat
Interactive Surveys
Inbound Content
Videos
Tracking Behavior
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24/7/365 Response Plan
MOD Live Chat Call CenterMarketing
Automation
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Personalization
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Move Ins
Conventional Industry Indicators
LAGGING
New Leads
LEADING
Call Outs Tours
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PCSSM Leading Performance Drivers
Time Per Lead PlanningTotal Time in
the Selling
ZoneSM
Creative Follow-Up Move Ins
LEADING LAGGING
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Occupancy Optimization
Predicted Length of Stay
Likelihood of Conversion
Move-Out Risk
Prospects that OPTIMIZE ALOS
Ranking each prospect based on their projected LOS in the community
Ranking each prospect based on likelihood of
becoming a resident
Ranking each resident based on the risk of an unplanned move-out
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Number of Call Outs/Tours - Correlation is not Causation
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OperationalDrivers
Engagement
SurveysRecruitment
and Retention
Operational Drivers
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Operational Drivers
Red Ocean Strategy
Yearly surveys
Hiring, firing and performance reviews
Holiday family celebrations
Set operational structure
Blue Ocean Strategy
Point in time surveys
Pre-emptive recruitment, value recognition, and development
Ongoing and proactive family communication and engagement
Choice
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Clinical Drivers
Pre-Move-In
Pro-ActiveCare
Predictive Analytics
Clinical Drivers
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Clinical Drivers
Red Ocean Strategy
Clinical intervention starts at move-in
Reactive approach to care
Care Plan
No “ownership” of residents in acute settings
Not utilizing data
Blue Ocean Strategy
Clinical intervention starts pre move-in
Pro-Active approach to care and wellness
Personalized Care Plan
Protocols for MLOA residents
Utilizing predictive analytics
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Short Length of Stays: a Real Problem!
• Difficult to catch and monitor• Very costly to maintain and operate• Creates a vicious cycle…
1. Sales constantly trying to fill beds2. Focused on quantity of leads over best match3. Quantity and quick leases result in even shorter
length of stay
Move outs in 90 days
Familiar pattern with many clients
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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
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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