Revitalizing marketability and driving higher occupancy in a competitive senior living market can be boiled down to developing strategic repositioning plans to ensure a successful future, according to marketing experts.
Love & Company and Plante Moran Living Forward, during a webinar Wednesday, discussed implementing a holistic approach to strategic planning centered around the “six Ps”:
- Place: The external market and an operator’s position in its market area.
- Product: Everything a senior living community offers to create the resident experience — healthcare, residences, servies, amenities and aesthetics.
- Price: How monthly and entrance fees compare with those of the competition.
- Planning: Putting up guardrails of success, project phasing and financing.
- Performance: Setting a focus and parameters in the design phase, developing a project schedule, aligning operations to support strategic goals and creating an action plan.
- Promotion: The marketing and sales efforts, including digital marketing.
The oldest of the baby boomers (who are aged 58 to 77) are on the doorsteps of senior living communities as the future occupants, Plane Moran Living Forward Senior Vice President Sally Heffernan said.
The projected demand for senior living — independent living, assisted living and assisted living memory care — is expected to double over the next 20 years, from 1 million units today to 2 million, presenting a tremendous opportunity for the right type of housing, she said.
And at the same time that the senior living industry is experiencing “tremendous” growth, nursing home beds have been decreasing year over year, Love & Company President and CEO Rob Love said. Additionally, over the past 15 years, many states have changed their assisted living regulations to offer more acute services and care, further minimizing the need for long-term care, he said.
To capture the growing market, Heffernan said, market studies can help operators understand their markets and projected demographics, existing and planned local housing supply, and potential penetration rates for care and service levels.
Those data help identify the right product for the market, she said.
Some overall trends, Love said, reveal approaches and aspects that appeal to boomers as well as members of the silent Generation and Generation X: health and wellness, connectedness (both personal and technological) and choice and flexibility.
“The biggest thing changing over the past five years is the evolution away from care-based models to one of empowering our residents to be able to live the lives they truly want to live and not be in a place they only need to come to just in case they ever need care,” Love said.
Product and price must align to ensure that a senior living community is offering the right value, Love & Company Senior Vice President of Strategic Services Sara Montalto said. Part of the planning process, she added, includes consumer research to validate what consumers in the market are willing to buy.
A cost analysis can determine whether a project makes sense, and if not, what changes need to be made. Ideally, pricing will maximize demand, Montalto said. Certain metrics, for example, tie entrance fee pricing to home values.
“As a field, we feel that we have not done a good job of keeping entrance fees up and in line with some values,” Love said.
Typical annual entrance fee increases have hovered around 3% for the past 15 to 20 years, he said, adding that senior living organizations may be missing a significant opportunity to increase those fees, which in turn can help offset the need to increase monthly fees.
When it comes to planning, Plante Moran Living Forward Senior Vice President Greg Hensley said that the keys to a successful project include factoring in cost, community and consumer priorities, timelines, funding and financial limits.
Planning today, he said, is more difficult due to increasing costs and interest rates, which create a more complicated financial picture. Hensley said that operators need to build in opportunities to add and take away things from projects, to avoid holding them up, and that operators also need to cultivate discipline to set parameters and stay within them.
“The benefit is having a good roadmap but allowing for road closures,” he said. “Things pop up. You have to have discipline to follow the roadmap but add alternatives. If you can afford it, plug it in, but you also have to add ‘deducts,’ so if it’s not affordable, it’s easy to pull out, so it doesn’t stop the project.”
