I am frequently asked questions about when and how to present price information to prospective private-pay residents during the referral/inquiry process and whether this information should be provided on a website or in brochures. Before I go into the details on how to answer this thorny question, here are some basic concepts you need to understand.
HOW BUYING DECISIONS ARE MADE
Prospective residents and their families make buying decisions based on two simple concepts:
- Affordability. The prospects ask themselves: “Can we write the check each month to cover these costs?” If they do not have the financial resources to write the check (and they don’t qualify for some type of funding such as the Veterans Affairs Aid and Attendance program) then they are not a qualified resident for your community and they won’t be moving in.
- Value. If the prospect can write the check, then next he or she will be evaluating the perceived value of your community relative to those costs and any possible alternatives such as staying home with care or moving to a competitor’s community. If the prospect doesn’t perceive that the value of your product exceeds the cost (or that of a lower-priced alternative), then he or she won’t be moving in. Think of it as simple math equation:
- Value (greater than) price = New resident
- Value (less than) price = Lost sale
The problem with prospects understanding the affordability of long-term care (LTC) products, such as assisted living, is that many times they are evaluating the price relative to their monthly income, not their accumulated assets. As a result, an uneducated view of your costs presented on a website or in a packet of information will result in prospects believing that your services are unaffordable, when in actuality the prospects have sufficient assets to meet their needs. It is at this point that the sale is lost.
If price is presented as part of your first interaction with a prospective resident either because he or she asked for the information or because it is on your website or in a packet of information, then you run the risk of the individual stopping the process because he or she does not see the tremendous value of your community.
Objections associated with your costs are another reason that the prospect stops the process when he or she receives price information. An objection is either a “real” or “perceived” fact about your product or service, which de-motivates the customer from choosing your community. A perfect example of a cost objection is the prospect’s concern about how long his or her assets will last or become exhausted. If you have taken the time to understand the prospect’s needs (building trust), demonstrating how your community can meet those needs (building value), presenting price and gaining commitment (closing), then you are in a much better position to handle objections that develop.
The price question comes first because prospects don’t want to waste their time. If they can’t afford it, why should they requeset a brochure or schedule a tour? Prospects also don’t want to be upsold. They are concerned that once a salesperson finds out their financial status, they’ll be overcharged or sold a product they don’t want or need.