Census success north of 90
Economic indicators may not be sexy, but they are essential bellwethers when it comes to monitoring the seniors housing sector, according to Beth Mace, chief economist and director of capital market research at the National Investment Center on Seniors Housing & Care. “Unemployment, housing starts, the stock market—things that contribute to wealth—are what I watch when considering the future of the seniors housing sector,” she says.
Pointing to a very strong job market, low unemployment and high consumer confidence levels, Mace asserts that the economy is “definitely moving forward with beneficial signs for demand for the sector.”
Indeed, a bullish stock market bodes well for one’s 401(k) balance, while low mortgage interest rates can help someone sell a home faster. Both of these factors are important to a retiree who wants to move into a senior living village or continuing care retirement community (CCRC) that requires a real estate purchase.
|Gardening is an element of the Circle of Friends program at Belmont Village. Photo courtesy of Belmont Village.|
The proof is in the pudding: the current average occupancy rate for seniors housing is 90.1 percent (as of the fourth quarter 2015), according to NIC. Specifically, the average occupancy rate for independent living properties is 91.4 percent, while assisted living occupancy is at 88.4 percent.
While senior living operators have little control over unemployment and interest rates, there are some on-the-ground factors that also account for why some providers enjoy high occupancy levels. Long-Term Living sat down with some operators to find out what’s in their secret sauce when it comes to attracting—and keeping—occupants.
Location, location, location
Many senior living operators with above-average occupancy rates say their community is well located, either due to its placement within an urban area, being near or adjacent to an institution of higher learning, or serving as a “destination” location.
For Kendal at Lexington, in Lexington, Va., the latter has much to do with why its occupancy rate has held steady at 93 percent for several quarters. “We have a wonderful location, just outside of the small town,” says Mina Tepper, Kendal at Lexington’s executive director. She notes that while the town is “very tiny” it does have two historic universities: Virginia Military Institute and Washington and Lee University. “Those two longstanding historical educational facilities make a big difference in terms of its attraction to residents,” says Tepper. “At the same time, we also have a wonderful rural campus with rolling hills and walking paths.”
In fact, nearly all of Kendal’s CCRCs are strategically located near a college or university. A prime example of attractive location is Kendal at Hanover in Hanover, N.H., which is a stone’s throw from Dartmouth University. In addition to its affiliation with the Ivy League school, the community’s proximity to the Upper Valley area of New England is also a big selling point, says Jeff Roosevelt, director of public relations and marketing.
With an occupancy rate of 96 percent, Roosevelt notes that he does advertise in several local monthly publications in area, including the Dartmouth alumni magazine.
Amenities and services
With an average occupancy rate among its 24 communities of 94 percent, Houston, Texas-based Belmont Village Senior Living believes it is lucky to have many of its communities in markets where there are high barriers for competitors to enter, says Carlene Motto, Belmont’s chief marketing officer. But that’s not what differentiates them, she adds. “I believe that our success is due to hiring and retaining the best-in-class people and delivering exceptional services from a care standpoint,” she says.
|Couples with varying needs can stay together at Belmont Village because the entire building can accommodate changing care levels. Photo courtesy of Belmont Village.|
One example of those services is its Circle of Friends program for residents with mild cognitive impairment. Originated by Belmont, the program was created in consultation with experts from Vanderbilt University, University of California–Los Angeles and the University of Southern California. It serves as a strong selling point for residents, Motto says. “What’s nice about the program is that it was designed so that couples can still live together while one is in Circle of Friends,” she says.
Another service-oriented aspect of Belmont is its commitment to maintaining 24-hour nurse staffing and 24-hour medication administration at all of its communities. “Family members and residents want beautiful surroundings that make them feel at home—and that’s important—but what’s most important to families is peace of mind and that you have people who have passion for taking care of seniors,” Motto says.
Among the amenities offered by Kendal at Lexington is the option to build out units to fit the needs of residents. “We have large and small apartments and cottages that range in size and type, and residents can customize them,” says Jessica Buhler, Lexington’s director of marketing. “Over the last couple years, we have also invested in refurbishing and renovating our cottages, and many residents have had the opportunity to be part of the renovation process. We offer a standard package with options, such as adding a sunroom or a four-season space. Sometimes we move walls to make a bedroom or living room larger.”
When it comes to amenities and services, the more options the better, our panel of operators agreed. “Choice is very important,” Buhler says. “We give our residents the ability to choose among many dining and activities options. It differentiates us in the marketplace.”
|Belmont’s program engages long-term memory exercise for residents with mild cognitive impairment. Photo courtesy of Belmont Village.|
Augsberg Village in Baltimore is a CCRC whose long history inside Charm City dates back to the 1800s. Executive Director Glenn Scherer credits the community’s location within the city as one reason for its 100 percent occupancy level. “We think we are the most affordable CCRC in Baltimore,” he says. Augsberg’s niche is that it’s the only “true, faith-based, Christian community” in the area, he says, noting that it also has a number of Jewish residents. “Our other draw is that it’s smaller than its closest competition,” a very large Erickson Living community down the road in Catonsville, Md.
In addition to being a destination community, Kendal at Lexington offers a promissory note to buyers. “When someone first moves in and they are unable to sell their home right way, they can use the promissory note,” Tepper says. “It’s interest free for the first six months of their stay and can be renewed if necessary.”
Tepper notes it’s a great way to reduce stress for potential residents who need time to sell their homes. “It’s served us very well,” she says.
Marketing efforts pay off
Amenities, location and incentives aren’t much good if potential customers don’t know about them, which makes marketing an important aspect of keeping occupancy elevated—something that all of the operators interviewed for this story underscored to one degree or another.
Augsberg’s census was not so high several years ago, after the Great Recession hit. Scherer recalls that occupancy was down to just 80 percent. “When the economy tanked, so did our independent living,” he says. “For the first couple years of the recession we were full, and then it hit us in 2011 and 2012. At one point, we had 25 empty apartments.”
Scherer then realized he needed some help with marketing. “Before the recession, our apartments sold themselves,” he explains. “We barely advertised and we barely had promotional events.” With a consultant’s help, Augsberg has added a software package that generates leads and has invested in advertising, mailers and events.
“Today, we know where our leads come from, we know every single ad we put in, and we know how many calls came from that ad. We also buy mailing lists,” Scherer says. The site also has held culinary competitions, summer barbeques and a winter coat drives.
Scherer credits the new marketing efforts, as well as a great sales team, with filling all of Augsberg’s apartments. While marketing is important, nothing beats the combination of great service, an array of amenities, and some financial enticements in boosting occupancy and pleasing residents, the sources agree.
Case Study: Digital marketing digs deep
Behind Augsberg Village’s marketing program is Tom Mann, principal with Love and Company, a sales, marketing and research consulting firm that specializes in not-for-profit senior housing. When Scherer hired them to boost occupancy, one of the first things Mann did was conduct a branding analysis of the organization’s name.
At the time, Augsberg Village was called Augsberg Lutheran Home. “The problem was that the Lutheran population was no longer strong in the marketplace and the organization wanted to serve people of all religions,” says Mann. “So we rebranded them as Augsberg Village.”
The organization also didn’t have a cohesive advertising program and was not utilizing a customer relationship management (CRM) system, Mann notes. “So we helped them identify those things and implement what they have today.”
Not surprisingly, among the tools in Mann’s arsenal are some that utilize the Internet and social media. “These tools have changed dramatically in the last two years, especially among not-for-profit organizations,” Mann says. “As a result, today we are seeing more than 50 percent of leads coming in online for many clients—and digital leads close at a much faster pace than others.”
Although big data is something not typically associated with community-level sales, it has become a hot trend, Mann says. It uses a client’s database of existing residents and sales history to determine characteristics of individuals who will most likely buy in the future. “With predictive modeling, we load into a CRM system the characteristics that historically indicate someone is a buyer, and it’s very successful,” Mann says. It helps communities zero in on solid prospects instead of spending time on others that are less likely to bite, he explains.
Another sleuth-like tool making waves in digital marketing involves tracking online behaviors of prospective residents. According to Mann, if someone signs up for a white paper at a client’s website, a pixel identifier is used to track their activities on the site. “If that person comes back to the website, we can tell our sales associates that Mrs. Jones was online looking at a two-bedroom today,” he says.
Both Google and Facebook have crafted a slightly more unnerving way to finding leads, which Mann describes as buying clones: “If I load in current residents’ email addresses, Facebook can find their clones—people who are like them—and therefore create leads for my clients.”
Despite the sophistication of digital marketing, direct mail is still the industry workhorse, Mann says.
Meg LaPorte is a journalist specializing in aging issues. She is based in Chevy Chase, Md. Follow her on Twitter at @AgingMeg
Topics: Executive Leadership , Finance , Uncategorized