overcoming obstacles in senior housing market

WE HAVE ENTERED A NEW ERA OF SELLING SENIORS HOUSING

© 2012 Bild & Company

INDUSTRY TRENDS

• Record attrition• Older and frailer new residents coming

in.• Length of stay now down to just under a

year and a half (AL).• Competitors discounting at record rates.• More demanding and educated

consumers.• Unprepared sales counselors.


INDUSTRY INFO• Industry occupancy:

– IL 07 93.8% Dec 08 89.8% Dec 09 88.2% Dec 10 87%

July 11 87.7% Oct 11 87.7%– AL 07 91.5% Dec 08 88.9% Dec 09 88% Dec 10

89% July 11 88.4% Oct 11 88.4% (little to no change)

– CCRCs are now 89.7% occupied, down from 90%. – You should be at 98-100% at all times (you are

close!). – Our portfolio of 200+ grew by 9.3% in 2009 & 9.4% in

2010.

HOVERING AT 88%


THE ECONOMIC OUTLOOK

How can we stand out, differentiate and grow while others decline?


6/13/12 7© 2012 Bild & Company

CHANGE BUSINESS AS USUAL

• It’s time to step out of the seniors housing box.

You MUST add the sales component to the puzzle to survive and THRIVE!

Must be EQUAL priority.


WHILE IT USED TO BE ABOUT CARE AND

OPERATIONS…

COLLABORATION

• No longer optional. • Must come from the top down and

be integrated into your culture. • Must become a priority and part of

your long term strategy. • You have to TEACH people HOW

to create this type of environment in their communities.


COLLABORATION

• As an industry we simply don’t collaborate.• Executive director, sales counselor and

director of nursing must collaborate regularly. Second tier is the departments heads and line staff.

• Must have business basics 101 for all new hires and current staff to foster collaboration.

• This is essential to growing to 100% occupancy.


TRUTH

Most companies in our industry are out of

ideas & have tried everything to grow

occupancy.• ERA must master sales systems to grow

occupancy and revenue.• Employees must believe full occupancy

is possible. • We have to merge new behaviors

(systems) with mindset to see strong results.


100% OCCUPANCY

• Filling a community is like putting pieces of a puzzle together. You have to slide one piece in at a time until the puzzle is complete.

• You have to know what the pieces are and the order in which you need to place them.

• Why we have filling buildings down to a science. How that will benefit ERA.


LEADER FOCUS• Participate

– Take calls, give tours– Participate in outreach activity– You don’t have to have all the answers, but you

have to ask the right questions!

• Accountability– You’ll celebrate successes with me, but also

support me through barriers or obstacles

• Promote a sales centered culture– Do your all staff in-services have a sales and

marketing piece to them?– Documentation and follow up– Set expectations for back up team


VALIDATE

Saying “Thank You”• You can never say Thank You enough.• To make it really effective …

– Make it personal– Make it specific– Make it public (for those who like

recognition from others)– Keep it real

• Make it part of your daily “To Do” List• Motivate your team to be the best of the best!


REDUCE TURNOVER • It wasn’t what they expected. • Not the right fit for the position• Too little coaching and feedback. • They feel unrecognized. • Work/life imbalance.

• Over 50 % of people recruited in to an organization will leave within two years.

• One in four of new hires will leave within six months.

• Nearly 70% of organizations report that staff turnover has a negative financial impact due to the cost of recruiting, hiring, and training a replacement employee and the overtime work of current employees that’s required until the organization can fill the vacant position.

– HR.BLR.com


LEADER VS. MICROMANAGERLeader

• Open, Honest Conversation

• Weekly Meetings• Adding Value

Micromanager• Directing work• Questioning decisions• Interfering in

meetings, contacts, etc.


RETENTION STARTS WITH

THE RELATIONSHIP


GALLUP FOUND THAT TOP PERFORMING SALES PEOPLE SOLD BETWEEN 6 AND 10 TIMES MORE

THAN THEIR AVERAGE COUNTERPARTS.


ALLEVIATE BARRIERS OR OBSTACLES

• Drive out the work that makes your sales team “busy” but doesn’t promote productivity

• Sales team MUST focus solely on IPA (Income Producing Activity)

• Revenue generation=

Strong Business©2012 Bild & Company

SALES SYSTEMS VERSUS IDEAS AND PROCESSES

What’s the difference & how does this impact you?


OUR SALES SYSTEMS EQUATE TO A DRAMATICALLY IMPROVED CUSTOMER AND RESIDENT EXPERIENCE.


http://tracibild.com/

6/13/12 22

SALES SYSTEMS TO MASTER

• A SYSTEM for increasing traffic: Outreach (tomorrow).

• A SYSTEM for the inquiry process (today).• A SYSTEM for personal visits (today).• A SYSTEM for effective follow up (tomorrow).• A SYSTEM to retain residents (today).• Must commit to systems and hold people

accountable.


CASE STUDY CLIENT A

Client A has 30 plus locations in Minnesota, Iowa and Wisconsin with a combination of independent living, assisted living and CCRC communities serving over 9,000 residents. The communities are in both rural and metro markets. As a company, Client A historically ran at 96-97% occupancy. Not unlike many in the industry, during this past recession, the company experienced tremendous challenges maintaining its occupancy, and even greater difficulty in hitting its start up benchmarks. Overall occupancy was at an all time low of 87% for the buildings we were coaching. Client A decided to conduct a Bild training seminar and to enroll twenty of their most census challenged properties comprised of multiple housing/care options, including IL, AL, MC and SNF, into the Bild coaching program.

As a not for profit, this company had one individual who over saw sales for all locations. Stretched thin, we were able to step in and provide support by taking over the sales focus for those ten specific locations. We collaborated closely and worked together to manage results. Our primary focus in working with this client was to:

Customize and implement our proven sales system company-wide as Client A had no formal sales process in place.

Train the VP of sales through a train the trainer program for a smooth transition at the end of our contract. Create a collaborative sales environment where staff work together to capture inquiries and effectively

conduct tours that made impact. The executive director was responsible for both sales and operations and struggled to manage both so our goal was to better support that position.

Implement strong follow up systems that shortened the sales cycle. It was important that ED worked smart and efficient due to the limited time he/she had to focus on sales.

Because Client A had a CCRC environment, it was critical to equip executive directors with the skill set needed to build strong value as to offset the pain of selling homes in a downturn economy and making a move during uncertain times.

Based on an average $2,000 monthly rental rate less care, this group of communities generated an additional cash flow of $148,000 per month. At the end of eight months, with the nearly 1,600 units in our coaching portfolio, occupancy grew a total 4.68%, thus generating an additional $1.776 million dollars of annual rental income, excluding healthcare.



Total UnitsStarting

OccupancyCurrent

Occupancy NetCommunity A 54 53 54 1Community B - TCU 34 17 22 5Community B -TH 50 40 41 1Community B - SA 56 49 55 6Community - LTC 267 213 212 -1Community C - MC 18 18 18 0Community D - EAL 19 18 19 1Community E 44 37 42 5Community F 230 210 224 14Community G - MC 36 35 36 1Community G - AL 91 87 88 1Community H - TH 67 60 62 2Community H - MC 18 18 18 0Community H - AL 66 62 63 1Community I 177 174 175 1Community I - MEWS 76 36 66 30Community J - EAL 27 24 27 3Community J - AL 39 38 39 1Community K - AL 77 69 77 8Community K - TH 135 124 118 -6Total Numbers 1581 1382 1456 74Percent Occupied at Coaching Start Date 87.41%

Current Occupancy Percent 92.09%Total Occupancy Growth 4.68%

CASE STUDY B Client B is a national healthcare and senior living services provider with more than 200 retirement

communities with independent and assisted living, memory care and SNF. Current staffing structure had a corporate sales trainer and five regional sales directors supporting the vast network of communities. A need for individual community coaching and increased focus was established that would assist both experienced and new executive and sales directors in maximizing occupancy and revenue. With increased competition, high attrition, frailer residents moving in, and a new economy where consumers trust us less and demand more; come the need for sales directors have solid sales systems in place as well as weekly accountability. Bild works closely with this company’s regional sales directors (RDSM) to foster growth and had six months to make a strong impact.

Each community has a marketing director and an executive director. Operationally focused, our goal was to help transition the culture to put more focus on sales and to make it a priority at all levels. Rather than launching with a training seminar, this client placed its properties directly into our coaching program for immediate results. We utilized the Bild Online Training Center to roll out the training and coached teams through execution via our weekly coaching and support. Our primary objectives with this client were to:

Deliver training remotely and implement the Bild coaching program to drive sales results. Due to the communities being located across the nation, it was cost prohibitive to bring them all in for a seminar.

Assist busy RDSM with growing occupancy while reducing their workload. Grow occupancy in specific regions or areas of the company that had been proved challenging

areas. Work hot leads with sales director and moving them to close via role plays and specific strategy that

they could use long term to keep move in volume high. Concentrated focus on each community with high levels of accountability to move ins and

occupancy growth.


CONTINUED CASE STUDY B

We have launched two groups into our training program: Group one and group two, each having twenty communities. With each group we are learning more about the company and driving results faster. Based on 13 coached communities’ individual lowest market rental rate less care, this group of communities generated an additional cash flow of $148,509 per month after six months of coaching with a potential annual revenue increase of $1.78 million.

Based on 20 coached communities’ individual lowest market rental rate less care, this group of communities generated an additional cash flow of $125,572 per month after three months of coaching with a potential annual revenue increase of $1.51 million. Below is a sample of results for both groups:



RED notes move ins during 2010 per Group 1 (20 buildings) prior to Bild coaching

GREEN notes move ins during 2011 per Group 2 (20 buildings) during Bild coaching

Year to year comparison

RED notes move ins TOTAL per Group 2 (20 buildings) prior to Bild coaching

GREEN notes move ins TOTAL per Group 2 (20 buildings) during Bild coaching

Month to month comparison

AVERAGE INQUIRY TO VISIT RATES FOR AL IS 45% & IL 35%

Our benchmark is 60% with a goal of 75%

Our trained sales counselor average is 74%


JUST 20% OF INCOMING CALLS REACH A SALES PERSON. WHAT IS HAPPENING TO THE REST?


WHAT ARE PROSPECTS HEARING?


6/13/12 31© 2012 Bild & Company

CAPTURING LEADS

• Mismanaged calls are “robbing you blind!”• We have found well over 40% of leads are

mismanaged during the day.• 75%+ are mismanaged on nights &

weekends• How many leads have you lost this week?• The industry as a whole is not paying

attention to this huge loss.

6/13/12 32© 2012 Bild & Company

STOP THE DRAIN

• The average community loses $60,000 per year due to mismanaged calls.

• You have the power to recapture this lost revenue.

• What could you do with an additional $60,000 annually?

6/13/12 33

PROMATURA FINDINGSRelative importance of sales solution counseling.

1. Emotion 25%

2. Personal specificity 21.4%

3. Value differentiation 17.6%

4. Trust 13.5%

5. Sell 9.2%

6. Practice 9%

7. Move counsel 4.8%© 2012 Bild & Company

6/13/12 34© 2012 Bild & Company

THE BUYER’S EMOTIONAL SIDE

• New body of lab results: Neuroeconomics.• Buyers go by feelings, not logic. Sales get made

when people master the tougher objective of tapping into the customer’s emotions!

• Buyers oftentimes don’t know what they want. Don’t swallow their stated reason for buying or not.

• 95% of consumer decision-making occurs subconsciously.

• The bigger the risk, the more emotions come into play.

*Robert McGarvy Selling Power 4/06

ON-SITE VISITS

• People used to look at 1.9 communities prior to making a move.

• It then moved to 4 communities prior to making a move.

• Today, it’s as high as 7-8 communities.

• How do you stand out?


CLOSING

• The real estate market.• The economy.• People who simply want to wait.• Multiple decision makers and

family dynamics.• What does it take to close a sale?


FROM WAIT LIST TO RESIDENT

• Think, “Membership program.”• Get wait list people to experience

the community so they want more of that experience.

• Engage more often and they will move sooner.

• The grass must be greener on your side of the fence!


ACCOUNTABILITY

• You must have a culture of accountability.

• People will rise to the level you expect of them.

• Sales counselors seek accountability and want you to notice when they perform.

• Holding people accountable requires laser focus on core metrics you are trying to improve.


ACCOUNTABILITY

Why we don’t hold people accountable:

• In the past, sales came easy. Wasn’t needed.

• Not sure where to draw the line. Managers are afraid of losing good people.

• Loyalty to staff impedes ability to effectively manage results.


overcoming obstacles in senior housing market

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