AGING-in-PLACE – Threat or Marketing Opportunity?

A SWOT analysis, identifying Strengths, Weaknesses, Opportunities & Threats, is often used in developing the marketing strategy for an individual community.  As discussed in several prior articles in the “Wake-up Call” series, the aging-in-place concept should definitely be viewed as a threat to the traditional senior living community industry.

This phenomenon is clearly gaining traction and as reported in the Orlando Sentinel, “it even has its own National Aging in Place Week, which falls on Oct. 11-16 this year.”[i] All indications are that this stated preference will become even more prevalent as succeeding generations age into the historical target demographic for senior living communities.

On the other hand, management, marketing and sales can turn this challenge into an OPPORTUNITY.  It is becoming clearer that an aging adult will need to adapt their living space to be able to continue to effectively “age-in-place”.  For instance, the Orlando Sentinel article identifies the following AGING-IN-PLACE Architectural Features:

Wider doors, hallways and toilets

Same-level transitions or ramps instead of steps

Roll-in showers with wide, doorless entries, grab bars, nonskid tiles, built-in seats and handheld shower units

Walk-in closets, casement windows, lever-style door handles

Waist-high kitchen appliances and storage drawers.

How many of these features are provided as “standard” in your community?

Are some of these features included in selected apartments (e.g. ADA[ii] or “handicapped” units)?

How often do you focus on these features when conducting a tour?

Is your company willing to add certain of these features to accommodate the needs of a potential resident and get a move-in?

Can you speak intelligently about what it would cost the individual to make these changes in their own home?

Some organizations, especially independent living communities, have been reluctant to include several of these safety features for both cost and ambience reasons.  The philosophy of these companies has been to “wait for the customer to ask for it”.  For instance, one IL only included grab bars in their ADA units because they didn’t want the building to look “too much like an assisted living facility or nursing home”.  After losing several prospective residents, the owner agreed to make modifications – AS NEEDED – but encountered problems in retrofitting the showers.

Another industry leader uses lo-rise toilets throughout their buildings, except where ADA regulations require raised toilets.  In most cases, they will “switch-out” the toilet if the resident specifically requests it, but leave it up to local management to handle.

The fact that aging adults are prepared to add these architectural features in their own home should tell builders and owners that it’s time to wake-up. Items such as grab bars, hi-rise toilets and walk-in closets need to become as standard as wide hallways in ALL levels of senior living communities.

Taking this step may initially increase construction costs slightly, but will positively impact marketing. It will enable sales people to build better relationships by focusing on CAPABILITIES vs DISABILITIES!

In fact, safety features such as grab bars, non-skid flooring, etc. may be marketed as part of a HEALTHY AGING concept.  Aging is a normal process and it should become natural to either add these features or move into living accommodations that were designed to promote resident safety.  As senior living specialists, we should promote these features as preventive measures for a healthy aging lifestyle instead of only adding them AFTER the individual needs them.

3 things happen – ALL NEGATIVE – when we make a prospect ASK for features that they may have already installed in their own home:

  • We place them in an awkward / embarrassing situation when they are forced to admit and focus on a frailty.  NO ONE likes to be reminded of their weaknesses – why should we expect a senior to be any different.
  • The value perception is diminished.  The prospect will question:  “WHAT ELSE is LESS than I have at home?” or “WHY don’t they have these features – I thought they were the experts?”
  • They may never ask the question, nor learn that options are available.  They will simply go elsewhere that does provide the desired features.

If your community does offer these features, how do you work it into the conversation and turn them into selling points without making the prospective resident feel “disabled”?

For instance, a 6 – 8 foot hallway is clearly wide enough to navigate a wheelchair, but that’s not what most prospects want to hear.  On the other hand, you might point out how spacious and well-decorated it is and then ask the question as to how it compares with the prospect’s home. [Note:  the average hallway in a single family residence will be 36 inches or narrower.]

The key is to sell a LIFESTYLE vs a litany of real estate features.  This approach will enable you to establish a personal relationship with the prospect and present the retirement community as a positive option, instead of something they will “have to do”.

Show the prospect how different features are designed to keep them safe and able to maintain their independence.  Observe that very few private residences are designed with these safety features even though statistics show that 1 out of every 3 seniors (over 65) will fall each year.[iii] This may prompt a discussion about the type of safety features they have or lack in their home and lead to the conclusion that the “smart” choice is to move-in with you!

A great follow-up question is whether they know what it would cost to retrofit their current home with the same features that you include in their basic rent.  Depending on the extent of the modifications, costs can easily run between $20 – 40,000.  (How many months of service would that buy at your community?)

Invest a little time to establish greater credibility by identifying contractors that are doing those services in your local community and finding out exactly what they charge.

Should the prospect “know” what the costs are, MOVE THEM TO YOUR “HOT LIST”!  They are ready to do something – now all you have to do is convince them that you offer their best alternative!

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[i] “Seniors embrace aging in place”, Jean Patteson, Orlando Sentinel, July 9, 2010.

[ii] Americans with Disabilities Act

[iii] International Council on Active Aging

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PROPERTY UPKEEP – in a challenging Environment

“How long can an organization postpone renovation/rehab and not risk losing move-ins?” asks the ALFA[1] Case Study: “When Looks Really Matter”. In response, there is no universal right answer, as each company and its situation are different.  Factors that may influence management’s reaction to occupancy challenges include the type of business (i.e. acute hospital, SNF, ALF, IL, etc.), type of clientele, level of competition, census level / amount of decline, and the organization’s overall financial condition.

As a former CFO, I understand that the company must live within its means and that there are often financing considerations behind decisions and timetables for rehabbing a building.  But, unlike a hospital or nursing home where admissions are driven by need and paid by third parties, independent and assisted living communities have a greater requirement in maintaining their properties to remain competitive and continue to attract private pay clientele.

SHOULD MANAGEMENT CUT OR SPEND?

Traditionally, organizations tend to do nothing extraordinary for a 1–2 % change in census, but cut costs and eliminate expenditures as occupancy drops 5–10 points.  Then when the occupancy decline hits 10 points, management panics and starts spending more money, bringing in outside sales/marketers and doing more advertising, special events, etc.  At 12 – 15 points, they call out the National Guard!

So, why wait for it to become a crisis before responding?  No matter the state of the economy, if the census drops, management should do something POSITIVE for the community instead of cutting costs.  Create value-added services[2] to increase the satisfaction of existing residents and marketability for potential residents.  In the private pay world, you must overcome inertia to obtain a move-in and CUTTING COSTS IS NEVER THE ANSWER!

[In fact it can become a “self-fulfilling prophecy” as the company continues to cut costs, reducing the perceived “value” of the services, thus leading to still lower occupancy.]

RENOVATION CYCLES

Many organizations schedule total renovations for their properties on an 8-12 year cycle.  This process generally includes an updated color scheme with new upholstery/furniture and furnishings in the building core and other common areas.  A conventional approach in difficult times is to delay these major expenditures until a) the census improves or b) the economy turns around.

The problem with this strategy is that the appearance of the building may be a CONTRIBUTING FACTOR to its census challenges, so management must look at each situation individually.  For instance, a well-maintained building with consistent local management might require a rehab for only cosmetic purposes and could likely postpone its renovation without adverse consequences.

On the other hand, a property that clearly shows wear and tear – regardless of age – needs attention NOW!  Executive management must convey support for the marketing efforts of the local management team.  In addition, efforts to instill “pride of ownership” in the local staff will be negatively impacted if it appears that management doesn’t care how the place looks.  This will only make the wear and tear cycle worse in the future.

Yet, in this economy, financial limitations are a reality.  No one expects everything to be fixed at once, but the key is to DO SOMETHING! Additionally, PLANNING, PRIORITIZATION and COMMUNICATION are essential for successfully managing renovations.

So, suspend the traditional cyclical renovation program and focus on extending the life of the existing color schemes with repairs and partial replacements.  At the same time, communicate to all properties and the residents in each of those communities that there is a plan and assure them that their concerns will be addressed in due course.  The key is to do a little something for everyone so that the management and residents of the “good” buildings are recognized and shown appreciation for their efforts in maintaining the property.

You don’t have to spend a lot of money to do this.  We promoted a lot of goodwill in a turnaround situation by throwing away a couple of rickety park benches and spending about $500 to replace them with rockers for the front porch.  In another situation, we simply re-arranged the lobby furniture to create several conversation groupings in a less formal setting.

DOES REAL ESTATE SELL?

Roger Bernier, the President and COO of Chelsea Senior Living states in the ALFA Case Study:  “Our buildings are our single most important marketing tools …” and he makes a compelling argument for maintaining a community in good repair, even in hard economic times.  However, a superior building may not be enough to stimulate new move-ins.

Psychologist Abraham Maslow teaches that physical and security are the basic needs for all individuals and most senior living communities focus on meeting these needs.  But, the real potential is in helping the retired adult achieve social, ego and self-actualization goals, which Maslow identifies as higher level needs.

If management shifts its focus to providing a fulfilling lifestyle for their existing residents and then highlighting these activities and services in their marketing efforts, they will find their clientele to be much more accepting of a little normal wear and tear.

GROUP PURCHASING

Lastly, having worked for both large and small enterprises, I understand the substantial price breaks from group purchasing that Todd Kaestner (Brookdale Senior Living) discusses in the case study.  But, to think outside of the box, the operator may get a better return on their investment by purchasing locally! Yes, I know it will likely cost more, BUT . . . you are only doing partial renovations and any exposure within the local community is good and provides inexpensive advertising.  A local owner-operator to whom you bring business (and even the local trades-people that do the work) can be turned into exceptional referral sources to “spread the word” as they visit your property and observe the level and quality of service you provide.  The fact that the company is putting money back into the community – especially in “tough times” – will produce positive public relations on MAIN STREET……one of  your targeted markets.

Again, these suggestions won’t work for everyone, but hopefully they’ll make you consider new options and maybe come up with even better ways to respond to the economy.


[1] Assisted Living Federation of America

[2] Please contact me via email at art@progressiveretirement.com or phone at 615-414-5217 to learn more about the types of value-added services that can be provided and how Progressive Retirement Lifestyles could help you with today’s challenges.