Senior living occupancy saw an uptick in Q3 2019 to 88.0 percent from the Q2 2019 eight-year low of 87.7 percent according to new data from the National Investment Center for Seniors Housing & Care (NIC). Earlier in the year, Enquire’s 2019 Annual Senior Housing and Post-Acute Sales and Marketing Benchmark Report of 3,967 senior care locations had 28 percent of respondents saying that improving the sales process is the biggest opportunity for growth in 2019. This raises the question, does a better, more disciplined sales process equate to higher occupancy? Based on our experience over decades in the industry, the answer is a resounding yes!
But that leads to an even more important question: what constitutes a disciplined sales process? One key component to a disciplined sales process that supports occupancy growth and maintenance is marketing and sales metrics.
A strategic marketing plan should always start with the goals and metrics in mind. Determine your occupancy goals and then work backwards based on your performance metrics. The standard metrics for marketing and sales should include effective, lead, and performance indicators:
- Effective indicators provide information to determine if your marketing and sales activities are adequate to provide the number of inquiries and movement along the pipeline you need for occupancy; examples include cost per lead, total inquiries, and daily and weekly sales activities.
- Lead indicators are those metrics that allow you to gauge the success of your sales process and whether the prospects are qualified. Lead indicators include inquiry-to-tour and tour-to-close (deposit) ratios plus length of sales cycle.
- Performance indicators allow you to accurately gauge occupancy; in senior living, the number of deposits and scheduled move-ins are also performance indicators.
Setting the Goals
Now that you have identified the metrics and goals, how do you set them? This is where backwards math comes in. Let’s work with a simplified example that does not factor in other measurements, such as turnover or anticipated move-outs of residents, which will increase the overall move-in goal.
- If you have a goal of 95 percent occupancy in independent living and need 10 units filled to reach that goal, then you determine a deadline to reach that goal; for this example, we will use 90 days.
- If your facility has a historical inquiry-to-tour ratio of 1 in 3 (or 33 percent) and a tour-to-close ratio of 25 percent, then you will need 12 inquiries for every move-in: 4 of the 12 will tour, and 1 of the 4 will put a deposit down and move in.
- If you want to average 3.33 move-ins per month over the next 3 months, then you will need 40 inquiries per month to reach your end goal of 10 new residents over 90 days.
You can also determine the number of activities needed per week and per month based on measurements. To determine a sales activity goal using the above example: if it takes an average of 25 activities (emails, calls, face-to-face meetings) to gain a move-in, multiply that by the number of move-ins you need and factor in the prospects who don’t move in.
Setting the goals and metrics to measure marketing and sales performance is a key step to being able to effectively oversee and gauge the success of your marketing and sales team and their efforts. With extensive experience as developers and operators, HDG consultants can work with your team to develop a strategic marketing plan that will include the goals, strategies, and tactics to help you achieve your senior living occupancy and revenue targets. For more information, please contact us at 763.537.5700 or firstname.lastname@example.org, or meet with Erin Shvetzoff Hennessey, CEO, and Craig Abbott, EVP, Growth, at the American Seniors Housing Association (ASHA) 2020 Annual Meeting.