Not that I am enamored with the current pace of economic recovery or even a true believer in the sustainability of the present trajectory of recovery, there are now enough signs that should encourage CCRC operators hardest hit by the recent downturn to return to an aggressive marketing strategy. Truth be told, no CCRC owner/operator should have abated their marketing efforts during the doldrums period but many certainly pulled back or restrained their spending to coincide with flagging census and revenue periods. As we head now into the new year, it makes sense for CCRCs to pre-ordain the recovery just a bit and move back into a modest-aggressive posture, qualifying and securing new residents. Consider the following if need be, as fuel for a re-tooling initiative on the marketing plan for 2010.
- Existing home sales in most markets is “up” and should continue to stay modestly up as result of Congress extending the first-time home buyer credit. As most seniors considering a move to a CCRC must sell their existing home, now is a good time to re-encourage them to take that step as “activity” for sales remains and should continue to remain, better than any period within the last twelve months.
- Mortgage rates remain low and for the foreseeable future, show no signs of significant upward movement. Lenders while still more cautious in their lending practices, are less skittish and seemingly more willing to write new mortgages for new/existing home sales. Another positive sign for the senior that needs to sell his/her home in order to facilitate that move.
- While still a distance from fully recovered, the stock market has rebounded and helped many seniors recapture some if not the majority of the wealth they lost on paper. For those prospective residents that did not materialize their paper losses into real losses via wholesale selling as the market was tumbling, their wealth prospects have likely improved enough to entertain a possible move into a CCRC. In other words, their economic pessimism measurement has softened enough that good salesmanship and planning can probably sway them into looking at the CCRC as a proper move.
- The New Year brings about a set of opportunities that most CCRCs can capitalize upon, especially non-profits. Within this list is the chance to position against rising property taxes, the ability to offset gains on investment sales with the applicable deductibility of a portion of the entrance fee relegated to pre-paid healthcare, and the advantage (assuming your CCRC has it) of a predictable history of rent/occupancy fees versus rising home ownership costs.
Even with a glimmer of light at the end of the tunnel, no CCRC owner/operator should expect there to be a great deal of pent-up demand. Seniors aren’t monitoring CCRC opportunities and the market and economic conditions favorable for sales – that frankly is the CCRC’s job. The demand for CCRC units is very, very elastic and the more elastic the demand curve, the less attentive and the more fickle buyers are at any given point in time. Even for those seniors on the “hot” prospect list (some who visited, some who have previously paid deposits, etc.), the economic conditions have been such that their profile has changed and they will need a certain amount of reinvigoration. Re-channeling their attention and presenting the opportunities of considering a move again is a tactical and deliberate process as remember, their attention has waned and moved to other concerns.
In order to get “back in the game” so to speak, a CCRC’s marketing approach may need to be tactically tweaked. The next generation of marketing plans will need to be different, for quite some time, from those of say two years ago. I’ve listed below a series of ideas and concepts that should work and ideally, be incorporated into an updated marketing plan or at minimum, a review of existing marketing plans.
- Review and Re-Work Entry Fee Pricing: CCRCs need to critically review their entry fee structures and make sure that their prices reflect the residential real estate trends in their primary markets. If entry fees are at a significant premium to residential real estate values (current), the required value proposition is out of alignment and new sales to new residents will be difficult. Consider adding new options for financing, lower entry-fee levels in exchange for less refundability, less guaranteed healthcare, and/or quicker amortization. Offer buy-up plans for additional healthcare guarantees allowing new residents to gain entry (with lower benefits) but still buy additional healthcare (if qualified) at some point certain in the future. Bottom line: If a CCRC does not have pricing that is reflective of the current real estate and general economy in its market area, no marketing plan ever created will budge new sales enough to justify the expense of the activity.
- Re-Evaluate Your Value Proposition: All CCRC sales (or at least nearly all) are to prospective residents with enough financial means to pursue a myriad of other options. To hone in on prospects and convert them to residents requires the CCRC to qualify a value proposition that makes emotional, social and economic sense. In order to fully understand the value proposition, re-survey current residents, analyze the trends in the market place (economic and other) and the healthcare trends in the market area as well as regionally and nationally. Finally, take all of the gathered intelligence data and place it on a plus/minus grid that can be qualified against the price of moving into and staying within your CCRC and be prepared to make adjustments (if possible) to any weak areas or at least, to intelligently counter the weakness with a positive intangible (assuming the intangible is weighty enough to offer a counter-balance impact).
- Market the Current, Not the Past: Remember, CCRC sales are fairly esoteric and always occurring across a very elastic demand curve and as such, psychology is as important a factor as economics. Marketing the current means getting in experts in areas such as real estate and investments that can speak to how things have changed and why the progression is now forward. These “current” condition testimonials help to create a new thought paradigm for the senior, moving from “pulled-back” to “ready to explore”. If the CCRC can sell optimism, promise and a sense of positive energy now and going forward, the senior is much more likely to re-explore the move opportunity.
- Update Tactics: Sales will now occur in a totally different environment and as such, tactics need to be updated. The United States has just bottomed-out from the worst recession since the Great Depression and been through a period of economic decline unwitnessed by most, including potential new residents. New sales will need lots of consultation, creativity and reinforcement. Sales persons will need to be re-trained to understand the mind-set and to provide new information and new resources. The CCRC itself should be well-armed with a multi-media approach, fully deploying web technology, e-mail, radio and television, print, and direct mail. If a sale two years ago took six touches to get through the qualification process, the sale today will take double – be prepared and expand the number, quality and accessibility of possible touches.
- Focus on Brand/Focus on Information: Effective CCRC marketing requires a solid brand and a commanding presence across the range of housing options within the marketplace. If your CCRC is not a “destination” for seniors and senior related information, it needs to be. Build rapidly, the number of resources that the CCRC can deploy to seniors throughout the market with respect to finances, economics, real estate, healthcare, etc. Information is key to keeping seniors engaged with the project and to qualify consistent, high-value leads. Most important, brand is built on reputation and consistency and if the CCRC has not consistently stuck with an aggressive marketing campaign, even during the downturn, reinvigorating brand will be key to building a solid constituency of prospective seniors.
Even though most CCRCs won’t feel or see results right away, getting back into the game now, slightly ahead but in pace with the gradually recovering economy will be key to reaping new sales and staying positioned as the recovery hopefully, gains additional momentum in 2010.
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