Using Marketing to Drive Long-Term Planning · Atria Senior Living, Inc. Louisville, KY 153 17,958...

LeadingAge Maryland 2016

Using Marketing to Drive Long-Term Planning

April 27, 2016

loveandcompany.com

Presenter

Rob Love Love & Company President/CEO 27 years in Love

My Plan for Today

❖ What does the future look like? ❖ How can marketing help you prepare for

the future? ▪ Target market ▪ Product ▪ Pricing ▪ Performance Measurement ▪ Positioning

❖ Case studies ❖ Key takeaways

What does the future look like?

Brief Dip Before the Dramatic Increase

Today’s 82-year old was born in 1934 and is of the Silent Generation.

The leading edge of the baby boomers turns 70 in 2016; will hit 75 in 2021.Today’s 82-year old

was born in 1934 and is of the Silent Generation.

Demographics Define the MarketForecasted U.S. Seniors Population (1980 to 2040)

(Millions)Increasing Demand

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

1980 1990 2000 2010 2020 2030 2040

(In M

illions)

65 - 74 75 - 79 80 - 84 85+

We Are Here

“I ROB THE BANKS BECAUSE THAT’S WHERE THE MONEY IS!”- William “Slick Willie” Sutton

Region2010

Population

Absolute Population

Change, 2000-2010

Percent Population

Change, 2000-2010

U.S. 309,050,816 26,884,972 9.5%

Northeast 55,417,311 1,753,978 3.3%

Midwest 66,972,887 2,480,998 3.0%

South 114,555,744 14,318,924 14.3%

West 72,256,183 8,774,852 13.8%

Source: U. S. Department of Commerce, Economics & Statistics Administration

Will prospects be able to afford CCRCs in the future?

Summary of Selected Research Findings

❖ About 1/3 of boomers are well-positioned to meet their financial needs in retirement.

❖ About 40% are not likely to be able to meet their financial needs on retirement.

Interesting Research Findings

❖ The single greatest thing baby boomers can do to get their savings rate back on track is to work approximately two years longer. If boomers increased the median retirement age from 62.6, where it is today, to 64.1 by 2015, the number of households unprepared for retirement would drop from 69 to 40 percent.

McKinsey Global Institute, 2008 ❖ 65% of baby boomer workers plan to continue

working past age 65 or do not plan to retire. 15th Annual Transamerica Retirement Survey of Workers, April 2014

United States Demographics

Households Age 75+Income 2015 2020 # Change % ChangeBelow $35,000 7,686,000 8,038,000 352,000 4.6%

$35,000 to $74,999 3,593,000 4,000,000 407,000 11.3%

$75,000+ 1,810,000 2,298,000 488,000 26.9%

14% of 75+ Pop

16% of 75+ Pop

United States Demographics

Households Age 65 to 74Income 2015 2020 # Change % ChangeBelow $35,000 6,135,000 6,900,000 765,000 12.5%

$35,000 to $74,999 5,793,000 6,892,000 1,100,000 19.0%

$75,000+ 4,713,000 6,403,000 1,689,000 35.8%

28% of 65 to 74

Pop

32% of 65 to 74

Pop

Psychographics of the Coming Consumer

❖ Less subject to peer influence and status issues ❖ Less responsive to embellished claims ❖ Less sensitive to price, more sensitive to value ❖ Greater interest in having choice ❖ Greater interest in intergenerational

interaction ❖ Greater interest in well-being and supporting

programming ❖ Greater interest in walkability ❖ Greater comfort with technology

Source: “Making Innovation Work,” Point Forward Solutions, 2015

The Spectrum of Choices for Seniors

75+

60+ 70+ 85+ 90+

Preventative Long-term CareHospital

AACs Continuing Care Retirement Community

Senior Center Services

Geriatric Assessment &

Case ManagementSenior Health

& Wellness Center

Continuing Care at Home

Assisted Living

Respite Care PACE

Programs

Memory Support Skilled Nursing

Rehab

Subacute

*Community Based

Services

Wellness Program

Case Management

Independent Living Adult

Day Services

Memory Support Assisted Living

Home Health Care

Skilled Nursing

Hospice

Transitional Medicare Acute

*Transportation; Information/Referral; Counseling; Meals-on-Wheels; Integrated Day Care; Homemaker/Chore/Housekeeping; and Emergency Response System

❖ Within a regional or metro-area market, the ability to offer solutions for older adults across the age, income and services continuum ▪ Market Rate IL with a hospitality focus ▪ Moderate Independent Living ▪ Assisted living ▪ Memory care ▪ Skilled nursing, post-acute ▪ Skilled nursing, Medicaid ▪ Affordable Housing ▪ HCBS (home health, home care, concierge, PACE,

Adult Day) ▪ Maximization of partnerships in the region

The Potential Not-For-Profit Full-Service Senior Living Model

Defining the For-Profit Providers

Entry Fee Communities • Few for-profit entry-fee Life Plan

Community operators

IL/AL Communities • Significant growth post-recession • New Regional Operators (est. 20%)

Memory Care • Often with AL and IL

Rental Communities • Majority of the for-profit

Life Plan Community inventory

Freestanding AL • Significant growth post-recession

Skilled Nursing – Post Acute • Geared toward rehab and post-acute sector

Skilled Nursing - Medicaid • Medicaid-oriented providers

Pace of for-profit growth – is it showing signs of a slowdown? Senior Housing Construction by Profit Status; MAP31

4Q05 – 2Q15

Num

ber o

f Pro

pert

ies

Und

er

Con

stru

ctio

n

0

55

110

165

220

Not-For-Profit

For-ProfitPrimarily free-standing

AL/MC or IL/AL

Source: NIC MAP® Data & Analysis Service

15 Largest Senior Living OwnersCompany Headquarters Properties Units

Brookdale Senior Living Inc. Brentwood, TN 976 82,356

Ventas Inc. Chicago, IL 785 69,708

Health Care REIT Inc. Toledo, OH 611 59,786

HCP Inc. Irvine, CA 491 49,731

Senior Housing Properties Trust Newton, MA 297 34,772

Boston Capital Boston, MA 486 29,741

NorthStar Healthcare New York, NY 209 17,514

Senior Lifestyle Corporation Chicago, IL 176 16,685

New Senior Investment Group New York, NY 124 14,838

Holiday Retirement Lake Oswego, OR 114 13,768

Harrison Street Real Estate Capital Chicago, IL 107 12,359

National Health Investors (NHI) Murfreesboro, TN 103 8,678

Highridge Costa Companies Gardena, CA 84 8,402

ACTS Retirement-Life Communities West Point, PA 21 7,982

Enlivant Chicago, IL 177 7,829

Source: 2015 American Seniors Housing Association, “ASHA 50”; Note- properties w/ >30% SNF excluded

15 Largest Senior Living OperatorsCompany Headquarters Properties Units

Brookdale Senior Living Inc. Brentwood, TN 1,138 110,443

Holiday Retirement Lake Oswego, OR 308 37,657

LCS Des Moines, IA 123 32,172

Five Star Senior Living Newton, MA 272 31,267

Sunrise Senior Living, LLC McLean, VA 245 22,561

Erickson Living Baltimore, MD 17 20,517

Senior Lifestyle Corporation Chicago, IL 201 20,334

Atria Senior Living, Inc. Louisville, KY 153 17,958

Capital Senior Living Corporation Dallas, TX 118 11,632

Elmcroft Senior Living Louisville, KY 101 8,874

ACTS Retirement-Life Communities West Point, PA 21 7,982

Enlivant Chicago, IL 177 7,829

Watermark Retirement Communities, Inc. Tucson, AZ 38 7,483

Meridian Senior Living Hickory, NC 130 7,026

American House Senior Living Communities Bloomfield Hills, MI 61 7,002

Source: 2015 American Seniors Housing Association, “ASHA 50”; Note- properties w/ >30% SNF excluded

Senior Living Sector: For-Profit

Brightview Senior Living (The Shelter Group), Baltimore, MD

❖ 56 Communities in 8 States CT, MA, MD, NJ, NY, PA, RI, VA

❖ 6,969 Total Units ▪ 55+ Community ▪ Independent Living ▪ Assisted Living ▪ Skilled Nursing ▪ Memory Care

Senior Living Sector: For-ProfitMassachusetts Brightview Concord River, Billerica Brightview Danvers Brightview Country Club Heights, Woburn New Pond Village, Walpole Brightview Arlington Brightview Canton Brightview North Andover

Maryland Brightview Avondell, Bel Air Brightview Bel Air, Bel Air Brightview Catonsville Brightview White Marsh, Baltimore Brightview Mays Chapel Ridge, Timonium Brightview Westminster Ridge, Westminster Brightview Towson Brightview Perry Hall, Nottingham Brightview Rolling Hills, Catonsville Brightview South River Edgewater Brightview Fallsgrove, Rockville Brightview Severna Park

Connecticut Evergreen Woods, North Bradford Brightview on New Canaan, Norwalk

Rhode Island Brightview Commons, Wakefield

New Jersey Brightview Mount Laurel Brightview Woodbury Lake Brightview Greentree, Malton Brightview Tenafly Brightview Randolph

Pennsylvania Brightview East Norriton The Manor at York Town, Jamison

New York Brightview Tarrytown

Virginia Brightview Baldwin Park, Staunton Brightview Great Falls Brightview Woodburn, Annandale


Brookdale Senior Living, Brentwood, TN (includes Emeritus Senior Living)

❖ 1,140 Communities in 48 States All States except AK, DC, HI, SD


Senior Living Sector: For-ProfitBrookdale Senior Living, Brentwood, TN (includes Emeritus Senior Living) Georgia

Brookdale Augusta Brookdale Buford Brookdale Dunwoody, Atlanta Brookdale Lawrenceville Brookdale Newnan Brookdale North Augusta Brookdale South Lee Buford Brookdale Stone Mountain Brookdale Sweetwater Creek, Lithia Springs Brookdale Vinings, Atlanta Sheridan Place, Dublin

South Carolina Brookdale Chandler Place, Rock Hill Brookdale Ebenezer Road, Rock Hill Brookdale North Augusta Brookdale Spring Arbor, Rock Hill Homewood At Cleveland Park, Greenville Horizon Bay Charleston Sterling House Of Central Sterling House Of Greenville Sterling House of Greenwood Sterling House Of Harbison, Columbia Sterling House Of Sumter Sterling House On Parklane, Columbia

Maryland The Bellavita At Scarborough The Solana Olney

Delaware Brookdale Hockessin Brookdale White Chapel, Newark Brookdale Senior Living

West Virginia Bridgeport Campus, Bridgeport

Virginia Abingdon Place Of Danville Brookdale Gayton Terrace, Richmond Brookdale Imperial Plaza, Richmond Brookdale Midlothian Brookdale West End Richmond Chambrel At Williamsburg Clare Bridge Of Virginia Beach Estates Gayton Terrace, Richmond

Senior Living Sector: For-ProfitBrookdale Senior Living, Brentwood, TN (cont’d.) (includes Emeritus Senior Living) North Carolina Brookdale Carriage Club Providence, Charlotte Brookdale Charlotte Easat, Charlotte Brookdale Charlotte South, Charlotte Brookdale Churchill, Mooresville Brookdale Concord Parkway, Concord Brookdale Concord South, Concord Brookdale Cotswold, Charlotte Brookdale East Broad, Statesville Brookdale Monroe Square, Monroe Brookdale New Hope, Gastonia Brookdale Peachtree, Statesville Brookdale Robinwood, Gastonia Brookdale Salisbury Brookdale South Park, Charlotte Brookdale Union, Gastonia Brookdale Union Park, Monroe Brookdale Weddington Park, Matthews

North Carolina (cont’d) Burlington Manor, Burlington Carolina House Of Asheboro Carolina House Of Cary Carolina House Of Chapel Hill Carolina House Of Durham Carolina House Of Lexington Carolina House Of Morehead City Carolina House Of Pinehurst Carolina House Of Reidsville Carolina House Of Smithfield Carolina House Of Wake Forest Clare Bridge Of Burlington Clare Bridge Of Cary Clare Bridge Of Chapel Hill Clare Bridge Of High Point Clare Bridge Of Wilmington

North Carolina (cont’d) Clare Bridge Of Winston-Salem Eden Estates, Eden Greensboro Manor, Greensboro Greensboro Place, Greensboro Heritage Of Raleigh Hickory Manor, Hickory High Point Manor, High Point High Point Place, High Point Lenoir Park, Lenoir Reynolda Park, Winston-Salem Skeet Club Manor, High Point Sterling House Of Goldsboro Sterling House Of Hickory Sterling House Of New Bern Sterling House Of Rocky Mount Sterling House Of Shelby Wynwood Of Chapel Hill

Senior Living Sector: For-ProfitEmeritus Senior Living, Brentwood, TN (part of Brookdale Senior Living) Georgia Emeritus At Flint River, Macon Emeritus At Heritage Hills, Columbus Emeritus At Peachtree Village, Commerce

South Carolina Emeritus At Anderson Place Campus Emeritus At Bellaire Place, Greenville Emeritus At Conway Place Emeritus At Countryside Campus, Easley Emeritus At Greenville Emeritus At Hawthorne Inn At Hilton Head Island Emeritus At Hawthorne Inn Greenville Emeritus At Laurel Gardens, Florence Emeritus At Lexington Gardens, West Columbia Emeritus At Palm Court, Hilton Head Island Emeritus At Palm Village, Hilton Head Island Emeritus At Skylyn Place Campus, Spartanburg

North Carolina Emeritus At Greensboro Emeritus At The Pines of Goldsboro

Maryland Emeritus At Hagerstown Emeritus At Pikesville Emeritus At Potomac Emeritus At Towson, Baltimore Emeritus At Westminster Emeritus At Woodward Estates, Bowie

Virginia Emeritus At Arlington Emeritus At Cave Spring, Roanoke Emeritus At Danville Emeritus At Harrisonburg Emeritus At Lake Ridge, Woodbridge Emeritus At Manassas Emeritus At Ridgewood Gardens, Salem Emeritus At Roanoke Emeritus At Staunton Emeritus At Sterling Emeritus At Wilburn Gardens, Fredricksburg

West Virginia Emeritus At Charleston Gardens

Delaware Emeritus At Cape May, Cape May Court House Emeritus At Dover


Sunrise Senior Living, McLean, VA

❖ 248 Communities in 31 States AZ, CA, CO, CT, DE, DC, FL, GA, IL, IN,KS, KY, LA, ME, MD, MA, MI, MN, MO, NE, NV, NJ, NY, NC, OH, PA, TN, TX, UT, VA, WA



Sunrise Senior Living, McLean, VAGeorgia Brighton Gardens of Buckhead, Atlanta Brighton Gardens of Dunwoody Sunrise at Buckhead, Atlanta Sunrise of Decatur Sunrise at East Cobb, Marietta Sunrise at Five Forks, Lilburn Sunrise of Huntcliff Summit I, Sandy Springs Sunrise at Huntcliff Summit II, Sandy Springs Sunrise at Ivey Ridge, Alpharetta Sunrise of Johns Creek Sunrise at Webb Gin, Lawrenceville

North Carolina Brighton Gardens of Charlotte Brighton Gardens of Greensboro Brighton Gardens of Raleigh Brighton Gardens of Winston-Salem Sunrise of Cary Sunrise at North Hills, Raleigh Sunrise of Raleigh Sunrise on Providence, Charlotte

Virginia Braddock Glen, Fairfax The Colonnades, Charlottesville The Fairfax at Belvoir Woods Sunrise at Bluemont Park, Arlington Sunrise at Bon Air, Richmond Sunrise at Countryside, Potomac Falls Sunrise at Mount Vernon, Alexandria Sunrise at Reston Town Center, Reston Sunrise of Alexandria Sunrise of Arlington

Virginia (cont’d) Sunrise of Fairfax Sunrise at Fair Oaks, Fairfax Sunrise of Falls Church Sunrise at George Mason, Fairfax Sunrise of Hunter Mill, Oakton Sunrise of Leesburg Sunrise of McClean Sunrise of Richmond Sunrise of Springfield The Jefferson, Arlington

Delaware Sunrise of Wilmington


Sunrise Senior Living, McLean, VAPennsylvania Sunrise of Abington Sunrise of Blue Bell Sunrise of Dresher Sunrise of Exton Sunrise of Granite Run, Media Sunrise of Haverford Sunrise of Lafayette Hill Sunrise of Lower Makefield, Morrisville Sunrise of McCandless, Pittsburgh Sunrise of Newtown Square Surise of Paoli, Malvern Sunrise of Presque Isle Bay, Erie The Quandrangle, Haverford Sunrise of Upper St. Clair Sunrise of Westtown, West Chester

Maryland Sunrise of Annapolis Bedford Court, Silver Spring Brighton Gardens of Columbia Brighton Gardens of Friendship Heights, Chevy Chase Brighton Gardens of Tuckerman Lane, North Bethesda Sunrise of Columbia Sunrise at Fox Hill, Bethesda Sunrise of Frederick Maplewood Park Place, Bethesda Sunrise at Montgomery Village Sunrise of Pikesville Sunrise of Rockville Sunrise of Severna Park Sunrise of Silver Spring

District of Columbia Sunrise on Connecticut Avenue, Washington


Five Star Quality Care, Newton, MA

❖ 260+ Communities in 30 States AL, AZ, CA, CO, DE, FL, GA, IL, IN, IA, KS, KY, MD, MA, MN, MS, MO, NE, NV, NJ, NM, NY, NC, OH, PA, SC, TN, TX, WY



Five Star Quality Care, Newton, MAGeorgia Morningside of Macon Morningside of Evans Savannah Square Habersham House, Savannah Marsh View Senior Living, Savannah Morningside of Columbus Morningside of Conyers Morningside of Athens Palms (Gardens) of Lake Spivey, Jonesboro Eastside Gardens, Snellville Northlake Gardens, Tucker Morningside of Gainesville Gracemont, Cumming Cameron Hall of Canton Cameron Hall of Ellijay Morningside of Dalton

Pennsylvania Tiffany Court at Kingston Clarks Summit Senior Living Exton Senior Living NewSeasons at New Britain, Chalfont The Devon Senior Living Glen Mills Senior Living Mount Vernon of Elizabeth Overlook Green, Whitehall Mount Vernon of South Park Franciscan Manor, Beaver Falls

Delaware Somerford House & Place Newark Millcroft, Newark Foulk Manor South. Wilmington Foulk Manor North, Wilmington

Maryland Heartland Assisted Living at Severna Park Somerford Place Annapolis HeartFields Assisted Living At Bowie Somerford Place Columbia Heartlands Senior Living Village at Ellicott City Aspenwood Senior Living Community, Silver Spring Five Start Premier Residences of Chevy Chase HeartFields Assisted Living At Easton HeartFields Assisted Living At Frederick Somerford House & Place at Frederick Somerford House & Place Hagerstown

Senior Living Sector: For-ProfitFive Star Quality Care, Newton, MASouth Carolina Morningside of Lexington The Haven in the Summit, Columbia Morningside of Orangeburg Morningside of Camden Morningside of Sumter Morningside of Greenwood Morningside of Lancaster Morningside of Hartsville Morningside of Rock Hill Ashley River Plantation, Charleston Morningside of Anderson The Haven in the Village at Chanticleer, Greenville The Legacy of Anderson Summit Place of Daniel Island, Charleston Summit Place of Beaufort Morningside of Beaufort Sweetgrass Village, Mt. Pleasant Sweetgrass Court, Mt. Pleasant The Palms of Mt. Pleasant Morningside of Georgetown Morningside of Seneca Myrtle Beach Manor Summit Place of North Myrtle Beach, Little River

North Carolina Seasons at Southpoint, Durham HeartFields at Cary Morningside of Raleigh Home Place of Burlington Fox Hollow Senior Living Community, Pinehurst Morningview at Irving Park, Greensboro Carriage House Senior Living Community, Greensboro Parkwood Village & The Landing, Wilson Forest Heights Senior Living Community, Winston-Salem Morningside of Concord The Laurels & The Haven in Highland Creek, Charlotte Summit Place of Mooresville Summit Place of South Park, Charlotte Legacy Heights Senior Living Community, Charlotte The Havens & The Laurels in the Village at Carolina Place, Pineville McCarthy Court, New Bern Home Place of New Bern Morningside of Gastonia Summit Place of Kings Mountain

Virginia Morningside of Charlottesville Morningside of Bellgrade. Midlothian Morningside in the West End, Richmond HeartFields at Fredericksburg Dominion Village at Williamsburg Morningside of Williamsburg Dominion Village at Poquoson Dominion Village at Chesapeake The Talbot on Granby, Norfolk The Reserve at Greenbriar, Chesapeake The Gardens of Virginia Beach

Conclusions

❖ There is a tremendous pipeline of Americans nearing the traditional age of move-in to a Life Plan Community.

❖ These people will have significantly different expectations for retirement living than the people we have served in the past.

❖ For-profit operators are already investing substantially in preparing for these changes.

How can marketing help you plan for the future?

Elements of a Marketing Plan

❖ Target market How is your market going to change over the years?

❖ Product What do you offer today, and what needs can/and should you meet in the future?

❖ Positioning strategy How does your community compare to competitors, and to what the market is looking for? How does your brand need to evolve?

Elements of a Marketing Plan

❖ Pricing strategy How do your fees compare to competitors? To other market factors?

❖ Performance measurement How do you evaluate ongoing performance, and what can that analysis tell you about your community’s needs?

Target Market Analysis

Resident Demographic Analysis

Sample Community #1

Resident Demographic Analysis

Sample Community #2

Typical Average Age of New Residents

Average Age of New Residents at Move In

Num

ber

of C

omm

unit

ies

0

8

15

23

30

Average Age of New Residents

70 to 72 >72 to 74 >74 to 76 >76 to 78 >78 to 80 >80 to 82 >82 to 84 >84 to 86

7

27

24

13

6

211

❖ Residences are too small ❖ Too high a proportion of one-bedroom

and smaller residences ❖ Contract options may be too limited ❖ Limited amenities ❖ Limited wellness and dining options ❖ Sales team may not be educating

prospects on the benefits of moving

What is it telling you if your new residents are much older than average?

Geographic Analysis: IL Market Density

Geographic Analysis: IL Resident Origin

❖ We are at a distinct competitive disadvantage to our competitors.

❖ Challenges could be product and/or pricing related.

❖ We have a niche market and need to focus on the unique needs of that niche.

What might this be telling us?

Primary Market Area Demographics

Households Age 75+Income 2015 2020 # Change % ChangeBelow $35,000 17,181 17,301 120 0.7%

$35,000 to $74,999 10,216 10,670 454 4.4%

$75,000+ 6,569 7,580 1,011 15.4%

How is the PMA expected to grow in the future?

Primary Market Area Demographics

Households Age 65 to 74Income 2015 2020 # Change % ChangeBelow $35,000 9,908 11,420 1,512 15.3%

$35,000 to $74,999 12,453 14,807 2,354 18.9%

$75,000+ 13,943 18,181 4,238 30.4%

How is the PMA expected to grow in the future?

❖ Healthcare primary market area is frequently smaller than the IL market area

❖ Look at many of the same things: ▪ Where are the greatest concentrations

of prospects? ▪ How do those concentrations compare

to where you are actually drawing from? ▪ Does your draw area appear to be

impacted by competitors?

Healthcare Target Market

Geographic Analysis: IL Primary Market Area

Healthcare Primary Market Area

Rehab Market Analysis

Key Questions Organizations Should Be Asking

❖ Target market environment ▪ What is your primary market area (PMA), based on

historical data from actual resident moves? ▪ Are there untapped pockets of potential residents in

your PMA? ▪ Can your PMA support growth? How much? And how

much of that growth can your community capture? ▪ What is the market demand and potential for other

services, such as home-based care, continuing care at home, dementia care, and rehabilitation services?

Product

IL Residence Size and Mix

Proportion of Couples by Residence Type

Residence TypeCouples

Proportion

Studio 0%

1 BR 10%

1 BR/Den 25%

2 BR 60%

2 BR/Den 80%

Impact of Residence Mix on Couples

Residence TypeCouples

Proportion Community A Community B

Studio 0% 20 0

1 BR 10% 100 40

1 BR/Den 25% 20 50

2 BR 60% 50 60

2 BR/Den 80% 10 50

Total Residences 200 200

Proportion of Couples: 27% 46%

Smaller Residences Produce Lower Margins

❖ Lifecare Actuarial Surplus Projections, Single Residents * Comm A Comm B Comm C ▪ Studio: -12% n/a -18% ▪ 1 BR: 4% 7% 0% ▪ 1 BR/Den: 19% 22% 9% ▪ 2 BR: 28% 31% 19% ▪ 2 BR/Den: 37% 41% 28% Weighted Avg, Single: 10% 15% 3%

*Goal is >10%

Larger Residences vs “Younger” Couples

Community A Move-Ins, 2009-2013

Type # of Move-Ins Avg Age % Married

Studio 3 79.7 0%

1 BR 19 80.6 0%

1 BR/Den 29 81.9 38%

2 BR 24 79.3 54%Subtotal: 75 80.6 32%

New Garden HomesAll 8 78.2 63%


Community B: 2011-2014

Type # of Move-Ins Avg Move-In Age % Married

Studio/1 BR 32 78.1 22%

2 BR and larger 30 75.8 87%


Community C: 2008-2012

Type # of Move-Ins Avg Age % Married

Older Residences 66 81.7 20%

New Residences 11 79.1 82%

❖ IL turnover, 6-year length of stay: 17% ❖ IL turnover, 8.5-year length of stay: 12% ❖ 5% of 200 residences is 10 residences/year ❖ Lower turnover results in:

▪ Higher census ▪ Greater revenue ▪ Lower marketing costs

Is 2.5 Years Meaningful?

Design Implications on Resident Age

Influence of Attributes on Purchase Decision of CCRC Buyers (ProMatura Group)

Attribute% of Highest

Possible Rating

Attribute% of Highest

Possible Rating

Appearance of Buildings 87% Fitness Center 79%

Location 87%Entertainment Opportunities 79%

Reputation of Community 87% Residents in the Community 77%Dining Services 86% Other Staff 77%Medical Facilities 84% Library 77%The Type and Quality of Food 83% Swimming Pool 77%

Type of Residences Available 83%The Times Available for Dining 76%

View From Your Residences 83% Receptionist 76%The Variety of Menu Choices 83% The Cultural Opportunities 76%

Size of Residences Available 83%The Educational Opportunities 74%

Types of Dining Venues 83% Executive Director 73%Natural Light in Residences 81% Number of Residences 71%

The Social Opportunities 81%The Arts/Crafts Opportunities 71%

Assisted Living/Personal Care ❖ Household model ❖ One-bedroom residences ❖ Choice of decor ❖ Kitchenettes ❖ European showers ❖ Dining experience that’s equivalent

to independent living

Key Healthcare Product Attributes

Memory Support ❖ Dedicated dementia unit vs

intermixed ❖ Household model ❖ European showers ❖ Extensive programming and

necessary staff training


Rehab/Long Term Care ❖ Household model ❖ Private rooms ❖ European showers ❖ Personalized dining ❖ Dedicated/separate rehab unit


Private Payer Expectations (Nursing) ❖ Private rooms ❖ Customization options ❖ Enhanced sleep experience ❖ Menu options ❖ Stimulating programming ❖ Fresh air exposure and activities


Community Scorecard

Pricing/Product Analysis

Competitive Pricing Analysis

❖ Lifetime cost analysis ▪ Actuarially based ▪ Factors in lifecare vs fee-for-service

and other contract options, as well as refund options

Competitive Pricing Analysis

❖ Result: A clear understanding of the relative total cost of living at each community.

Competitive Positioning Analysis

Home Value Analysis

❖ Desired relationship between home values and entrance fees ▪ LC declining balance = median home value ▪ FFS declining balance < less than median

home value ▪ FFS, high refund: 20 to 30% > median

home value ❖ When pricing goes higher than this, it

reduces potential demand by limiting the number of people that can afford the community.

❖ End goal: Objectively determine your value and competitive position in the market…

❖ …and determine an appropriate niche and target position for your community. ▪ Is this target position feasible and

achievable? ▪ What will it require?

❖ You don’t have to be the best in your market, but you do have to have alignment between your price and your product.

IL Pricing/Product Analysis

❖ The same product/pricing analysis process applies to AL and memory care.

❖ Pricing analysis for rehab and long term care involves a different approach: Revenue maximization.

Healthcare Pricing Analysis

❖ Quality of care and outcomes are influencing referrals.

❖ Communities are now competing for Medicare/Medicaid bundled payment partnerships.

❖ ACO partnerships are forming.

LTC Revenue Maximization

❖ Relationships with referral sources need to evolve.

❖ Do you have the right person in the community outreach role to maximize your payer mix?

LTC Revenue Maximization

❖ Length of stay, outcomes and hospital readmission rates are still essential.

❖ Add rehab customer satisfaction to the mix.

❖ Increase orthopedic referrals through outcomes: 10-14 day stay and follow-up after discharge to reduce hospital readmissions.

Rehab Revenue Maximization

Performance Measurement

Declining Census

50%

63%

75%

88%

100%

1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15

95% 95% 94%92% 91% 90% 89%

87% 85% 84%82% 80% 79%

95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 95%

Census Goal Cenus Actual

What is it telling us? ❖ Aging residents, high

turnover? ❖ Decreasing sales? ❖ Competitive

challenges? ❖ Market saturation? ❖ Marketing

challenges?

Lead Generation Trends

30

45

60

75

90

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Total Leads FY12 Total Leads FY13 Total Leads FY14

What is it telling us? ❖ Decreasing

effectiveness of marketing?

❖ Increase in competitor marketing?

❖ Reputation challenges in the market?

❖ Outdated branding?

Sales Trends

0

2

4

6

8

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15

Sales Goal Sales Results

Ratio Trend: Leads to Appointments

0%

8%

16%

24%

32%

1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15

Goal Ratio Actual Ratio

Benchmark: 25 to 33% of leads should convert to appointments

What is it telling us? ❖ Change in sales

process? ❖ Change in event

experience? ❖ Change in market

reputation? ❖ Website challenge? ❖ Collateral challenge?

Ratio Trend: Appointments to Sales

Benchmark: 7 to 10% of appointments should convert to sales

0.0%

2.3%

4.5%

6.8%

9.0%

1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15

Goal Ratio Actual Ratio

What is it telling us? ❖ Product challenges? ❖ Pricing challenges? ❖ Selling skills? ❖ All of the above?

Do you have the staff to achieve your goals?Community A:

Newer, fresh, shows well Goal: 30 sales

316 appointments

3,950 connected calls ÷ 250 work days =

16 calls/day = 1.5 full-time sales

counselors

9.5%

8%

Community B: Older, outdated Goal: 30 sales

430 appointments

6,615 connected calls ÷ 250 work days =

27 calls/day = 2.5 full-time sales

counselors

7%

6.5%

Assisted Living & Healthcare Performance Measurement

Stand-Alone vs Life Plan Community

Stand-Alone Healthcare Community ❖ 1 full-time community outreach coordinator

▪ 20 networking presentations per week – 80/month

▪ 1 in 4 referrals will convert to a qualified lead

❖ 1 full-time admissions director ▪ 20-30% of leads should convert to

appointments ▪ 10-15% of leads should convert to sales

Stand-Alone vs Life Plan Community

Life Plan Community ❖ What is the philosophy of internal IL

moves to AL? ❖ What percentage is needed from

external move-ins? ❖ Marketing director provides outreach

activity ❖ Same metrics apply

❖ Full-time nurse care coordinator/outreach specialist

❖ 80% of time spent in hospitals and networking

❖ Referrals are based on quality of care and outcomes

❖ Plan for achieving the desired payer mix

Rehab/LTC Metrics

Positioning Strategy


Strategic planning ❖ Bring together key constituency

groups ❖ What opportunities are there to

extend your mission? What niches are the right ones for you?

❖ How can you extend our mission in a way that best matches market needs?


Financial Strength ❖ Have you been regularly reinvesting in your

physical plant to keep the community current? What is your average age of physical plant?

❖ Do you have the cash/liquid assets to be able to invest in upgrading the community to meet current expectations?

❖ Does your balance sheet support the ability to finance improvements?

❖ Do you need an expansion to generate funds to complete renovations?


Brand positioning ❖ Who and what are you today? ❖ What is your long-term vision? ❖ Does your positioning enable you to grow? ❖ Do you have a brand that can grow with

you?

Repositioning Strategy

Master planning ❖ Bring together an experienced team

▪ Architect ▪ Financial analyst ▪ Investment banker ▪ Marketing ▪ Residents ▪ Board members ▪ Management/staff

Case Studies

Case Study #1: Baltimore CCRC

Situation: ❖ 35-year old community ❖ Beautiful, rural setting on 94 acres ❖ Great reputation for care ❖ Strong financial position ❖ Census dropped into the mid 80%

range


Target Market Analysis: ❖ Highly competitive market ❖ High potential demand with

strong growth ❖ Population density centered

around competitors


Product Analysis: ❖ High proportion of small residences ❖ Out-of-date residence design ❖ Institutional healthcare ❖ Limited health and wellness

programs ❖ Overall: Below average product


Pricing Analysis: ❖ Highest cost community in the

market ❖ Limited contract offering

(declining balance lifecare) ❖ Market area home values

support higher entrance fees ❖ Poor overall perceived value


Immediate Action Items: ❖ Hire a VP of marketing and sales ❖ Revised lifecare contract to lower

cost ❖ Offer Type C contract option ❖ Develop IL pricing model that

adjusts entrance fees by location and view

❖ Develop “prototype” expanded existing residence

❖ Census is now at 94%


Longer Term Actions: Master Plan ❖ Renovate healthcare into

neighborhoods ❖ Expand assisted living ❖ Expand fitness and wellness ❖ Expand/update resident amenity

spaces ❖ Add 52 new, larger residences

Case Study #2: Rochester Skilled Nursing

Situation: ❖ 117-year legacy in skilled nursing ❖ Conveniently located near sister

CCRC community ❖ Reputation and census are strong ❖ Private pay census only 29% ❖ No outreach presence or plan


Target Market Analysis: ❖ Highly competitive market ❖ One competitor is adjacent to a large hospital


Product Analysis: ❖ Old product undergoing

renovation to neighborhood model ❖ Hallway clutter and inconsistent

cleaning guidelines ❖ Shared suites ❖ Shower rooms


Pricing Analysis: ❖ Competitively priced ❖ Rehab referrals are strong ❖ Challenges with perceived

value for private pay prospects and adult children


Immediate Action Items: ❖ Medicaid residents will not be

moved back to remodeled rooms

❖ Customization options ❖ Sleep enhancements ❖ Declutter and clean ❖ Develop outreach plan


Longer Term Actions: Master Plan ❖ Renovate first floor common

areas and front entrance ❖ Remove nursing stations and

renovate hallways prior to room renovations

❖ Provide dedicated short-term rehab neighborhood near gym

Conclusion & Key Takeaways

Marketing and Strategic Planning


The same things you need to know to develop an effective marketing plan are the things you need to know to

develop an effective long-term strategic plan.


❖ In the short term, this information drives: ▪ Marketing budget requirements

▪ Marketing staffing levels

▪ Residence renovations/capital budget ▪ Pricing and contract adjustments ▪ Aesthetic upgrades to the community ▪ Service modifications (e.g., dining,

wellness)


❖ In the long term, it drives: ▪ Master planning

▪ Operational staffing levels

▪ Residential reworking/expansion ▪ Pricing and contract adjustments ▪ Amenity additions ▪ Service additions ▪ New strategic initiatives


❖ While you are in the planning process: ▪ Be sure to use solid results reporting

and metrics evaluation to identify early warning signs of problems!

[email protected]

Thank You

loveandcompany.com

Find us on:

Using Marketing to Drive Long-Term Planning · Atria Senior Living, Inc. Louisville, KY 153 17,958...

Documents

Transcript of Using Marketing to Drive Long-Term Planning · Atria Senior Living, Inc. Louisville, KY 153 17,958...