On the Record: Sean Kell, CEO of A Place for Mom

Senior Housing News recently caught up with Sean Kell, the chief executive officer of A Place for Mom, the nation’s largest senior living referral information service. The CEO’s previous work experience includes three years as senior vice president and general manager of Expedia.com and two years before that as senior vice president and general manager of Hotels.com. Kell has now been with APFM for nine months, and he’s already made his presence felt.

In this interview, Kell talks about how senior living communities can build a competitive edge in the referral process, the changes APFM has made to its employee compensation structure, and what the company’s strategy is for supplying quality, highly-converting leads.

Senior Housing News: Your company recently underwent some reorganization. Can you give us some details about that?

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Sean Kell: We are changing our business model slightly. We’re the largest nationwide referral service, and by far the largest referral service that uses advisors. A number of small companies operate through the Internet only, without advisors, and that’s the difference between us and most of our competitors. We have 300 advisors that are employees out in the market helping families find senior living and senior care.

Historically, those advisors were paid on commission only. As I’ve been with the company for nine months, one of the things I identified pretty quickly was an opportunity to align those advisors more closely with the families and communities and to change their payment to a base-salary structure with a performance-based bonus structure. We started this model with about ten percent of our employees in January, and the rest are undergoing the transition; we’re trying to get it done pretty quickly.

There’s absolutely been a favorable response; this structure gives stability and it’s a more traditional model for advisement. We’re trying to align their incentives and their job to help people. Our partners have been very favorable in their response as well.

SHN: How big is your company, and do you have any independent contractors? How many companies do you work with?

SK: We don’t have any independent contractors. We believe that having our own employees helps us have a better staff. There are about 500 people in our company; 300 of those are advisors. We also have a set of folks who work in Seattle who screen and qualify leads, and we have our corporate staff.

We currently have over 18,000 partners in the US, which includes home health care services.

SHN: How are you competing with other lead generators, in terms of quality control, etc.?

SK: Our advisors are how we provide more value to the properties across the country. We screen, qualify, and work with every single lead we send on to the properties. Our competitors who don’t have advisors send out leads with virtually no screening or qualifications.

Our leads are vastly better quality because we’ve screened out the bad ones. We think that’s a much better model; our partners tell us that our leads are higher quality, too.

SHN: Do you have exclusive partnerships with any senior care communities or companies?

SK: We don’t have any exclusive relationships; we don’t believe in exclusive relationships. We believe that properties should choose who they get referrals and leads from based on the quality of those leads.

SHN: Does the lead referral service work under a Medicare/Medicaid model?

SK: We don’t work with folks who are using Medicaid, because of restrictions on that by the government. But we do get a number of leads for folks who are on Medicaid, and we direct them to a number of online resources. We still help them, we just don’t do a full referral.

SHN: What are you noticing in terms of the types of facilities/communities consumers looking for? Has there been a noticeable trend toward any one type of care?

SK: We provide assistance to families across the country looking for any type of senior living, from home care all the way up to memory care and dementia care. We’ve seen a little more of a shift toward some of the lower cost options, for two reasons: We definitely believe the economy has impacted peoples’ ability to pay; and secondly, we think that more people are out there looking for housing.

With the growth in the number of consumers looking for housing, you’re getting more people who proportionally are looking for options earlier in the care continuum, and earlier tends to have less medical needs, and therefore be slightly less expensive.

SHN: Do you find yourselves recommending home care more now compared to before?

SK: We are not seeing a significant uptick in home care business or leads. I believe, though, that is a big market and will be growing, because an awful lot of people want to stay at home, and it seems to me that it’s a market that’s underserved. I would expect that to be a growing market for the country and for us.

SHN: Can you share any demographic findings, such as the ages of consumers related to the types of facilities they’re entering? Have you noticed any specific geographic densities?

SK: We don’t keep track of the age of the seniors that are moving in. We work with generally the seniors’ adult children; those are the folks we’re generally dealing with.

Most of the business is happening—consistently—in the bigger cities; that’s where we find the most people looking for care, likely driven by population. More interest, more properties. The top states for us, where we see demand are California, Florida, Texas, and New York. There’s been no change in those trends over the last few months, probably not even the last year. It’s a pretty consistent business; we’re pretty big, so we see trends all over the country. It’s been pretty consistent throughout the last few years.

SHN: Is it really the adult children, or the consumers themselves, who use your service?

SK: We do have some actual consumers, but the vast majority are the adult children of the senior. About ten percent of the time, it’s the seniors themselves.

SHN: Washington state recently passed a bill seeking to regulate the referral business. The industry had until January 2012 to comply; how did this law affect A Place for Mom, and are you aware of any other similar bills in other states?

SK: We are not aware of any other bills across the country in any other state that’s like this. In Washington, the bill went into effect on Jan. 1, and we’re fully in compliance with that bill. We were essentially in compliance before that happened. The bill asked for things like liability insurance, and it required that referral agencies did background checks. The vast majority of the requirements in that legislation were things we had been doing anyway, and the additional requirements were things we were happy to comply with.

We are completely supportive of legislation that helps consumers. We think that doing business the right way is the way we should operate, so we haven’t seen much of an impact. We had to insert an acceptance form that our customers need to sign. It’s a little bit like—you know the iTunes Terms and Conditions that pop up when you use it?—we inserted kind of an acknowledgment form into our contract. Everyone has to do it in the state of Washington.

SHN: Does A Place for Mom have any plans to get into the home care business on a state by state basis as demand for those services is expected to heat up, and licensing and regulation may start to get tricky?

SK: We’re not planning to do that. It is an interesting idea, for sure. But we’re not planning to do that, because our business is being a trusted resource, an unbiased resource, for families, and that is contingent on not doing business with anybody on either side of the business model.

We’re basically a marketing company. We don’t really have a business relationship on the partner side other than referrals. I don’t think we’d buy one. It’s a cool idea; I know a number of companies are trying to do that. We like working with the companies who are trying to do that, but I don’t think it’d be something that we would do. We think of ourselves as a marketing company.

SHN: What insights do you have that would help communities in the competitive process for getting new residents?

SK: There are a couple of things, and our property partners ask us that all the time.

First, when we send a referral to a property, we encourage the consumer to definitely go and tour the property. We tell the properties, ‘Please schedule a tour.’

Number two: The biggest question that families ask us is, What’s the difference between Property A and Property B? I know my parent needs assisted living, but what’s the difference, other than the price?

We work with the properties to understand how they differentiate themselves versus their competitors, and how one property is different from another. Because we’re unbiased, we can describe the differences between the properties to the families, so that they can make an informed decision. [Senior living communities should] help referral agencies understand what is different and special about them so we can tell their story to customers.

SHN: Are you noticing a lot of communities offering specials or discounts to attract customers?

SK: It’s a competitive market out there; a number of companies tell us that they’re doing specials, but I don’t have any data as to whether that’s how they’re getting most of their business.

SHN: What’s going on with your “Secret Shop” program?

SK: We work with a number of our properties through our Secret Shop program so they can get outside data on how well their properties are doing with working with leads, and compare themselves with other properties across the country, for best practices and benchmarks. We do it for free with our partners, and we do it every year; our partner properties tell us they find value in it.

It started with largest national partners, with the biggest senior living providers in the country. Over the years, we’ve expanded into more partners, and we continue to expand it into more, some more regional, and even some smaller partners as we’ve been able to expand.

SHN: What is A Place for Mom’s conversion rate for the number of leads that result in placement (either in facility, or with care services)?

SK: We have no information about home care. Conversion rates for placement varies wildly across the country and across the care types. Most Internet leads that come off the web convert at one percent. That’s why we have basically our entire company that works on filtering and screening and qualifying those leads.

Certain types of memory care convert at 40 or 50% after screening. For assisted living, it’s at less than that, generally.

It varies regionally and by time of year, too. In New York, rates a little higher than in Pennsylvania; in January and February, it’s higher than in October or November. The key for us is the filtering and qualifying that we do with our advisors, so we’re able to find the gems in the leads so that our partners are able to focus on the highly-converting families, and not spend their time filtering through the non-converting leads that show up.

SHN: Heading into March Madness, who are you rooting for?

SK: Duke!  The Final Four is wide open right now, but Duke is on a tear. They do business the right way—I admire the way they appear to run their program, and I admire their coach. We’re trying to do that here at A Place for Mom—trying to be not only the best company and the best place to work, but also the best partner for all of our partners.

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