The senior living industry is lacking many foundational elements of professional selling, according to a sales and marketing consultant, and it’s holding the industry back from achieving higher, pre-recession-level occupancy.
“I don’t have a crystal ball, but I would safely say there’s no reason [the senior living industry’s] occupancy shouldn’t climb above 91% and higher,” says Traci Bild, founder and CEO of Bild & Company. “It’s been slowly climbing up, but it’s been stuck between about 88-89% for ever.”
Albert Einstein’s definition of insanity—doing the same thing over and over again and expecting different results—seems particularly applicable to the situation.
“The senior living industry keeps doing the same things, but to get a different result and climb above 90% [occupancy] we have to change how we’re doing things,” Bild says.
One way to change is to build a solid professional sales foundation, which includes ongoing sales education, having and using customer relationship management (CRM) software, and appropriate, motivational compensation.
The hold-up, she says, is that the concept of a professional sales force is foreign to many mission-driven senior living providers who consider “sales” a dirty word.
“Care is a priority—as it should be—and the lack of priority is always on the sales side,” Bild says. “But sales is the engine that drives your business, and without revenue, your hands are tied. The more business and residents you have, the greater ability there is to scale the mission people are so passionate about.”
In order to close the senior living occupancy gap of where it stands today versus the pre-recession level, the industry needs to take selling much more seriously, according to Bild. That includes a focus on training and education.
“Providers often bring people in [to the senior living industry] and expect them to have the skill set to do the job,” she says. “Especially for smaller mom-and-pops, they might do an initial education, but it needs to be continual. That’s how salespeople grow.”
For some providers, the lack of sales training has to do with the personnel in training roles being spread too thin.
“A lot of people have great regional sales managers, but most of the time the ones who are supposed to do training are busy [working with] troubled communities and don’t have enough time to do training,” she says. “They want to, but it doesn’t happen. New hires fall through the cracks, and the existing sales people who aren’t performing kind of flounder, even if they want to be successful.”
The pressure on sales forces is intense, Bild says, but it needs to be combined with actual tools, such as a CRM system.
“People need software. It’s amazing to me how many people still don’t have quality software,” she says. “Invest in something that’s quality-proven and professional to give [sales associates] a tool.”
Bild points to a lack of incentive on the compensation side as another factor in subpar selling.
The average base for a sales position in a senior living community ranges between $43,000 and $47,000, according to Jennifer Saxman, director of recruiting and compensation development at Bild & Company, although in some markets it’s closer to $50,000. Most sales associates have the opportunity to earn more money based on performance, and can make around $10,000 to $12,000 on top of their base salary on average.
Commercial real estate agents, on the other hand, earn an average annual income of $85,000 as of June 2013, according to Indeed.com.
“The seniors housing industry pays extremely low in comparison to other industries, which makes it challenging to bring in new talent,” Saxman says.
Even if communities are seeing move-in activity that’s similar to pre-recession levels, Bild says, there’s one key difference that’s holding them back: attrition.
“We’re losing residents at a mass rate,” she says.
When Bild & Company begins consulting with a company—which includes an intense sales force focus—the goal is always to double move-ins as quickly as possible. Communities typically come to Bild averaging about two to three move ins a month, and she says it’s hard to increase occupancy at that rate because it often matches the move-out rate.
After looking at more than 200 clients her company has worked with in the past year, Bild saw favorable stats in communities that were coached for six to twelve months: 11 times as many inquiry-to-tour conversions, and a move-in ratio that improved fivefold.
“If someone tells you to be a better writer—if you don’t get the education, and someone doesn’t teach you, you’re probably never going to be a better writer,” she says. “You can’t just want it. We need to strengthen what we’re offering the sales people in our business to attract better talent, or just train the people we have now.”
Written by Alyssa Gerace