J.D. Power’s senior living certification program rollout now has its first successes.
Three independent living and assisted living communities owned and operated by Newton, Massachusetts-based Five Star Senior Living (Nasdaq: FVE) became the first senior living communities in the U.S. to earn the coveted Power badge.
The communities are Five Star Premier Residences of Hollywood, Florida; Five Star Premier Residences of Boca Raton, Florida; and The Horizon Club in Deerfield Beach, Florida.
J.D. Power, the global marketing information services company, announced its plans to launch a senior living certification program last May, which builds on the results of the company’s first-ever Senior Living Satisfaction Study last February. In Five Star, J.D. Power found an operator willing to pilot the certification program, Senior Director of U.S. Service Industries Greg Truex told Senior Housing News.
Five Star was motivated by the results of the satisfaction survey, Vice President of Sales & Marketing Rob Poyas told SHN. Sunrise Senior Living, Holiday Retirement and Capital Senior Living (NYSE: CSU) earned top honors. The Five Star communities reviewed in the survey did not do as well, and the company took the results seriously.
“In the end, what matters is we’re in the service business,” Poyas said. “Our job is to take care of our residents, their families, our team members. Customer satisfaction is one of the most, if not the single most, important thing we need to focus on.”
Even as Five Star grapples with ongoing financial woes, J.D. Power’s laser focus on customer satisfaction allowed the company to regroup after the satisfaction survey, determine what residents and their family members find important, and develop a strategy to move forward with the certifications.
An extremely detailed certification process
J.D. Power worked with Andrew Carle, president of Herndon, Virginia-based senior living consultancy Carle Consulting and founding director of the senior housing administration program at George Mason University, to establish a three-stage process senior living operators would need to meet to earn the certification.
The first stage involved taking what was learned from the satisfaction survey and making a scorecard of different criteria that communities need to attain for certification, Truex said. J.D. Power and Carle eventually settled on 174 operational best practices.
Certain metrics carried more weight toward certification such as dining/food and beverage programs, resident engagement and services, staffing and employee engagement and coordination between sales and marketing and move-ins.
With such a large range of criteria to measure, J.D. Power ran the risk of over-communication, Truex said. So they worked on simplifying much of the terminology so that the criteria could translate between operators and even between communities within a single company, allowing operators of any scale to pursue certification.
“We realized we were developing the criteria in a vacuum,” he said. “One criteria at a Five Star community in Boca Raton may be called something different in Hollywood.”
The second stage involved gathering customer feedback, via J.D. Power “Voice of the Customer” surveys. All of the surveys were conducted and gathered electronically, Poyas said. This is harder than it seems, in an industry still struggling to adapt to technology.
“We gathered email addresses from residents and their family members, and added them to our system,” he said.
Five Star ultimately had a 27% response rate to the surveys, and 93 communities within its 283-property portfolio scored above the certification benchmark for voice of the customer research, Truex said.
Of those communities, Five Star selected the three Florida communities to pilot the third stage of the certification process — on-site inspections, Five Star Divisional Vice President-Eastern Region Melinda Skirvin told SHN. A 30-year industry veteran with over 15 years at Five Star, Skirvin is responsible for communities in Florida, Tennessee, Texas, Virginia and one in Boston.
The Florida communities were selected because they scored exceptionally high in the customer surveys, as well as their proximity to each other, Poyas said. J.D. Power auditors spend an entire day at a community, interviewing staff, residents and their family members, inspecting facility operations and procedures on a granular level, and even eating the food residents are served.
“They immerse themselves in the community,” Skirvin said. “There is nothing to hide.”
Five Star paid about $3,000 per community to undertake the certification’s third stage, Poyas said.
An educational tool for future residents
Five Star actively pursued certification because the operational efficiencies and best practices it learned from the Florida communities can be applied across the entire portfolio. Having the J.D. Power certification also gives Five Star an advantage in courting new residents, which Poyas believes will help stem the company’s financial and operational woes.
Five Star’s executive leadership encouraged the move, Truex said.
“This started at the top,” he said. “We had great discussions to kick off the program, and the conversations expanded when we met with regional and local teams. They were very patient.”
The certification will help potential residents making their first senior living decisions, Skirvin said. Consumers are largely uneducated about senior housing until they research it, and find themselves crunched for time and in an emotional state when making a decision.
“This is an educational piece for customers,” she said. “They’re typically in crisis when looking for senior housing. Without having to investigate, they can trust in J.D. Power to help them make the best choice in the midst of crisis.”
Moving forward with more communities, operators
With the Florida communities certified, Five Star is moving forward to certifying its entire portfolio, Skirvin said. Another nine properties are ready for on-site audits, and the company expects to certify another two to three residences a month moving forward.
Five Star expects to have its entire portfolio J.D. Power-certified by 2020, Truex said.
The certification process has attracted the interest of other operators, but Truex would not comment on which are currently going through the process. The company hopes to conduct over 120 different audits across several operators, however, by the end of Q2 2019.
Five Star is pleased to be the first.
“It shows we went above and beyond,” Skirvin said.