The Covid-19 pandemic has prompted a regional senior living provider to reevaluate its value proposition and pivot its operations and marketing.
That company is Oakmont Senior Living, a Windsor, California-based provider with 31 communities throughout California and Nevada. The provider, which traditionally focused on high-end amenities and services, found itself in unfamiliar territory when Covid-19 turned the senior living industry on its head, according to Matt Stevenson, Oakmont’s COO.
“Pre-Covid, our value proposition was the luxury of a highly amenitized building, hospitality, renowned five-star dining experiences, amenities like massage rooms, fitness centers, pool, spa and sauna … and that’s what enticed many seniors to move into our community,” Stevenson told Senior Housing News. “Covid shifted the value proposition completely.”
Oakmont recognized that the old way of selling luxury senior living wouldn’t cut it in the middle of a disruptive pandemic that had residents sheltering in their rooms. So, the company tried something new: making health care, safety and sanitization its primary value proposition to prospective residents and their families.
“It was a complete transformation of our sales process,” Stevenson said.
That change in sales and marketing was backed up by a sizable investment in clinical care, including setting up a multi-discipline task force aimed at getting all of the company’s stakeholders involved in the Covid-19 mitigation effort, converting some of its senior housing units to quarantine rooms, linking up with a laboratory and hiring a medical director.
And while marketing that new focus on health care was a tough endeavour that took time and attention to get right, doing so has helped the provider weather the past few months. So far, its total number of infections has not quite reached 70 people, out of its roughly 3,000 residents. Today, Oakmont is free of active Covid-19 infections among residents, and has a 92% occupancy rate driven by a steady stream of new move-ins, according to Stevenson.
The company is also still growing, with five communities under construction slated to open by the end of the year. And while the future looks uncertain with Covid-19, Oakmont feels as though it is well-positioned to cope with whatever the pandemic brings next.
Batten down the hatches
Oakmont realized in late February that Covid-19 was a threat that deserved to be taken seriously. The company began hosting daily calls about the disease, and set up a task force to talk though how the provider would handle its containment measures, safety protocols, sanitation measures, federal guidance and other preparations.
The company in early March converted large, multi-roomed apartment homes into specially marked quarantine areas in all of its communities specifically to prepare for an influx in new Covid-19 cases. Oakmont stocked the rooms with personal protective equipment (PPE) and other medical supplies it might need to treat the disease. Oakmont also around this time secured a relationship with Core Analytics Laboratory Services to procure Covid-19 test kits. In April, Oakmont hired Dr. John-Mark Geiss as its medical director, a role that tasked him with leading the company’s infection control strategy during the pandemic, among other duties.
Central to Oakmont’s infection plan is a four-level Covid-19 precaution scale. The scale ranges from enhanced precautions at level 1, to staff in full PPE and a full restriction on visitors and communal dining at level 4.
“We think that really allowed us to continue to successfully operate and reduce Covid’s impact on occupancy,” Stevenson said. “We didn’t make a blanket decision to take everybody to a level three or level four, and completely shut the doors to move-ins or … inquiry tours.”
Like most other senior living providers that have seen spending rise during the pandemic, Oakmont had to make a significant upfront investment to accomplish these changes. Stevenson estimates the provider spent around $20,000 procuring PPE and equipment for each one of its communities, totaling several hundred thousand dollars in the end. While the company offered premium pay for associates working in communities with Covid-19 outbreaks, only a handful of the company’s 31 communities housed residents who tested positive, meaning that its extra labor expenses were “almost immaterial.” And since then, expenses have begun to stabilize, Stevenson said.
“We’re going to have a little bump in marketing expenses here as we look to recover occupancy,” he explained. “But outside of that, we don’t anticipate any long-term increase in expenses.”
Focus on care
In addition to a revamp of its operations in March, Oakmont also saw the need to overhaul the way it marketed to prospective residents and their families — especially considering all of the bad press and negative headlines plaguing the industry at the beginning of the pandemic.
“Covid introduced a new challenge and another inaccurate perception, but one that we couldn’t overcome,” Stevenson said. “So we knew we had to shift our strategy and approach as we talked about our value proposition.”
Oakmont retrained its entire sales force in March, shifting their focus from luxury and experience to safety and security. The company changed its marketing campaign to focus not on luxury buildings, but on safety, access to health care, services and support, creative engagement, access to testing and medication — all values that Stevenson believes prospective residents and their families are increasingly interested in, given the state of the world.
“There are many seniors that are going to have an emergent need now more than ever, and are going to need our service and support,” Stevenson said. “So, we had a responsibility to be there to offer it to them.”
But it wasn’t easy. Many of Oakmont’s marketing directors struggled with the change, and Oakmont needed to schedule training sessions multiple times a week to help train them on the company’s new value proposition. Those sessions included help from Dr. Geiss and physicians from the company’s local health care partners.
“We really wanted to educate our sales team about the importance of access to health care … so that they felt as comfortable having those discussions as they did about our award-winning culinary program and our beautiful luxurious buildings and multiple floorplan options,” Stevenson said.
Oakmont took its sales process digital on April 1. That move included enhancements to its website, a new digital paperwork process, the ability to schedule virtual tours or to have an immediate text chat with a community representative. At the same time, the company also stepped up its digital marketing spending, Stevenson said.
“Where most stopped spending, we pushed to spend more,” Stevenson said. “We said, ‘Let’s go out right now while others are taking a conservative approach.’”
Oakmont in April introduced a new engagement coordinator position at all of its communities. The role carries the primary responsibility of engaging new residents in their first 90 days of moving in — a challenge during a pandemic. That effort includes giving residents iPads loaded with loved ones’ contacts and games, and partnering them with another resident in the community.
“We think there’s going to be continued challenges [during Covid-19] related to isolation that we’re going to have to overcome,” Stevenson said. “And the engagement coordinator position is certainly going to help us do that.”
Already, there is evidence that this approach is working. The company’s total move-in count dipped from 83 new residents in March to just 39 in April. But in May, Oakmont’s move-ins were back up to 78 new residents. Oakmont has also noted an increase in demand for its memory care services, and it has adapted to that demand.
“We went through and looked at every community in the portfolio and decided where we had opportunities to expand memory care by converting AL units, and we did that in a number of communities,” Stevenson said. “And that’s really helped us capture some of that memory care demand and drive occupancy growth in a number of communities.”
Looking ahead, Oakmont is moving full steam ahead on its five properties slated to open in California this year. Although Covid-19 pushed back the development timeline for some of those projects, there has been little disruption in pre-leasing so far, Stevenson said.
After those five projects, the future is a little more hazy. But the company has strong relationships with its ownership partners and development partners Welltower (NYSE: WELL), Healthpeak (NYSE: PEAK), and developer Gallaher Companies.
“What we do know is that there are still a number of communities that our development partner Gallaher Companies has planned for 2021 and 2022, and that we will operate those communities,” Stevenson said. “But we’re going to wait to see how we open the five this year before we put some firm timelines and commitments for the rest.”
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