Market Heats Up as Senior Living Referral Companies Seek Reinvention, Better Operator Relations

With each passing year, the tastes of senior living prospects become more sophisticated. Third-party referral companies are evolving and growing to meet those needs.

Whether through launching a new company or bolstering existing efforts, senior living referral companies including A Place For Mom, are ramping up their investments and switching up their strategies as the marketplace rapidly shifts. Other smaller companies, like newly launched Referah, are retooling the senior living referral process with operators in mind.

But for operators, family caregivers and prospective residents, the experience with referral platforms is still in the eye of the beholder.


“We’ve got operators … we work with that totally understand what we’re good at and how to exploit us and how to take advantage of our leads,” CEO Jim Rosenthal told Senior Housing News. “And at the other end of the spectrum, there are operators that see us as a cost.”

The truth is that some operators still see online referral partners as a necessary but unideal part of the senior living business. Even so, they are leveraging their relationships with these services to the fullest extent possible, even as costs rise and operators feel some dismay.

Referral costs rising, frustration lingers

As they have done for years, senior living operators in 2023 are looking to both utilize online referral platforms and minimize costs. Referral spending has ticked up in the last year, according to a recent survey conducted by Senior Housing News.


Though the survey is a relatively small sample size at 18 responses, a majority of the respondents said they represented operators with between 20 and 50 communities in their portfolios.

Almost half of respondents said their organization’s spend on third-party referral services increased in 2022, compared with 2021. A little more than a quarter responded that the costs were “much higher” in 2022 than in 2021, while the same amount said costs have stayed the same in that time.

It’s not a new trend that senior living operators have had a sometimes-fraught relationship with their referral partners. For instance, it was an initial goal of A Place for Mom CEO Larry Kutscher when he came aboard in 2019 to improve the company’s standing in the eyes of senior living operators.

But fast-forward to 2023, operators still seem to have reservations about their referral partners. According to the recent SHN survey, 60% of the respondents said they are either “somewhat” or “extremely” dissatisfied with their third-party referral relationships. On the flip side, a little more than a third of respondents said they were somewhat or extremely satisfied.

One common complaint among operators is that they feel bombarded by non-targeted leads from referral partners. There is also the question of exactly how many senior living operators are talking to those leads at one time.

“Sometimes we’ll pick up the phone and call a prospect … and they say ‘Oh my gosh, you’re the 10th person to call,’” Legend Senior Living Vice President of Sales and Marketing Christy Van Der Westhuizen told SHN. “Are they exaggerating? Am I really the 10th?”

For Sunshine Retirement Living COO, the biggest pain point in working with third-party platforms are the fees associated with care.

“It’s understandable given the technology investment in online advertising, but almost forfeiting the first full month of revenue can be painful especially now that margins are so thin.”

Bend, Oregon-based Sunshine increased rates across its 42-community portfolio by 7% – 10% in 2023 to deal with inflation, a tight labor market and other costs associated with operating a senior living portfolio.

In addition to the costs, the successful conversion of a prospect to a resident doesn’t quite happen often enough, according to Priority Life Care VP of Sales, Brandie Petras

“We want our marketers to be efficient,” Petras told SHN. “The industry is closing referral agency referrals an average of 4% to- 5% – to us, that is a lot of work and follow-up that is not panning out.”

As a result, some operators are expecting to cut back on their total spend with referral agencies this year.

Almost half of respondents to the SHN survey said they anticipate their third-party referral fee spend to be somewhat or much lower in 2023 than in 2022. A little over a quarter said they expect their costs to be somewhat or much higher in 2023.

Referral space gets more crowded

The two biggest senior living referral partners in recent years have been A Place for Mom and, and that is not changing in 2023. As they have been in the past, both big companies are focused on improving their processes in 2023 and have made big investments in doing so.

But there is also at least one new player in the space this year looking to change the old model, and its business model is tailored to solve some of the industry’s previously stated frustrations. The new company is Referah, which launched in 2022. Instead of casting a wide net, the service focuses on a smaller number of leads in a method dubbed the “dating profile approach.”

Specifically, the Chicago-based company matches clients with just three communities representing the best possible fit.

Two years of planning went into the Referah model, according to CEO Lesley Durkan. At top of mind was creating a referral platform with operators’ specific needs in mind.

That has attracted investors from across the senior living world, including senior living operator Priority Life Care; Frontier Management CEO Greg Roderick, who also serves on Referah’s board of directors; and Kare CEO Charles Turner.

“I don’t have an investor that’s not somehow involved in the senior living space,” Durkan said.

Referah’s business model is subscription-based and priced at $300 per month. The price point pays for itself annually with one move-in, according to Durkan.

“If you had one move-in with us for the year at a $2,000 move-in fee, you’re still paying less than the average of one move-in for the entire year with other services you’re using,” Durkan said. “It is a very small investment in putting your community and your brand into a website with incredible search engine [optimization] and power.”

The subscription model has been a sticking point for operators thinking about working with Referah. Durkan said operators are most interested in knowing how many leads they are going to get at any given time. Her response is always a reminder that quality is better than quantity.

“How many leads do you get now from a high-volume lead source that aren’t valuable to you?” she will ask them.

While companies like Referah are looking to deliver more targeted referrals, mainstays like and A Place For Mom (APFM) are also focused on giving them more referrals in 2023. 

So far, it appears to be working, as Seattle-based APFM reported a year-over-year increase in referrals of 45% this January.

Both models center on offering targeted referrals vetted by professionals, and Kutscher also believes there is enough demand to go around, even as the referral space gets more crowded.

“I think everybody in the industry could be doing even better if we focus on converting the demand that’s out there,” Kutscher said.

In January 2022, APFM – already the nation’s largest senior living referral platform – announced it raised $175 million dollars that it would deploy to make advancements in its brand and abilities.

Unlike Referah, APFM doesn’t accept investments from operators, though the company did entertain the idea before, according to Kutscher. Today, the company’s capital stack includes investments from large private equity firms such as Insight Partners, Silver Lake and General Atlantic. 

Kutscher took the reins at APFM in 2019 and immediately rolled out a plan to reinvent the company, a plan that, as of April 2022, was about half complete. The company saw revenue increase last year by more than 20%, and looking ahead management expects 30% growth in revenue this year.

A Place For Mom pumps $100 million into consumer-facing marketing efforts each year, according to Kutscher, despite the brand already standing on top of the mountain. Additionally, the company has increased its senior living sales staff to a headcount of 400.

Those follow-up conversations are often where referral platforms can make the best difference. For her, the most impactful information that a platform can provide are the narrative tidbits about a prospect like their interests, personality type and their story.

What operators want

With the pandemic, senior living prospects and their families changed how they look for senior living; both in what they search and how they search for it. 

For example, more prospects these days are starting their senior living journey on smartphones, and platforms like and APFM are prioritizing mobile optimization to stand out from that crowd.

“At this point, mobile is more than 65% of what we do,” Kutscher told SHN.

With the pandemic still at hand, prospects are coming to senior living salespeople needing more help than perhaps in any time in recent history. That is why is prioritizing empathy according to Rosenthal.

“They speak to us or want to talk to one of our family advisors who are trained and are empathetic,” Rosenthal said. “After a discussion that includes discovery about their wants, needs and budget, it gets into things like hobbies, pets, religion and diet.”

This kind of information is exactly what sales staff wants, according to Van Der Westhuizen.

To Van Der Westhuizen, the most valuable things that organizations like A Place For Mom, and Referah provide are relationships and insight.

“I think it would be incredibly important for any other referral sources out there to make sure that the relationships are at the top of mind,” Van Der Westhuizen said.

Priority Life Care’s Petras also stressed the power of relationships in referrals. In fact, she thinks it could be the reason the operator changes referral platforms in the future, notably “if there were a service that would build better relationships with us,” she told SHN.

“Relationships take work,” Petras said. “Physically or virtually meeting with someone needs to happen on a consistent basis.”

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