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The previous year was one of improvement and bolstering weak points for Vitality Living. With a stronger platform in place, the company is looking to further grow in 2024.
The senior living operator grew from seven properties to 30 over the last five years. A good portion of that growth came from acquisitions, with Vitality having done 13 in 2021. But in 2022 and 2023, the company slowed down its rate of acquisitions, allowing it to “double down” on improving operations through sales, according to CEO Chris Guay.
A big piece of that improvement has been resetting the kind of expectations and goals the company sets for its sales teams. In doing so, Brentwood, Tennessee-based Vitality has become a more sales-oriented senior living company.
“Vitality Living has doubled down on the fact that we are not only an operator, but a true sales organization,” Guay said during a recent interview with Senior Housing News.
But sales organization or not, Guay is not a fan of the “occupancy-at-all-costs” approaches used by some operators in recent years to grow margins. Instead, he sees staffing, expenses and resident rates as greater levers to success in the future, and believes that salespeople must keep this in mind as they communicate with prospects.
“[We have] really been educating our salesforce the ‘why’ behind the asks, and we are really try to create a culture of accountability and execution around the reason why we need to build our business,” he said.
Becoming a more sales-oriented company
A big piece of Vitality’s sales improvements has been determining the right performance targets for sales staff to hit.
The company has taken a particular focus on lead-to-prospect volume, and how salespeople can best move prospective residents deeper into the sales funnel. From there, Vitality puts lots of emphasis on speed-to-lead – and the company’s target is far lower than 30 days.
“I’d argue if you lead a lead sit for two or three days, you’ve lost them,” Guay said.
Using lead times and volume as its barometer, the company will tweak sales strategies to the local market. Oftentimes, that is a process of trial and error. For example, sales teams might put more emphasis on digital methods or traditional mailers, depending on what yields the best results.
Vitality also analyzes where it can best automate tasks in sales, and where technology such as AI can play a role.
An example of this process at work lies with a community in the Atlanta submarket that Vitality acquired in 2022. When Vitality bought it, occupancy sat at around 40%, Guay said. Over the course of seven months, the operator “rebooted” the community and its sales team with these goals in mind. Today, the building is on track to hit a 92% occupancy rate soon.
“You have to have all those pieces, or it just doesn’t work,” he said. “It’s never one answer.”
In senior living, “it’s almost frowned upon” to be a sales-oriented company, Guay said. He added that there is often a misconception that operators who care about sales don’t care about their customers.
But to Guay, the truth is actually the opposite: Companies that put a lot of emphasis on sales likely have stronger operations, and can better serve their customers and partners at the end of the day.
“Buildings that are losing money can’t take care of people,” he said.
That message of financial accountability also fits into the company’s quest to help its sales people “buy-in” to the process, and in turn help customers do the same.
“We’ve really opened up and gotten a lot more transparent with all of our processes, especially on the sales side,” Guay said. “It’s so they can understand … ‘Hey, you can’t discount these apartments by $1,000, and here’s why.’”
Outside of sales, Vitality also put time and energy into retooling other critical functions, such as staffing – chiefly, recruiting and onboarding. The company is also focused on training for mid-tier leadership, such as community executive directors and regional directors, to help drive that change.
The operator additionally spent time in 2023 shifting its approach to data collection and analysis by shifting away from using a professional employment organization (PEO), and toward one more suited for a larger, growing organization.
Though that was a costly and timely process, Guay is hopeful it will pay off in better workforce management and data analytics at the end of the day, especially as Vitality gets bigger.
“We’re trying to improve the same fundamentals that we do in the sales world, with speed-to-lead and how you interact with your customers,” Guay said. “We are trying to really build those tools in the people side of the business, too.”
Growth in 2024
Like many other similar operators, Vitality Living is in an interesting spot when it comes to growth in 2024.
The company has grown in recent years alongside its partners that include Sculptor Real Estate, AEW, Broadview Capital, Fundamental and Columbia Pacific Advisors. And future growth will likely come from those and other similar avenues, Guay said.
“When I think about growth this year, [I think about] making sure we can grow the right way to build and make sure we are still a good partner and still delivering on our promises,” he said.
Depending on which way the wind shifts – such as how interest rates evolve this year – Guay noted Vitality could add anywhere from two to 10 buildings to its portfolio.
“It’s really about finding opportunities to make sure we can still deliver on our brand promise and grow the company in a way that makes sense,” he said.
The company’s focus is on newer and new-vintage independent living, assisted living, memory care continuum communities with unit counts north of 80. The company’s sweet spot lies in communities with between 150 and 175 units and a memory care wing that is 36 units or smaller.
As Guay has indicated in the past, he has no intention to grow Vitality to become a 300-community behemoth. For now, he plans to keep its footprint centered around the Southeast, Midwest and parts of Texas.
And looking ahead, although he sees growth on the horizon for Vitality and others, for now, the game is wait-and-see.
“I think everybody is going to be a lot more strategic and probably a little bit more card-close-to the vest this year,” he said. “I don’t think any of us want to get too over-excited or too over our skies until we see how things start to play out.”
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