CHICAGO — There is one surefire way to make sales hum in seniors housing, says Margaret Wylde, an industry consultant who has conducted research in this niche property sector for 34 years. Know who your customer is, the product they want and how much they will pay to get what they want.
“If you deliver what they actually want, they actually pay more and feel there is value for the dollar spent,” says Wylde, CEO of Oxford, Miss.-based ProMatura Group.
The problem is the industry’s knowledge of customers is “not good,” Wylde is quick to add.
“We know them in a generic manner. We know their age, we know how many of them there are, and we know how much money [they have]. But we don’t know who they are. And once they get to that golden age, we think they want seniors housing, and that everybody who wants seniors housing is exactly the same because we are giving them a list of stuff.”
Worse yet, she believes, is that the industry is by and large chasing the luxury market, which is less than 10 percent of the potential market. “The middle market is 320 percent larger than the market everybody is going after.”
While the product today clearly is architecturally better than it was 15 years ago and has the consumer in mind more so than ever before, it’s “over-amenitized, overbuilt and over-programmed,” says Wylde. “And as an industry we always focus on customer needs, but we don’t buy based on customer need, we don’t choose based on customer need. All we do is surrender based on need.”
Wylde’s critical comments came during InterFace Seniors Housing Midwest in Chicago last Thursday, June 7. The one-day event, which took place at the recently opened four-star Marriott Marquis Chicago at McCormick Place, drew 372 professionals from across the region. Panel sessions focused on the state of the industry, including operational challenges, investment activity, development, design, technology and resident care, plus the capital markets.
Marketing reboot needed
The term “seniors housing” has a negative connotation — the last place you go before you die — and is a complete turnoff, explains Wylde.
“Does that sound good to you? Why do you call a product by something nobody wants to become? Why do we even put those words in any literature anywhere because all we are doing is tainting every product that is out there.”
For example, a resident of an assisted living facility receives less than one hour of care a day on average, which prompts an important question.
“What are you doing with my life? It is my life that you are messing with,” explains Wylde, speaking as a hypothetical resident. “And I want more than care. I want to have friends. I want to see my family. I want to know how you are going to allow me to enjoy the time I have. Yes, I want good care — I want it done quickly, I want it done professionally. But then what am I going to do the rest of the day?”
The industry is catering too much to the needs of seniors, not their wants, which makes the task of boosting sales a challenge. In fact, Wylde describes the scenario of a senior suddenly in need of seniors housing as a “hostage sale” that is not “based on a positive emotion.”
In short, she says that the seniors housing industry too often is sending prospective residents the wrong signal by focusing so heavily on the needs-based services and care it provides.
“We’ll do everything for you. You don’t have to do a thing because you can’t do it yourself. You are incapable. You are worthless, so come sit in our place and we’ll bring you a muffin. We’ll have someone check all your vitals. You don’t need to do anything but sit there and watch TV and come play games because you have no value to anyone else. That’s what we tell people.”
The arts colonies are great examples of creating properties that are not focused on age, but rather on something people love and are passionate about. “They don't feel like they are going to a seniors community. They are going to go with peers. They don't need anybody to prepare any activities for them,” says Wylde.
For example, the NoHo Senior Arts Colony in Hollywood, California offers amenities, programs and social events that go beyond the traditional senior apartment living.
How to boost market share
In the 1940s, psychologist Abraham Maslow unveiled his now famous hierarchy of needs of people, typically depicted as a five-level pyramid. That theory applies to today’s seniors, who first and foremost must have their physiological needs (food, water, sleep) met, explains Wylde. The second level of the pyramid is security and safety, followed by love and belonging, self-esteem and self-actualization.
“If someone feels like they can belong and live in your community, the odds are 80 percent to 20 percent that they are going to move to your community,” says Wylde.
There are several important ingredients to boosting market share, says Wylde, the most important of which is tipping the scale from needs to wants. She urges developers to adapt the product platform to market sectors and to understand and accommodate the social and psychological differences among consumers.
More specifically, developers need to ensure the individual residences meet a consumer’s wants. “Right now I’d say we’re a bit too small,” she says, referring to the unit sizes. “We don’t have enough storage, and we don’t make it livable. We need a variety of apartment sizes.”
The same building can probably serve a lot of different market segments within seniors housing, points out Wylde. “It’s all in the positioning, it’s all in the lifestyle.” Once the developer truly understands its customers in a particular market, it can tailor the product to fit the needs of the development and even provide a point of differentiation.
ProMatura has conducted large-scale studies of more than 400 properties. The biggest determining factor in a prospective resident’s choice of community is the staff, the people on the ground.
“From the first phone call that they [prospective residents] make, the touch had better be right. From the minute they get on those grounds, there had better be someone smiling and saying hello.” It’s Wylde’s observation that too much money is invested in amenities and not enough in people.
Ultimately, feeling at home has nothing to do with the architecture, concludes Wylde. “It has everything to do with the people inside.”
— Matt Valley