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Metrics, the Essential Standbys

Friday, June 08, 2018

Perhaps you have been a sales professional in a senior living community for several years, routinely filling the residences that become vacant through attrition. That’s the first number to which you should pay attention. Each year, approximately 10% or your current number of residences will vacate due to death, health or change of circumstance. In certain life cycles of the community, this figure can drastically increase to percentages as high as 17-18%. Thus, be prepared to refill that number every year. In addition, you may have the responsibility of pre-selling an expansion or additional campus. If that is the case, numbers will assist in you planning on how to accomplish both feats at the same time. Use metrics.

Retirement Community VacanciesPLANNING FOR FILLING VACANCIES

Many years ago, prospects would explore senior living accommodations and within two years, they would make a determination of where to move. Prospects remained on your list for two years, but today’s prospect has extended that to five years. That’s a good number to know when gleaning your database for possible move-ins. Independent living accommodations are more difficult to convert than assisted living because the move is more of a proactive choice rather than a need-based move. According to Mature Market Sales Source, the close ratio for an independent living home within a CCRC is only 3-6% of age and income-qualified leads. Additionally, it now requires approximately three to five face-to-face encounters on top of connected calls to move someone to a sale.

DETERMINING YOUR CONVERSION RATES AND BUDGET

BudgetHere are some numbers that may assist you in determining how many leads you need and how much money you need to convert to occupied residences.

The average conversion rate for prospects of a Life Plan Community (CCRC) is 5%. Yes, a lowly 5%. And the average cost per lead is around $400 to $800, and that amount seems to escalate every year. If you are in a highly competitive market, the cost could be as high as $1200 per converted lead.

So let’s examine a scenario. Your community is expanding with an additional 76 residences. With a conversion rate of 5%, you will need 1520 leads to pursue and nurture in order to fill these homes. In addition, you will need to allocate somewhere between $608,000 to over one million dollars to support your marketing efforts.

The next step in playing the numbers’ game is establishing sales metric goals. Let’s talk about that next week.



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