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.
PLANNING 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
Here 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.
Like what you are reading here?
You can subscribe to our blog through our RSS feed which you can set to automatically download each new blog article to your inbox!
RSS Feed for RD Blog -
If you would like to add the blog to your Outlook RSS Channels directly use the following link: https://www.retirementdynamics.com/RSSRetrieve.aspx?ID=28586&Type=RSS20
If you have trouble displaying the RSS feed using Chrome, please install the Chrome RSS Feed Extension that can be found here.
Subscribe to Weekly Email with Latest Blog
About the Authors
Our blog is written by our Retirement Dynamics team members.