Selling Security – What’s Working in Today’s Economy

No surprise – like you, we at SB&A are finding we have to work harder than ever to meet marketing and sales goals in today’s economy.

Here’s the issue: what do you say to someone who doesn’t believe they can sell their home, feels the need to let that home regain its former value, and – oh by the way – has lost a significant amount of their investment portfolio?

The one strategy that seems to be working consistently is selling security.

Potential depositors or renters seem to be more motivated to reserve a residence if there is a security incentive than if there is a price reduction. They have shown stronger interest in benefits that provide a sense of certainty and health care assurance such as modified Life Care or free health care days than a sale price. And who would blame them, especially considering the current economy and the uncertain state of health care in the United States. More often than not, the Silents and Baby Boomers want to feel secure in their planning; therefore, an additional health care option proves infinitely more valuable than a monetary or upgrade incentive.

Consider the following strategies to enhance your sales:

1. 1. Offer some sort of Modified Life Care Plan. This can be a certain number of free Assisted Living (AL) or Health Care (HC) days or a discount on the “street rate” per diem.
2. 2. If you’re selling blue-sky Life Care, work with your actuarial firm to see if you can offer guaranteed acceptance under a Life Care contract when the community opens its doors for those who qualify when they make their deposit.
3. 3. If you’re building an expansion, allow your depositors preferred access or preferred pricing in your current health center should they need it before opening.
4. 4. Consider making these special plans available only to Charter Residents to create urgency.
5. 5. In rental CCRCs, consider improving resident retention by allowing residents to accumulate free days for each year of residency.

It should be noted that selling security can’t involve giving away the store. These strategies must be evaluated carefully to assure that they are sound from the financial and actuarial perspective, and that the long-term impact is acceptable.

In the communities with which we are working, the financial impact or projected cost of the above strategies was surprisingly low, while the value of the incentives was perceived to be very high.

Back