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The Science of Marketing Senior Living Communities

Marketing disciplines are not applied as effectively in senior living communities in general, and assisted living in particular, as in many other businesses. Assisted living managers have grown up, so to speak, in a business environment where fiscal management was far more highly valued than marketing ability. Furthermore, many senior living communities were new to the marketplace, and there were minimal direct competitors. Only recently have absorption rates started to slow with higher penetration of assisted living, spawning much more aggressive competition. This has led to increased interest in marketing – and some wasteful mistakes. “We’ve tried advertising, and it doesn’t work!” Or my personal favorite, “We had to fire our sales rep. She didn’t produce!”
Marketing is the management of the interaction between an organization and its markets. This definition holds true if the organization is for-profit or not-for-profit, retail, manufacturing or service based. How your organization manages its interactions with decision makers, residents, the local community leaders, doctors and others defines your marketing. A “market” is any group who might refer to each other about your community. Family members is a distinct market from hospital discharge planners, and doctors is a distinct market from estate attorneys.

Considering this definition, it can be seen why marketing is concerned with a broad array of organizational functions. There are traditionally 5 “Ps”: Product (what are you offering?), Placement (where?), Pricing (how much?), Promotions (how do you promote yourself?), and Position (what do they think about you?). In addition to the usual and generally well accepted roles of advertising, public relations and sales, marketing must be concerned with such things as how the phones are answered, what the stationery looks like and even how the bills are presented. Virtually every form of communication and interaction your community has with any of its markets helps or hurts your marketing.

Having defined what marketing is, let’s go on and make a further statement that marketing is a science. The disciplines of marketing are based on substantial observation and experience, and there is a wide variety of marketplace phenomenon that are predictable. For example, many of you receive a Publisher’s Clearinghouse Sweepstakes letter. These letters represent carefully developed direct marketing and are built on experience and data that has been tested and re-tested. The response rate for these mail pieces can be predicted with great accuracy. Direct mail, specifically the Publisher’s Clearinghouse letters, is used here as an example of empirical (observed) data applied to marketing.

Marketing science in the assisted living setting contains a complexity that goes well beyond the usual marketing challenges. Because the “product” (assisted living services) can’t be inventoried and controlled for consistency, each unit of service – each service experience – is a unique event. There are, however, service characteristics which can be reproduced or discouraged through training. A simple example of this is how the telephone is answered. Some assisted living staff, especially in the evening, answer the phone as though it were an annoyance! Simple training on exactly how the phone should be answered, how to place a caller on hold, or transfer a call, will positively effect the way callers perceive the community.

Research has shown how customers behave when the service experience is positive, as well as when the service experience is not positive. Only about 25% of those who have negative service experiences actually complain. Unfortunately, however, those same people love to tell others how rudely they were treated, telling, on average, 11 people about their negative experience. This data means that every time you hear a complaint, 44 people have also heard the same unflattering story! There is very good data describing the successful and less than successful methods for responding to both situations – i.e., positive and negative service experiences. Marketing science can identify those behaviors in service delivery which should be encouraged and those which should not. For example, how family complaints are handled about lost items of clothing can make all the difference between a satisfied customer and a situation spiraling out of control. Some community managers spend an enormous amount of time trying to put out these kinds of fires by tracking down responsibility. Yet this is of low importance to, and impact on, the customers who complain. What they want and need is a prompt response and the feeling that someone has listened.

Managers pursue other issues because they and their staff “believe” that those issues are important to their customers. Marketing science, well applied, can add certainty through customer surveys and focus group interviews.

The science of marketing is also extended to making decisions about which markets to pursue. We can’t be all things to all people. It is, therefore, not surprising to learn that a community which has positioned itself through advertising, radio and direct mail as an attractive option for active, independent seniors, is having difficulty attracting more frail, ADL-dependent assisted living residents. Marketing transitions must be handled thoughtfully, understanding that your reputation in the community, and among important markets (e.g., doctors or discharge planners), has a tremendous impact on the referrals you receive. It’s so easy to confuse the market, and it is too costly to re-establish your position. It is far better to test any planned program changes in advance to evaluate their effects.

By viewing marketing as a science, we can approach each element in a disciplined and logical way, making decisions about what steps to take, based on their predicted return on investment. Far from being based on glitz or fads, marketing can and should be an integral component to the success of your community, demonstrating its value on a daily basis through measurable improvements in referrals, customer satisfaction, customer loyalty, revenue and profit.

Irving Stackpole is the Principal of Stackpole & Associates, a research, training and consulting organization serving senior living and health care clients, located in Boston. (617) 739-5900, Ext. 11.

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