Expanded Market Positioning Is Now A Necessity
Most seniors, their families and their financial advisors need answers to critical senior living questions. That’s because a number of deal killing misconceptions continue. The Frequently Asked Questions (FAQs) concept is a very effective and credible marketing communication strategy. Consider creating a market positioning theme that addresses “You’ve got questions . . . We’ve got answers”. Rather than rambling text or boilerplate, this approach focuses very directly on specific important issues. Here are ten FAQ examples:
- With my Medicare and Medicaid entitlements, aren’t almost all of my future health care costs covered? Obviously an erroneous assumption. A senior consumer or their family’s future private pay exposure can be significant.
- Private health care insurance is getting very expensive. Do I really need it? Efficiently operated assisted living or possibly a comprehensive CCRC with life care options is frequently the correct answer.
- Can’t most of my future health care needs be provided in an affordable manner at home? This may be initially true, but the aging process frequently results in higher acuities. The skills of a typical companion or homemaker are rapidly exceeded. Licensed, third-party home health agencies can provide reasonably effective short-run temporary assistance, but the long-run cost effectiveness is questionable.
- It appears that living in a retirement community is much more expensive than staying right here at home. Am I correct? Not necessarily true. A surprising majority of seniors have significant misconceptions regarding their true annual cost of living versus the pricing of well run, market-responsive retirement communities.
- Is there a way to control my future health care costs so I don’t spend-down my life’s savings? If a prospect is initially income qualified for a well run community, their likelihood of experiencing significant spend-down is relatively remote. Many operators also have a menu of options to avoid future spend-down such as unit downsizing, reducing the future entry fee refund obligation for a CCRC and possibly charitable content funding for a not-for-profit. Many life care community’s initial pricing assume the financial risks of providing high cost health care when needed.
- Some entry fee communities charge quite a bit. Won’t I seriously reduce my current net worth if I decide to move to one of them? Frequently this is a classic example of short-run thinking. Most seniors do not pay entry fees with their current actual net worth. Most sell a home and pay their entry fee from new cash from their home sale. Very frequently a senior’s current active net worth (before the home sale) is not significantly impacted. A brief explanation of this concept can avoid initial sticker shock.
- If I pay a big entry fee, how will I be able to leave a legacy to my children and grandchildren? Upon death, a senior may have a refundable entry fee of up to 90% of their original payment. This can provide a living financial legacy to their children or grandchildren. The initial entry fee payment might also provide substantial life care benefits in the form of significant cost reductions to cover their future health care financial exposure. There can also be a substantial tax benefit to the consumer of a one-time medical tax deduction of between 30% to 35%. See next FAQ for an example.
- Are there any special income tax deductions available for some health care costs? For a moderate $300,000 entry fee that involves life care. That one time deduction would be in the range of $90,000 to $105,000 with tax loss carry back and carry forward financial options.
- If I live in an assisted living community, are there any tax benefits? Yes, If you are receiving assistance with at least two Activities of Daily Living or require substantial supervision because of cognitive impairment you can potentially deduct almost all of the full monthly service fee; shelter, services and care. IRS Publication 502 (irs.gov) provides the details.
- Will my children or my financial advisor understand all these FAQ details? Probably not. Most of the answers to the FAQs seem like basic common sense that the senior consumers, their adult children or financial advisors already know. Not true. Many have not either considered them or have not put them in proper perspective.
These ten FAQs are just the tip of the iceberg. The concept can be substantially expanded. There are at least another 25 very relevant questions to address. Don’t assume the market knows about all the relevant questions that need to be asked . . . and answered. Implementing a comprehensive FAQ approach sharpens the market positioning of your community and dramatically increases the competency of your sales and marketing professional team.
Jim Moore is president of Moore Diversified Services, Inc., a national senior housing and healthcare consulting firm based in Fort Worth, TX that has been serving clients for 46 years. He has authored five books about senior living and healthcare including Assisted Living Strategies for Changing Markets and Independent Living and CCRCs. Jim Moore can be reached at (817) 731-4266 or jimmoore@m-d-s.com.