MDS Strategy of the Month – May 2011

(The following is Part 1 of 2 and was excerpted from Jim Moore’s book Independent Living and CCRCs; Survival, Success & Profitability Strategies for Not-for-Profit Sponsors and For-Profit Owner/Operators)

MISCONCEPTIONS STIFLE SALES

Turning Deal-Breaking Sales Objections

Into Win-Win Strategies

Let’s face it, we don’t always respond effectively to consumer misconceptions.  We frequently fail to properly communicate with frustrated and ill-informed adult children.  Misconceptions and lack of knowledge can slow down the decision-making process and leave room for sales objections.  The challenge for sales and marketing professionals is to work through these objections.

Senior consumers evaluate senior living options with both concern and skepticism.

Four Serious Misconceptions

If we want to sell to seniors, we must first understand that seniors come to us with misconceptions that impact their decision to move in.  There are four serious misconceptions to be aware of:

1. Cost of Living. Most seniors underestimate their current cost of living.  They think most senior living options are very expensive and not affordable.  .
2. Inflation Concerns. Seniors have an understandable concern about future inflation.  They fear they will outlive their assets.
3. Leaving a Financial Legacy. Seniors are heavily focused on leaving a financial legacy to their children.  They feel that living in senior housing could wipe out much of their net worth – assets accumulated over a lifetime of conservative financial planning.
4. Health Care Cost Misconceptions. Many seniors do not have a good understanding of their Medicare and Medicaid benefits as related to the cost of covering nursing care, making seniors unaware of how much they may realistically have to pay for future health care costs.

These misconceptions form a flawed and dangerous mindset.  Some seniors think they are being prudent and conservative by delaying a decision to move into senior housing.  In fact, their inaction could actually be more costly.  Being unaware of the options available to control future health care costs can actually put seniors at risk to significantly deplete their assets.  Senior living options typically are viewed as a financial burden or threat when they should actually be seen as a way to enhance a person’s lifestyle, while at the same time introducing a prudent financial safety net.

Deal-Killing Misconceptions

As senior living professionals, we have to anticipate and respond to customer misconceptions in the early stages of the sales and marketing process.  With a more detailed game plan, we can substantially improve the performance and acceptance of senior living.

These misconceptions can stifle sales.  We tend to celebrate the 3 percent of the market that moves into our community, but we fail to determine why the other 97 percent of prospects got away.  Lost prospect surveys reveal some surprising but consistent results.  Typical responses include:

1. “Your community was just beautiful, but it was too expensive, and I’m sure I could not afford it.”
2. “I liked everything I saw, but I worry that you will increase your pricing and I will outlive my assets.”
3. “Your monthly service fee seems unrealistically high.  That’s an awfully high rent payment.”

Keep in mind that these responses came from prospects who were previously determined to be asset and income qualified.

These misconceptions present enormous obstacles for sales and marketing professionals.  A successful response will require sophisticated and redoubled marketing efforts in the future.  Sponsors, owner/operators, and most sales and marketing professionals pride themselves on organization and selling techniques, but very few truly understand how to get inside the minds of seniors.  To succeed, you must help seniors make very important financial planning decisions

Part 2 of this article will address the “Seven Steps to Professional Sales and Marketing Success”