LeadingAge Magazine · March-April 2018 • Volume 08 • Number 02

Do Consumers See You as a Good Value?

March 18, 2018 | by John Mitchell

“When you listen to consumers you might end up hearing something you don’t want to hear,” says one LeadingAge member. When consumer desires drift away from your organization’s value proposition, what’s next?

Beginning in 2008, Denise Rabidoux, president and CEO at EHM Senior Solutions, suspected the future of her multi-site organization, which serves southeast Michigan, might no longer revolve around putting a shovel in the ground for new bricks and mortar. So, she did something that wasn’t easy: She spent 6 months asking her future customers what they wanted.

EHM photo 1
“Fireside chats,” focus groups and phone interviews with
potential residents and clients convinced EHM Senior
Solutions that its traditional bricks-and-mortar-based
services weren’t enough to meet future consumer
demand—a robust home services program would need to
be developed. Photo courtesy of EHM Senior Solutions.

“When you listen to consumers you might end up hearing something you don’t want to hear,” she recalls.

In taking this action, Rabidoux was putting an old sales adage into motion: You have to sell what people are buying, not what you are selling. Another name for this concept is defining the value proposition. For EHM, the value proposition quest turned up findings so disruptive that the 138-year-old faith-based group changed its name to reflect its new-found mission. The organization, formerly known as Evangelical Homes of Michigan, became EHM Senior Solutions.

Ask and You Shall Learn

According to the 2,500 community members they spoke with in a series of fireside chats and focus groups, EHM was not providing the upfront support older people were seeking. The organization also conducted 500 follow-up phone surveys. Respondents told Rabidoux and her team what they wanted was to stay in their homes until they needed to move to a life plan community, assisted living, a nursing home or even memory care. These findings were so convincing, Rabidoux said, their board agreed to sell property slated for future housing development to fund a robust home services program. Today, EHM has expanded from providing services to about 4,000 onsite residents, adding 1,500 people through home-based and technology solutions, to serve 5,500 people in total.

“This led us to this amazing opportunity to connect with individuals—perhaps prospects—who had an impression of what we did and had an opportunity to voice their desire for the future,” says Rabidoux. “We found out that 75 percent of seniors in our communities are not ready to leave home (because) home is king.”

What Do Consumers Value?

Rabidoux led the value proposition reinvention journey from a position of strength. The organization had nearly 100 percent occupancy and was not in any distress. But, according to Mario McKenzie, partner at CliftonLarsonAllen, leadership for the future is about being good at peeking around corners.

“The ability is to connect with the consumer—not just the current one, but the future one—and really start questioning what they value,” says McKenzie. “Do they want to pay for an entire suite of services? What are we doing for the ones who don’t? Are we prepared to move out of our bricks and mortar and develop access to serve people at home?”

While the questions McKenzie poses run throughout the full range of operations, it is fair to say that the at home services trend is emerging as part of the life plan community value proposition. He stresses that the time to ask such questions is from a position of strength, which can be difficult because it’s also the hardest time to think about change. The financials may be solidly in the black for now, but by the time the financials look bad, he adds, it can be too late.

“Unfortunately for many providers, their value proposition is tied to a lifestyle … that is greatly amplified by the bricks and mortar … [and] all of these require pretty significant capital investments,” McKenzie notes. “Oftentimes there is very little return, outside of strategic return … that doesn’t bring in a single dollar of new revenue.”

Cecily Laidman, executive director of Cadbury Senior Lifestyles at Home, the second-oldest continuing care at home program in the country, established almost 20 years ago, agrees that such changes can seem counterintuitive to a traditional life plan community mission. She says that bricks and mortar communities sometimes consider an at-home services program as a form of competition and it can be difficult convincing a board to look beyond its traditional mission. This, even though the investment in at-home programs is much less than a bricks-and-mortar strategy.

But Laidman says that the value proposition offers many benefits. Among the pros is expanding services to the other 85% of people who have no interest in a residential community. She says Cadbury’s then-parent organization came up with the idea of an at-home program in the first place because it was landlocked from any further building expansion.

“Once people wrap their brain around this and understand what the program is, they see the huge benefit,” she says. “It expands the mission to more people … in senior living, as different generations come up, this is offering more choices for people as one-stop shopping. You may want to move into a community; you might want to move into assisted living. But for the majority of people who don’t, it really opens things up.”

Because Cadbury does not operate any bricks-and-mortar sites, Laidman also says, they have stricter medical standards for participation than residential programs.

Their success has not gone unnoticed. Springpoint Senior Living, a New Jersey-based provider with 8 full service retirement communities, 19 affordable housing communities and its own home and community-based services division, decided to affiliate with Cadbury to access its expertise for its service areas. The 2 entities merged under the Springpoint brand.

Anthony Argondizza, president and CEO at Springpoint, says the move is an acknowledgment that the percentage of age and income-qualified seniors in any given primary market that will choose to reside in a life plan community is only 5-10%.

“Springpoint is excited to provide a product that will be a valuable option to those seniors who will never move into a life plan community. The affiliation with Cadbury brings with it one of the most mature continuing care at home products in the country,” says Argondizza. “The expansion of our home and community-based services offerings with the addition of the CCRC at home product provides us with greater product line diversity, a goal identified in our 3-year strategic plan.”

While home services are an emerging influencer on the value proposition important to potential future residents, no provider can afford to overlook the opinions of its current residents. Nikki Rineer, president of Holleran Consulting Group, stresses that all residents want to be heard. This, she says, is vital to how well any community supports successful aging—which may very well be the ultimate value proposition. The best practicing communities listen to their residents.

“The worst thing you can do is ask someone for feedback and then not do anything with it. I have seen communities with results that were not up to the standards they desired stand in front of their residents and say ‘This isn’t what we wanted for you and we are committed to turning this around,'" says Rineer. “It's hard to be that vulnerable, but the gift is that being genuine goes a long way. It’s even OK not to have all the answers, but ignoring the results has never gone over well.”

According to Rineer, her company primarily relies on “overall satisfaction” and “willingness to recommend” measures to gauge resident satisfaction as measured against its national benchmarks. This helps communities to position themselves with a greater competitive advantage. And she stresses that if a community wants highly engaged residents, it must first have highly engaged employees.

“Being genuine goes a long way. It’s even OK not to have all the answers, but ignoring the results has never gone over well.”

"This correlation is the basis of a true culture of engagement, and many senior living communities promote their distinct atmosphere by way of leveraging their value proposition to potential residents as well as for retention efforts,” Rineer points out.

In Ohio, Friendship Village of Dublin worked through its value proposition self-examination and ended up rolling out an in-home assisted living program in central Ohio. The unique home services selling (value) proposition it arrived at reads: “Our team of professionals will handle the day-to-day tasks and other burdens so you can sit back and enjoy life—the way you want to."

Friendship Village Executive Director Jerry Kuyoth reports the program required a cash infusion of nearly $1 million before breaking even, but it’s what the larger community wanted—and what Friendship Village needed.

“Don’t expect (all potential) members to flock to your [community]. Most prefer a home-based option, and that diversification has strengthened all areas of the organization,” says Kuyoth. “Our commitment to top-tier bricks and mortar as well as a diversified platform of community-based options has been a winning combination."

Should Growth Be a Higher Priority?

According to McKenzie, Springpoint Senior Living, Friendship Village, and EHM Senior Solutions all display a trait that he thinks providers could work to more fully cultivate: a focus on growth. He says that the average nonprofit provider speaks a lot about mission, but not so much of growth. He maintains that a board should be pleased with a growth initiative, but why not look at 4 growth strategies to help support the mission? McKenzie thinks there is, right now, an opportunity to make growth more natural in the nonprofit culture.

EHM photo 2
Is growth underemphasized by nonprofit providers? Photo courtesy of EHM Senior Solutions.

 

“The drive to grow does not seem to be baked into the average (nonprofit) DNA,” he explains. “But the biggest competitor is and will always be people who want to stay home. We need to … say at some juncture [that] people at home and capital will continue to pursue solutions. Traditional providers should ask: ‘How do I cast my net beyond just my walls?’”

The good news is that providers can have it both ways, as is evident in EHM Senior Solutions’ success. Rabidoux asserts that EHM’s faith-based, not-for-profit status remains an essential part of its value proposition to current and potential clients. She says that by leveraging that part of their traditional value, the organization was able to take the next step by taking the time and energy to find out what the larger community wants and expects. She asked one simple question: If you were the CEO, what would you do? It was a question that resonated deeply with the broader community.

“It was amazing the data we got from this journey,” she concludes. “There were lots of beautiful parts of that which described our value proposition and then made us think about what was missing for the older adult or family.”

John Mitchell is a writer who lives in Cedaredge, CO.