Marketing is key to high occupancy rate

Providers wanting to acheive an occupancy rate greater than 97 per cent should get on the front foot and perfect their local area marketing strategy now, according to a soon-to-be released report.

Above: Commercial director of The Ideal Consultancy, Fiona Somerville

By Yasmin Noone

The major point of difference between an average aged care facility and one that achieves more than 97 per cent occupancy is a robust, honest and locally-focused marketing plan, according to a soon-to-be released report.

The results of a national residential aged care market survey, conducted by The Ideal Consultancy, demonstrates that a comprehensive local marketing strategy and a robust sales process are the keys to achieving a higher occupancy level.

The survey, undertaken in late-2011, found that around 45 per cent of facilities with more than 97 per cent  occupancy spent up to six hours per fortnight on marketing activities compared to 23 per cent of facilitates that had less than 97 per cent occupancy.

“…An empty bed equates to no bond and no recurrent revenue,” the survey report states.

“There is little saving on the marginal costs of having an empty bed but there is significant lost revenue – lost income of $172 per day, lost supplements, lost interest from bonds and lost bond retention.

“Clearly no-one can afford to have less than full occupancy…Up-to-date, relevant, well produced marketing material has a positive impact.”

Over 65 per cent of facilities that were more than 97 per cent filled provided information on fees and bonds to consumers making an enquiry and only 40 per cent, with a lower occupancy rate, provided the same level of detail to customers.

“Fifty five per cent of facilities with more than 97 per cent occupancy had developed their marketing material within past two years compared to 41 per cent of facilities with less than 97 per cent occupancy,” according to the survey report.

“Forty seven per cent of facilities with occupancy of more than 97 per cent provided people [making an enquiry] with a professionally produced brochure compared to 29 per cent of those with occupancy less than 97 per cent.”

Meanwhile, the average occupancy rate across the 252-strong respondent group was just over 95 per cent.

Commercial director of The Ideal Consultancy, Fiona Somerville, said the survey also showed that local engagement, a positive sales experience and market presence were also major factors that influence occupancy.

“When we looked at the admission statistics of organisations, there is often a discrete local catchment area where [residents] might come from,” Ms Somerville said.

“That’s fairly consistent in metropolitan areas – you probably wouldn’t get [residents] who live outside a five kilometre radius. In regional areas, the catchment would probably expand further afield but…the facility might be the only one in town, or one of the only two or the biggest employer in the area.”

The survey also confirmed the most powerful source of referrals is word of mouth, closely followed by referrals from local providers, many of whom are already caring for the client, and those from the Aged Care Assessment Team.

“Good marketing also means having positive relationships with key stakeholders. And word of mouth is just like the thinking behind that typical ‘barbeque conversation’. People might ask, ‘What did you do over the weekend?’ If you have unhappy staff and a poor culture the person will say, ‘I worked at Shady Pines and I hate it’. And that’s not going to do that facility any favours.”

But, Ms Somerville said, despite the difference a good marketing strategy can make to a facility’s occupancy rates, many in the sector are “scared” of the subject. Ms Somerville added that she’s visited many a facility where the senior staff member said ‘I don’t do sales and marketing’.

“Often you’ve got a nurse who has become the director of nursing. Their clinical skills are really strong but [the management part of the job] is a little outside their comfort zone. So sales and marketing can be a bit of a challenge as it means learning new things.”

Ms Somerville stressed that the importance marketing is not just specific to aged care – it is just good business sense.

“If you are looking at Shady Pines and ‘Facility A’ – one is backed up by good marketing material and the other offers a poor customer experience and gives the consumer a million government forms which focus on the process of admission rather than how they make the customer feel. The one with the marketing plan is going to stand out.

“..We are also seeing that aged care is becoming a much more competitive environment. We’ve gone from being a facility-focused environment to one that is much more consumer focused.

“As a sector, it is getting more competitive so people need to be on the front foot and ensure they have a strong marketing strategy.”

Most importantly, she added, a marketing plan has to be truthful and relevant, and the claims made in print have to be legit.

“If you are saying you are doing something, there has to be a level of integrity there. Advertising the fact you provide five-star service when you’re not will not do anyone any favours, as the customer will tell every man and their dog about the experience. It’s just like going to a restaurant and finding out it is terrible.

“And in terms of marketing material, if you put it out there that you are doing X, you actually need to be doing that.”

The July/August 2012 issue of the AAA magazine will feature a special report on marketing, branding and competitor strategy.

Tags: branding, fiona-somerville, marketing, occupancy, racfs, sales, the-ideal-consultancy,

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