There was a time when pricing was more uniform in assisted living. Large facilities in certain areas of the world asked for pretty much the same thing and smaller facilities also stuck to a pretty uniform set of pricing standards. Today things are quite different.
From ala carte amenities to differing levels of care, pricing has taken an entirely new turn with reliance upon numerous factors. If you are entering the business of assisted living or you are already an assisted living entrepreneur who accepts that you have to change with the tide, you may be asking how do I determine how best to price my services? There are several factors to consider, as noted below:
I. Consider the Community
Generally an assisted living consumer is willing to invest as much as 80% of their gross income into assisted living services. This allows a bit of a surplus just in case their family wants to maintain their home, handle medication and other medical co-pays, etc. So if the median income of those over age 70 in the area you exist or want to exist is around $4000.00 monthly, you can count on most being willing to invest $3200.00 for your services, or $38,400.00 annually.
Demographics will vary. This will largely depend on where you are. Your program may draw people with lower or higher incomes, from 40 to 50 miles away.
II. Learn to Mine Data
It is a part of the busy-work that demographic marketers must do (and assisted living owners must be demographic marketers) but you have to learn how to gather information on income and other items affecting the communities you serve. Investigate median income by age from responsible, credible information suppliers. Learn population statistics using your accounts at www.sl360.com and other sources.
Use that data to design and manage long-term marketing campaigns that will make you profitable and competitive.
III. Examine Your Competitors
Look around 10 miles in every direction. Make a list of providers of assisted living of comparable size programs to your own. Find out not only what they charge but how they arrive at pricing services. Know what extras might exist and on what they are based.
This process can give you insight into what is appealing to those who shop for assisted living in your area. This knowledge must be modified as things change. In some communities, development draws a higher income residential population, especially those with new, high-end subdivisions.
This could impact your pricing structure, what amenities you can offer and more.
Whatever formula you decide to use, make it an up-to-date process and base it on reality. This is not an emotion driven task but one that must be reliant upon real market data.
Any consultant or technical advisor you hire should have experience in developing data driven marketing initiatives. You have our best wishes for success as you manage these processes with consistency.
Sign-in, share your thoughts and comments!
Another Blog Post provided by Direct Care Training & Resource Center, Inc. and its affiliates. Photos and other images used are for the sole purpose of complementing written material and are not designed to imply or suggest an affiliation with or support by any individual or organization.
Bruce Wayne McCollum is a long-term care operational and systems development consultant with a focus on care delivery programs for adults and children. He works with clients throughout North America, Australia, Africa and Europe. His organization operates online schools for providers of care to adults and children. School for Providers of Care to Adults – School for Providers of Care to Children.
For More on our commitment to the success of assisted living providers, please join the LinkedIn Group: Small Scale Assisted Living Success Strategies.