In 1988 I told my business partners that if they figured out how to build The Gatesworth, I would figure out how to fill it. That was confidence talking. Fifteen months after we opened, I had personally run out of money and was scrambling to cover my own living expenses. The building was not full.
My confidence was grounded in several years of successful real estate sales. I had also studied the thought leaders in senior living and the sales figures outside of it, Zig Ziglar and Brian Tracy, and Tom Hopkins among them. Unfortunately, almost none of the transactional real estate sales techniques worked on the senior prospects sitting across from me. They were not objecting to the price, services and amenities offered or the floor plans. They simply were "not ready" to move, and nothing in my training or residential real estate experience had prepared me for that.
What eventually filled those 220 apartments was not a better pitch or generating more inquiries, it was refocusing the nature of my engagements and prioritizing where my time was going.
We often count the wrong things
Ask most operators how sales is performing and you will typically get two numbers: how many new leads came in, and how many tours were given. Our CRMs were built to report those numbers upward to owners and investors watching occupancy. Focusing on the number of new leads and tours is consistent with the fact that most of our CRMs were designed for reporting activities rather than for improving selling effectiveness. Moreover, what metrics to track effective senior living sales were usually not determined by anyone who had ever had to move a reluctant prospect toward being ready.
Underneath that reporting sits an assumption nobody says out loud: a belief that conversion ratios are fixed. If you want more move-ins, the thinking goes, generate more leads and more tours because the percentage that will convert is simply what it is.
That assumption is wrong. Conversion ratios can improve, by a lot, when the selling style and focus change. Treating conversion rates as fixed is expensive, because it quietly writes off a lot of the very prospects you most need.
Think about who gets ignored under a fixed conversion rate model. It is the higher-functioning prospect who is not in crisis. Often someone who is still driving and still managing at home and nowhere near a decision. For these higher-functioning prospects, there is no urgency flag anywhere in the sales journal. A typical transactional or "speed-to-lead" oriented seller generally marks them "cold" and moves on to someone with a more urgent need to move somewhere quickly. Roughly nine out of ten qualified prospects fall into the "I'm not ready yet".
What we have learned to measure instead
In Moneyball, Michael Lewis tells the story of Billy Beane looking at the same players everyone else was looking at and concluding that his industry, professional baseball, had spent a century measuring the wrong things. When it came to offensive metrics, Batting average was what conventional wisdom tracked, On-base percentage was predictive, and Beane staked his career on the value of replacing batting average with this new metric.
When we first developed Prospect-Centered Selling ("PCS") my business partner Alex Fisher and I asked a version of the same question. Whether there are sales behaviors we can identify, track and measure that actually help drive and hence which tracking can better predict a move-in.
That question produced two ratios. The inquiry-to-visit ratio is the share of new inquiries who agree to meet with you face to face at least one time. The visit-to-move-in ratio is the share of prospects who, having met you face to face at least once, proceed to move in. The second metric, visit-to-move-in, is harder to accomplish yet a far more valuable predictor of sales effectiveness.
Here is one of the first reports of these two industry benchmarks, taken from the late Tony Mullen's Sales Summit nearly 10 years ago. For every 100 qualified IL/AL leads, about 45 will agree to a tour or a home visit ("visit"), and of those 45, only 10 will move in. That is a 22% visit-to-move-in ratio.
Across eight One On One turnaround campaigns during that same time frame, the rapid fill turnaround sales teams that I led using PCS were able to get an average of 70% to meet face-to-face at least once and of those we were able to convert 50% into Residents. That meant that for every 100 IL leads, PCS enabled us to convert 35 rather than just 10 for an average team. Those were campaigns I personally led and participated in and I am reporting only to illustrate what is possible. Comparing results from Top PCS performers in the Sherpa CRM database roughly 5 years ago showed that they were converting 36% of prospects who had at least one face-to-face visit, against the industry's average of only 22%, and they were also able to get more leads to a visit in the first place: 55 out of 100 instead of the industry average of only 45. Same prospects. Same buildings. From the same 100 leads, the average PCS performers achieved 20 move-ins instead of just 10. Double the move-ins.
The difference is not related to the number of leads generated. Rather, sales effectiveness and conversion rates are tied to what the counselor does with the time they have.
What Time in the Selling Zone® measures
Time in the Selling Zone, or TSZ, is the time a sales counselor invests directly in advancing an individual prospect toward readiness. For a quick overview of what effective time distribution actually looks like, see David's Sales Tips: Time in the Selling Zone®.
The definition of what specific activities to include as TSZ came out of necessity. When I started leading sales teams, I began tracking their focused selling time or TSZ against their results, and the relationship turned out to be immediate, instructive and durable: the more time we invested in in the Selling Zone per prospect worked, the more successful we became.
The four activities included in our definition of TSA are time spent engaged in
- Face-to-face with the prospect or their family
- Voice to voice, plus email, text and snail mail
- Planning before and after an engagement, including learning the person's life story, stage of readiness and choosing a relevant best next step
- Creating personalized, creative follow-up
Notice what is not included in TSZ. Marketing, PR, event planning or attending, move-in coordination, new resident orientation and any administrative or operations support. These are activities that need doing, and most of them usually end up on a sales counselor's calendar. However, not one of them advances a prospect toward readiness or directly contributes to increasing move-in conversion ratios.
Now do the arithmetic, because the total amount of time available to invest as TSZ is generally a lot smaller than it looks. Connecting with a frightened 84-year-old and untangling what is actually stopping her is emotionally exhausting work. That is likely why, in practice, even the best sales professionals are only able to spend about half of their total working hours in the Selling Zone. Assume an average of twenty-two working days per month, eight hours each, and, in the best case, only half of it available. That is only about 88 hours a month per Leasing Counselor.
That is it. Unless you are able to budget more than one Leasing Counselor per community, that is all the TSZ there is to work with.
Consider that many data studies show that it takes roughly 10 hours of TSZ to help a typical assisted living prospect "get ready", about 20 hours for an independent living rental prospect, and longer than either for a typical CCRC prospect. Run those numbers against the 88 total hours of TSZ available per FTE and the importance of prioritizing utilization of available TSZ becomes apparent.
Fewer prospects, more time with each
We looked at 512 communities that had been using Sherpa CRM for more than a year, and the split was stark: those averaging an hour or less in the Selling Zone per prospect worked posted an average of a 21% visit-to-move-in ratio. Those averaging two and a half hours or more hours of TSZ per prospect worked improved their conversion results by 90 to 100%.
The benefits of spending more time with fewer prospects are not unique to senior living sales effectiveness. Ryan Fuller at VoloMetrix studied several thousand sellers at a large software company and found the same type of results. He summarized the objective as one of "depth trumping breadth". He found that top sellers were spending 18% more direct selling time with customers while working 40% fewer accounts.
So how can you find additional TSZ to invest? There are three ways and only one of them is obvious.
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Delegate the non-selling work, like marketing, unit turnover oversight, move-in coordination, new resident orientations and event logistics can be handled perfectly well by someone other than the Leasing Counselors at a much lower cost, and they should be.
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Minimize the number of total Active Leads. I know that might sound like heresy, but consider how much of a Leasing Counselor's time needs to be spent vetting, contacting and following up with each new inquiry. In a stabilized community with even average Leasing Counselor conversion rates, you do not need more than 10 to 15 leads for every vacant unit and most providers consistently wind up trying to work with far more than that. Don't bulk up on leads. It does not help you and it does not help your prospects get ready. Top performers can really only effectively work on about 10 prospects at once anyway.
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Sell as a team. Market penetration in this industry is only about 10%, so there is no advantage whatsoever in having counselors compete with one another over the same scarce prospects. Set performance milestones for the community rather than the individual, and pay incentives to everyone when anyone on the team gets a lease. Two people on a tour is also simply better than one, and while filling a community in Provo, Utah, we once had a prospect arrive with 47 members of her extended family. Try running discovery on that alone.
Where the best performers put the hours
Once we could see how top counselors in the Sherpa CRM database allocated their TSZ, the pattern was consistent:
- 35% face-to-face
- 30% planning
- 20% phone and email
- 15% creative follow-up
Add the second and fourth lines together. 45% of a top performer's selling time is spent on work that happens when the prospect is not even present!
Today's CRM data points the same way. WelcomeHome has found that prospects whose profiles are at least 75% complete are about 45% more likely to move in, and a complete profile is exactly what more TSZ helps produce.
One thing worth saying plainly: using the hours you have to hunt for urgency is usually counterproductive. The most urgent prospects tend to have the shortest length of stay and ask the most of your care staff. See the hidden costs of constant urgency.
One more number, and it is the one I would put on the wall. In the Sherpa CRM data, top performers received seven and a half times more incoming calls from prospects than outgoing calls they made to them. Seven and a half times more. If you want a single question to organize a sales meeting around, try this one: what would we have to do this week to get a prospect to call us?
What Changes on Monday
You already know your new inquiry count, and most communities can recite it from memory. Far fewer can tell you how many hours their counselors spent in the Selling Zone last month, or what the average TSZ invested per prospect worked was or what share of that TSZ went into planning and personalized follow-up.
Those are the numbers that help predict move-in results. Lead volume, beyond establishing a necessary minimum number is not an effective sales performance metric at all. Think of it as more of a purchasing decision metric. TSZ invested per prospect worked reflects sales behavior, and a behavior is something you can coach and something that if you can increase will drive higher conversions.
Start by measuring one thing, which is average TSZ invested per prospect worked. If it sits under an hour you have found your opportunity, and you have found it without spending another dollar on marketing.
It's about time. Invest in more TSZ and your results will improve, because you can identify, track and coach the behaviors that have been proven to produce higher move-in conversions. In the end, you win. Your community and your company win. And so will a lot more of the 90% of older adults still holding onto a house that stopped supporting their lifestyle a long time ago.
More TSZ with fewer Prospects. That's a key ingredient of effective, heroic selling.