We are currently ‘selling’ our research projects, and have contacted over 400 village operators. About 200 have taken our phone calls while about 200 have ‘gate keepers’ that refuse to put us through to the decision maker.
Over 15 years this is standard. (This is our seventh research program since 2008).
The surprise this year, amongst the operators we talk to, is the hunkering down.
“We have no budget. We have made our plans. There is nothing we can do”.
This is at a unique time in our marketing lives thanks to COVID, when the village sector faces its greatest threats and greatest opportunity.
The first great threat in that deposit taking is already softening and settlements are beginning to fall over. Cash flow October through June is going to be hit.
Reduced cash and increasing vacancies which will hit valuations of villages. Lendlease recognised this last month:
So did Stockland:
Village operators that hunker down and wait can be assured that the value of their villages will drop significantly over the next 12 months.
But this doesn’t have to be the case. It is an opportunity; COVID is making everyone, especially Australians aged 70+, think about their actual security.
The snapshot below from our DCM Prospect Profile survey of 2,200 people just two weeks ago shows 43% are experiencing increased vulnerability.
Gold for village marketers you would think. But this is not what we see.
We have the ads coming through to our villages.com.au search directory and we estimate that less than 20% of operators promote security. You have to ask – how much marketing cash is being spent on the least effective messages?
The basic definition of marketing is: identify a need and satisfy it.
So first operators must do the identifying in this dynamic market. Its called understanding the customer.
Our research has identified that 51% of potential customers believe villages are expensive, yet nearly all village homes are significantly lower priced than surrounding homes. However just 23% of the villages promoted on villages.com.au have home prices featured.
We also need to talk about the COVID threat to the brand of retirement villages. We have seen the impact on ‘trust’ of aged care homes. The sector had no goodwill in the consumer bank and the reputational damage has been massive.
The village sector runs the same risk, as demonstrated by the 2017 Four Corners program that impacted sales by 25% for nearly three years.
Does the sector take out insurance by building the data to counter negative news, or wait? Do operators invest in building data around their own villages to use in local marketing, to fight the fight, when negative events occur in other markets?
Logic says yes.
If any of the above resonates with you and you would like to know more about how our research programs will support you in acting now, rather than waiting, please email me today.