If you are responsible for the cash flow – and ultimately the financial health – of your retirement village business, then now – more than ever – in these uncertain times you need to be making decisions based on facts, not gut feel or historic trends.
The graph above was released by Aveo last November. It is proof positive that in normal times you need a sales funnel with the ratio of 200 leads delivering 100 appointments which delivers 20 sales.
Bad times severely damages this ratio. If you look at Q1FY18 – July to December 2018 – you will see Aveo achieved 160 leads, 75 appointments and 10 sales. This was immediately after the June Four Corners program which featured Aveo.
You can see that they then had to get 250 to 275 leads over the next 18 months to generate 20 sales.
This is what the village sector will face over the next 18 months thanks to COVID.
But it will be more challenging. At least Aveo had an overheated residential market, meaning people could sell the family home and settle on the village purchase. The sale became a settlement.
We don’t have the overheated residential market now – we have the reverse. Property sales are down 50% according to CoreLogic.
Simple maths says if you want the same volume of settlements as last year, you need at least three times the number of leads.
If you are not marketing to get those leads, and if you are not training and equipping your sales people to identify the best quality leads, converting them to a sale and then supporting them to sell their family home, your settlements will suffer.
There are two pieces of good news however.
The first is that there are interested buyers. Check the graph above of the numbers of people researching retirement villages on villages.com.au over the past 12 months. The red line shows the same volume of people have returned to the market from May onwards after a COVID hit through March/April. In fact 7% more people searched in June 2020 than in 2019.
The second piece of good news is emotions are fired up. COVID has had an impact.
Results are coming in from our DCM Research program of potential village customers, and fear and anxiety are driving a desire for ‘control of life’. The research is showing that staying in the family home is not delivering control and does not deliver independence. Fear and anxiety remain.
However moving to a retirement village home does deliver independence, control and ageing with ‘grace, dignity and joy’.
This is the position and messaging that resonates with the 100,000 people who research villages.com each month and are potential customers.
Our message: we will need to go early and go hard to generate significantly more leads to deliver the standard number of settlements. And your actions must be based on real, current market data. Our research programs deliver this – plus marketing and sales tools.
If you want to learn more, email me here.