Senior Living - Market Analysis

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Senior Living - Market Analysis

This three-part report conducts a detailed market analysis of the senior living sector. Part I highlights recent or emerging trends in the senior living market. Part II presents insights related to marketing practices for the senior living sector. Part III provides a competitive landscape of ten key market players organized in an attached spreadsheet.

I. Senior Living Market Trends

Two recent trends in the senior living market are an increasing demand for accommodations for low- and middle-income seniors and the integration of new technologies into the senior living experience. This section includes details about what is driving these trends and provides examples of senior living communities that have incorporated these trends into their marketing strategies.

Demand for Senior Living Accommodations for Low- and Middle-Income Seniors is Rising

  • Assisted living facilities cost residents an estimated $60,000 per year in rent obligations and other fees. Roughly 54% of middle-income seniors are expected to lack the financial resources needed to cover such a cost.
  • According to Forbes, this demographic of seniors is an underserved market, and the lack of affordable senior living options presents a "critical void in future US housing needs."
  • Industry reports indicate that senior living facilities are approaching this issue in a number of ways. These include developing lower-cost pricing models, cutting corporate costs through more "cost-effective construction options" or "repurposing existing real estate," and using new technologies to "drive efficiencies."
  • The surge in retiring Baby Boomers is likely driving this trend. Granted, Baby Boomers are staying in the workforce longer than earlier generations. However, the youngest members of this generation will be turning 65 in 2029, and Baby Boomers are presently retiring at a rate of about 10,000 workers per day.
  • Approximately 47% of Baby Boomers have already retired.
  • A 2018 retirement survey found that 45% of Baby Boomers have no retirement savings. It also found that American adults over age 65 spend an average of $48,885 per year.
  • Reasons commonly cited for this lack of financial resources are that Baby Boomers failed to start saving early enough, underestimated how much healthcare would cost them, and have "unrealistic expectations" about how much money they will need in retirement.
  • Erickson Living is one example of a senior living community that has incorporated this trend into its marketing strategy. A recent commercial describes the facility as "hassle-free and affordable" with "predictable expenses." The company markets itself as a community with options that can fit any budget.
  • Abbot Senior Living is another example, marketing itself as the "most affordable senior living community" in Zanesville, Ohio. The facility's pricing model includes cooking, cleaning, and laundry services starting at $960 per month.

Facilities are Integrating New Technologies into the Senior Living Experience

  • Technology has become a staple of daily life, and many people depend on it as a tool that can enhance "social connections, ease, and wellness." As a result, senior living facilities are beginning to incorporate new technologies like smart devices, cyber cafes, and online billing services to monitor health issues, promote social engagement, and increase convenience.
  • For example, some facilities are introducing smart watch technology that can be used as a touchless resident access key and remote wellness monitor. Communities are also incorporating smart technologies into apartment lighting fixtures and furnishings as they design senior living spaces.
  • There are likely two main forces driving this trend: a need to cut costs by increasing efficiency and a consumer demand for new technologies in senior living facilities.
  • As mentioned previously, senior living facilities are finding ways to cut corporate costs so that they can offer residents more affordable pricing models. One way to do this is by increasing efficiencies through the use of new technologies that can automate administrative tasks and assist with caregiving.
  • Baby Boomers are also more tech-saavy than earlier generations. Pew Research reports that 68% of Baby Boomers use a smartphone, 52% use a tablet, and 59% are active on social media. Eighty-five percent of Baby Boomers use the internet.
  • In the context of senior living, new technologies can help residents keep track of doctor's appointments, automatically dispense medications, and remotely monitor vital signs. Motion-sensor technology can alert staff if a resident takes a fall. Facilities are also using music technology in therapy to help residents with memory issues.
  • Five Star Senior Living is one example of a senior community that has incorporated this trend into its marketing strategy. A recent video promotion shows seniors enjoying themselves as they wear virtual reality goggles for the first time. It ends with the tagline "Just Another Day at Five Star."
  • Benchmark Senior Living is another example and has a dedicated connections coordinator who assists residents with using new technologies to "connect with the world around them." A recent commercial showcases this team member and follows her as she works with Benchmark residents.

Research Strategy

We searched industry journals, market reports, and trusted media sources to determine recent or emerging trends in the senior living space. Each trend included is corroborated by reputable publications, championed by industry leaders, and expected to grow over the next two to three years.

II. Senior Living Marketing and Advertising Insights

Three insights related to marketing practices for the senior living sector are that ad campaigns often showcase a team of experts, incorporate digital advertising in engaging and user-friendly ways, and appoint current residents as brand ambassadors. This section includes details about what these insights mean and why they are relevant.

Ad Campaigns Showcase a Team of Experts

  • Choosing a senior living facility is not an easy choice for both future residents and their families. Consumers often spend years making a decision as to which community is the best fit for their unique needs. In addition, the aging process can be confusing and sometimes difficult, especially if seniors are experiencing health issues or memory loss.
  • Many senior living communities address this by using a "team of experts" approach to advertising. This type of marketing is informative, educational, transparent, and builds trust. It often focuses on advertising the knowledgeability and experience of the facility's staff or provides consumers with the educational materials they need to make an informed decision.
  • A 2019 consumer preferences survey found that quality of care is the top-ranked priority among 67% of people researching senior living options.
  • Consumers researching senior living options are also more likely to respond positively to expert advice and information versus an obvious sales pitch.
  • Genesis HealthCare is one example of a senior living facility that uses a "team of experts" approach to marketing. A recent ad campaign features the slogan "Better Begins Here" and showcases the organization's use of new medical technologies and "highly-trained doctors."
  • HCR ManorCare is another example of an organization employing this approach. The company has been running a recent campaign that interviews and follows exceptional members of its professional staff. One video advertisement titled "Real Experiences" follows Dr. Brickman, a physician specializing in emergency medicine.

Marketing Efforts Incorporate Digital Advertising in Engaging and User-Friendly Ways

  • Senior living communities are making their websites easier to navigate with enhanced readability and tailored content. According to Forbes, consumers in general are looking for personalization from companies and become easily frustrated when digital content is not tailored to meet their specific needs.
  • Blogging is also a popular digital advertising technique that serves the duel purpose of engaging with website visitors and providing useful information. One marketing study found websites "that prioritize blogging achieve a positive return on investment (ROI) on their efforts."
  • Senior living companies are also using social media platforms to build stronger relationships by connecting with potential residents and their families. Atria Senior Living is one notable example and has run such social media marketing campaigns as #goGrateful and #MomGenes. It also displays quotes from social media followers on its website's landing page.
  • Industry experts recommend that senior living communities use social media consistently in their marketing efforts, featuring photos and videos of current residents and staff members to gain followers' trust. They also recommend creating hashtags and engaging with followers by regularly responding to comments.
  • Using digital advertising is a particularly useful way to reach adult children of potential senior living residents. It is not uncommon for Millennials and members of Gen X to help their parents research senior living options. Pew Research reports that between 91% and 100% of this demographic uses the internet, between 90% and 93% have a smartphone, and between 76% and 86% are active on social media.
  • Most of the senior living facilities included in the attached spreadsheet have a website that is easy to navigate and uses large, viewer-friendly texts and images. Their websites provide personalized information in anticipation of visitors' specific needs and most feature an interactive blog.

Facilities are Appointing Current Residents as Brand Ambassadors

  • Since word-of-mouth marketing is a powerful advertising method, many senior living facilities are turning passionate residents into brand ambassadors. These current residents personify the community's brand and often share stories, participate in tours, and are rewarded through referral programs.
  • Brand ambassadors offer authentic publicity at a relatively low cost. Including current residents in marketing efforts also fosters a sense of purpose and belonging, which will likely increase their loyalty to the community's brand. In addition, consumers are more likely to trust a current resident over corporate advertising.
  • The American Marketing Association reports that 75% of consumers consider word-of-mouth marketing "a key influencer in their purchasing decisions." It notes that word-of-mouth marketing has a high ROI.
  • Brookdale Senior Living uses the “brand ambassador” technique when marketing to potential residents. In a recent commercial, one resident describes taking up painting, running for Resident Council, and feeling a general sense of purpose and belonging as a member of the community.
  • Friendship Village is another example of senior living community that uses brand ambassador marketing. A recent video promotion interviews several current residents, who provide insight about the living options, activities, and welcoming atmosphere at Friendship Village. They also share stories about their careers and lives before retirement.
  • A third example of a community using this marketing method is the Pillars Senior Living. A husband and wife act as brand ambassadors in a recent video promotion, explaining when they knew it was time to move into an assisted living facility and why they believe the Pillars Senior Living was the best choice.

III. Competitive Landscape of Key Market Players

Ten key players in the senior living market are Brookdale Senior Living, Genesis HealthCare, HCR ManorCare, Holiday Retirement, the Evangelical Lutheran Good Samaritan Society, Sunrise Senior Living, Five Star Senior Living, Life Care Centers of America, Atria Senior Living, and the Ensign Group. This section provides each company's annual revenue, funding sources, services, and social media accounts, as well as a description of its marketing efforts or recent ad campaigns. All information is organized in the attached spreadsheet.

Summary of Findings

  • Annual revenue numbers reported by these organizations range anywhere from $92 million to nearly $5 billion.
  • Funding sources vary, though almost all of these facilities are at least partially funded by Medicare and Medicaid. Details about private investors are limited for most companies.
  • Common services provided by these companies include independent and assisted living, memory care, rehabilitation services, and skilled nursing.
  • LinkedIn, Facebook, and Twitter are the most frequently-used social media platforms among these senior living facilities.
  • Ad campaigns often employ such marketing tactics as the use of brand ambassadors and showcasing a team of experts.
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