To wait or not to wait?
Solutions Advisors works with a number of communities across the country that are in various stages of sales; some are under development, some are challenged with occupancy while others are in more of a maintenance mode. Regardless of the circumstance, a common question asked by the sales team is – should we have a waiting list even if we are not 100% occupied?
The short answer is – YES! Using a waiting list strategically is a great way to allow prospects to commit to the community prior to moving in.
The long answer is…well, longer.
My community is under development!
Google “senior housing projects under construction” and you will find new communities being developed across the country. “Blue sky” projects typically go through two deposit phases – a priority deposit phase followed by a reservation deposit phase. The goal is to have the priority depositor convert to a reservation deposit or a waiting list for the future. Then, once the community reaches 100% pre-sold with reservation deposits, new deposits are for the waiting list only. The waiting list will help back-fill cancellations as well as provide a pipeline for future move-ins after the community opens.
Some important waiting list tips for blue sky projects:
- Divide the waiting list by floor plan style. If a reservation depositor cancels, start with those waiting list members who have expressed an interest in that particular floor plan style. If no one on the waiting list is interested in the available residence, then it can be offered to the market
- Know the timeframe of the waiting list members. Remember, with a new community, opportunities to reoccupy a residence take considerably longer than with an established community. Ensure the depositor understands the sense of urgency
- Ask the depositor for back-up residence styles. Since, as noted, reoccupancy can take longer, know the depositor’s first, second and third choice
- Include the waiting list members in select, depositor-only events. Some events should be held for only reservation depositors; however, inviting waiting list members to select events will help form a bond with the future residents more easily
My community is occupancy challenged!
Managing a waiting list for an occupancy-challenged community is just as important as for one that is full. Prospects in the planning phase of the sales process may find the waiting list a safe way to connect with the community while not being quite “ready” to make the move. The goal of converting a prospect to the waiting list is to engage them with the community so their desire to move increases. The deposit shows a financial commitment which is typically an indication of future interest. We’ve seen some communities that have stagnant waiting lists in which depositors simply want to have a placeholder but have little intention of moving unless a crisis hits. In some cases, prospects may be on multiple waiting lists, possibly waiting for the best deal or incentive.
Some important waiting list tips for occupancy-challenged communities:
- Consider defining two separate waiting lists: one more traditional list of people who want to be kept apprised of the availability of the community and one with a higher financial commitment that allows them to personally experience life at the community. In the case of the list with the higher financial commitment, the depositor would, for example, provide a $5,000 deposit to become part of the “Club”. As a member of the club, they might receive special benefits such as:
- Monthly Sunday brunch
- Access to the fitness center or other select amenities
- Monthly trips and excursions with residents and other club members
- Priority ranking on the waiting list over traditional waiting list members
- Create conversion events specifically for waiting list members that allow them to mingle with existing residents
- Set goals for both waiting list deposits as well as waiting list conversions to move-ins. Review these conversions separately from typical inquiry to move-in and tour to move-in conversion ratios
If you are challenged with occupancy, it becomes even more important to be strategic in your communication with a waiting list. Don’t just follow up occasionally to see if their timeframe has changed – use creative follow up, home visits and other strategies to engage them with the community. The goal is to get them to move in sooner rather than later.
My community is in maintenance mode!
If your community is operating above budget and in more of a maintenance mode, a more traditional working of the lead base typically will suffice. However, it is still important to keep the depositors engaged in the community to ensure they are more likely to move when something becomes available for them.
- The waiting list deposit is typically 100% refundable. The deposit should be small enough to be manageable yet large enough to demonstrate a financial commitment to the community as an indication of future interest. Traditional CCRCs see waiting list deposits that vary from $1,000 to $2,500 while some rental communities require less money to commit
- One option to identify depositors who are more serious is to require a 10% deposit to be on the waiting list for those residences that are the highest in demand, such as larger floor plans, apartments with great views, etc.
- Some communities have a “three and done” philosophy in which the waiting list depositor is offered a residence three times before they drop to the bottom of the list. Often, this strategy requires a 72-hour decision making period. While this may create a sense of urgency, it can actually slow down the process while waiting for a commitment, and make the depositor feel pressured to make a decision that they may regret. We find that placing the decision in the hands of the depositor allows them to feel more in control and not feel ‘punished’ if the timing and circumstances are not right. We prefer allowing the depositor to turn down the available residence without losing their place on the list. In order for this method to work, however, it is imperative to have a clear understanding of the timeframe of the depositors on the list so the sales team does not waste time contacting depositors who are unlikely to move
- We find it useful to send out an annual waiting list survey to determine if interests, timeframe or circumstances of the depositors have changed. This will help the sales team maintain a grasp of the status of the waiting list depositors.
Of primary importance is to be strategic in your approach and consistently track conversions to monitor the success of your efforts. Review key ratios such as waiting list deposit to move-in, waiting list deposit cancellations as well as gestation periods from waiting list deposit to move-in. These conversions will vary based on the current sales state your community is in as well as the attrition rate; however, establishing ratios and tracking them over time will allow you to evaluate progress. Also, do not assume that waiting list members are already sold on your community. They need to be engaged and connected with often, just as you would with traditional prospects.
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