Which is your Retirement Village Business Model–Hospital or Hospitality?
There is one widely accepted understanding by marketers targeting Australian mature age consumers – they now accept the mature age market is not one homogenous group.
There is growing acceptance that segmentation by “age” as an indicator of consumer behaviour is at best ineffective, and generally misleading.
Before attempting to identify the niches and micro-niches within the Retirement Community marketplace (see later in this Article), there is one major segmentation that must be clearly differentiated – the “needs” or the “wants” driven prospective residents.
Does your Retirement Community seek to attract mature age consumers who “need” to move into supportive retirement accommodation, or are you seeking to attract those who “want” to move from their current housing arrangements into the alternative you offer?
Based on this answer, ie whether your Retirement Community is seeking to attract needs or wants driven prospective residents, your business model should take its lead from either best-practice Hospital or Hospitality operators.
If you are looking to successfully attract residents who “want” to accept a change in their retirement accommodation, evaluate the way your facilities, and your marketing, look and feel. How do your staff interact with residents? How are staff job titles chosen? What is the style and extent of resident engagement and resident empowerment , in comparison with the feel of a boutique hotel.
Do your employees seem more suited to healthcare or hospitality? What do their dress and appearance suggest?
If you were in charge of that boutique hotel, how many of your current staff would you employ? Are they hospitable enough?
If you were a holidaying guest at this boutique hotel, and the options for entertainment and activities were in line with those on offer within your Retirement Community, how would you rate the hotel on their Guest Satisfaction Survey?
As a house guest, would you happily accept the restrictions and regulations you see as necessary for your Retirement Community? Would you return as a guest?
Can you care too much?
In what we know as the aged care industry, it is appropriate that the extent and style of care provided dominates the marketing efforts of the operators, and forms a major aspect of the competitive advantage they articulate.
However, the market positioning of most Australian operators in the Retirement Community industry also strongly emphasises their level of resident care, often stressing the flexibility in the care provided, and at times attempting to differentiate between the resources dedicated to “caring for” and “caring about” their residents.
If your business model targets the “wants” driven prospect, the community environment you are striving to create should encourage residents’ independence and self-sufficiency, and assist them to thrive by exploring new interests, while retaining the most fulfilling aspects of their previous living arrangements.
In that environment, will staff members who were chosen for their ability, and desire, to take care of residents, stifle that feeling of independence and thriving? The answer would appear to be Yes!
A comparison with US operators.
One major aspect that pervades the marketing by US operators in all product and service categories is their propensity to target a specific niche.
In Australia we may have a magazine for, say, joggers.
In the US, they have a magazine for male joggers, who live in the Bay area of San Francisco and train 50 to 100 miles per week.
In Australia we have a bar.
In the US, there are bars targeting African Americans, who like Country and Western music and drink bourbon.
This same niche marketing is evident in US Retirement Communities, where operators commonly target a single ethnic, religious or sporting group, or the gay and lesbian market, or ranch-based communities for old cowboys.
This US ability to successfully target niche markets is often erroneously dismissed by Australian marketers as being solely a result of the US population, and therefore would not be viable locally.
Certainly there is no confusion deciding whether a US community is targeting needs or wants driven prospective residents. Everything in their facilities, marketing and staffing makes the target differentiation obvious.
By comparison, Australian operators seem reluctant to clearly nominate their target as either the needs or wants, and to carry through that decision in all aspects of their business model – facilities, marketing, staffing, level of care, arranged activities, and most importantly, the selection of residents within their sales process.
The most incongruous are Australian communities, where a very expensive facility has been specified and constructed to perfectly reflect the desires of the wants prospect, but then through fear of losing sales opportunities, the operator accepts a percentage of needs residents and must therefore staff and operate the facility in line with the requirements of the highest need, thus changing the environment necessary to attract the wants prospect.
The Internet Influence
The traditional marketing benefits that flow from nominating the segment of your market you will target, continue to be as significant as they have ever been.
However, there is now one more compelling reason to at least declare in your marketing, whether you aim to serve the needs or wants driven prospects, with a location indicator. That is the Internet, and more particularly, search engine optimisation.
If the market position of your Retirement Community is to appeal to anyone and everyone over 55, it is impossible to choose the words to traditionally convey that message, or the keywords to successfully attract the attention of search engines.
The more specific your target, the more specific your keywords, the more success you will achieve with the search engines locating your online content.
How to identify your niche.
To identify the niche, or micro-niche, which contains the highest proportion of targeted mature age consumers for any marketer, we have created the Mature Marketing Matrix, which recognises 6 Categories of Influence on their consumer behaviour, and 6 Segments within each Category.
The 6 Categories of Influence are
- Age
- Family Commitments
- Financial Position
- Health and Mobility
- Lifestyle
- Work Status
As an example of Segments, the Family Commitments Category has Segments such as “Single – no dependents” up to “Couple – with carer responsibility.”
The Work Status Category has Segments ranging from “Fully Retired – no paid or unpaid work” up to “Self Employed – exceeding financial needs.”
The Take-Away.
Australian Retirement Community operators seem to agree on the significantly different requirements to successfully attract and service the needs driven resident, as opposed to the wants driven.
Within industry circles, discussions on the percentage of needs versus wants driven prospects are frequent, and usually contain common understanding on the varying market demands, particularly relating to facilities and staffing.
However, when it comes to executing a business plan which unequivocally nominates, internally and externally, whether they seek to operate within the needs or wants driven marketplace, too often it appears a “foot in both camps” is the default middle ground.
Market evidence suggests the safety of that middle ground brings with it a guarantee of mediocrity and not the “best of both worlds” result sought.
About the Author
Born in late 1945, Graeme qualifies within the accepted definition of Baby Boomer.
Throughout his career in business, Graeme has been aware of his position just in front of the biggest population wave in mankind’s history. Aware also of the social impact caused by Baby Boomers as they “rewrote the book” for each age they passed through.
Since 1993, Graeme has increasingly targeted the consumer behaviour of mature age Australians to hone his expertise in:
- Marketing Strategy and Tactics
- Brand Development and Positioning
- Niche Marketing
- Sales Effectiveness
- Talent Retention
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