By Rob Love, President & CEO of Love & Company
This article is the first in a series we’re publishing that’s all about the reasons to adopt a team-based master planning process. Before discussing the merits of why adopting a team-based approach is best for senior living organizations seeking to build a new community or expand an existing one, it’s important to note that the whole process is built on one crucial element: market intelligence.
The first ingredient
Just as the right ingredients are essential to a making a great recipe, the right information is essential to developing a great master plan. It is imperative that the planning team has access to detailed information on the market. What is the potential for growth? What niche(s) is underserved? What are competitors doing? What price point can the market support? This information provides the foundation on which a successful project is developed.
Too many times we’ve been brought in to market a project after the client has gone through the master planning process without a clear understanding of what the market can actually support. A project has been designed, the prices have been set based on what it costs to build it, and then marketing often is tasked with selling a project that is mismatched—from a price perspective—with the market. By starting with a clear vision of the targeted market niche in mind, you can ensure that the entire plan is designed so that it meets the needs of the people who are going to buy it.
“Before you ever draw”
When conducting research on a market, we aim to inform two main components of any project: What should the product be, and how should it be priced to be successful?
Melissa Pritchard of SFCS Architects agrees with the fundamental need of having market intelligence compiled “before you ever draw.”
“One of the things we want to know first is, ‘What does the market study say?’” Melissa says. “If a client tells us, ‘We don’t have one,’ then we really can’t start meaningful design.”
This can be a challenge, because Melissa notes that many clients want to jump straight to design based on what they think they “need.” This assumption is often a mistake, as the insights from the market study and a disciplined analysis of the community’s needs can paint a different picture from what the project owner thought was needed.
Insights to vision
Market research is used to drive what clients actually need, and what will help their organization best advance its mission. The vision for the whole project should stem from the intelligence on the market, which should inform the provider:
- What is the competitive landscape like in the region?
- Which exact niche are we aiming to fill?
- Is there sufficient demand to sustain the project?
With that clear vision in place, the project team can start thinking about unit mix and sizes, pricing, contract options, amenity spaces, service packages and the sales timeline for the project. With a team-based approach to master planning, the team can then take that information and start developing the plan.
Remembering who we represent
When you think about senior living market intelligence, it’s easy to get lost in the data, demographics, charts and maps. It’s always important to remember that, when it’s time to presell the project, we will be dealing with real individuals with real needs and concerns.
As such, marketing is often the representative—and protector—of the consumer throughout the master planning process, as the consumer will ultimately be paying for the project. At Love & Company, we consider a key part of our role in a master planning process to be the protector of the revenue.
With the consumer in mind, it’s imperative that master planning teams don’t just increase fees to cover increased costs and make a project financially viable. The first priority always is to ensure the project is priced right for the market. Then you can adjust other variables as needed, which we will discuss more in future blogs for this series.
If your organization is thinking about an expansion or new senior living product, feel free to reach out to Tim Bracken at 410-207-0013 to explore how to get started with a market demand analysis.