Does Value Impact Assisted Living Pricing?

What is the Value of your Service?

The weekend newspaper seems to contain more sales inserts than actual news. My family members always gravitate to them, so they must be effective for certain retail products.

Over the years when an Assisted Living or Independent Living community begins to struggle with occupancy, price discounting is the first topic of conversation. Frankly the thought of lowering the price of a quality product or service makes me sick. A decrease in your sales or occupancy is normally symptomatic of quality or service delivery problems.

Around 2006 I was managing an Assisted Living Community located in Mooresville, North Carolina owned by Pulliam Investments. The community was led by an amazing Executive Director who created a team of associates dedicated to providing the best service possible. The community was the price leader in the market and remained full. A new competitor was about to open and our pricing strategy was to continue premium pricing with aggressive annual rate increases.

I have to admit this strategy was the source of tremendous anxiety for the Executive Director. She later admitted it was a valuable lesson. The new community opened with a lower pricing structure and tremendous discounting. We remained completely full and continued our aggressive premium pricing.

This was possible because our pricing reflected the real and perceived value of the service delivery.

To often pricing strategies do not consider actual service capability or perceived value, resulting in a continuous stream of discounts, unfortunately devaluing the product.

You really do get what you pay for.

Rick D Watkins

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