Question of the Month: Improving Penetration Rates

The industry’s penetration rate has been stuck around 10% for some time. How would you grow that number?


Supply and demand are local statistics

By Michael Stoller

Managing Partner, CEO

LCB Senior Living

On the one hand I’d ask: Why would we want that to go up significantly? A low penetration rate says the demand outpaces the supply. Thus, as operators, we should all be happy. 

On the other hand, there is oppor-tunity to build and move that needle up, albeit hopefully
not to a saturated level. 

In reality, supply and demand is a local matter, so national statistics on penetration rates are a single reference point. There are markets that have penetration rates as low as 2 to 3 percent, and other markets that exceed even 30 percent. It’s a local business.


Stereotypes still damage the industry’s reputation

By Lisa Welshhons

Senior Living Division


While the industry has made great strides in overcoming some of the stereotypes, an image makeover is still needed. Terminology such as the dreaded “nursing home” is widely used, creating barriers to growth. 

Changing those longstanding perceptions for the future resident and adult children takes a lot of education. We also need to think about those efforts for attracting the next generation of talent into the senior living workforce.

Many communities are in dire need of a cultural shift. Focusing efforts on employee engagement and creating a hospitality experience have been widely successful for many organizations, resulting in lower employee turnover, higher resident satisfaction, more referrals and increased occupancy. 


Educate and exceed expectations

By Alan Plush



Simply put, it’s about consumer education. 

Every generation that is exposed to extended life expectancies needs to grapple with the practicality that results, thus the continued evolution of our industry. As an adjunct I would add that we need to exceed the expectations of our consumers, both the residents and their adult children. 

The more seniors housing is seen as a positive lifestyle choice and not a worst-case default, the more we as an industry move the penetration needle.


The industry can create the demand

By Barbara Kleger


Kleger Associates

My recommendations are:

1. Educate the consumer and create desire rather than just needs. ASHA has already taken a step in that direction with the Where You Live Matters initiative.

2. Revamp product and services. Implement more flexibility and choices in the product as well as the services. Develop programming that acknowledges the new consumer’s youthful spirit, curiosity and penchant for reinvention.

3. Reset the marketing approach. Focus on living, not aging. Create a culture that supports consumer wants, not deficiencies. Collaborate and compete on every level. Stress personal relationships. After all, people make all the purchase decisions. 



Give consumers a positive, data-driven message

By Jeff Sands

Managing Principal

General Counsel 

HJ Sims

There is a false message: “The best option is home.” We hear it from home care, security, telemedicine and technology groups, all promising seniors can live at home forever. 

We need to counter with a different message: “Odds are you will live longer and healthier at a senior living community.” 

Look at the power of education. Everyone, including seniors, is exercising more because people have finally internalized that exercise equals health and longevity. Senior living advocates have powerful research to back their message. We need to deliver it better.


Spend smart to drive down rents 

By Dan Baker

Vice President, Senior Housing

Avison Young

The best way is to incorporate more technology and be strategic with amenity offerings and design details. 

Many communities underdo it regarding technology and overdo it regarding amenities and expensive design. That combination keeps monthly rates just out of reach for a large swath of the prospective resident population.

Using innovative tech, emphasizing choice and flexibility with amenities, and value engineering out fancy-but-unnecessary design elements can keep costs down and make seniors housing a more compelling choice for prospective residents than staying home.

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