Changing psychographics: residents are demanding more as their perception of value changes.

Editor's Note: This is part one of a two-part series.

I try to experience as many senior living communities as possible. So far I've had short stays in more than 55 of them. As I was having dinner one evening with a distinguished gentleman he said, "You know, I was somebody once." The lady at the next table chimed in, "The young people who work here are just delightful--but they really don't understand us," This community seemed to have all of the right services and amenties. The staff knew all the residents on a first-name basis. But what was missing was a true understanding of each resident's inner emotional needs. We all recognize the importance of demographics, but now we must also focus on the changing psychographics of seniors.

A new generation of seniors is emerging that will expect much more from our senior living communities. Today's typical prospect is an 80-year-old senior who grew up during the Great Depression and World War II. By the Vietnam War and the rebellions of the 1960s, they were in their forties. They reached mid-life in the 1970s as members of "The Establishment" and approached retirement during the boom/bust cycles of the 1980s and 1990s.

Their lifespan has created a series of birthmarks, making today's seniors more demanding, less complacent and more pragmatic in their continuing search for self-fulfillment. The men will have experienced Corporate America's "gray flannel suit era" including the transition from a period of conformity to one that emphasized entrepreneurial individualism and autonomy. Females who were primarily homemakers joined the outside workforce in surprising numbers, making them less passive, more worldly and less likely to settle for someone else's definition of the status quo.

There is an evolving disconnect between the situation-driven focus of many sponsors and owner/operators and what it takes to be truly market-responsive for this new breed of seniors. Sponsors and owner/operators focus on covering real estate costs and operating expenses, while delivering their definition of acceptable operating profit margins and cash flow after debt service. These are certainly important financial fundamentals.

But there is an equally important question to address: "In the future, do I want to be perceived as offering a price-sensitive commodity or a value-enhanced community of choice?" In many cases, the deciding factor is the senior consumer's definition of good value.

Due to a lifetime of financial conservatism, many seniors are now in a position to focus primarily on choice and value. In fact, many have been making value choices for the better part of their lives. They don't always opt for the lowest-priced commodity. Many buy Buicks and Cadillacs--not Chevrolets. They dine at the nicer restaurants and buy clothes by brand names at the better department stores--not necessarily Kmart or Sears. They travel extensively.

But while many seniors face the biggest, most important decision of the rest of their life--senior living choices--we find that we haven't done a very good job of either creating unusual value or effectively telling our value story.

Seniors are on a constant search for self-fulfillment. Five very important quality of life attributes are:

* Experiences/adventures/nostalgia

* Comfort/peace of mind

* Individual recognition

* Socialization and intellectual stimulation

* Self-expression and fulfillment.

Astute sponsors know that the real issue is not just resident satisfaction, it is quality of life leading to exceptional value. Ask yourself this question, "What would I want out of the last 6 to 10 years of my life?" If you're having trouble projecting yourself into the future, ask what you would want your parents to benefit from in the later years of their lives.

The primary obstacles to improving value will be creativity and frequently cost. Making major improvements in the quality of life discipline will require increased staff time and innovative program strategies. This will obviously increase operating expenses. But in the long run, benefits realized in distinguishing a community of choice from a look-alike, price-sensitive, commodity could be significant. The good news is that you can actually recover most of the additional costs you incur in delivering unique value. In fact, cost recovery versus value is the essence of avoiding the price-sensitivity, community syndrome.

Jim Moore is president of Moore Diversified Services, a Fort Worth, Texas-based national seniors housing and health care consulting firm. He is author of Assisted Living 2000 and Assisted Living Strategies for Changing Markets. He may be contacted at [e-mail].