Dealing With Problems Out of Your Control

What if the only thing standing between you and next month’s rent was how well you treated a resident today?

Of course, that’s not how senior living actually works.

We don’t lose a resident because of one bad Tuesday, the way a restaurant loses a customer over one bad meal. Most residents stay for life once they’re in. But a Wall Street Journal article about Texas Roadhouse got me wondering what would happen if we operated as if it were true.

Right now, senior living is facing a ton of problems operators have no control over. Staff acquisition and retention, increasing labor costs, increasing insurance costs, increasing food costs …

Most operators have dealt with it by increasing rates, which has largely worked out due to rising demand, but in the long term, one can’t help but wonder whether this cycle is sustainable.

That’s the backdrop I had in mind when I read a Wall Street Journal article about Texas Roadhouse, the number-one casual-dining chain in the US. There were so many good things in that article that it will become a short series.

Texas Roadhouse is all about beef. Way more than 50% of their menu items contain beef, and beef prices have gone sky high. A problem they didn’t make and can’t control. The other side of the equation is that, while customers are extremely loyal, they are super price-sensitive. Texas Roadhouse represents a dining-out experience at a relatively reasonable cost.

They did three things:

1. They examined every single expense they had, asking, “Where can we shave a few pennies?” with the goal of maintaining the customer experience. This has direct application to senior living. Spending time exploring how to reduce costs, even pennies, can pay big dividends. Too often in senior living, this has meant degrading the resident experience, which is exactly the wrong approach.
   

2. They raised prices at a rate significantly lower than their expenses had increased, focusing on what was important to their customers.
   

3. They were willing to accept reduced margins in order to retain and grow their customer base.

There are times when this is a good long-term strategy. It ultimately comes down to a single question: “Does the customer feel like they are getting good value for the money they are paying?”

Here’s where it gets interesting for every leader. Point 2 is a hard pill for any organization to swallow, and at first blush, it doesn’t seem to have direct application to senior living. We don’t typically have repeat customers. Once we get someone in, most of the time they either stay for life or leave because they’re unhappy, never to return.

But word of mouth is its own form of repeat business. When residents and families feel like they’re getting value, they tell their friends. When they feel like they’re not, they tell their friends too, and that story follows an operator around a lot longer than one unhappy family ever will.

The restaurant industry lives and dies by whether a customer walks back through the door tomorrow. We don’t have that daily reckoning. Nobody’s tallying up our score sheet each night the way a diner does after a bad steak.

Maybe that’s the problem. Maybe the absence of a daily reckoning is exactly why it’s easier to let things slide.

How would it work for your organization if you treated every single day like it was the only thing keeping that resident and their rent in the building?