Hi, this is Todd Petty. I want to welcome you to another edition of Senior Housing Unfiltered.

Today I have a very special topic. I've written much about the math problem with middle market.

60% of seniors needing senior housing is going to be unavailable to them for two reasons.

One, most of the senior housing being built and developed is for the top 20% of this demographic

group, and the bottom 20 has a safety net with the government helping them. find services so that

leaves the 60 percent without a solution the only way to create a solution it's really a math

problem you have to cut your expenses cut your development fees create a capital stack that reduces

your cost so that you can deliver an affordable rent to the seniors and most people have made this

a brand problem with or they've just sliced and diced the expenses and delivered something really

inferior at times and our seniors deserve much more i know this you can't cut the the debt you

can't cut the property taxes you can't cut the expenses associated with labor it's basically the

same operation platform you need for a luxury model for middle market we have to cut the expenses

so one of the things we're going to talk about today is with the emerging of ai i mean some people

say ai is here to do to destroy us i've always said that ai arrives just at the right time to save

senior housing and we'll talk about today i have a very special guest kevin kuykendall i've worked

with kevin kuykendall for 20 plus years now and we've been involved in nearly every project that

i've had the opportunity to be in whether it's an affluent senior housing project a startup

development acquisition kevin has helped me in a variety of ways and he's got a new book out and i

really wanted to get this out to market called prove it So I'm going to pause here. We're going to

get going here. And Kevin, tell them a little bit about yourself. I've been in marketing all my

career and got involved in senior living with originally photographing skilled nursing facilities

in rural Georgia, which that in itself is quite an adventure. But then when Todd called and we

started working on Thrive Senior Living, we... up about 20 communities together the

way underwriting is going in senior housing i mean 10 000 units under construction right now and

the need is 240 000.

so if we can't build it we have to get our dollars down somehow and this is this is one element of

that in the marketing area it is one element and yes it it That's a really stunning statistic.

And then you add a 5.75% interest rate, the Federal Reserve's interest rate,

that is going to cost you a lot more than three did years ago to borrow money.

It just makes the rent unattainable. You can't do the development because the outcome on the other

end is a very expensive rent you have to charge to a prospect that can't afford it.

So the big move now in development is acquisition and uh redevelopment because you can buy existing

buildings lower but you still have to manage your expenses and and to get a rent to the client and

affordable right that's attainable makes a lot of sense but you know this isn't only about reducing

cost it's increasing the quality of your marketing and increasing the effectiveness of your market

so you have a back in so you have more contracts so you have more you know,

occupancy, which occupancy solves a lot of problems.

One of the difficulties with senior living is that by law,

every competitor, every community you compete against is just like your community fundamentally.

It's required by law. You have to provide these things. The life safety, the regulations.

And just even down to the care. Yes. And so.

So in the concierge model, we responded by building beautiful communities that were unlike anything

ever seen. The marketers, knowing that everybody was the same, defaulted to what I'm calling in the

book, I call the three A's, and that is amenities, activities, and adjectives.

So here's what we do. I remember, Kevin, that was Bible study. birthdays,

and bingo. Yeah, that was pretty much what we would say. And it still exists today. And if that's

what they want, fine. But we have to expand it for a new generation. Yeah, absolutely.

And the new generation is the point. Prove It was written to address the Gen X marketing

opportunity in senior living. So as the boomers were moved very much by what we built that didn't

look like the hospital model, Gen X grew up with it and they've seen it and they are a different

group of people. They don't respond emotionally as quickly. They don't extend trust as quickly as

the boomers did. And so we've got to stop marketing to boomers through our amenities,

activities and adjectives and start marketing to Gen X with proof. We have to build a trust

architecture. and a trust path that they can follow that answers their questions because vibrant

and compassionate care doesn't answer any questions at all it simply projects what we want to say

about ourselves so

what i what i would like to do because this is the first chapter of your book yeah i'd like you to

tell the story of of the the vendor that figured out a way to go to market by just telling the

story of their own manufacturing process i think that might be helpful first chapter approve it

right and and why you're going down this road of highlighting security and safety and surveillance

that we're going to give to our seniors so you know let's talk senior living and beer but schlitz

beer that's a popular baby boomer item probably beer is assisted living anyway but the uh schlitz

beer was uh last in the market and they could not figure out how to get you know how to increase

their market share the buzzwords in beer uh brewing at the time was the buzzword was pure our beer

is pure and everybody said it's pure kind of like we say it's vibrant right yeah so here it comes

so that's the parallel and uh the marketing pioneer claude hopkins came in and looked at,

you know, was hired by Schlitz, and they took him on a tour, and he was blown away by all of the

things they did to make their beer pure. You know, 4,000-foot artesian wells,

steam sterilizing bottles, keeping the beer cold in filtered environments throughout the process.

And all he simply, you know, he asked him, he's like, well, why aren't you telling people this?

And they're like, well, this is what everybody does. OK, there's a parallel there to senior living.

This is what everybody does. But he went to market with ads that focused on the process of making

beer pure and Schlitz. to number one in the market and battled up there for you know back and forth

with another company but they went from last to first simply because they revealed what was what

they were actually doing to support the marketing promises that we're making so they were proving

the claim correct the claim is X and they showed how that how how that is reality not just a claim

made in a commercial so one of the things I on this conversation I really like is that you know

we're not talking about strategies that are going to cost the owner operator the community a lot of

money you're simply going digging into the value that they're already bringing and you're

highlighting that in a way that no one else is doing so that you gain credibility and you grain uh

you gain um rapport so that is i know we're going to talk about this but that that is different

than someone believing they can go hire an expensive agency to change the brand or to highlight the

amenities or to call um dining five-star dining i mean that that's that takes a lot more dollars

and we're simply going to take what we're already offering the value it brings,

the attention to detail that on the development side or the redevelopment side was given.

And we're going to highlight that to gain confidence in our prospect. Pointing these things out,

give certainty to the buyer and they establish your authority as a person who is qualified to do

what they do. You got it. Wow. That's exactly right. That's exactly right. And it's not being

afraid of the details because they're mundane. Everybody does it. It doesn't mean you have to hide

it. And they can cry foul that we do that too, but it's okay. It's too late.

We already did. One of the features I put in the book, and it's one I really believe in,

and it's kind of a twist the knife, but it's here are all the things that we prove.

We can prove to you in this community. Now, there are three other blanks here.

Take this to our competitors. And when you're with their salesperson, ask them,

you know, how many days supply emergency food do you have, food and water?

They won't know. Okay. But because you've empowered them with this tool,

or how long does it take EMS to respond? They may not know. It's those details that you've proven.

And now... When the person goes to the competitor and they're unprepared,

well, that just made your case.

Right, that's strong.

When we're talking about reducing costs for marketing in the middle market, the thing that I'm not

a proponent of is slashing and burning. Just come in and say, we're wiping out all our expenditures

and we're going to build from ground up.

Look at your current pipeline and begin putting proof elements into the current pipeline if you're

sending out emails Go ahead and send out an email about here is the here's the criteria for staff

selection Well, that's something nobody talks about and and here's the state requirement for staff

ratio to resident and we target that and when we can't achieve it we bring in a temporary agency or

here's how we address short staffing issues again it's a real world example that builds trust

because you have now opened up a discussion that nobody else is opening and you've differentiated

yourself in the in the world of your competitors even against the big box competitors because you

are now saying something the market is hungry to hear And so you begin with that and you begin with

those emails and you try to maximize the yield of the current pipeline that you have. So hopefully

instead of closing two out of 10, you're now closing three or four out of 10. You're not going for

the home run. You're just trying to incrementally improve your marketing from a content and

informational standpoint. So let's break this down a little further, Kevin.

So statistically, 75% of owners have three or less buildings,

which is pretty interesting fact. So we're probably in the news talking about the top 25.

And if you even look at the top 150 communities, there's some big ones in the top 10,

but pretty shortly after that, 40 or less communities are even what you'd call the top 25%.

So these are folks that have three or less buildings and they don't have the big,

dollars to deploy to marketing so what you're suggesting is in order to keep a connection in a

relationship with a prospect that's come through the door Instead of sending an email out that

we've seen commonly in the industry, like just checking in on you, how's mom doing, right? Or maybe

like, oh, we're having a karaoke night, you're invited. Nothing wrong with that,

I guess. And a free lunch. We're big on the free lunch. Come enjoy our five-star dining,

right. But what you're suggesting is that for me, as me as a marker,

I'm connecting with my prospects that by simply telling them, some salient information that's going

to begin that's so different it's going to build trust like the fact that a reminder that that we

secure all of our doors after 8 p.m at night and access is limited to secure the residents in the

building they still have egress out but we want you to know the doors are secured so we're proving

security and

then once you have you have that and you're testing it and you're starting to keep, you know,

starting to analyze your analytics. Then you begin moving it in, you know,

moving into the AI zone where you're building a knowledge base of the facts about your communities.

You know, all your SOPs can be in this knowledge base that AI can now reference.

And you start developing pieces if you have a designer that you've been hiring.

Well, take the designers' designs and concepts and frameworks and put them into AI.

And now AI can handle those because they're designing very, very well. You just have to give them

content. And so we have this line item in the budget now called subscriptions. And it's expensive.

And when I look what's in those subscriptions, sometimes we're not using the software that we've

committed to a year. Sometimes... We are using it, but not to the best efficiency.

And we're spending a lot of money that AI simply can save us money because it can really do the

same thing. And now you're customizing what you're doing based on what your needs are versus

putting a bunch of software together and trying to utilize it. It makes sense. We were buying

salvation with software. We were really trying to get the software to take care of automations,

take care of the...

the look and all that kind of stuff. where AI can do it all now. You can upload your brand voice,

you can upload your brand standards, and it will be, it would adhere to them all,

it will honor them in all the designs it produced. But the idea of saving money is as you

incrementally increase your internal capabilities, you can, first off,

you get value there because you're spending less time of your salesperson's time and of your

marketer's time to produce these things so they have more time to do what it is that they really do

and those that's an important metric because that really comes down to the salary and what you're

already paying for with the person if you can make the person more productive empower them empower

them make them more productive and increase the quality of their outputs right then that has an

impact on the marketplace because they're seeing better marketing marketing that they want to see

they need to have in and and you can produce it more quickly and more pieces as long as you know as

long as they're good pieces you know one example i could practically give is uh that we create PDF

flyers for our investors and they meet the brand standards and they're high quality and we put that

together in a PDF form and we can mail that out.

I wanted to be able to embed an image of that in my email the other day.

So before I would have had to go to agency to help me.

And so I thought I was getting clever. So I actually took a screenshot of the PDF and put it into

AI and said, i'd like you to embed an image in here and it said so it did it and it looked pretty

good but it said well if you have the pdf i'd be better off if you had the pdf i could take the pdf

and and exactly give you what you need a professional rendered image and so i said yeah i've got

the pdf i just took a screenshot of it put it in there and it gave me a beautifully embedded image

uh png image to put in my emails for my investors that's perfect and And that was me kind of

stumbling on that. Is that what you're talking about doing to save money? A lot of it,

but even generating from zero. Just, you know, in the case of a brochure,

you have the content, you have the photographs, you can just throw them into... Claude or Chat's

doing a really good job with design right now. Give it the brand standards and it can just produce

it if you tell it what you want. I want a four-page brochure. I want it to be,

you know, give it the specs. And when it produces something, you can always make changes if it just

doesn't, if it isn't what you like. But what you've eliminated is the hours it would take a

designer to sit down and do it. And the hours you would spend proofing and making changes that also

take hours. And the designer not only is going to charge you for the time but they have to make a

margin for their company so it becomes a very expensive adventure. It puts the control in the hands

of the salesperson and the marketer so they don't have to rely on anybody else other than their co

-workers because there needs to be a collaboration. Not having a grasp of what it is you want AI to

do. is the big problem. I want AI to solve this little problem because I have to do this once a

week, every week, and it's taking me two hours a week. Let me solve that problem with AI,

and now I'm saving two hours a week. In marketing and in operations,

that's just the key to it. And then being able to replicate it and share that.

You can call it a prompt or you can share that process with other communities. So if an ED comes up

with something that's really cool, that ED can share it with another ED and now you've saved four

hours a week.

But getting to that point is not that difficult. It's just a matter of solving the problems that

you're having over and over and over again in operations and in marketing. We're always writing

content. things like that so all those things bring it uh bring down the cost because you're

spending less time into it and not outsourcing what you were even to the point of subscription um

if if someone were to do what we're sharing right now would they need a subscription would they

have to pay the 20 a month which is very reasonable but would they or could they do that with just

a basic free version the the they can do it with a basic free version but the higher thinking

models are at the $20 level and $20 is not that bad of a subscription whenever we used to buy the

Adobe Suite on CD-ROMs for $1,200 a piece. I remember that.

So, you know, it's a bargain. Right. Even $100 a month would be a bargain if you can eliminate a

lot of these expenses that you're having to pay for people to, you know, make their living.

I produce a lot of work. on ai i produce it on a couple of different platforms and every now and

then not all the time but every now and then i run out of tokens and i'm in time out for four or

five hours right okay fine you know i'll go do something else it doesn't take a lot of training you

don't have to go through a lot of courses it's really common sense on how to use it however i will

say that above all of this uh an operator must have a good governance policy in place uh prior to

like what's allowed and what's not allowed to be put in because you are in a hip environment so

kevin let's let's talk about and i'm not sure why this has happened and maybe you can share this

with the audience but in particularly it seemed to happen around the pandemic but there's there

used to be

organic, we used to call it guerrilla marketing, but there was organic marketing in the marketplace

where the marketing person, the salesperson, we called them the community relations director,

would be introducing the new building coming out of the ground up, out,

or their new building that they started working at, their new community, kind of like a person that

decides to run for office. We always talked about it was a campaign. And so we were out telling the

story at events. connecting with people so they became aware of who we are.

But it seems like over the years, there's been less and less people even wanting to do that. And as

a result, they've become more dependent on third-party referrals. Third-party referral sources

that charge one, two months of rent for capturing the referral.

And I guess if you want to do that and just rely on them as your marketing person, which is very

expensive. you can do that but um my thinking as a good business person what the goal would be is

try to organically get that lead and nurture it before someone gives it to you and 50 other people

and guarantee them a commission why does somebody call a referral agency right they one they don't

know who's available in the market and they don't know what to do I mean, I would think that those

are the two biggest reasons. Well, and they're capturing it online now, too. They put their

information in and think they're going to get help because they're hurting. They're usually pain

when they start looking to move their loved one in. They don't know what to do. They're not

trafficking in this industry. It's a lot of pressure. It's a lot of pain to have to go.

this actually and this offers them a way for someone to help them it is true um and i've been on

the other side i had to place my mom and dad and i know you did too uh you have and it was a very

difficult thing given everything i knew about senior living when i came when i was confronted with

a website I could not learn a thing about them and I was frustrated because there was just this

this wall of platitudes and it said the right things but it said nothing at all and that's a

problem we have in the industries where we we all say the same stuff but there's nothing there

there's nothing substantive they put their information in and think they're going to get help

because they're hurting they're usually pain when they start looking for to move their loved one in

they don't know what to do they've never they you know they're not trafficking in this industry

it's it's it's a lot of pressure it's it's a lot of pain to have to go through this actually and

this offers them a way for someone to help them it is true um and i've been on the other side i had

to place my mom and dad and i know you did too uh you have and it was a very difficult thing given

everything i knew about senior living when i came when i was confronted with a website i could not

learn a thing about them and i was frustrated because there was just this this wall of platitudes

and it said the right things but it said nothing at all and that's a problem we have in the

industries where we we all say the same stuff but there's nothing there there's nothing substantive

and So it calls it to me as a marketer, it calls into my mind,

well, then how are you positioned in the marketplace and how loud is that position? How solidly do

you own that position that even somebody who is vaguely aware that they have a need would know that

you are the community to go to? And that's an essential thing to...

achieve is a market position that nobody else owns. And if you are right now,

in my opinion on this, if you are the community that is truly dedicated to the care by showing

people what it is that you do and how deeply your brand is committed to it,

I think there's a place to start there. Then it's a matter of broadcasting it. And AI can't replace

a paid search, but you can position, you can put the right things on your website where AI

citations will occur. And that's a really, really important thing to do right now is to position or

have the right, say the right things on a website and in videos that will give AI something to

cite. So when a if a person is using AI and more and more people are using it for search instead of

going to Google or whatever, but, you know, they are asking specific questions and they need

specific answers and AI can't provide specific answers if you're saying vibrant.

Right. When you when you have an FAQ that's in a natural language question and you answer it in a

natural language way. which AI can produce for you, now the algorithms have something to return and

they have an answer to return. They have data to return. Right. To the question that was asked. To

the question that was asked. And your identity is tagged along with it because, you know,

you said it. So it says, you know, it quotes you, it cites you. Right. That's powerful. Yeah.

And that is becoming more and more. uh uh the the path however seo is not dead and it won't it's

not going to be dead really focusing and deciding who you're going to be in the market and what

you're going to be in the market gives you the power to have an identity that the market can

understand and respond to when you have no identity then you're going to be one of those people who

gets the phone call that says you know hey i've got a lead for you But if you own your position in

the market well enough and you do the right things, and I want to talk about that just for a

moment, then the market will know you and come to you automatically. The right things,

stop doing the wrong things. The wrong things are, I went to a senior living gathering a couple

months ago. And everybody in the room was a senior living salesperson for a community looking for

other people to give them leads, but the room was filled with their competitors. Did you ever get a

contract from your booth at the Alzheimer's block? Because all your competitors were there and you

were just handing out squishy balls and- Swag. Swag. Yeah. And it cost you a great deal of money

to do that. Same with just things like that. Be where your competitors are not.

Go to the women's business functions because you'll be the only one there.

the only senior living person there and go to the places where your market is hanging out and go to

the places that your your market trusts and be visible there and you can and you can position

yourself with that negating the need for being on a referral site because you're anonymous and

because you look just like everybody else and you say the same things but give them rich rich

information that's usable for making a decision and for gaining trust and for gaining certainty.

And you're going to wean yourself from that dependency. David Ogilvie,

back in the 60s, did this ad for Rolls-Royce.

And it's actually, I put it up on my website, which is seniorlivingproof.com.

And the ad is... not about the status of a Rolls-Royce.

He made an entire ad that went into detail about the fact that it takes two days to make one door

for a Rolls-Royce. And the engine is, every engine is run at 90% of its capacity for 10 hours.

And it tells you all the details about the manufacturer, where the leather came from, where the

wood comes from, and it's all details. And when you sit in a Rolls Royce after you read that ad.

you have a connection with that rolls-royce because you know what kind of wood that is and and

where it came from in this leather and that engine you trust because it was run until the pipes

were red hot and didn't fail that's what this book is that is a great example okay that's really

what it's about that's a great example and then you have great appreciation for the car once you

know that um so you should have great appreciation for the community you're moving in but you know

the commitment of the manufacturer of that car was so you know just so great yeah that they could

put these things out with such confidence that they owned a brand position that no one could yeah

okay it's the same thing It doesn't have to cost a lot of money to be a great brand and to have a

great community. It takes a commitment of everybody inside to be congruent to this vision of being.

you know, a community that's open, just willing to talk about everything.

Because that sends a message to the market that Google Ad can't do.

Wow, that's tremendous. That's a drop the mic moment right there. So Kevin, what I'm hearing, what

you're able to provide is something that came up at the Argentum meeting several years ago.

And the Argentum owner operators were... pulled and they were asked,

you know, are you, are you concerned about, are you nervous, are you frightened?

I'm not, I'm not sure the exact verbiage, but it's like, does AI make you nervous? And it's like,

no, it doesn't make us nervous. Are you looking to invest in AI in the future? Absolutely 100%.

Are you cautious regarding the expense of AI? No. Are you going to invest in AI?

No, why not? Because we don't understand what's going on. And what you're doing is arriving at the

right time to explain to everybody what is going on. Well, thank you, Kevin, for an engaging,

just fascinating conversation today. And tell the audience how they can get hold of you.

Seniorlivingproof.com is the best way to get a hold of me. I have my email there. And it,

again, has a pretty good orientation to the book. The introduction and the first two chapters are

there so you can see a little more about the research into Gen X and understand exactly what

marketers and salespeople are up against when they're dealing with that cohort. You can also reach

out to me. You can DM me at LinkedIn and I can connect you with Kevin as well. So thank you,

everybody, for the Senior Housing Unfiltered broadcast today. Appreciate you and thank you for...

your continued attention to issues we're bringing to the market.