What Pivots From Brookdale, Sonida Senior Living Say About Future Of Third-party Referrals

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During an earnings call last week, Brookdale Senior Living (NYSE: BKD) CEO Cindy Baier said that the company is redeploying marketing dollars from paid third-party referral sources and into internal marketing and advertising channels.

The move came after the nation’s largest operator observed “softness” in some of its larger third-party referral partners, Baier said.

“While we have seen success at generating third-quarter leads and move-ins at a more attractive cost, internal move-ins were not able to fully offset the continued decline from paid, third-party partners,” she said during the call.

Brookdale is not the only publicly traded senior living company making the pivot from paid third-party referrals to internal marketing and advertising sources. Sonida Senior Living (NYSE: SNDA) is also making similar moves, CEO Brandon Ribar said during the company’s earnings call this week.

Although he told me Sonida is not necessarily “moving away from” third-party referral sources, he said it is “decreasing our reliance on them, which gives us more control so we can tailor our marketing efforts based on what each community needs and what works best in each local market whether that be local outreach, smaller boutique referral companies, digital advertising, etc.”

At the same time, large paid referral partners such as A Place for Mom are investing in new ways to work more closely with senior living operators. The company made its own pivot earlier this year when it named Tatyana Zlotsky as its newest CEO, and not long after that, former Harmony Senior Services CEO Margaret Cabell as chief community relations officer.

Notably, A Place for Mom told me that the company is not seeing “softness” in senior living referral markets. Instead, the company has seen an increase in demand throughout the year.

Still, putting the pieces together, I see an ongoing shift in the way operators are working with paid referral partners, and vice versa. Bottom line, I think that the senior living industry is in the early stages of a new reality for referrals, both from the companies that provide them and operators that use them.

In this members-only SHN+ Update, I analyze these recent earnings calls and trends and offer the following takeaways:

• Why operators like Brookdale and Sonida are making the pivot to internal advertising and marketing 
• How referral partners like A Place for Mom are trying to work more closely with senior living operators
• What the new landscape of senior living referrals could look like

Decreasing reliance on third-party referral sources

During Brookdale’s earnings call last week, Baier elaborated on the company’s decision to move away from third-party referral sources. She noted that occupancy growth in the third quarter of 2024 was “not as robust as we had wanted,” and added that the company’s move-ins were hampered by “softness” from two third-party referral sources, though she did not name which two.

In response, Brookdale has made the pivot to internal marketing and advertising, such as campaigns touting its HealthPlus program and Clare Bridge memory care program. But at least last quarter, the operator was not able to fully offset “continued decline from paid third party partners” using that strategy, Baier said.

“Our sales and marketing teams are leaning in to new and unique sales campaigns at the local market and national level to drive qualified leads and attract new residents,” Baier said. “We have also increased the number of communities that are hosting themed local events to introduce prospective residents to our high-quality care, personalized services, culinary experience and Brookdale’s strong value proposition.”

She did note that Brookdale “grew share amongst the larger operators within one of the paid third party referral sources,” however.

Another publicly traded operator, Sonida Senior Living, is making a similar pivot to internal lead cultivation. Sonida has shifted its marketing strategy to focus on direct conversions from the company’s website rather than third-party referral services like Caring.com and A Place for Mom.

Ribar noted during the company’s third-quarter earnings call that move-in conversion rates are higher among prospects who discovered a Sonida community through the company’s website. Referrals through Sonida’s website and local referrals now make up 56% of the company’s leads, which is up from 52% in 2023 and 41% in 2022.

Ribar stressed he does not want to fully move away from using third-party referral sources. But as he noted, he does want Sonida to decrease its reliance on them. Part of the problem is that some referral partners are providing leads to a greater number of communities, which he said impacts the conversion ratio of those leads.

“If we are now competing with more communities to secure a move-in, the likelihood that they’ll move in with us inevitably decreases,” he told me.

Sonida is also seeing an influx of “smaller, boutique-like” referral companies that tend to share a lead with only one or two communities at a time.

“Given this growth in referral partner companies, we oftentimes receive leads from two or more referral companies, sometimes after we’ve already obtained those same leads on our own,” Ribar told me.

In other words, Ribar believes that Sonida can source many leads on its own and can secure those leads at a lower cost than those sourced through paid referral sources. I think that is a strong and compelling reason to decrease reliance on third-party referral sources.

Of course, such pivots are only as strong as operators’ plans for executing new marketing and advertising campaigns, and their ability to make good on those plans. But on that front, I think there is more ground to gain given that senior living prospects are doing their research online in a bigger way than in the past.

Referral partners making ‘meaningful investments’

Although APFM is not seeing softness or weakening in its markets for senior living demand, the company is making a pivot of its own toward sending higher-quality leads to its operating partners.

Currently, the company already supports communities in their respective local marketing efforts through social and advocacy programs such as its “Game Changer” series and “Because We Care” campaign. And its current network spans more than 18,000 senior living and home care providers.

That said, APFM has made some recent “meaningful investments” aimed at better working with operators, Cabell told me. For example, the company recently restructured its senior living advisor role for the first time in 10 years.

APFM also created two new specialized teams to better support the needs of families and operators alike: One team of “Welcome Advisors” who guide families through the initial consultation process, such as care assessments, amenity and activity preferences, location, budget and tours; and another of “Senior Living Follow-up Advisors,” who help support families and serve as a connector between communities and prospects.

The referral company also launched a new program called Family Live Transfer that connects families directly with communities to facilitate conversations. According to Cabell, the program has generated 75% more tours within the first seven days of inquiry and 60% more conversions than other referral types.

Cabell herself is also among the ways that APFM is trying to better work with senior living operators. As the former CEO of Harmony Senior Services, she has had a firsthand view into the challenges of being a senior living operator and attracting new prospects.

“Based on my experience in the industry, I found that it is in the best interest of the operators and investors to lean into the most efficient strategies to profitably grow their business,” she told me. “In this case, partnering with APFM on marketing is a big opportunity to focus resources and enable the local community teams to prioritize helping families, which is their core competency and passion.”

Given that APFM lives or dies based on the success of its lead conversions, I believe the company is genuinely making an effort to reach operators in a new way that plays to their strengths.

Of course, the New York City-based company is just one referral partner operators work with, with others including Caring.com. And as Ribar pointed out, it is not just that leads are sometimes ill-suited for communities, but that there are often too many leads from too many sources for operators. There is also the simple fact that in-house leads are just cheaper than those coming from a third party.

Still, I think APFM’s recent moves are notable and reflect an ongoing industry shift among referral partners, who no doubt want to see the leads they source turn into move-ins at the end of the day.

I don’t think that senior living operators will be able to fully wrest control of their leads from third-party referral sources any time soon, a fact that is apparent any time one searches Google for “senior living.”

I think the ideal world ahead is one where operators and their referral partners work together, with operators cultivating what they can through local outreach and APFM and others bolstering those efforts with harder-to-reach prospects. Of course, whether operators and referral partners can achieve that is a whole other question, and history suggests that achieving alignment is among the thorniest problems to solve in the industry.

But there is no doubt that the market is changing. At the start of 2023, Senior Housing News predicted that increasing competition in the third-party referral space would be a major industry trend. Since that time, the space has drawn sharper scrutiny from the media and federal lawmakers, and the demand for senior living has continued to ramp up with the aging of the population – with the difficulty of navigating the housing and care market still a major consumer pain point.

So, I think that senior living operators and referral partners will – and must – come to some kind of better equilibrium in the future given that their business outcomes depend on working together, with rising consumer demand increasing the need for innovative solutions.

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