Cost of Lost Sales
Introducing the Rick Hunsicker Rule of 78, Part 1
The cost of lost sales is not talked about enough because losing one each month costs your community huge amounts of money over the year.
If you don’t do the little things well, and you lose a resident once each month that you would have had otherwise, you will lose 78 months of new revenue over the next 12 months. Here’s what it looks like when this happens. (Click image to enlarge)
So, what does this mean to you? Just how much money will not doing the little things well cost in revenue losses? Take a look at the following table. (Click image to enlarge)
So, if your average monthly fee is $3000 per month and you lose two new residents each month by not doing the little things well, you’ll have lost $468,000 in revenue at the end of the year. If you are an assisted living community and your average monthly fee is $5,000 per month, and you lose 3 move-ins per month, you stand to lose $1,170,000 in revenue over the year.
Some examples of the little things that could be costing you lost sales each month:
- Poorly handling calls to your community, especially in off hours
- Not treating each visitor like they are the most important person in the building
- Not asking the prospect the right discovery questions to find the real hot button
- Not having the Executive Director or Administrator meet prospective residents consistently
- Not having the waiter provide our visiting prospect with the best service and meal possible
- Not having the prospect meet and visit with a happy resident or family member
- Not calling the prospect shortly after their visit to answer questions while your community is top of mind
The point is, not doing the little things well can cost you lots of money!