Byron Cannon, CEO of what he told the LEADERS SUMMIT 2025 is a home care operator within a retirement village setting, urged the retirement living executives to consider breaking from the DMF model.
LDK Seniors’ Living Village Membership, which is being trialled by Anglicare Sydney, operates at its three retirement villages Greenway Views, The Landings and Amberfield.
“I still recall the curious smirks and the audible laughter that we were sharing our vision about what we were going to do with other executives and industry leaders before we kicked off,” Byron said.
“I think now we've demonstrated that you can create absolutely amazing outcomes for your residents, but also a very strong enterprise value issue if you adopt what we're doing (the membership contract and One Move promise).
Byron said the strongest lesson is to listen to the consumer.
“If you listen to the consumer, they will tell you ‘we want simplicity; we want certainty, we want transparency’. The property aspect: money in and money out. You give me $1 million and when you leave, I'll give you $1 million back within six months or earlier, as required by the Act. You can explain that to a consumer within about 30 seconds and they get it,” said Byron.
“The next piece is the services aspect, which is our Village Membership model. I have two options. The consumer can pay up front, or defer that payment and we will take it out of the property.
“About 85% of incoming residents are paying that membership amount upfront. You need the upfront cash to invest in the value proposition for your consumer, because it is a big investment, and it does take a little bit of courage to get your head around it and understand it, and then take the leap to invest in that right now.
“You don't have to be an actuary to work out bringing forward those cash flows starts to create some really good value for your business. The Village Membership model just delivers you a whole range of benefits.”
Byron said the strongest attraction of LDK Seniors Living is the “One Move Promise”.
"Move in with us and you won't have to move again. If your care and services change, usually through memory loss or mobility, you may need to downsize within the village. It's a simple change of the license agreement.
“You don't have to go through the legal financial exit/entry type component from retirement living into residential aged care. The one move promise is, I think, the strongest foundational part of our model.”
Sales figures show LDK Seniors’ Living model works
"We've just sold over $200 million of property leading into the early part of this year at Amberfield, our next project in Canberra, without $0.01 cent in advertising. It’s driven by the value proposition of the brand, the model, and also very strongly driven by the people that we have working for us,” Byron added.
He told how The Landings in North Turramurra, 20km northwest of Sydney’s CBD, had 220 villas and apartments operating under a traditional DMF model. As part of the transaction, LDK converted 97% of the residents to its Village Membership model. The full story is in SATURDAY, issue 86, where Byron explains how it took place.
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