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* Incentive as  % of Monthly Basic Service Rate

Capacity Vacant

 Approx. 

Occ % 

 Incentive 

% * 

Under 50 0 2       0%

40               3      4       92.5% 20%

5      7       87.5% 40%

8      9       80.0% 80%

10   49     75.0% 120%

50 ‐ 74 0 4       0%

70               5      8       92.9% 20%

9      12     87.1% 40%

13   17     81.4% 80%

18   74     74.3% 120%

75 ‐ 99 0 6       0%

95               7      11     92.6% 20%

12   17     87.4% 40%

18   23     81.1% 80%

24   99     74.7% 120%

100 ‐ 149 0 9       0%

140            10   17     92.9% 20%

18   26     87.1% 40%

27   34     80.7% 80%

35   149   75.0% 120%

150 ‐ 199 0 12     0%

190            13   24     93.2% 20%

25   35     86.8% 40%

36   47     81.1% 80%

48   199   74.7% 120%

Over 200 0 14     0%

220            15   28     93.2% 20%

29   41     86.8% 40%

42   54     80.9% 80%

55   200   75.0% 120%

Brookdale Sales Toolbox

Sales associates in rental IL, AL or MC settings use a common toolbox when they are not participating in a national promotion. The toolbox contains pre-approved incentives and collateral for private-pay customers, along with a number of other key features to encourage quicker move-ins.

Structure The capacity of each product line on a campus determines which sales

toolbox to use for that portion of the campus, based on the following capacity levels: <50 apartments 50 to 74 apartments 75 to 99 apartments 100 to 149 apartments 150 to 199 apartments 200+ apartments

The number of vacant apartments within that product line/portion of the campus you are extending an offer determines the % of the selected apartment Basic Service Rate (BSR) that you may offer to the customer, with options at 20%, 40%, 80% and 120% of the monthly BSR.

Depending on how dynamic your local move-in and move-out activity is, you may set your toolbox vacancy level by the current day, once per week or once per month, and you may consider near-term move-out notices as you enter your number of vacant units in the Excel Sales Toolbox Incentive Calculator.

The toolbox uses percent of BSR vs. flat dollar incentives, recognizing variability of BSR rates. Use your judgment to apply the portion of your pre-approved toolbox incentive necessary to obtain a move-in commitment.

Communities with few vacant units in a product line should obtain the full market rate for the apartment, without the use of a toolbox incentive.

Extended offers are in effect for only 14 days, recognizing the dynamic nature of community vacancy levels. If a customer is unable to make a move-in decision within the 14 days, update the offer based on your vacancy situation when the next lead advancement conversation occurs. Note that a 14-day offer does not hold a particular apartment off the market, and we will continue to market each vacant apartment during the offer period. If a customer wants a particular apartment, that market pressure will be the driver of their decision – a shorter offer period is not intended or desired.

Toolbox offers may not be combined with other temporary sales promotions, and are not intended for Medicaid customers.

Using your sales toolbox 1. Discovery

Listen to understand before you determine whether to offer a toolbox incentive.

2. Customize the offer If you believe you can advance a lead toward a move-in decision more quickly, align the incentive to the customer’s need in one of the following ways:

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Credit to offset relocation-related costs the customer incurs to move-in to your community Credit to offset customer costs for pre-approved physical upgrades to the selected apartment i.e.

granite counter-top, crown molding, presence sensor light switch, etc. A credit to apply toward the one-time Community Fee A credit to apply toward the monthly Basic Service Rate (BSR) in one month, or split over multiple

months. For example, if a customer is eligible for an incentive of $3,000, you might elect to offer this as a credit in months two, six and thirteen rather than granting this splitting this over the first three months of residency – spread this in a way that works for your business while still representing a value for the customer.

3. Calculate the offer Once you identify the customer’s desired apartment, calculate the amount of the offer using the “Sales Toolbox Incentive Calculator” Excel file available for download through Brookdale Brandworks. Follow the entry instructions and use the link to watch a Training Demonstration:

Note that the entry of Capacity and Vacancy totals are specific to each distinct Product Line on a campus, not the community totals. The calculated incentive relates specifically to the vacancy situation in that product line – i.e. Independent Living, Assisted Living or Memory Care.

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4. Document the offer Brookdale Brandworks contains resources to help you extend the offer and explain the 14-day time limited incentive:

For every extended Sales Toolbox offer, you are expected to document your offer by filling in the blanks on the downloaded .pdf file “Sales Toolbox - Time Limited Offer”.

Provide a copy to the customer; retain a copy in the prospect’s file.

Note that you must set the “Offer Expires” date to be 14 calendar days after the “Offer Date”

Although the offer is based on an apartment the customer has expressed interest in, this offer is not holding that apartment while the customer considers the offer. You will continue to market each vacant apartment every day, and if a customer wants to hold a particular apartment, they must make a deposit with you.

The 14-day period was established intentionally seeking a balance of making a short-term decision without placing undue pressure on a customer to make a decision even faster that may inadvertently diminish their trust in you.

Note that a 14-day Sales Toolbox offer is not creating a “Right of First Refusal” for a customer on a particular apartment, presuming that another customer within the 14-day period is interested in the same apartment. The customer has in hand a financial offer that was calculated based on the rate of a particular apartment, but within the 14-days they can apply this offer amount to whatever apartment of that type that is available on the day they decide to move-in.

5. Option to Support Your 14-Day Time Limited Offer with Graphic Editable Flyer

Brookdale Brandworks also contains four editable flyer/mailer options that you can use as a supplemental presentation with the Time Limited Offer form, to more graphically link the sales toolbox offer to either the customer’s relocation costs, a desired apartment upgrade, or an offset of a portion of the Community Fee or Basic Services Rate.

Examples of these flyers are presented on the following page:

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6. Legal Processing of Sales Toolbox Offer Carefully select the appropriate Residency Agreement Addendum to download from Brookdale Brandworks to correlate to the way you extended the offer and how this will be entered into the billing system. There are options for these situations:

Offer to be credited during first full month of residency

Offer to be credited in multiple contiguous months, based on your specification of a beginning and ending period, and your division of the approved sales toolbox offer amount by the number of months that you want to spread out the offer.

Relocation Costs Apartment Upgrade

Community Fee Basic Service Rate

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Offer to be credited in multiple noncontiguous months, based on your specification of the distinct months that you want to spread out the offer over, and your division of the offer amount by the three months selected.

7. Accounting

See the “Community Sales Toolbox Billing Job Aid” in Brandworks for detailed instructions.

These Sales Toolbox short-term incentives are not permanent discounts. The incentive is processed as a credit on the resident billing statement and cannot be processed

as a direct reimbursement for relocation costs or apartment upgrades. The Billing Job Aid also conveys instructions for how to enter the incentive credit to be split

multiple months if desired.

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Questions and Answers

How would I use the toolbox to determine the incentive for a retirement community campus with a mix of product lines? Based on the product line capacity differences, the Excel file Sales Toolbox Calculator will automatically apply the proper sales toolbox to determine the appropriate offer. For example: total capacity of 310 apartments, but with 225 IL units, 55 AL units and 30 MC units – three separate tables are used.

IL has 27 vacant units: Eligible for 20% BSR

AL has 3 vacant units: Ineligible for an offer

MC has 1 vacant unit: Ineligible for an offer

When you enter the product line capacity amount, the Excel file determines the right table to use, so this keeps the process easy for you. How might a sales toolbox offer vary during the month? Incentive offers are based on the number of product line vacant units when you are extending an offer. Recognizing that the number of vacant apartments dynamically changes during each month, you should determine the frequency of how often you refresh your vacancy total, with the options to do this daily, weekly or monthly. As appropriate to your business need, you may consider near-term pending move-outs in your entered number of vacant apartments. The Incentive Calculator includes formulas that use your entered number of vacant units to calculate a rounded incentive amount based on the % of BSR incentive you can offer. For example, in the AL portion of a community with <50 apartments of capacity (see right table above):

If you had 5 vacant units on the 1st of the month, you could offer a 40% of BSR incentive; If you had 8 vacant units on the 15th of the month, you could offer a 80% of BSR incentive; If you had 11 vacant units on the 30th of the month, you could offer a 120% of BSR incentive.

What is my next step in the sales process after I’ve extended a 14-day offer? Continue routine follow-up with the prospect during the 14-day period to answer remaining questions to support their advancement toward a move-in decision. To qualify to receive the offer, the prospect must either physically move-in within the 14-day period,

or sign all paperwork to take financial possession of an apartment within the 14-day period. If the customer can’t make a decision within that period of time, continue to nurture them as an

active lead and you could say to them – “let’s continue to remain in close contact so that if you get closer to a decision point, we can revisit our then-current situation to determine what if any financial support we are able to provide.”

What if a new national sales promotion launches after I have extended a 14-day toolbox offer? Your sales toolbox offer should remain in effect for the entire 14-day period. However, if the customer expresses interest in the national sales promotion, and if your community was approved for participation in the national sales promotion, you may convert to the national sales promotion. What if our vacancy situation has gotten worse since I extended a 14-day toolbox offer – can I update the offer to the customer? Use your best judgment in this situation. Did you sense that the original offer was meaningful to the customer – if so, it may not be necessary to change your original offer during the 14-day offer period. If

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you sensed that the customer was not influenced by the amount of your first offer, you may contact them again to extend a new 14-day offer. You’ll need to honor a full 14-days for the new offer, so be aware that a new offer could delay a move-in decision. Consult with your District Director of Sales as needed. Is there an option to extend Sales Toolbox offers for a period of less than 14-days to drive more urgent decision-making by our customers? Brookdale’s current belief if that your chance of achieving a sale is best with a 14-day offer, a reasonable time for customers to make an emotionally-charged decision. Since Sales Toolbox offers are not holding an apartment off the market, and you continue to actively sell all vacant units, let the pressure of them knowing you are still showing the apartment they are interested in to other prospects create the urgency the customer needs to make their move-in decision. When you consider the psychology of our sales process, which embraces building trust and partnering with prospects and their families to find the right solution for them, you may actually diminish your chances for a sale if you apply too much pressure for a quick decision. So to achieve your month-end sales targets, keep enough customers in process so that you don’t feel the pressure to turn-up the heat too much on an individual customer. You should feel the heat and the urgency to work all of your leads hard – don’t push one away by pressing them too hard to make a quick decision. Is there a special form available for a deposit if a customer wants to officially hold an apartment off of the market while they consider the toolbox offer? To hold a vacant apartment off of the market, the customer needs to make a $500 “Apartment Hold Deposit,” with completion of the following form that can be downloaded from Brookdale Brandworks. This type of deposit grants the customer up to 24 hours to make a decision without losing any of their deposit, but thereafter, we earn $100 per day while the apartment is being held. See the form for details. May I offer a toolbox incentive based on pending move-outs? Your professional judgment is allowed to determine what is best for the business at this point – if you have an unusually high number of move-out notices that will occur within the next two weeks, you may add those move-outs to the current vacant units. But also consider pending move-ins – if you have six vacant units today, but know that you have four move-ins within the next two weeks, it would likely be best to not extend a toolbox offer and to obtain the full market rate instead. Do I have to adjust the basic service rate used for the toolbox incentive calculation if my community uses an “all inclusive” care pricing method? The toolbox incentive applies the appropriate incentive percentage based on each community’s rate structure regardless of the care pricing method used. Therefore, you do not need to make any adjustments if your community uses all inclusive pricing. Enter the full Basic Service Rate in the Toolbox Calculator. When I am completing the 14-day “time limited offer” form, what if the amount my toolbox approves me to offer is high enough that I can meet two perceived customer needs – for example, a minor physical upgrade in the apartment and a credit to offset a portion of the community fee? In reality, the incentive offer amount is processed as a rent credit, so there are no variances in our accounting for the offer based on the need expressed by the customer, nor do you need to document

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whether the customer is viewing their credit as a reimbursement for incurred expenses or to offset paid fees. The four common applications are listed to allow you to verbally link the incentive to the need expressed by the customer. And in the case where you want to split a BSR credit to more than one month, the form sets out this possibility. Consult with your District Sales leader as needed. What if I want to extend a toolbox offer, but the customer hasn’t indicated interest in a particular unit type or specific available unit, which prevents me from calculating an incentive? In most cases, this means the customer is too early in their “path to purchase” and it is likely most appropriate to remain focused on your community value proposition rather than focusing on price or an incentive. Use your sales toolbox offer when you believe a customer may be near their window of making a move-in decision. Then your toolbox offer can be a signal to the customer that you heard them and understood their situation rather than simply extending an offer, which they may interpret as undue pressure. What do we do if the sales toolbox seems inadequate for our temporary local situation? Your District Director of Operations may appeal to your Regional VP of Operations for approval of Brookdale’s premium sales toolbox for a more significant incentive. If approved, the RVP of Operations should email Will Sanford in Brentwood with a CC: to his/her Division President, Sales VP and DDS. Will will adjust the “Incentive Tracker” system to reflect this RVP approval and will then forward a copy of the premium sales toolbox incentive calculator Excel file to approved communities. All other sales toolbox forms and processes remain the same. Use of the Premium Sales Toolbox is granted in one-month increments – the community should revert back to the standard Sales Toolbox Calculator unless they have been specifically approved to use the Premium Toolbox Calculator in that month by their RVP. NOTE: No more than 5% of communities should be approved for premium sales toolbox incentives. May a community opt out of the Sales Toolbox with permission of their District/Region leaders? The Sales Toolbox is an in-pocket incentive option that sets a maximum amount a community is pre-approved to offer. It is not an externally promoted incentive, nor is the community required to offer this to customers. In fact, they are encouraged to use this only when appropriate to the customer’s expressed need and when they believe it is necessary to achieve a closing or a more rapid move-in. All communities will be set-up in Brookdale’s system to utilize the Sales Toolbox. In exceptional situations (i.e. a competitor just closed and their residents must urgently move to other area communities), an RVP could guide their local teams to hold-back on use of the full Toolbox or even to temporarily refrain from use of the toolbox. But that doesn’t change the fact that they are set-up in the system to be able to use this when necessary. The defined Sales Toolbox approach has the built-in flexibility to accommodate dynamic vacant unit situations that prevents the need for an Opt-Out process. How do I position a Sales Toolbox Incentive if I want to help cover a customer’s Move-in costs? If a customer says to the sales associate that it is the physical move that is the concern for them, the sales associate can state, “I will apply a rent credit during your first full month of residency after your move-in to cover $_____ (authorized toolbox incentive) of your relocation related expenses.” In reality, this is still just an incentive credit on their monthly statement – it is not a direct reimbursement of an invoice – the customer pays the cost of their move, but we demonstrate we heard them by positioning the incentive offer as money they can use to offset their moving costs. How do I position a Sales Toolbox Incentive if I want to help cover the costs for physical upgrades of the customer’s selected apartment? If a customer says that they really want to have granite counter-tops in the apartment vs. the Formica that is there now, the sales associate can state, “I can apply a rent credit during your first full month of residency after your move-in to cover $_____ (authorized toolbox incentive) of your costs for installing granite. We have a list of vendors that we prefer you use, and a form to sign before such work could commence, but hope this amount will help you be able to make the desired upgrades in the apartment.” In reality, this is still just an incentive credit on their monthly statement – it is not a direct reimbursement of an invoice – the customer pays the costs for the apartment upgrade after our approval of what they propose, but we demonstrate we heard them by positioning the incentive offer as money they can use to offset their apartment upgrade costs.

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How do I position a Sales Toolbox Incentive if I want to help cover the costs for our One-time Community Fee? If a customer objects to the Community Fee and we can’t help them understand why we charge this, and it seems that they won’t move-in if they have to pay this, the sales associate can state, “I will apply a rent credit during your first full month of residency after your move-in to cover $_____ (authorized toolbox incentive) of the Community Fee.” In reality, this is still just an incentive credit on their monthly statement – the Community Fee will still be charged on their initial statement – but we demonstrate we heard them by positioning the incentive offer as money they can use to offset the payment of the Community Fee. How do I position a Sales Toolbox Incentive if I want to apply the incentive to Apartment Basic Service Rate? If a Regional Leader or community associate wants to apply the authorized toolbox incentive to a future month or months rather than the first full month, the entry of the incentive into our billing systems can accommodate this and is outlined in the Sales Toolbox Billing Job Aid. The local sales associate has the flexibility built into the system to vary the period the incentive is applied to (note that three months is the limit for these incentives to be classified as “short-term incentives” – if you determine that the incentive must be spread over more than three months, the accounting treatment of the incentive will use different codes to classify this as a “long-term incentive”). The sales associate must use their judgment (balance customer’s perceived need vs. a desire to spread this out to future months to recognize the possibility of a near-term move-out before the entire incentive is utilized) to determine how much of the available incentive to apply to the first full month’s statement or to apply to up to three months. As a guideline:

for a 20% to 40% of BSR toolbox incentive, spread this across 1-3 months; for an 80% incentive, spread this across 2-3 months with a minimum of two months in between; for a 120% incentive, spread this across 2-3 months with a minimum of three months between.

It is not necessary to spread this over the first several months – you might apply this to months three, six and nine, or any other combination of months that balances your business needs with the customer’s perceived value of your offer. See the Billing Job Aid for more detailed instructions. But at the point of extending the incentive offer, be sure to clarify at that time if you intend to split the incentive over several months – a surprise at the lease closing time about your desire to spread out the incentive is not appropriate. What is the relationship between this Sales Toolbox and my ability to “Value Price” certain apartments - i.e. apartments on higher floors, longer distances to walk or poor views? The company is on a longer-term journey toward more dynamic pricing at a unit level, recognizing many variables with software-guided and algorithm-based pricing actions. But for our current situation, this question is asking for clarification between two somewhat unrelated processes - “unit rate management” vs. a dynamic Sales Toolbox that provides local flexibility with a “sales closing tool.” Instead of off-the-books “value priced” permanent discounts, the intent is for community and district leaders to propose market rate adjustments for individuals units within the Unit & Market Rate Maintenance System. After a proposed new Market Rate for an apartment has been submitted, the system generates an e-mail that goes to the Divisions’ FP&A leader to “approve” the change so that it is accepted in the system (many other division leaders are CC’d on the system e-mail). This process for managing individual unit rates can evolve through the year as community situations change, with both increases and decreases in market rates for individual apartments.

Where do I find the materials that support my sales toolbox? Brookdale Brandworks is the host location for all materials you need. If needed, following are instructions for logging in to Brookdale Brandworks: Type www.brookdalebrandworks.com into your browser and press enter. Log in using your BU# (numbers only) and password.

First time user? Type ‘welcome’ into the password field and complete your profile. If you still need help, refer to the quick reference and user guides on the login page, or contact the

help line (brookdale@rjyoung.com anytime or 1-844-296-8013 from 8 a.m. to 5 p.m. CST.