NDIS Quarterly Report Analysis

It’s benchmarking time again. This quarter, we consolidated the 2022 Supported Independent Living (SIL) data to review the performance of the biggest providers, and most are still struggling.

Because we’ve seen significant government transfers this year, we decided to remove providers subject to the largest transfer volume which reveals the underlying market performance.

To be fair, it’s been a tough year for the major providers as they felt the full effect of cost savings measures in SIL. While the SIL market grew by 6.01%, the average of our provider set was -1.36%, this demonstrates the grim reality that growth is becoming more difficult, and larger providers are facing considerable disadvantages.

Growth By Government Transfers

The providers we excluded from our set came with an interesting caveat in the quarterly report:

“The top three providers listed in particular have had growth in participants that relate to former Victorian in-kind participants.”

So, given the remaining 7 had, on average, shrinking programs, how much of the SIL growth could have been government transfers? When we deduct the growth of the top 3 providers, it indicates that 56% of SIL growth probably came from government transfers. 

Interestingly, these top 3 providers accounted for 56% of all SIL growth in 2022. Outside of this, growth for SIL was just 2.65%. It is worth noting that this figure is still substantially larger than the performance of the non-transfer top 10.

This leads us to think about the providers who are growing in this turbulent market, and what strategies they are undertaking to succeed.

Strategy 1: Lead Management Optimisation

Clearly, Activ is the main exception to the broader SIL trend. Their growth has been exceptional, and here’s our theory as to why…

Although Activ operates in Western Australia (a less congested and mature market), it is still seated in a state where little unmet need was observed, given the robustness of the WA model. We dug into their annual report and discovered a sentiment that we think explains some of their success:

“To ensure that we consistently deliver outcomes that support independence for even more people with disability in Western Australia, we made some changes to our customer intake teams, adding a dedicated onboarding team to better assist new customers to access our services. This team will be instrumental in improving customer experience and facilitating growth.”

The focus on optimising lead management is a theme we’ve consistently noticed among providers who are successfully and sustainably growing their SIL business. 

These growing providers are:

• Noticing that customers now have access to multiple offers (2500+ SIL providers in 2022 compared to 935 in 2019)
• Understanding the difficulties customers and their support network face when comparing SIL offers that communicate little differences
• Recognising that if their lead management process is slow, or leaking, their potential customers will inevitably be engaged by other organisations with a better enquiry and intake process.

What does this strategy look like in practice? We recommend committing to responding to your leads within 2 hours of the documentation being received.

This expedient and respectful commitment signals to customers that their enquiry is highly valued, and they no longer need to continue their search. In fact, support coordinators we’ve spoken to indicate that they will consider at least 5 offers, and those that delay for weeks simply aren’t considered in what could be an urgent placement decision for their client.

Strategy 2: Lean Structure and Competitive Pricing

Another theme that commonly emerges is the effect of leadership distance. The CEOs and directors of smaller organisations we work with know their customers’ names, preferences, and undertake frequent informal contact. 

This contact is felt and seen, which is reflected in accountable workplace cultures and a strong familial sense. Larger providers may struggle to compete with this, and they’ll likely need to lean on their scale, efficiency, and capacity for investment to offer different values to the customer.

The new changes to the SIL funding model provides lean organisations with the ability to offer lower prices or more support to customers who may be sensitive to this fact for the first time. The previous model allocated the exact level of need at the NDIS unit price in the Roster Of Care (ROC). However, now the ROC is seemingly divorced from the funding amount, it’s possible that customers are becoming price sensitive for the first time.

What does this strategy look like in practice? Regardless of the size of your organisation, we recommend leaders make an effort to have face-to-face interactions with your customers on a regular basis. This contact presents critical opportunities for two-way dialogue with your customers, and it won’t go unnoticed.

It’s time to reject the broader opinion in the sector that says it isn’t possible and get ready to compete on price. Considering the top 10 providers only account for 19% of total SIL volume, we believe it’s highly likely that this price pressure will be allowed to develop into the competitive landscape.

Strategy 3: Specialisation

We’ve also seen the emergence of highly specialised providers that dominate their niche customer segments. A provider we work with specialises in complex care by providing highly skilled staff with expert leadership. This model leans on complexity funding, however their expertise and capacity attract support coordinators in their network who almost always reach out with customers that meet their risk profile.

What does this strategy look like in practice? If you’re willing to pursue a specialisation strategy, we recommend firstly undertaking a competitor analysis to identify potential opportunities. Are any of your competitors focusing specifically on niche customer segments such as high complex care, autism, or psychosocial disability? If the answer is no, turn your best suited niche into a unique value proposition (UVP).

The Bottom Line

The SIL data tells a compelling story about the nature of our market. Growth has been slow, and most of it is accounted for by government transfers. We expect that a growth trend of 2.65% will continue into the next quarter. While larger providers appear to be at a distinct disadvantage, those with robust lead management processes are able to resist this trend. Smaller providers continue to retain an edge, likely because they are closer to their customers, are more responsive, and can specialise and build strong referral networks.

If your SIL business is on the wrong side of these growth metrics, you need to take your UVP and lead management processes seriously. As for larger providers, we challenge you to consider how your scale can offer different values to your customers.

Finally, price competition is likely coming, and some providers are ready now. If your organisation needs support in preparing, or bringing a differentiation strategy to life, contact our team today.