The Hotel and Funeral Industry…what can we learn?

overcomeLast week’s article in Forbes magazine by Perianne Boring The Death of The Care Industry and Eternal Life Online  prompted a predicted limited response from funeral directors (at least from sources like LinkedIn, Facebook and the blog world) although the LinkedIn Connecting Directors.com site provided excellent opinionated responses from a few funeral professionals.  I had personal conversations with several others regarding not only the contents of the article, but the loud and clear silence of rebuttal opportunity to what I consider an expose’ that did not shed the best light on the funeral industry i.e., a paragraph heading of  “The Veil Of Secrecy in Funeral Homes.”

My personal position is that Ms. Boring wrote an excellent piece using several sources from Caleb Wilde, the Federal Trade Commission, Jessica Mitford, Consumer Reports and others.  If funeral directors are upset by the article, I remember a saying “I don’t make the news, I only report the news” and those of us in the funeral profession should not “shoot the messenger” but take note of what is revealed in the article.

My take away is that frankly, what was reported is not “new news.”  Guess what?  There is inflation in the funeral industry, the FTC makes regulations that are regularly broken by rogues, funeral homes are for profit businesses, funeral home practices have evolved over the years, the advent of the internet and social media are providing more exposure to once limited funeral home information.  And, oh yeah; it’s expensive to die.  

What is not generally known about me is that I have spent some time and have experience in the Hospitality Industry.  I have family that has developed, managed, owned, operated, bought and sold hotels with an impeccable reputation in the hotel business for decades.  My personal mentor in life and business, J.E. “Buddy” Watson, provided me insight along with opportunity to periodically work alongside him.  The exposure of brand standards, training, management, development, construction, capital raising (private equity, venture capital, legal requirements, etc.) actually was the impetus for me developing the Family Choice Funerals & Cremations brand of funeral service.

turn downHave you ever seen a J.W. Marriott hotel, a full service Marriott hotel, a Marriott Courtyard, a Marriott Residence Inn and a Marriott Fairfield Inn in the same cluster near each other and wonder why?  Well, it’s because each of those brands represent a different customer segment.  The contrast of the full service product with amenities like convention/meeting space, full restaurants and a bar significantly differ from the limited service hotel with basic check in, basic breakfast offering, etc.  Additionally, the rooms are appointed according to the level of what the consumer is willing to pay.  But remember; the fundamental purpose for a hotel is simply a place to sleep away from home.  

So now, it’s time for me to hone in on my point and take away from the Forbes article.  The hotel industry and funeral industry are similar, but many in the funeral industry have not figured this out yet or at least refuse to acknowledge such.  When funeral practitioners like Caleb Wilde shared in the article that his family of funeral directors shifted from “residence/home funeral service” to body removal from the residence to the funeral home, that was a big deal for the industry.  Interesting how residential indoor plumbing began to emerge around the same time making one wonder if removing waste from the home was then considered “new and modern.”

Many funeral practitioners changed their modus operandi; instead of embalming, casketing and setting up the residence for a funeral they built a location to perform all the work.  It’s now a rarity to have embalming and other funeral services provided by funeral directors at residences.  Many of the funeral homes were also residences of the funeral directors, truly exemplifying “family owned and operated.”  Over the years, I suppose funeral homes decided that they did not want to “funeralize” in their own homes, so the advent of the modern day funeral home was developed and built.

Some of the “family inhabited” and “new location” buildings are still in existence; but the buildings are now a real estate burden because the consumer community served back in the 50’s and 60’s has changed.  I have been to many a funeral home that is struggling due to changing of the local clientele change and the real estate value plummeting along with their business.  In contrast, the modern day funeral home is quite different from the early “new location” buildings.  Some of these “funeral homes” resemble resorts or very expensive hotels with fine amenities, well-appointed furnishings, lush manicured grounds, a huge chapel, fleets of expensive automobiles, catering/event areas exuding elegance and the finest surrounding to honor a loved one.  Others are more modest with functional meeting rooms, a chapel, and the basic necessities for service funeral consumers, just a bit smaller.  An emerging type of funeral provider, disdainfully called “discounters” by many funeral royalty, are minimal facilities that may even be located in an old shopping center, but often offer the same products and services as the others without all the amenities.

open casket 1Providing these descriptions of hotels and funeral homes…are you seeing the similarities (besides both industries provide turndown service)? Which charges more for service; the full service J.W. Marriott or the Marriott Fairfield Inn? The well-appointed “full service funeral home” or the so called “discounter?”  A number of resources are available online to compare prices of hotels which include their own brand reservation sites like Marriott.com competing with Hotels.com and Travelocity.  A consumer is now trained to research online for information, pricing and comparisons looking for the best value for their particular stay.  Conversely, if a consumer is seeking the same about funeral homes (a permanent stay product) their resources are limited.  My friend and fellow funeral industry entrepreneur, Ellery Bowker, owner of Directors Advantage reported that only 8% of US funeral homes provide pricing on their website. Ryan Thogmartin of Disrupt Media Group and the popular Connecting Directors.com website is considered the funeral industry “Guru” of social media.  Funeral homes are still reluctant to engage social media professionals like Ryan to provide consumers information to make an educated decisions.

Captain ObivousIn recent history, the hotel industry had either a full or limited service product but has now evolved with extended stay, suites and other offerings based on the consumer demand.  The funeral industry has basically provides for two categories of full service (like a J.W. Marriott or Ritz Carlton and full service Marriott) or a limited service (like Marriott Courtyard or Fairfield Inn).  If you shop online, sometimes you can find a full service hotel for a limited service price (ask my fellow Captain, Captain Obvious of the Hotels.com website).  The same consumer shopping for services is more commonplace in the funeral industry, but the results are not the same due to as the Forbes article and Ellery Bowker point out, a “Veil Of Secrecy” still exists purposely by funeral homes not listing their prices online…forcing a consumer to actually visit the funeral home location for the coveted and FTC-mandated General Price List.

The lack of response by funeral directors about the Forbes article may be due to the inability to adjust their practices to consumer demands such as the hotel industry has.  Basically, a “full service funeral home” has all the amenities one could want and charges appropriately for the goods and services…even if the consumer doesn’t have a desire for such.  Ever heard the phrase, “Spend a Night, Not a Fortune?”  Well, my mentor, Buddy Watson actually coined that phrase back in the 70’s for a hotel chain.  So could the phrase, “Pay a Tribute, Not a Fortune” be an appropriate message to consumers about making their funeral plans?

When spending a night in a hotel; a consumer has the choice of the finest of amenities and services or lack thereof based on their own value proposition. At death; burial or cremation, a consumer has the choice of the finest of amenities and services or lack thereof based on their own value proposition.  Either way, the emergence of savvy, limited service funeral and online funeral service providers will continue to capture growing market share.  Factually there will always be a market for the full service hotels and funeral homes and there are more limited service hotels than full service to meet the demand of the consumer.

Finally, the gap of funeral consumers that have the financial means or desire to use full service funeral homes are diminishing.  Consumers that either are financially struggling or don’t find value in the full service funeral product are increasing.  The funeral service providers that figure out how to meet the needs of the increasing segment of funeral consumer with immediate transparent information and desired product will flourish in the next several years of increasing death numbers due to population along with technology for spreading their message.  Take note of other industries and how they evolved successfully…the death care industry is not dead, it’s just “going through the change.” Cheers y’all.

 

10 comments
  1. Morguie said:

    I find myself in complete agreement with you, Jeff. I too, had my humble beginnings in the hospitality industry…worked in a large, fancy resort-type place with an attached convention center and two dining establishments, etc. It’s about providing amenities and services. Presenting a ‘menu’ and pricing online simply cannot give a prospective shopper any idea of what value he’s about to receive…at least from the funerary standpoint. Besides, funerals are of the utmost personal in nature as far as services provided are concerned. On the other hand, most folks pretty much know what they can expect in a hotel’s offerings and amenities. I applaud your post and the point you make in illustrating the special differences, which I am afraid the Forbes article was lack to do. Most pieces written by ‘outside’ press are lack to do this properly. I appreciate that you graciously define this profession, instead of feeling compelled to jump to its defense…thanks for that!

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  2. Jeff Harbeson said:

    Thank you young lady! Unfortunately many of our colleagues get a tad bit frosted about calling them out…but if ready carefully, I just made an analogies of the two industries. As an old southern saying goes “a bit dog is usually the one that yelps.” Cheers!

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  3. Sara M. said:

    Interesting post, Jeff. I do think it is challenging times for the ‘industry’. ” Perceived value” is something that is truly being put to the test for funeral professionals, and for some reason (but I think perhaps Paul hit on it in the LinkedIn thread) consumers do not generally have a perceived value of the services funeral service professionals deliver.

    The industry is certainly “going through the change”, which can be a very turbulent time! I would also suggest that your analogy of the hotel industry fits perfectly into SCI’s model of operation, and I believe we are wise to watch the big players in this market! SCI have their brands to fit every market segment – their Dignity (full service) brand, the Neptune (premium cremation), Advantage (budget funeral), National Cremation (low cost cremation). Difference is that most consumers do NOT know that one company owns all these brands, so SCI benefit from the families that contact Dignity who can be passed down the food chain…and SCI still look like the good guys.

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  4. Jeff,

    Two thoughts came to mind after reading this blog. Though you did not say so, but I can see where a reader might misconstrue this blog’s mention of a centralized embalming for multiple locations to be indicative of lessening service. Such is not necessarily the case. Consider Turrentine-Jackson-Morrow, a family owned, 8 location funeral home, based in Allen, TX, a suburb on the northern edge of the DFW metropolitan area. 5 of their 8 locations are in small surrounding towns whose populations in the last census were 6028, 3301, 1900, 1604, and 1498 respectively. Though some may say that centralizing services such as embalming lessens the level of and/or quality of service provided, I can tell you where to find 14,331 people who would beg to differ. Those 5 locations only handling arrangement conferences, visitations, and funeral services further personalizes service not only to those families, but to those communities. Just as having a post office branch or bank in a town is indicative of a threshold of stature for a community, so is having a hometown funeral home.

    At the other end of the spectrum, as of the start of 2014, SCI had one ‘care center’ for approximately 2 dozen funeral homes in a metropolitan area of over 7,000,000 population. Are there funeral homes SCI may not have kept open if they did not have centralized embalming and fleet management? Probably. Would that have had the same impact as in a town where there is only one ‘home town’ funeral home? Probably not.

    The other thing that comes to mind is that you discussed process/location of it occurring stratification, but you did not mention goods and services stratification, which should probably be a blog topic in and of itself. The bundling of goods and services blurs the value of each. Each requires differing infrastructure, operational patterns, and focus for delivery with maximum efficiency. Such efficiency enhances profitability for the funeral home and pricing for the family.

    Though I feel the advent of the combo unit has been to the benefit of the funeral homes at the detriment of the cemeteries, we are already seeing florist shops emerging within the cemetery under the same umbrella of ownership, but differing operational channels and patterns. Why shouldn’t the same occur for monument sales, cemetery property sales, and while you’re changing things, how about that casket showroom evolving into a freestanding on-location casket store?.

    When the consumer walks through five different front doors for floral, funeral merchandise, funeral services, monuments, and cemetery property, it creates the reality of ‘having it your way’ because it is easier to go elsewhere for only the part of the package you wish to. Will this make the cost of goods go down and services go up? Probably. Is that a bad thing? Probably not because everything’s cost is more closely aligned with its value.

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  5. Jeff Harbeson said:

    Paul: How have we not met before? Thank you for sharing your astute and experienced views with me (an others on LinkedIn). For those of us that have no fear of change or what others think or say, tremendous opportunity lies before us. I’d like to chat with you in the near future…my email is jeff@theharbesongroup.com. Cheers.

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  6. Beau said:

    Valuable information. Lucky me I found your website accidentally,
    and I am surprised why this twist of fate did not took place in advance!

    I bookmarked it.

    Like

  7. Jeff Harbeson said:

    Thank you Beau…I enjoy writing and sharing my points of perspective. Jeff

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  8. Jeff Harbeson said:

    Thanks Beau!

    Like

  9. Pretty great post. I just stumbled upon your blog and wanted to mention that
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    Like

  10. Jeff Harbeson said:

    Why thank you Justine! I will have another up tomorrow hopefully. Please share The Funeral Commander blog with your friends! Cheers. Jeff

    Like

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