Guess Who’s at the Door? It’s That Time of Year.

casket salesMy post earlier this week Let’s Make a Casket Deal has brought many responses.  If the funeral home operational model is in dire need of change to adapt to the shifting consumer market, shouldn’t the casket companies do the same?  The most resounding in box and emails from funeral directors I have received this week is that their casket salespeople are scarce until a promotion or “big sale” is being perpetuated (especially this time of year). A few nights ago, I had dinner with funeral home owners and directors.  They too had the same observation that casket company reps seem to show up now basically “hawking” (not my words, but from a funeral home owner) caskets or whatever their quota says the immediate need dictates your attention.

There was a time that casket company salespeople actually provided training and useful information other than “let’s make a deal.”  Again, the funeral world is changing, but are casket companies adapting?  Do you really need to look at a lithograph to buy a product, or can you go online and see for yourself? Merchandising?  Does a funeral home owner really need advice to know that the profit of a casket is whatever you decide the retail cost minus the wholesale cost? Does the phrase “buy low, sell high” ring a bell?  One of my favorites casket company quotes “YOUR WHOLESALE AVERAGE.”  All I care about is my net profit per sale!  If you don’t know that you can make the same net profit from a 20 gauge as a high dollar 18 gauge, send me an email and I’ll help you out. There is no direct correlation between your “wholesale average” and your net profit per sale…it’s the casket company’s way of saying “your wholesale average is helping our net profits.”

Just for fun, let’s take a quick economics and history lesson.  The cost of a particular white 18 gauge casket in 2004 was just under $1000 and in 2014 it is around $1950 (who knows what it will be in October).  I’m not really good with math, but that’s quite a stark increase in cost. Back then if the margin was $1.500 on this casket the consumer would pay around $2,500.  So, if the same margin was added to this product today the consumer must pay around $3500.  If today you purchase a white 20 gauge casket (or shop around for a similar product) for $700 and the margin is $1,500, the consumer pays around $2,200.  It’s not what you sell, but what you keep.  I have always wanted to conduct a consumer study by having white caskets, same color interior and different gauge/materials/interior material all lined up with corresponding retail prices.  What would the consumer buy?

Now you would possibly hear from some (most likely a casket company) that “we have conducted that test, and they chose the model with all the bells and whistles because of the perceived value.”  BUT; what if this was an actual at need purchase made with real dollars and has to be added to all the other funeral home, cemetery and cash advance costs?  Think about it.  Which of the before mentioned white caskets are you, the funeral director “better off” selling?  Either one.  IT’s the families financial and personal choice and they are happy and your net profit per sale is the same.  Help me understand where “your wholesale average” makes a lick of difference here?

Times are changing and so is the entire funeral industry operating model; from serving the shifting consumer, the funeral home, to the vendors of products and how they sell to us.  It’s time to take an objective and new look at how to purchase, price and position our goods we provide the families’ we serve.  So that “knock at the door from your new best friend to let’s make a deal” requires more scrutiny. Remember, it’s that time of year.  Cheers y’all! #thefuneralcommander

3 comments
  1. You know that I’m not a funeral home owner, nor am I a funeral director. You might even say that I shouldn’t be responding. But you asked a question about what the consumer would say? I cannot speak for all consumers, but I’ve been in the death business a number of years, as a family advocate and someone that does not represent a funeral home, cemetery etc. when people talk to me, I am hearing what they REALLY think about funeral homes, costs of services and their general impression of the “tradition” in the way we conduct funerals. Costs are everything. Even the rich are opting for simpler merchandise, quicker disposition and more emphasis is being placed on the memorial. Putting mother in the best casket on the market isn’t what I’m hearing any longer. In fact the position is more (from mother) don’t put the money in the grave. Consumer’s are savvy about mark ups, they can get whatever information they need by doing a simple Google search…they have an impression that funeral homes are out to take their money. People understand that businesses need to make SOME money. Bells and whistles are morphing out. When the consumer takes back control of how their family deals with death, the funeral director’s will have to change the way they are providing their services. They will have to meet the demand to stay in business. Why do you think all these discount companies that offer caskets at a reduced price are becoming so popular? I hear funeral directors say…how much are we going to make on this or that? What separates them from being in car sales? The consumer must FEEL that they are in control and that the transaction is fair. Otherwise they will find another way around it. Even to the point of changing legislation if necessary. btw, people will not tell a funeral director this stuff…just saying. Stay well…Peace.

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  2. Morguie said:

    God knows that sales guy is needing that “bonus” at holiday time. The pressure, like poo, is rolling down from the top of the hill.

    Like

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