I posted Can We Handle the Truth? a few weeks ago with tremendous feedback from many points of view.  Most  were in agreement with the notion that we in the funeral industry need to take a step back and reevaluate our businesses from many avenues of approach.  There were some that agreed with the post content, but doubted that such a collective discussion would ever take place, much less have impact.

I have traveled extensively the last few weeks attending a “meeting of funeral professionals” (I’ll leave out the name of this particular event to protect the innocent), meeting with several funeral home/large cremation providers and with a prominent/high volume funeral financial provider. At the funeral professionals meeting the format allowed for various speakers within our industry present a multitude of topics from how to manage change to the importance of social media (yawn…old news talking about it, implementation and execution are foreign strategy topics).  I listened intently to most of the speakers and one stood out as a practical real world, experienced voice.  In a nutshell this funeral provider actually understands consumer segmentation, invested, created, and implemented services/products to meet demand.  This man and his company created several different value propositions based on consumer needs/demands finding tremendous success; how refreshing.

In the very same week, an article was published by a well-respected industry leader regarding price competition.  The message had excellent points  such as projecting a clear message to consumers differentiating your brand versus competition along with providing value and customer service.  Let’s take a short look at how Walgreen’s does it:

What’s the message?  If one brand offers the exact same service for a better price (value) and can clearly communicate to consumers…what are the results?  Why didn’t the commercial show the pedicure for $30.00 ($10.00) more…would the lady react  the same? The truth is that a basic cremation is transfer of a body from place of death, the necessary paperwork, and the crematory fee. Most states require a minimum cremation container which adds to the cost.  How can a firm clearly articulate the difference to consumer on these basic charges in a value proposition?  Well, “we’ve been here forever, we care more, we have a bigger building, etc.” is not much of a definitive set of reasons to pay over $1000 more for exact services.  But here is the rub; the next piece of advice in the article is raise your prices.

A few thoughts about raise your prices. I get it, I really do.  If a business has expansive real estate and huge operating overhead costs, raising prices is just about all that can be accomplished. OR can change the model, cut fat out of operating costs by updating with technology and training personnel to perform better.  Perhaps earn new business by (fill in the blank) marketing?  Maybe even do as the speaker I referred to above, invest in developing different brands to meet consumer demands. Three elements of sustaining a business: 1. Do more business 2. Raise prices 3. Cut costs.  Does the current economy dictate that raising prices is the best answer right now?  Competition (like the Walgreen’s commercial) is savvy communicating their message to consumers.  Basically, they can do what you can do…for less and actually make profit.

There are many firms in the US that have created fantastic opportunities for celebrating life with upgraded facilities, offerings of services, technology, clear messaging and a true reflection of “you get what you pay for.”  The same firms invest and respond by creating value and realize that “one size does not fit all” by broadening their business (most cremation societies are owned by large funeral homes).

Just for fun, let’s look at Merriam-Webster’s definition: Value: the amount of money that something is worth : the price or cost of something: something that can be bought for a low or fair price: usefulness or importance.  The funeral industry definition: Value: pay more for something that can be bought for a lower or fair price just because we say so.  The article is right on point; show value…

An analogy:  2015 Cadillac ATS vs. 2015 Toyota Corolla; ATS base $33,215-Corolla base $16,950.  Now the question is: for the majority of working Americans, which is the best value?  Both are transportation and designed to take you from one place to another.  Many would absolutely agree the ATS…however, if the consumer does not have the ability to buy the ATS, the value means nothing.  Are we trying to convince consumers that a Corolla should be priced the same as an ATS and has the same value?  Value is defined by the person making the purchase, not by the person selling…it’s hard to show the value of a Cadillac if you only have money for bus fare, “I Only Have Bus Fare But I Want to Buy a Cadillac”, sound familiar?

The truth is the consumer is dictating changes that some funeral providers are unable to meet because their operating model is outdated only allowing for “raise prices” and a willful refusal to make hard choices for change. The funeral consumer is finding information online (not necessarily from funeral home websites), shopping for “better deals,” seeking celebrants for direction, and choosing offers/products/services outside of traditional funeral channels.  The funeral consumer is choosing cremation over burial at a rapid rate which applies pressure to funeral homes and manufactures to find new revenue.

With all the meetings and discussions over the last few weeks, the recurring need for adaptation to accept consumer change is at the top of the list.  Yes, there are companies and funeral homes making significant strides in the right direction.  However, the truth is, the vast majority of funeral providers will continue the status quo…just like Radio Shack did.  From the desk of the Commander, Cheers Ya’ll! #thefuneralcommander