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Cheap Cremation

Nope

I don’t think there is a single funeral director, funeral home owner or cremation provider in the funeral industry that doesn’t know that the death rate in the foreseeable future is going to steadily increase due to the Baby Boomers moving on the the permanent Villages in the sky.  Funeral industry pundits, soothsayers and oracles are continually propagating the “Boomer Boom” which will place all on solid footing and growth.

Visions of funerals that “reflect the life lived” with cocktail parties, receptions, doves, fly bye’s, movies, and theaters full of mourners wondering how they can “one up” such send off when their time comes dance in the heads like kids on Christmas eve.  If I had sound to enter this written prose, this is where I would place the screech of nails on a chalk board (I bet some of you hear it and reacting as you read this) to get your attention.

The Baby Boom has potential for Bust for many funeral homes.  WHAT?  Captain, you are such an idiot because we are showing more value and charging more…how could we possibly go wrong?  Take a look at the article posted in My Budget 360 regarding the financial posture of the pending retirement of Boomers.  Couple this information with the financial heath of the Boomer’s Offspring and the visions before mentioned reflecting the life lived are for $695 cremation, a box of Bojangles chicken and a Dollar Tree balloon released “in honor of” because “that’s what they would have wanted” are more realistic.

We are entering the convention season which includes seminars and CEU credit classes.  Just for your own observation and edification, take a look at the fall sessions and see if you can find “Strategies to Serve Broke Baby Boomers and Their Families.”  The seminar would not as flashy, hopeful or sexy as the talk of a lifetime, but it’s worth discussing.  From the desk of The Funeral Commander, Cheers Y’all! #thefuneralcommander

back homeThe Wall Street Journal just provided an interesting article Younger Generation Faces a Savings Deficit which outlines how the millennial generation is financially struggling.  Basically the economy has not been particularity kind to this group and due to many factors; they pretty much have no savings. Why is this an issue for the funeral industry?

We all know the millennial generation, for the most part are children of Baby Boomers.  And as we are also aware, Baby Boomers have not been the most fiscally responsible generation of all time.  Yep, we (Baby Boomers) are living longer which means we are spending more money on medical care to keep us alive and depleting our funds towards end of life. In many cases, we are still supporting our college educated millennials that have returned home in debt and unemployed (or underemployed working at low wage jobs with a high cost degree).  I am privy to daily inquiries for funeral funding of a relative that had no life insurance or made any provisions to pay for their own funeral, but relegate such to survivors.  It’s shocking to know that people actually say they have nothing, no funds to pay for their deceased loved one’s final expenses.

If the deceased left noting and their survivors are the generation depicted in the Wall Street article, how is your funeral home going to get paid?  Even more disturbing is the fact that millennials will most likely struggle to pay for a cremation out-of-pocket much less a funeral and all the cash advances like cemetery charges.  How does that affect the financial health of your funeral home?

I recently posted The Orchestra is Lovely regarding the bad news about Genesis Casket closing and indicators about the future of such companies.  If you are in the casket business and depending on millennials to buy caskets for their deceased Baby Boomers, the future is rather dim.  Another post from earlier this year Is it About Honoring the Life or Paying the Bill? reiterates the facts regarding how funeral homes are facing an increasing consumer base in financial difficulty.

Whats the good news?  We all have time to make smart decisions and choices to meet the changing demographics of funeral consumers.  A thorough analysis of operating costs, processes and re-engineering of how our funeral home operates is essential for not only growth, but survival.  I am fortunate to have “the secret sauce” with a team of real professionals that essentially function on “continuous improvement.”   There are some great consultants that will provide you and your firm the due diligence, solutions and oversight necessary to meet this tide of change.  I can attest they are not the ones hawking “new and improved” caskets (not to mention all the other goodies in their bag like websites, urns and funeral toilet paper), but consultants that actually know what a robust and healthy funeral home P&L should contain.

Want more insight?  Send me a message and I’ll gladly offer you some ideas of who can help you and how to prepare for the what lies ahead. From the Command Post: Cheers y’all! #thefuneralcommander

 

GenesisThe news broke yesterday on Connecting Directors  about Genesis Casket Company closing it’s doors.  I read comments from various people in the funeral industry touting their opinions regarding the company’s poor leadership and conjecture why the company failed.  Let’s take a different view at why a casket company going out of business at this point and time in our history is really bad news especially for the funeral industry.

Many of the funeral industry pundits, most  which are marketing “superlatives” that have never made a home removal or know the difference between a rough box and a alternative container have been leading the sheep about the oncoming huge spike in death because of Baby Boomers.  Sounds like great news from the Willie Wonka crowd, but a reality check of what’s happening is quite different.  Baby Boomers are living longer, spending more of their money to live, therefor dying with less. Guess what skippy? If your funeral home is relying on the Baby Boomers’ offspring to pay for the Disney Experience funeral from their own pockets, you’re in trouble because that age group is having difficulty paying for access to the annual county fair.  If there is money left for the next generation, they are paying for their own debt and bills (assuming they are actually living on their own and have not “boomeranged” back home). Take a moment and read an eye opening article from The Guardian about what’s going on in England and “the funeral poor.”  I know, “that’s happening over there” but the news continues:

Cremation is the fastest growing market segment and in the near future, cremation will surpass burials.  I’m not really good with math, but how many cremations must a firm perform to equal the same net revenue as a burial?  The consumer shift away from burial to cremation is not the best economic news for most funeral service providers because of the antiquated model of their operations.  No need for the big chapel, hearse, limo’s, embalming room, caskets, vaults and personnel.  In fact, no need for anything because a quick Google search and a consumer can not only order a pizza online, but also have grandma’s ashes delivered to the front door.

As usual, I’ll receive some of the snarky comments from the “establishment” about how great the orchestra on the Titanic sounds and their classy outfits make the experience so much better.   To circle back to reality; Genesis Casket Company closing is terrible news for the funeral industry.  If the market was so great, the Boomers would be dying at record pace with festivities rivaling a Super Bowl halftime and casket companies would be sprouting up all over the place.  What’s even more pathetic are those that take joy in the failure of Genesis and the people now out of work.  Well, you know what they say about Karma.  By the way, I think the orchestra is playing your tune…

From the Command Post; Cheers y’all! #thefuneracommander

questionFuneral pricing is an interesting topic.  Last week I posted about Cheap Cremation which provided excellent response from both consumers and funeral directors.  A notable post along the same line was from Kim Stacey The Price? Good Question on Connecting Directors which she discussed posting funeral pricing on a funeral home website and pricing transparency.  Additionally, I was part of a Face Book thread last week originally posted by Mike Strickland of Family Choice Funerals & Cremations in Virginia Beach, VA where Mike posted a GPL funeral price comparison of his and local funeral homes.

The Face Book thread was interesting because there were responses by funeral directors and consumers.  A particular local funeral director was incensed that Mike had the unmitigated gall to post GPL funeral price comparisons and her (the other funeral director) position was that a consumer must come to the funeral home to become educated about their funeral home selections.  I took a look at her funeral home website and a consumer could find out everything there is to know about funerals on that site but, what a surprise…funeral pricing for the firm was not posted.   Unfortunately, part of her defense of not showing funeral pricing on her firm’s website “because a family needs to see things like how nice the parking lot is.”  As we say here in the South “bless her heart.”

As a subject, funeral pricing is not going away.  Yes, I know someone will inevitably respond “but we have to make a profit just like hospitals and hotels, etc.”  I get that and that is not the point here.  The point here is there is usually a direct correlation between a funeral home’s overhead costs to the price that is charged to consumers.  Simple as that.  If a firm has a large expanse of real estate, fleets of cars, a large staff…well they obviously have to charge more. There are additional costs if a firm is publicly traded such as corporate governance and investors seeking returns. Smaller firms, smaller staff and less overheads usually means less cost to the consumer.

It’s the cost of doing business like any other industry…however, does Ruth’s Chris gave a rat’s fanny what Chick-fil-A charges?  No.  Why?  Because they serve two different markets with completely different choices.  The difference is that in the funeral industry, we all pretty much serve the same menu; caskets, urns, embalming and cremation.  That’s where the “casserole hits the fan”  because more expensive firms have difficulty explaining variances in prices such as “direct cremation” (removal, services of a funeral director, alternative container, and crematory fees).  Same exact services (not like Ruth’s Chris steak vs. a Chic-fil-A chicken sandwich) but sometimes thousands of dollars in difference.

Funeral pricing varies simply because it costs some firms more to operate.  I have also outlined the responses to “well, we give better service and you get what you pay for” post for later this week for those that love to sling that “casserole.”   Funeral pricing…what say you? Cheers Y’all.

cremation blogCheap cremation.  While attending the ICCFA last month I did not see any of the vendors of urns, retorts, training or otherwise advertise cheap cremation.  However, when our team convened early this morning for our weekly after action report, the term “cheap cremation” came up twice from funeral directors.  Their use of the term “cheap cremation” was from consumers that were shopping for services over the weekend.  We further discussed the conversations and the results…meeting the two families this morning!  Training does pay off.

While pondering the term cheap cremation, I decided to do some homework.  What does this term mean? According to Merriam-Webster online: Cheapnot costing a lot of money; of low quality; not worth a lot of money; charging low prices.  Cremationto reduce (as a dead body) to ashes by burning. 

I decided to conduct my own research this morning and call three different funeral service providers that offer cremation; all three are in the same competitive market within about 4 miles of each other.  I asked the person answering the phone to give me a quote on cheap cremation.  Here are the results:

Location 1: (cremation provider advertised online with pricing on their website): “Our complete cremation which includes taking the body into our care, the necessary paperwork, an alternative cremation container is which is required, the crematory fee and a temporary urn is $895.”  The person asked me if they could email me more information or if I had any other questions.  I replied no, I’m just checking around, thanked them and competed the call.

Location 2: (family owned funeral home with no prices on their website): “Has a death occurred? What type of cremation do you want?” I told them no, I just want a quote on a cheap cremation. “Our cheapest cremation is $1,575.”  I asked what was included; “Picking up a body, the paperwork, an alternative container and crematory charge.” The person did not ask me anything else in sort of a strange silence, so I thanked them and ended the call.

Location 3: (publically owned, corporate funeral home no mention of price on their website): “Has a death occurred? Do you want services?” I said no, I just want a cheap cremation. “We charge $4,390 for a direct cremation.”  The person went on to explain “included in the $4,390 is taking your loved one into our care, all the funeral director services including documents, a cremation container which a body is placed into the crematory and crematory fees.”  I asked “I just called 2 other places near you and they charge $895 and $1,575 for the same thing, what do I get for my extra $3,000 that I would pay you?”  The person answered “well, we are a full service funeral home and we provide more than just the minimum.”  I replied “but I’m only asking for the minimum, why so much from your funeral home”…the person’s reply “because we do more than the other funeral homes and we have facilities, others can’t accommodate all your needs.”  I replied that I only need a cheap cremation; and thanked him for his time. He then said “We have an affiliate that only charges $1,395 for a direct cremation, can I give you their number?”  I then asked where the affiliate was located, “right here in <name of city>, but all they do is direct cremations.”  I took the number and again thanked him for his time…and ended the call.

Wonder why a consumer is confused about cremation?  A few personal observations.  Location 1 and 2 at least provided me information on their respective website, but were not much on conversation or concern on the phone.  Location 1 gave me information and did not care if a death occurred, but offered a follow up where location 2 did not.  The most engaging was location 3, which is expected for an additional $3,000; however their follow up was referring me to another place to call and not to be bothered with my situation at their particular location. The lack of engagement from all three was astounding...AND NOBODY ASKED MY NAME!

So for your Monday morning wakeup call funeral directors and funeral home owners; shoppers are looking for cheap cremation.  What is going to be your answer?  Are your prices on your website?  Do you randomly “secret shop” your funeral home and competitors? What training are you providing your staff about phone engagement? As a consumer, which one of the locations would you have chosen based on the information provided above?    Cheap cremation is not going away and neither is the consumer that is looking online and calling to engage your staff.  What’s your solution? Cheers y’all. #thefuneralcommander

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