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
The 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
The 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
Over the weekend I was at a social gathering and the host introduced my wife and I to 8 others we were meeting for the first time. When I was asked about my profession, the subject matter turned to funerals. After finding out I was in the funeral business, almost in unison, they exclaimed “I want the cheapest funeral possible” followed by sentiments of disdain from recent experiences of burying their parents. Interestingly, the people at the table were the “target” Baby Boomers (I’m in this category, however these folks are about 15 years my senior) that are supposed to want “so much more” for their life celebration and these folks were not anywhere near financially challenged.
So I asked them what they thought the “cheapest funeral” would be in terms of cost and service. One lady shared that she just buried her husband last year and she hated the entire process. She said that going to the funeral home with her kids and in her words “consternation of dealing with those people” left a bad taste in her mouth. She said that she told her kids that in no way shape or form does she want them to go through the same process….”I told them to just cremate me and have a party at the lake house…I paid over $12,000 for the whole thing and I’ll haunt my kids if they waste that much on me.”
Another lady said “I don’t want anyone looking at me dead in a casket” followed by “just cremate me…what does that cost about $1,000.” I told her in this particular area that cremation is anywhere from $1600 to about $3500. With that, more discussion ensued around cremation. One interesting point a gentleman made was that he had been considering selling his burial family burial plots. “I don’t like visiting a cemetery and I know my kids don’t and won’t…why waste the money?” From there went the discussion of where cremated remains should rest…from putting them in the lake to scattering in the garden (I suggested they research viable locations before making a decision). I shifted the discussion to what type of service…almost all said that they don’t want to be in a church or a funeral home. From the lake house to the country club, the general consensus was to have some sort of party, but nothing dour for this group.
I was frankly surprised at the positions of those at the table. These were relatively affluent people that had defined opinions from recent experiences. Their candid sharing of thoughts was interesting…what are yours about the conversation? Cheers y’all! #thefuneralcommander