Archive

Funeral Operations/Training

DNA post

Nearly every day there are news feeds that address the topic of DNA.  Just yesterday, Legacy.com  posted an interesting article, What Can DNA Tell You About How You’ll Die?”  From science and medicine to solving crimes, consumers are becoming more familiar with the power of genetic developments and with DNA in particular.  For funeral directors, DNA and genetic advancements provide a new topic that adds to their professional knowledge and an informal obligation to provide some genetic information to the families they serve.

Information that is important to funeral consumers:

  • The cremation process is an irreversible process.
  • All DNA is lost (destroyed) during the cremation process.
  • Disinterment is costly; emotionally and financially (in some cases/areas may require legal action).

These three elements are factual and have relevance…but why?  Think about it, whether your funeral home provides a family cremation or burial for their deceased loved one, once your services are provided, their loved one’s genetic record is either destroyed or inaccessible.

As a funeral director, sharing such information with the families you serve imparts additional professional relevance for their decision making.  It’s our obligation to provide information so that families can make educated funeral choices.  Sharing that you offer one last chance to preserve their deceased loved one’s genetic record could have generational implications.  Most of all, you are offering information they might not otherwise have known; isn’t that what professionals do for their customers?

A couple of points to consider:

  • Funeral Professionals are making it known that familial DNA has accumulating medical and genealogical value and there is a straightforward, economical and private way to preserve it.
  • Genetic developments are supplementing the knowledge already imparted by Funeral Professionals.  Families benefit by receiving the latest in genetic medical and genealogical applications, as well as physical DNA preservation.  This is now becoming an important option in Funeral Service.

From the Command Post, Cheers Y’all!  #thefuneralcommander

P&C

We are entering a fresh season of baseball; from Little League fields to professional stadiums baseball players are honing their skills to play their part in the games on the schedule.  On a daily basis, our military trains to prepare for the moments of battle that will require their skills to be put to task.  Whether turning a double play, laying down a bunt, knowing fields of fire or following a battle plan, practice and training are essential to win a game or in the most dire of situations, stay alive.

When it comes to practice and training on a regular basis in the funeral business, regular meaningful practice and training is a rarity. Yes, I do understand that funeral homes are busy and we never know when the next phone calls can mean days and hours of focusing on one of the most important event of a person’s life; a funeral for their loved one. I also understand and know that there are times where there is not such activities being conducted where we could hone our skills.

From my experience, some of the best ideas are the result of practice and training sessions when those involved have engaged not because of mandate, rather the innate opportunity to carry out “the play” or “scenario”  and revealing gaps otherwise not recognized.  At our funeral home brands, practice and training for the many tasks required of this profession have created a culture of continuous improvement.  What are the results?

Elimination of mistakes by following process.  Mistakes are made by everyone; however training eliminates repetitive errors.  If you think about it, errors may be simple or drastic, some may be costly.  For instance, how many times in transition from the funeral home to a place of service has items been left behind?  It costs money and consternation to return to the funeral home to retrieve forgotten items (CD.’s, Reserved Markers, etc.). How about receiving a body at the funeral home?  Identification measures and process is a training opportunity; we have recently read news stories of the wrong body being cremated, do you think that  mistake is going to be costly?

From my assessment,  for every mistake or mishap in a funeral home, training would have been a preventative measure.  Think about it, what problem in our daily funeral home activities cannot be corrected with practice or training ?  Funeral home leaders must be intentional and make the time for practice and training; the results are worth the effort.  Literally taking 15 minutes a few days a week can create a culture of continuous improvement and better morale…after all, who does not like to win?

Well as you know if there is a gap, I’m paying attention. Don’t let your untrained heart be troubled, help is on the way!  Stay tuned.  From the desk of The Funeral Commander, Cheers Y’all!  #thefuneralcommander

TFC-Truth & HellI 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: Valuethe 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

intl chatI recently returned from an overseas trip meeting with funeral professionals from the United Kingdom, Ireland and Scandinavia (Sweden in particular). Having discussions regarding funeral home operations, marketing and consumer perspectives was quite interesting.  The basics of a person dying and the family in need of a funeral professional is the foundation of our business no matter the geographic location, however there are varying degrees of processes and perceptions about our business.

As in the US, pre-need planning/funding is a hot topic in the UK having continuous issues of perceived (and real) money handling issues.  Also in the UK, the funeral directors and funeral homes are not regulated as we are here in the US.  Basically anyone can “set up shop” to provide funeral services. Very few funeral homes own crematories as most crematories are owned by local municipalities.  Just like the US, consumers are struggling to pay for funeral services of their deceased loved ones which increases pressure on funeral homes to offer alternative services/products for additional revenue.  Significantly different in Sweden; consumers are prohibited from keeping the cremated remains of their deceased loved ones. The cremated remains must be buried or entombed in an approved niche.

I found most interesting the lack of technology (even worse than the US) funeral homes/directors use as a basic premise of their operations and marketing.  There are a growing number of funeral homes that have websites, however the content on the sites vary greatly (just like the US).  A consumer may find the perfunctory “we care more,”  “our family serving your family since” and “look at our fleet of cars” blah, blah, blah.  In some parts of the EU, funeral homes are now just considering posting online obituaries.  The use of social media by funeral homes to consumers is extremely sparse, yes even more so that in the United States.

The best part of my position is the ability to meet other professionals in our industry all over the world and have conversations from different perspectives.  A recurring conversation and full agreement is the varying degree of information a family may receive based on the funeral directors experience, personality or even mood while in an arrangement session…the lack of consistency of information provided.  We all agreed that the internet and an educated funeral consumer is going to create challenges for funeral directors in the “I’ve always done it this way” mode of funeral arranging.  I’m going to write a 2014 year end review and make some predictions for 2015…this subject will certainly again be addressed.

Next year I will travel all over the world  and have the blessing of chatting with many that work in and alongside funeral homes serving families.  The conversations will continue with the question “what do you think are your biggest challenges facing your firm (or business)” and that question is the topic for this post; your answers?  From the Command Post, 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

 

part 2The first post “Loyalty and The Funeral Industry (part 1)” has created great responses.  When I say great I mean many responses, not all them happy with me.  I was particularly pleased to find out that my readership includes some “big company executives” that I suppose perpetuated the old Southern saying “a bit dog always yelps.”  I’d like to remind readers that I am sharing my experiences and perspectives from being a funeral industry product/service provider, a funeral service provider, and from funeral consumers themselves.

When I took the leap from the field sales role into entrepreneurship of developing and owning a funeral home, I wanted to take a different approach.  First, I wanted to learn all I could about funeral home operations, processes, the consumer and the markets that I intended to operate.  Because I had no shackles of legacy keeping me bound to “we’ve always done it this way” (a phrase I abhor), I initiated what I was taught in the military called a “table top exercise.”  I went on home removals, facility removals, sat in on arrangements, studied P&L statements, etc. and basically categorized what I believed to be each step of the process on paper. Yep, I wrote down every step, one by one.  Simultaneously, I studied the principles of Six Sigma to create a template of process to overlay of my observations.

One of the most important steps during this process was listening to families during arrangements.  Obviously I could not ask families anything, however I created questions later to be asked in a focus group. The focus group study was conducted in another state with a similar demographic of the first location to be opened.  The issue of funeral home brand loyalty was important because we had no brand or name within the community and we wanted to know how to attract families to our new approach to service.

We had 2 sessions with consumers (about a dozen or so in each, multi ethnic) that had at some recent point made arrangements for a funeral of their loved one.  In a focus group study you may know that the questions sought after are not always asked “point blank,” but they are woven into the process.

One question was “if a new funeral home opened in your town, say in a former bank building in a nice area, would you use that location?” Some of the respondents raised their hand, but only a few.  For those that did not, the question was asked why? Basically, they did not know anything other than it being a new funeral home and didn’t know who was involved which would make them reluctant. The facilitator went on to other questions and then came back around asking “if that new funeral home in the bank building had licensed funeral directors, perhaps with a history of service, would you then give them a try?”  About 2/3 of the participants raised their hands indicating yes.  Again, the facilitator moved to other questions and then settled on prices that they actually paid at various local funeral homes.  We had already surmised the local average of burial and cremation costs by conducting a GPL survey.

We found it interesting that the participants responded with all sorts of dollar values.  The facilitator had to further explain that he was looking for the price of the burial services/casket or cremation services/urn only, not cemetery, outer burial container or obituaries (quite a lot of negative response on obit costs).  Finally, the question came back to “remember that new funeral home in the bank building, operated by licensed directors with experience or credibility?”  “What if that funeral home offered similar burial services and caskets for at least $2000 less, would you use the new funeral home?”  All the hands went up.  Then “if this same new funeral home offered similar cremation services and urns for at least $1,000 less, would you use the new funeral home?” Again, all hands went up responding positively. So there was one of the answers we were seeking; there is a point where loyalty has a price.  This group offered us quite a bit more from how/where they got their information (internet, newspaper, television, etc.) to importance (or lack of) having the actual product on hand or digitally presented would sit with them; all important elements of creating a new operating platform.

We have experienced success at our new brand of funeral service because of this and other “listen to the consumer” processes put into place.  Asking the consumer to provide us information prior to actually physically coming to the funeral home either on home removal or online was met with positive response.  Basically, my theory of getting all the “data collection” out of the way early and focusing in on the life lived was right.  Our proprietary TouchPoints arrangement system engages families in a co-creative process, not a “inquiry of data.”  We made tremendous strides operationally including the death certificate prepared prior to arrangements, digital presentations, consumer engagement via social media which all created a positive funeral experience…building loyalty the new way.

In development, I knew that price was not the compelling reason because other factors are even more important.  I always hear “well, you get what you pay for” in many circles when new competition starts eroding market share. Again, back to the car analogy; the next funeral you have look at the make and models of the cars on the lot (if there are a lot of Buick’s, you are in trouble). The consumer will decide the value proposition.

Frankly in my opinion (and we all know I have one) loyalty must not only be earned, but maintained.  Just because your firm has been serving since Sherman burnt down the South does not dictate loyalty.  Continuous improvement is sometimes painstaking and changes must be made.  A great example of this is a dear friend of mine that has been in the business 35 years and is an owner of a firm serving a local community, primarily Italian, since the early 1920’s (yes, he’s from “up North” and my friend).  The traditional families his firm serves for over 90 years has shifted to a nearby township leaving his location in the middle of a demographic market that has completely changed, including real estate values.  The families still come to him, but he realizes at some point they will begin to look elsewhere for many reasons.  Being proactive, he made a decision to follow the families by moving the entire operation to the township where the majority of his market has moved. His summation is that he needs to follow his market, not stubbornly resist the inevitable. Go into cities and look at boarded up churches…consumer shifts from not only location, but from traditions.  Sound familiar?  I think someone famous once said “go where they are.”

One last observation I personally experienced learning about is online funeral consumers.  By paying attention, we found that families were seeking online services from other states for their deceased loved ones right in our operational zip codes only because our locations were conducting the trade work. So what did that mean?  This particular segment of consumer had no “relationship” with a local funeral home (including ours), searched online, and made a choice based on the information found on a website.  Now I know what some of you will say (yes, I know who you are). “Well, we wouldn’t do the trade-work which is perpetuating the whole thing in the first place.”  Don’t.  The family clearly did not choose your firm in the first place for whatever reason, why not at least get some revenue from the transaction?  Being proactive, we addressed this consumer segment accordingly.  The online funeral consumer segment is growing.  If you think about it, this is the epitome of no loyalty.

So, what’s your firm doing to create and maintain brand loyalty including capturing the folks in your zip codes looking elsewhere?  Why are they seeking funeral services by some other firm that yours? Perhaps your website is not suitable with information (really, take a look at funeral home websites, I dare ya), or the prices you charge may be out of balance for the market (and the consumer has to come see you to get them at your location in a bad area of town).  “Networking” at the Lions Club is going stale, “marketing” by obituary placement in the local paper, restaurant place mat ads and printed calendars is failing.

“We’ve always done it this way” is not the answer for loyalty in the funeral business.  As usual, I am looking forward to the responses prompted by what I shared.  As always, don’t shoot the messenger (however I have been shot at before), but let’s have lively discussions.  So from the Command Post and through a blur of cigar smoke, Cheers y’all! #thefuneralcommander

 

 

part 1I have spent some time in the past years studying the shifts of “loyalty” in the funeral industry from a few different perspectives; from a funeral industry product/service provider, as a funeral service provider, and from funeral consumers themselves. My observations are from actual experiences/research including my tenure as a sales representative for a funeral products company, a funeral home owner/partner and a funeral industry entrepreneur.  There is quite a large amount to share, so this blog will have several segments over the next few weeks.

My first real loyalty (or lack thereof) experience in the funeral industry was when I worked for a big funeral products company. It was my mission to sell our provided products/services to the funeral homes in my assigned territory(s) and secure those relationships with multi-year contracts.  The contract was primarily to provide caskets, urns and some ancillary stuff at a discounted/rebated rate for 100% of the funeral home product purchases. My reality check was during my visits to the funeral homes I would notice products in the garages being stored that were not from our brand.  Additionally, you know how funeral directors love to talk, I was always made privy to why the urn sales were down by “you didn’t hear this from me, but we have whole closet full of X brand urns in the basement.”  What made these example scenarios interesting was “rebate check” time when I delivered the rebate check and it was lower than expectations.  Then it was “chickens come home to roost time” because the number of services provided and products sold were way off base. One of my favorite responses was “we are really here to assist you, but paying you a rebate for purchases from another company was not added to the contract.”

The even larger disillusionment while busting my fanny to not only sell for the company but to generate revenue for my family came when I unwittingly uncovered that I was not the only one in my territory selling my company products; so was my company.  Through local distributors under a different brand name my company was selling a “less expensive product with different features” to the same funeral homes that I supposedly had developed business relationships and even “100%” contracts.  Of course, my direct supervisor vehemently denied that any such activity was taking place until I actually showed him a price list and photos of the product.  That’s where the fun began.

During a particular company meeting I addressed this issue to the company leadership and frankly the responses were hilarious.  First starting with denial, then to “not the same products, these don’t have the same blah blah features” to “they are not manufactured with the same standards and finally “these products are not going to your customers.”  Being like the Coast Guard motto “Semper Paratus” I came with all the evidence with photos of the “non-features” and those photos taken in funeral homes within my assigned territory base.  You can imagine my popularity numbers were flying high with the company “big cheeses.”

This issue simmered for a few months and finally fully substantiated on a customer trip visit to the manufacturer.  While touring one of the plants, I noticed unfamiliar shells of caskets on the factory floor.  There was a point of manufacturing process that we prided ourselves as “unique.”  I watched one of the unfamiliar products go right through that same line and the process performed exactly like the other “core-line” products by the same personnel.  Taking the initiative, I asked the person performing the task in the factory “what type of casket it that, we don’t have those in our area?”  God bless him, he beamed “it’s a BR549 (names and brands not used here to protect the guilty).”  Basically, my suspicions confirmed that my company was manufacturing, selling and offering caskets to the customers in my territory without me receiving any of the revenue for those sales.  Some loyalty.

The influx of “foreign” caskets a few years ago was all the flurry of conversation.  Articles written, comparisons made, law suits brought about.  The “American made” label was touted by some of the companies basically offering that consumers would be totally off-put and “no one should be putting their momma in one of those.”  Hold it a second.  Remember that factory tour?  Stacks and stacks of “Made in China” boxes were abundant and in clear view for all to see.  Huh? And oh yea, how about the “we have a plant in another country, but it’s still our skill and craftsmanship that makes the difference.  I won’t even get started on urn manufacturing, just turn over the product and look for the “made in what country” label for your own answer.

There are other instances but not enough ink or finger typing endurance to share more.  My summations for the reasons for these examples of “lack of loyalty” are simple.  Although funeral homes enjoy the support provided by some of the vendors that provide their products and services, as owners we always seek better pricing.  If nothing else, the contract is supposed to be a binding “loyalty” contract, however I dare say they are pretty much nothing more but a piece of paper.  The vendors get all indignant about this issue, but as the example above with the BR549 product line, contracts really don’t mean anything to the vendor either.  It’s a vicious cycle; funeral homes vie for the best price (notwithstanding contracts) and manufactures sell however and to whomever they can find to buy their products.

I’m old enough to remember vehicles made overseas and how we viewed those vehicles.  Guess what’s at the top of the best selling cars on the road in America?  Some of those very cars we made fun of back then (see 20 Best Selling Cars July 2014).  The point here is consumers demonstrate some of the exact purchase and loyalty behaviors that we mimic but complain about in the funeral industry.

Why are we so shocked that consumers choose less expensive service/products (to some in our industry the analogy code words are “discounters,” cremation societies and online purchasing)?  Subsequent posts to this blog will address these same behaviors from consumers.  Don’t shoot the messenger, it’s an issue worth addressing;  I look forward to your responses and the discussions.  My cigar is about completed…so from the Command Post; Cheers y’all! #thefuneralcommander

 

 

 

 

almost overI have been inundated with messages from funeral home owners about some of the “year end deals” that have been presented in the last week.  Many questioned why we must be subject to the fiscal whims of the suppliers, i.e., most funeral homes operated the fiscal year January-December…so is this really the “end of the year?”

One of my favorites was a particular firm had two open spaces on their casket display.   While their supplier representative was paying him a visit, the rep said that he would call in for a reorder to fill the open spots.  The owner asked the rep what the new product lines are that he would like to try something new and “less pricey” because it seemed to take forever to sell the two that are now gone.  The rep explained there are going to be some new products out, but those won’t be available until after “the show” in October.  The rep again said he would just call in an order for the two empty spaces…the owner told him “not so fast, I told you I want to display something less expensive.”

That’s where the fun began.  The rep explained that he had some “special year end discounts” which would make the exact replacements less costly.  The owner pushed back with the issue that it took a while to sell those two off, and he was interested in something new/less costly (the owner said it was as if he was talking to a tree, no listening for the rep).  The rep finally showed the owner a line of caskets that had high eye appeal, less costly “but would not count towards their current discount, rebate or “numbers” as the rep put it.  The owner selected and purchased two of the “special line” of caskets after doing the math of less net wholesale cost, same margin as the two that were being replaced, and lower retail cost to the consumer that would make the purchase which had a better propensity for turn.

The deflated rep took the order knowing the trend is inevitable…math is dictating the business.  Please keep sending the “it’s that time of year” stories related to “let’s make a casket deal.”  I feel an article coming in the future about “buyer beware” on casket contracts…Cheers y’all! #thefuneralcommander

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

washed outIt’s the time of year that summer comes to a close…the end of a season associated with happy, warm and carefree days. However, this description of summer is not necessarily reflective in the funeral industry.  Just like the ocean, the death rate has an ebb and flow; historically the death rate is higher in the 1st and 2nd quarter of any given year and the 3rd quarter (summer) is significantly slower.  This historical trend offers the opportunity for timely discussion.

As a funeral home owner/manger, how do you prepare for the ebbs and flows of the death rate for expected “slow times?” Does your firm adjust prices based on recent revenues?  What type of marketing campaign do you launch (if the phone isn’t ringing, then go out singing is one of our firm’s methods)?  Or  are you the proponent of the ever popular “we have experienced this before” and do nothing?  The problem of decreased death rate in today’s atmosphere is coupled with other issues; competition (locally and online), shopping consumers, increase of cremation, decrease of traditional burials, and of course when a call is lost, so is the revenue along with that family most likely not returning either.

Lest we forget: it’s price increase time!  Yes, if not yet, your happy supplier will visit soon telling you how much you are loved and appreciated…and that love will cost you more this upcoming year!  Now, don’t forget that suppliers have to make profit and if you review the wall street owned ones, they do handsomely.  Nothing wrong with profit, frankly I’m in favor.  Back to my point, this time of year.  The funeral homes that I am owner/partner, we operate our fiscal year January-December.  However, the major suppliers find it necessary to impose their fiscal calendar upon us to suit their financial needs…this time of year.

What does this mean to you and your firm?  Well, first it’s time for you to make adjustments to your GPL and product price lists or absorb the product price increases starting October 1.  Remember the “slow” summer season just ending?  Now you have to account for those losses and adjust for upcoming increased product costs.  Frankly, if your firm has been adjusting prices along the way, this is not a big deal.  However, the majority of funeral homes in the US only make price changes this time of year, when dictated by suppliers, if any adjustments are made at all.  I know it’s hard to believe, but I see GPL’s and price lists that are actually dated “2010.”  Second, are the prices you are paying for products (and getting ready to pay more) a value to your firm and families?  At some point, there is a price for “loyalty,” just ask consumers.  I’ll address this question in another post soon.

So for discussion sake, how does your funeral home address “slow periods?”  Anyone out there heard the latest price increase numbers?  What are your methods to formulate price adjustments? How often does your firm adjust prices and what time of the year if only annually? Happy Labor Day (I’m working, but doing so with a cigar as part of the celebration).  Cheers y’all! #thefuneralcommander

%d bloggers like this: