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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

consumer debtConsumer economic news last week reports that 35% Americans in Debt Collections which continues to add pressure to funeral home revenues.  The thought that one out of every three people are past due on their mortgages, credit cards, car payments, student debt and even gym memberships certainly has relevance on the funeral industry.

I don’t make the news, I just comment and provide my perspective about how it relates to all of us.  From my point of view, this report sheds light on continuing shifts in consumer trends of how they care for their deceased loved ones.  This particular segment of consumers have loved ones die and as we all know, exacerbates an already difficult financial situation.

Think about it: you are behind on your mortgage, credit cards maxed out and now a loved one unexpectedly dies.  What happens next?  If the loved one had a pre-need trust in place or life insurance in force, then you are in luck.  However, if this is not the case, and more often than not it is, then if you are the responsibility of paying the funeral bill lies on your shoulders.  Now you are sitting in front of a funeral director that has taken your loved one into their care making arrangements…what happens next?

Let me repeat: 35% of ALL Americans are in Debt Collections.  We are serving this financially challenged families.  How is your funeral home staff addressing this issue?  It’s not going away…share your thoughts.  Cheers y’all! #thefuneralcommander

 

poor Saturday night I received a call from a lady that in years past I coached  her son in football.  The reason for her reaching out to me that her  niece, only 24 years old had just died at home and she wanted our  funeral home to assist their family.  Unfortunately, the young woman that  died had a debilitating disease and was released to home hospice  from a major medical center only the night before.

I know this family personally and frankly, the word pitiful comes to mind.  You know the family in your communities, truly struggling through life never seeming to get a break.  After providing me with the contact information, I forwarded the data to our on call funeral director.  Within just a few minutes, I received another call from the brother of the deceased.  He told me that he was the only one in the family with a job, almost everyone was on disability, and that finances were going to be a serious issue.  After listening, I shared with him that I understood and that our firm would certainly accommodate them to the best of our ability.  Since finances were an issue, I inquired whether he and the family would consider cremation; he said that was not an option.  They had a family farm property in another county and it was his sister’s desire to be buried there, the least that they could do.  Since this was a home hospice call, our staff was on the way as we spoke and I assured him that we would do our best and our conversation ended.

The best of our ability…this means that we (our funeral home) have to at least cover our costs; removal staff, casket and such.  Even with our offer to do this, what family wanted, they will still to struggle to cover the costs we must pay. When they came in to make arrangements, I was there simply so lend support and let them know that I truly cared for loss (I’m usually traveling all over the planet).  The funeral director conducted the arrangements as our standard; providing them information so that they could make educated decisions.

Anguishing from the experience losing their 24 year old loved one was now coupled with the living struggle of eking their way through life in financial stress…all the time.  I observed as the funeral director repeated what they were requesting from our firm, and then provided them with the cost for doing so.  We had agreed to provide what they wanted and reasonably could afford at our cost.  This family shared with the funeral director what funds they had available, and then we were able to provide them with a payment plan for the balance…still, just covering costs.

I felt compelled to share this real life event for a few reasons.  First, just plain human empathy for this family and so many others finding themselves in this very position.  Living day to day, struggling to make ends meet.  When death or another catastrophic event occurs, all of life’s regular problems are magnified for these folks.  Second, the families like this are one of the fastest growing groups in our country economically.  As a business person, whether a grocery store, shoe store, gas station, clothing store or pick a business; we have overhead costs just to keep the doors open and pay the people to provide service.  In the funeral home business, we are no different.

The difference in the funeral home business is that we are called provide service for those that have lost a loved one, regardless of their financial status.  Some states and municipalities offer indigent funds in the event of indigent death.  I have read that those offerings are “drying up” and non-existent in most areas such as our area of operations.  Many outside the funeral home business have no idea that we are not reimbursed by a government entity like Medicare of Social Security if a family has no life insurance and limited financial resources.  When a funeral home takes possession of a body, by most state statutes and regulations, we must either embalm or refrigerate within a certain time frame.  This regulation does not preclude getting paid from the family.

My heart really does go out to families that are financially suffering, God bless them.  I also understand and have concern for the gut wrenching job a funeral director does to meet their needs, both financially and their requests.  From one owner/partner of a funeral home to the others that read this, my true reason for writing this post is for more people to understand the business we run is more than just nice suits, shiny cars and transactions.  We make decisions that have profound effects on families, our employees and our business…it just isn’t what it seems.  Cheers y’all!

paying for the funeralThe subject matter of finances continues as I converse with funeral directors across the country.  As most have shared with me,  pre-need sales are stagnant or “not what they used to be.” With the shaky economy and consumers paying close attention to expendable dollars in their household budget, this should not be a big surprise.

Additionally, consumers arriving at funeral homes with life insurance are decreasing as well.  As reported by the Life Insurance Marketing Research Association; “the proportion of U.S. adults with life insurance protection has declined to an all-time low with 41% (95 million) of all adults have no life insurance at all.”

So if a consumer did not pre-pay/plan their funeral goods and services with a contract, the surviving family members that remain behind are making decisions for funeral goods and services with lingering thoughts:

  • If the deceased had valid life insurance, is the amount enough to pay for the goods and services that we desire?
  • If the insurance is not enough, should we pay the balance out-of-pocket or just spend only the amount of the policy?
  • If the deceased had valid life insurance, how much should we spend on funeral goods and services?
  • If the deceased had valid life insurance, should we use some of that money for other bills (medical, survivor needs, etc.)?

Of course, the above questions arise only in the cases that life insurance exists.  So with no pre-paid contract and no life insurance, what thoughts exist?

  • How much are the funeral goods and services going to cost?
  • We have savings, but should we dip into those funds?
  • Do we have enough credit card balance to charge the funeral goods and services?
  • What can we get for the amount we have…or willing to spend?

A funeral director must tailor the funeral goods and services to the budget that a family desires to spend.  And this is where the quandary begins with two sometimes opposing forces at work:

  • Satisfying the family’s desires for honoring their loved one within their budget.
  • Collecting funds for goods and services rendered that provide profitability for the funeral home.

Just like any other business, funeral home owners are being forced closely scrutinize their operating expenses and make decisions for financial sustainability.  A thorough evaluation of fixed costs, personnel management and cost of goods should be conducted.  Upon gaining a firm grasp of expenses, projections of revenue is essential.  As with most firms, the revenue projection process is like nailing Jell-O to the wall.

What is abundantly clear to most funeral home owners is that many consumers are making significant changes how they choose to provide final rites for their deceased loved ones.  “Traditional” burial is decreasing and cremation is increasing…no surprise there.  However; competition of getting the attention of consumers for how they can better budget their “funeral dollars” is rampant…within our industry along with outside of the funeral industry influences.

What does a firm offer for the growing demographic of funeral consumer that has little to no life insurance or limited funds for goods and services?  What strategies and training are in place to increase revenue along with cash flow from these consumers that meet the financial needs of the funeral home?  What are the messages and how are they sent to attract this growing market segment?  Are these conversations even taking place…or is the firm ignoring what the marketplace is telling them?  Times and consumers are changing.  The good old days are long past the funeral industry.

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