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conversation starterI’m just returning from another funeral convention and I would like to provide “color” on my observations.  I had conversations and meetings with many people from practically every facet of the funeral industry, however I am certain those conversations would not get published in any industry magazines…somewhat lends back to “The Truth” series I recently posted.

From vendors, the majority complained of a lack of attendance from buyers and decision makers. On opening day of the exhibit hall, a cannon could have been fired down most isles and not hit nary a funeral service provider.  Something new and never done before was the presence of a suicide prevention booth; however it was hard to get in as it was jam packed with new vendors/first timers seeking counseling trying to figure out why their booth is not full of buyers (I guess they failed to read and take my advice on being an entrepreneur in the funeral industry).  The non-conventional conversation among this particular crowd (vendors) was that “second tier” organizations should consider events with exhibits such as these perhaps every other year.  The cost to attend, lack of ROI, and dwindling attendance is going to force some tough decisions in the future from a vendor participation perspective.  Suggestions of one big annual funeral expo that covers funeral directors, cremationists and cemeterians would suffice with perhaps individual breakout sessions if needed for organizations.  The individual organization fiefdom is a drain on vendors, members and participants.  Every state has its own annual organizational gathering repeating the same madness but on a smaller scale.  The smart states have completely eliminated exhibits.  So my vote (and I’m sure lots of others if they had one) is to let’s quit doing the same thing the wrong way over and over again…what’s that called?

The speakers and breakout sessions had excellent content with relevant information.  Again on the notion of “one big funeral gathering” with many speakers and subjects would stop the redundant messaging under different flags…so maybe the presentations given at the “one big funeral gathering” could be recorded then retrieved in an archived library for those not attending.  That sounds like a smart revenue generation model with mass appeal, but what do I know?

Speaking of tough decisions, the funeral service providers I had the privilege of chatting with provided me with realistic reports of their experiences at providing services/products to the ever changing consumer.  Outside of the emerging Social Media, technology and of course DNA collection (yes, that’s a shameless but true plug) they saw nothing really addressed how to provide better service to the consumers they serve.  Think about that for a moment.  Basically, if the company/vendor is not providing or improving upon a technology based solutions (sales, service, arrangements, B2C marketing, operations, or product) then the relevancy to a funeral service provider is benign.

An interesting and emerging segment that was present in technology seems to be a platform for consumers to memorialize themselves using an online portal to capture their life stories, videos, etc. (I guess Facebook/online obits is just not getting the job done).  The fallacy for most is the choice some really odd names which I personally wonder how consumers find them in the first place.  One of those odd named providers makes claim that their product/service helps with the “family experience” but when I drilled down a bit I got the old “we’re still working on that” position.  Basically, capturing a life well lived is a great notion, in fact some of these cats have somehow found people (companies) to invest in this idea without a strong revenue generation model (you know, pay back investors’ money).  Aurora’s value added Be Remembered has all of the components for such a platform (at no cost to the consumer or funeral home) which leads me to believe that others fail to do any relevant market research before launch.

The best non-conventional conversations took place off the floor with a drink in one hand and a cigar in the other (yes, that’s my favorite environment for great conversations). I think that all would agree such funeral gatherings provide a platform for those in attendance to have all important face to face interactions.  During these important extemporaneous sessions,  I actually was made privy to a new product that I think is brilliant; cremated remains, the life story, storage and columbarium all in one…technology, sleek design and a solution.  Another was about a new brand of funeral service to consumers; a collaborative effort for a brand that will capture and address the majority market in America…the 75% that make less than $50,000.  Those folks die too, but we don’t talk about them much.  Finally, this is a big world but getting smaller.  The alliances of companies collaborating on a global scale are becoming more commonplace.  I personally had conversations with people from Canada, Australia, Spain, Italy, China, Ireland and even New Jersey.

In a nutshell, if it’s not a technology driven product at the exhibitions and expos that assists funeral directors to provide enhanced service to their consumers, the interest level is dwindling.  There is always some that will pine for the days of yore, but those days are going away with facsimile machines.  The from my vantage point, defined success for the future in the funeral industry is messaging, technology and collaboration.  That’s the view from the field and The Funeral Commander.  Cheers Y’all! #thefuneralcommander

5th yearRecently I started receiving emails and notifications from LinkedIn congratulating me on my work anniversary of 5 years.  I’m pretty staunch about remembering important dates especially after being married 30 years, but frankly I had to look at what the salutary messages were referring to as an anniversary.  Just a short 5 years ago, I left the “security” of a big company to become an entrepreneur; what a journey it has been and continues to be!

I personally believe, “a vision is only a dream without execution.”  I had a vision of an operating platform for a funeral home developed with Six-Sigma principles; a new way of operating and adapting to meet the changing consumer demands of caring for their deceased loved ones.  The vision 5 years later is being executed; 2 locations in competitive markets serving over 300 families a year led by team of associates that earn a good living because our culture dictates and supports their efforts for success.  The dream at times was a nightmare.

Starting a funeral home from scratch has it’s unique challenges.  One just doesn’t walk into a lending institution, share your vision and get your capital for startup, but if you have a compelling story people will invest in you.  A lesson I learned in the military; Officers eat last.  Basically a leader makes sure his troops are cared for above his own needs; as an entrepreneur associates often may get a paycheck when you don’t.  You just can’t walk into Verizon or sign leases, etc. to open a new business account without significant deposits (or as I see it, betting against your failure).  Of course we received the typical competitive “the bit dog yelps” rhetoric from many especially the “we have been serving since Sherman burned down the South” crowd, however I also had the pleasure of a threatened lawsuit “making sure I did not violate my non-compete.”  Yes, apparently I had a good idea because we had quite the attention from our local purveyors of funerals, but now the Toby Keith song “How Do You Like Me Now” is playing in my head as I write this.

“My failure gave me strength, may pain gave me motivation”- Michael Jordan.  Not all of the visions could be executed.  There are days when defeat and self doubt are the thought of the day.  Such days are where I found out what I was really made of; do I practice what I preach to my sons and everyone else on the planet about perseverance, effort and resilience, or throw on the proverbial towel?  When one of the initiatives does not work out, I know that my detractors find glee, but my fans wonder, “what is he going to come up with next?”  Determination, intellectual curiosity and the ability to connect with people breeds opportunity.  I am a living example.

“None of us is as smart as all of us”-Ken Blanchard.  I know what I don’t know and I am certain of what I do know.  I am blessed to have a business mentor Buddy Watson along with partners like Steve Zittle and Chris Tharp that I continue to seek guidance about many things “out of my wheelhouse.” After literally “burning my boat at the shore” in the funeral industry, I have developed relationships from professionals like Frank Immordino, Ryan Thogmartin, Kate Hamilton, Ryan Lehto, Simon Rothwell and Francine Trendler that spurred more visions which are now being executed internationally.

Interesting that this week, 5 years later I was so busy and excited “executing my vision” that I failed to even notice my anniversary of becoming a funeral industry entrepreneur.  Today, I am at the pinnacle of all the cumulative successes, failures and lessons over a business lifetime launching a life changing business.  Lives of consumers, our team and our families will be better from this journey I embarked upon 5 years ago.  In essence, Happy Anniversary to Me…it’s only going to get better.  This path is not for everyone, but it is for me, thank God for the blessings along the way.  From the Command Bunker, 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

 

 

 

 

innovationThis past week famed musician Bono of U2 announced that their new album “Songs of Innocence” would be released free to anyone with iTunes (Bono Explains U2’s Deal).  The idea of reaching new customers with their brand/style of music is a brilliant marketing campaign on many levels.  Of course, Apple is participating and launching products of their own simultaneously which creates buzz for all involved.

Let’s see; reaching a new audience of listeners (not even the same genre’s), collaborating with another company to deliver the message, and a fresh approach to consumers.  Any lessons/ideas here for us in the funeral industry?  I have a few ideas, but I’d love to hear from from you.  Cheers y’all! #thefuneralcommander

bad dealIt’s September; kids are back to school, college football is here, we pack away our white shoes, and some casket companies are playing “let’s make a deal.”  Obviously it’s been a tough year for casket sales and once again they are making last minute efforts to “make the year” for their investors (but more important for company bonuses).  It used to be called “pull ahead” where funeral home owners were asked to buy extra caskets at a “great deal” meaning a discount on top of the normal discount and savings from the upcoming price increase.  However, upon a close look and drill down into the numbers, it’s not difficult to decipher which entity is getting the best end of the deal.

Just this past week a fellow funeral home owner reached out to me for my opinion on a casket company’s “let’s make a deal” offer.  Immediately, I found it amusing the casket company was making an offer that was contrary to their original contract and the assumptions made from the wrong date of contract expiration.  Contract?  Who needs a stinking contract? This was the first evidence of desperation and what appeared to be deception attempting to “make the year.”

Here is the overview of what’s “behind door #1.” The casket company wanted the funeral home owner to purchase a pretty good size bulk number of caskets before September 30th. The bulk order would be discounted (in addition to their normal discount/rebate) and the firm would have a short time period to pay for the bulk order.  There were restrictions on what type of caskets that could be included.  AND; based on the current contract (you know the one they got the date wrong), they would “forgive” what looked like a shortfall of achieving a purchase bonus rebate and “give” the firm that particular amount calculated AND just renew the current contract for another x amount of years.

So let’s break this down.  The casket company wants the funeral home owner to buy x number of caskets now and store them until this purchase is depleted.  I have a few problems here.  Isn’t the casket company that came up with “just in time delivery” so funeral homes are not required to “warehouse” caskets? Does this defeat the purpose of that “room” the funeral home paid for over time?  So, is the funeral home owner is supposed to fork out a five figure check over a short period of time (equal payments of course) for caskets that may not be used for months?  Of course, the casket company explains how much savings are realized with such a purchase by “avoiding the impending price increase.”  So the rationale is spend five figures of cash up front to maybe save 3-5% on purchases you are going to make anyway…damn the cash flows!  Oh yeah, you can’t order the casket that you sell the most…they don’t count.

If the casket company is “sucking eggs” from low sales, do they even acknowledge that the funeral home probably has suffered financially over the same time period?  Back to the contract (you know the one the casket company holds near and dear, but willing to “forgive” all when in their odds).  In this particular case, the casket company said that if the funeral home makes the bulk order before September 30, then those caskets will make up all shortfalls for the “wrong date” and a new contract will start October 1.  The “math” says that the funeral home has another 6 months on their contract and with their average monthly casket purchase history; there could be a shortfall of maybe 30 caskets which would keep the funeral home from the “purchase bonus.”

I’m not real good with math, but if the funeral home owner buys their average amount of caskets monthly for the next 6 months and monitors their purchases, the worst case scenario would be that the funeral home would need to buy an additional 5 caskets per month.  Of course, take into account that November-February is typically the “high season” so the additional purchases may not be necessary. The amount of units the casket company offered for this “deal” exceeded the amount of the impending “shortfall.”  This smells like the fish you caught over the Labor Day weekend and just remembered are still in the cooler.

“Behind door #2” is the ability for the funeral home to continue their average casket purchases over the next 6 months, monitor purchasing units for needed additional adjustments, hang onto their cash, order just in time products (only the ones that they really need and use), earn their “purchase bonus” and renegotiate a new contract.

Let’s take a look at what should be “behind door #3” but is highly unlikely to ever get revealed.  An annual contract, not multi-year. Let’s say the casket company provided a 25% discount/rebate over 3 years.  Good deal?  Only if there are no price increases over the life of the contract.  The first year of the contract is great (unless you signed in the wrong time of year, see note below) and let’s suppose that the casket company increases their prices an average of 4% per year.  That means the last year of your 3 year sweet deal you are now getting a 17% discount/rebate in real dollars, not the “Monopoly Money” casket companies base their figures.  By negotiating annually, a funeral home can appropriately avoid the price increase shell game. Renegotiate the next contract in conjunction with price increase time.  AND make every casket purchase count.  It’s not the funeral home’s issue that the casket company “doesn’t make the same margins” on certain caskets. Certain lines, non-gasketed and cremation caskets are…caskets.  If the casket company is unwilling to include their “low margin caskets” to the count of discount/rebate/bonus, then purchase those caskets from another casket company (include this information in the contract).

If your “new best friend” casket sales representative has been (or is getting ready) to play “Let’s Make a Deal” take notice!  It’s that time of the year; price increases from suppliers, adjustment to GPL/product price lists, recovery from the financial strain of the slow summer season, and bulk purchase offers so the casket company can “make their year.”  Make good financial choices based on math, not loyalty.  After all, your competitor may have a better deal from the same company; there is no loyalty from the “Let’s Make a Deal” crowd.  Coming soon to The Funeral Commander blog: the “loyalty” post for us to ponder.  Cheers y’all!  #thefuneralcommander

10489664_10204233373373040_6140789426579688307_n (3)Living in the entrepreneur world is quite an experience. Thinking of an idea/process/product, development and working through to completion which is basically market acceptance and penetration, is a great reward of satisfaction that drives our motivation.

The hard part of being an entrepreneur is not all the creative, coordination, structure development, testing and so on.  That part of our “existence” is why we engage in our endeavors.  One of the most difficult facets of entrepreneurialism is the struggle with people that have either no understanding or will to learn about our creative initiatives.  Interestingly, even after vetting products/services in “beta” situations (at need arrangements) with real funeral directors with real funeral consumers, posting positive revenue numbers and elimination of “glitches,” skepticism abounds.  So why is the phenomenon of knee jerk “well, that won’t work” so pervasive?

I believe and understand that we all have natural skepticism about anything new.  Having stated this, I also believe that many people don’t possess natural intellectual curiosity to research for themselves prior to providing their opinion.  Thus, the term “knee jerk” is appropriate; just what comes off the top of mind with no real foundation or reasoning to support a given position.  Is this because the “opinionated” has never invented or created anything in their life and merely shows up everyday to perform repeated tasks for their livelihood, thus hating change?  Or is the “opinionated” always positioning or believing themselves as the smartest person in the room, resentful of not being the one that created the enterprise?  We see this type of reaction is pervasive in our society today on social media (mindless reactions) and even in our Nation’s leadership;  “JV team” comment sound familiar?

In particular, the funeral industry is quite adept in providing “often wrong but never in doubt” opinions on a wide variety of subjects.  However much like the reference to the Middle East scourge, the issues we face are real and not going away.  In fact, the problem is getting worse and there is no plan of how to address the escalating and dangerous situation we are finding ourselves.  For example, in many cases our approach to cremation, use of technology, regulations, competition, price transparency, the economic environment we are operating and shifting consumer views of funeral service have not been a track record of stellar business practices.

Ten years ago, we were so surprised when consumers actually choose a custom cap panel, or shopped prices, purchased a non-gasketed casket, or asked for a “direct cremation.”  Today these examples are common and closer the norm.  So when the subjects of technology to serve families (bricks and mortar not necessary for services provided), use of celebrants, declining revenues from financially challenged consumers, DNA in the funeral industry, sending cremated remains into space, alkaline hydrolysis and such…are they so far fetched?  However, remember your first Thumbie sale? I suppose the proprietors and change leaders of our industry that now enjoy the fruits of their effort are humming the Toby Keith song “How Do You Like Me Now?”

Fortunately the funeral industry has forward thinking and operating professionals that actually provide leadership by having the intestinal fortitude and broad view to pave the way for those that don’t.  Actually, I addressed these leaders in a post Kiwi or Eagle earlier this year.  So from my view as a funeral home owner/partner and funeral service/product business owner/entrepreneur, there is a bright future for the funeral industry Eagles!  As for the Kiwi’s, well as we say in the South, “Bless your heart,” your beak is getting warmer as we speak.  Cheers y’all! #thefuneralcommander

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