Archive

Tag Archives: Funeral Industry News

SOTP

This evening Americans will hear our President give the State of the Union address, which is an important event for our nation.  Whether you agree or disagree, the content provided offers a perspective of “what’s going on” in our country.  I wrote an article, published in The Director magazine, providing my perspectives about the State of the Profession.  You may download the article by following this link Step Up_ 2018 State Of the Profession Address  or read below.  Yes, there are a few statements that some may deem controversial and take umbrage, however I always welcome your thoughts for discussion.  Cheers y’all!

Step Up

As I began to write this article, my mind conjured up the image of our country’s State of the Union address. The president is announced, and upon entering the House chamber, he shakes the hands of well-wishers. Of course, no matter which party is in power, the opposition is generally less exuberant as the exalted speaker continues toward the podium. Imagine with me the magnitude of the words spoken, and with that scene in your head, I now present you with the State of the Profession address.

Fellow funeral professionals, providers, suppliers and supporters, we are living in a unique time of opportunity and challenge to our livelihood. Our noble profession serves families during a most difficult life event, the death of a loved one.

Like a hospital, your funeral home does not have the luxury of set hours of operation because life can end at any hour. The men and women who serve families spend countless hours tending to the needs of others, often to the detriment of personal time with their own families. Missing birthdays, holidays and other special events is a common occurrence. And while most consumers do not have knowledge of or an appreciation for our craft, when we are called upon, all understand the importance of our mission.

The future of the funeral service profession is excellent for those embracing new paradigms of education, operations, communications and willingness to adapt to consumer demand. It’s time for leaders of our industry to rise, take charge and apply contextual intelligence.

An example of such behavior is Steve Jobs. He didn’t just create the Apple computer; his vision was to bring technology to the fingertips of everyone, rather than just the privileged and businesses. True leaders look beyond the current landscape to consider a broader vision of society, politics, technology and demographics. The funeral profession is in dire need of contextual intelligence from its emerging leaders.

Because our industry has so many facets, we have no one leader to guide the direction for the future. In fact, we have no collective, unified voice, as evidenced by the many similar yet autonomous membership organizations. The Have the Talk of a Lifetime program is about as close to a combined effort as I have witnessed, and support among professionals is growing.

There are more pressing issues that will have severe ramifications for many funeral service operators than a membership organization can address, nor does it have the capacity for deliverables. I’d like to take time now to review the serious challenges to funeral service businesses and look at opportunities for leaders to take charge.

Unfortunately, the major headlines regarding the funeral profession seem to be dictated by Chicken Little. Yes, cremation now eclipses burial in the United States, and the change will become more rapid in the coming years. Cremation is a challenge, but it’s not the biggest challenge. I’ll address the leadership opportunities for cremation later in this address.

What is the biggest expense on a funeral home’s profit and loss statement? It’s not caskets, hearses, limousines or building maintenance. Its personnel – the people who work in funeral homes who make our profession a profession. Soon we’ll begin to see the senior ranks of active serving funeral directors decline due to retirement and death.

Unfortunately, the influx of new funeral directors to backfill for the attrition of senior directors will not keep pace. The number of bright-eyed, bushy-tailed students entering the funeral profession is dwindling. Why would a bright student want to go into debt attending mortuary college, earning a degree and taking national exams just to work as an indentured servant, er, apprentice until finally licensed as a funeral director? How many people want to work for low pay and ridiculous hours in a stressful environment?

Without a doubt, we have firms across the country with stellar operations that are rewarding their employees handsomely. However, there are also horror stories of low pay, long hours and HR nightmares involving overtime, harassment, etc. Once again, leadership is the solution to this growing problem.

Now let’s review the ridiculous licensing requirements that require a funeral director to also be an embalmer. Let’s face it, embalming is an art as well as a science, but it’s not for everyone. In fact, the skillset and personality requirements for an embalmer are significantly different than those for an arranger/planner. Additionally, the average pay scale for these professionals is not attractive enough to recruit the best and brightest.

The transfer of knowledge to practice is another important yet lacking facet that does not help with retention of funeral directors. Regular, meaningful training must be part of a funeral home’s operations to assist with developing skills and reducing vulnerabilities.

Finally, it’s time for funeral home leaders to pay serious attention to HR violations concerning overtime pay and hours. Most funeral home owners do not even have basic job descriptions, up-to-date employee handbooks or procedure manuals. The Department of Labor offers guidance and requirements for these subjects, and we have experts in our ranks to remedy what is broken.

Unfortunately, because our profession has no unified leadership, I believe that the opportunity exists for individual funeral home owners to create an atmosphere of opportunity within their firm to attract new funeral professionals who see the value of a career, not just a job. 

At the beginning of my address, I stated that we find ourselves in a time of opportunity. While the funeral industry generates more than $17 billion in annual revenue in the United States, our business of doing business has changed and is still changing significantly due to shifting consumer trends coupled with the costs associated with managing a financially healthy funeral home. One number rarely discussed is funeral home profit, which is less than 7% of revenue. It’s a cancer that is permeating our businesses and is deadly to our future. Owners must get a firm grasp on the financial operations of their firm, armed with data to make decisions for profitability. Unfortunately, a majority receive financial information on their P&L statements but haven’t a clue how to interpret the numbers or identify trends.

It’s time for leaders to step up and recognize that pricing methods should not be based on competition. Rather, they should understand their own true overhead and charge not just to cover overhead but to make some profit. After all, long-term sustainability of a business is profit, even in the funeral profession.

At no other time have so many products been made available by suppliers from all corners of the world. The quality and sheer number of choices of funeral goods has increased over the last few years, creating a buyer’s market for savvy purchasers. Long gone are the days of suppliers demanding exclusive offerings of their products with unbalanced contracts detrimental to buyers. Handshakes for business are a thing of the past, and funeral home owners can use RFPs (request for proposal) to select products that fit business needs.

At the risk of upsetting the “opposition party” (those who keep the status quo and live the “we have always done it this way” motto), I am going to speak the truth: The funeral business in not unique. A business needs a service or product to offer, customers to buy those offerings, prices for those offerings (that offset the cost and taxes), payment for the offerings and, finally, to make a profit.

Again, our profession does not have a solution for the entire industry to solve this problem because we cannot regulate profitability. We do, however, have an opportunity for leaders to focus their attention to ensure that their business is poised for long-term financial sustainability, including controlling overhead, proper pricing for services/products, eliminating accounts receivables, paying attention to tax vulnerabilities and taking advantage of different product offerings. Because of technology and education, individual leaders have more resources that ever before at their fingertips, so it’s time to make profit great again! 

ellow professionals, I have touched on our greatest resource – human capital – and addressed the need to focus on profitability. But I would be remiss if I did not discuss the rise of cremation in our country.

Without a doubt, we must be accountable for our poor early response as cremation demand increased. Frankly, we blew it. But it’s not over until we say it’s over! I am bullish on the opportunity for funeral professionals to embrace cremation as one of our great offerings of service to families. Training arrangers to provide information so families can make educated decisions can provide tremendous benefits to those we serve as well as to our bottom line.

Leaders need to provide continuous training and monitor results. For example, the presentation of cremation opportunities should always include embalming, services and products. The first part of this address was about our people, and again, people are the solution for greater opportunity for meeting the cremation demand.

The theme of financial matters loops around to matters of cremation as well. Funeral home owners, pay attention to my words: You must charge appropriately for your cremation services, period. I understand your fear of pricing with so many providers offering services for less, but you must overcome your fear with the reality of numbers. If discount or low-price cremations were all consumers desired, this article would not exist because neither would the thousands of funeral homes that support this periodical.

The truth is, your competitor does not have your overhead, and you can’t charge the same for like services. At some point, the dam of burial families subsidizing cremation families is going to burst. Cremation families must pay the same fee for services as burial families. Transfer and basic services fees should be the same regardless of disposition. A cremation needs to include a full removal price, full basic services fee, transportation to the crematory (if necessary) and full cremation fee.

Cremation is not going away; in fact, it’s increasing, offering funeral home leaders the opportunity to look beyond their current way of operating and into the future. To be successful, it’s critical to train personnel and monitor and measure results to adapt to the increasing consumer demand. Equally important is developing and instituting appropriate pricing.

People, finances and cremation are all challenges and opportunities for funeral professionals. Our industry continues to experience a new facet in the business that did not exist in the past – technology. It is imperative that funeral homes embrace and engage with the technology available to conduct our business and serve families better. There are those among the opposition who still have poor websites, use paper and pen in the arrangement conference and shun social media as a means to bolster their position within the communities they serve.

Funeral home leaders have a tremendous opportunity to integrate technology into practically every facet of operations. Doing so reduces mistakes, eliminates waste, creates a positive family experience and increases profit.

Another piece of the technology puzzle fits into our discussion of attracting and recruiting talent. Funeral homes that embrace and use technology in their day-to-day operations will attract a better candidate versus those operating in 20th century mode.

I would like to reiterate my thoughts on the state of the funeral profession address by quoting President Franklin D. Roosevelt: “We have nothing to fear but fear itself.” We have an opportunity to develop our funeral homes into work environments that provide a noble service. Not only can we provide superior products and services to those who have lost a loved one, we can provide a secure financial future for our own families and our employees. We’re at a point at which we can dictate how consumers view cremation by training our staffs to provide information to families to make educated decisions. Technology has presented funeral professionals a better way to serve, communicate and attract funeral consumers.

The only impediment to our bright future is ourselves. We have no room for complacency and hubris; it’s time for leaders to step up into their rightful place. 2018 is a landmark year to embrace and engage our destiny. I ask you: What’s holding you back? What are you scared of? Turn your vision into reality – all it takes is execution.

 

 

doc n a box

Recently we’ve been made privy to reports from NFDA (2015 Member General Price List Survey) and CANA (Cremation Rate Doubles in 15 Years & Correlation Between Cremation/No Religious Affiliation.  These reports provide excellent data of where we came from, where we are now, and initiates further need to focus on where we are going to meet the demands of consumers in the future.  In fact, Ryan and I discussed these topics at the top of Episode #2 of Funeral Nation which will air Tuesday October 13th.

I have been a proponent of continuous improvement of our funeral service brands from training, technology, services/products provided to the physical environment of where we operate.  This focus in my not so humble opinion is how we will both survive and thrive in the years to come as funeral service providers.  As I was watching this morning’s news, a medical segment was profiling an online or “virtual doctor visit.”

The online consultation is provided by a licensed physician or nurse practitioner though a webcam for personalized treatment.  When necessary, the professionals can submit an e-perception for pick up at a local pharmacy.  Online consultation is for the convenience of the patient and according to this particular story; patients are moving this direction in droves.  Convenience? Eliminating the hassles of scheduling an appointment during “normal clinic hours,” long waits at the ER or urgent care,  and the costs associated with a doctor visit, etc.  This new service allows the patient to remain in their comfortable surroundings and receive consultation; any guesses of what’s in the next paragraph?

As I write at this very moment I can see “we’ve always done it that way” (aka WADITW) smirking and thinking “that’s terrible service and unprofessional.”  Is it?  Similar service is being provided now across the country by savvy funeral directors that are in the quest of continuous improvement.  Yep, total online offerings with the consumer never leaving their comfortable surroundings and the cremated remains delivered to their front door.  Ole WADITW is smirking once again thinking “well, they can’t get a burial done that way and my families would never go for this.”   Yeah, you’re right Sparky.  But make sure and read the before mentioned reports above and maybe conduct some consumer research.  Remember when we heard “nobody will use a dang card instead of writing a check and I need a travel agent?”  Cremation is rising like the Pillsbury Dough Boy’s brother in a 400 degree oven!

As usual, my mission is provide fodder for thought by funeral professionals to consider and discuss.  If you don’t like the message or challenge for continuous improvement, then how about this provocative question: matching suits and ties or not?  From the Command Post and a thick fog of cigar smoke, Cheers Y’all!  #thefuneralcommander #funeralnationtv

honor

The truth: U.S. active duty or veteran military members deserve proper respect for the title they earned and honor for serving our Country at their funeral. Recently, I have been party to discussions that some (few) funeral professionals just get this flat wrong. When it comes to military affairs and funerals there is no room for debate or opinion.  Anything short of our best effort is unprofessional and disrespectful.

One of the great attributes that the military provides for those that offer their life (only 1% of all US citizens) is the complete understanding of (and adherence to) regulations, standards and protocol.  The culture of discipline and following the chain of command ensures success from the most insignificant tasks to major initiatives.  Follow the rules, your leaders and do your job.  All of the success is not just happenstance; training takes place every day to perfect the standards of operation and organizational effectiveness.

A service-member has earned a title, whether it is Soldier, Marine, Sailor, or Airman. It is also customary to address that person by their rank; Corporal, Sergeant, Chief, Captain or the like.  Yes they are ladies and gentlemen, but they earned a title and rank which distinguishes them from all others, period.  By taking some time to understand the particulars about the military member (branch & rank) by funeral directors prior to engaging family or others, our profession is elevated. Trust me, for those of us that know the difference, it makes a difference.

One great debate ensued with a group funeral directors about proper folds of a flag while resting on a casket.  I hate to even share this, but there was actually a funeral director that stated, “I was taught this way and I don’t care who likes it or not, that’s the way we do it,” when referring to how they incorrectly fold the U.S. flag on caskets of veterans at his funeral home.  If you read my blog or know me, I love a great debate.  But I get pissed off and downright indignant when people, and I don’t care who you are, disrespect our country, our military or our flag.

In an effort to educate rather than humiliate, how about we read the link Congressional Research Service that provides information for proper uses of the flag.  More relevant information: Flag Casket Placement: http://www.vba.va.gov/pubs/forms/VBA-27-2008-ARE.pdf; Navy: http://www.public.navy.mil/bupers-npc/support/casualty/Documents/NAVPERS%2015555D.pdf; Army: http://www.armypubs.army.mil/doctrine/dr_pubs/dr_a/pdf/atp1_05x02.pdf; Marine Corps: http://www.marines.mil/Portals/59/Publications/MCO%203040.4.pdf; Air Force: http://www.mortuary.af.mil/shared/media/document/AFD-141110-023.pdf

If you take the time to read the information provided above, it’s blatantly obvious that, “we’ve always done it that way,” doesn’t cut it for military funerals.  As a point, wouldn’t it be great if all funeral homes had such detail in their operating manual and regularly trained on these along with other funeral related topics?  Well, some of us do, but that’s another subject.

The truth is that Military funerals are special and deserving of professionalism by those of us that provide the service.  If you don’t know, ask.  Most states have a National Guard burial detail and local military organizations like the VFW are always willing to lend a hand.  Don’t make it up, there are those of us that know the difference.  As one of them, Cheers Y’all.  The Funeral Commander #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

 

 

%d bloggers like this: