6 Ways Funeral Homes Can (And Will) Succeed
November 5th, 2013
In a previous article Joe Joachim wrote called 5 Reasons Funeral Homes Fail, he points out the fact that 8 out of 10 businesses fail within the first 18 months. Some of the reasons he discussed for the failure of a firm included not providing unique value, having no interest in the customer experience or feedback, relying on the wrong business model, as well as having poor communication.
In response to the ways funeral homes could fail, I think it’s important (and needed) to talk about some ways funeral homes can – and have – succeeded.
But, before getting into the criteria of how to succeed in funeral service, ask yourself this question: why death care?
If it’s revenue, keep looking, for there are many more profitable (and probably less stressful) options – drycleaning for instance (reported as the #1 money maker for your neighbors in The Millionaire Next Door). Has your family been in funeral service for several generations? Interesting, but the rearview mirrors aren’t really helpful anymore.
No, the only workable reasons are:
– you were called
– it’s your passion
– you want it more than anything
It’s the only explanation for the limited margins, high risk and huge challenges you’re going to face. Although it can be a huge disaster for those who don’t, funeral service is ultra-satisfying for those who hit the mark. But how can you make sure you hit the mark?
Here are six ways I believe a funeral home can succeed in today’s economy:
1) Offer a “crowning performance”
In 2012, Olson-Zaltman Associates published a research project called “Studying the Market We Are Losing”. 150 Baby Boomers were interviewed for 1.5 hours each, and every interview was transcribed to reveal some pretty groundbreaking results about the way consumers view funerals and funeral services (download the results here).
In the study, consumers described their funeral as their “crowning performance”. They wanted to be the writer, director and the star in their “show”. This means they want to write their story, choose the setting, props, costumes, soundtrack, location, as well as many other aspects of their funeral service. There are some practical aspects of this that will be considered in a moment. But, more importantly, are the funeral directors of today the right people to guide these efforts? My guess is probably not. As we speak, people such as Celebrants and Event Planners are lobbying for this space and you’re going to have to earn your way back in. Can you do it?
To find out, ask yourself this: how many really creative ideas has your firm generated and implemented in the last 90 days? And by ideas, I don’t just mean those tired old “gimmicks” to sugar coat a service. The funeral directors who will be successful in the future will be able to produce, and direct the loved one’s “show”, providing lots of creativity and resources to remain valuable along the way. And as this new service gains traction, it will become the expected “norm.”
In addition to the creative piece of a funeral service are the other equally important components on theology, death, and grief strategy. A successful professional in this realm will be a hybrid of a Producer/Clergy/Therapist/Funeral Director, and the FD part is really probably optional and could be outsourced with disposition (see #3 below).
At a minimum, the writing skills of an English major, theater and performing experience and a strong creative bent will be the keys to success in the future of serving families.
2) Have “the talk” — but don’t stop there
The Funeral and Memorial Information Council [FAMIC] “Have The Talk of a Lifetime” could be a step in the direction of offering families the “crowning performance” mentioned above. Although “the talk” we have with families gets content surfaced, how does that get transformed into a script and a show? Not by the decedent – even if you catch them while living, they probably don’t have the skills or experience to write a script or design a show. Although consumers described this in the research, one interpretation could be: “I want to be the content, the center of attention.”
A successful crowning performance will be put together by a hybrid Producer (described above) who is the writer and director who creates the star. And not just the story of the decedent and their family. There are other pivotal ingredients as well – theology and grief therapy for instance. Not a lecture, but a cohesive, integrated story which, when properly staged, becomes a show and meets the objectives that consumers describe as “connecting” and “transforming.”
The best person to do this job? A writer with experience in theater. Find someone who knows how, better yet — is doing it today — and hire them for a project. Learn “hands-on” from that person and that project. If you’re ready to do the next project on your own, go for it! Or, bring your expert back to assist or at least review your efforts and adjust if necessary. That’s how you transfer knowledge and develop new skills.
3) Disposition is minimal
The handling of human remains has become minimized into a utility, driven by high volume crematories, refrigeration and industrial park settings. We could argue about less price-sensitive segments and the ability to charge more being a full-service firm, with “truly excellent” service wrapped around everything. But, according to economics, the low-cost producer will usually win.
That means if this position is currently occupied, buy them out or stay away.
Your ability to compete profitably is limited – you missed the window, so invest your effort and your capital elsewhere. As for embalming, burial and entombment… those are things of the past. You can probably outsource them based on the low frequency of need, and save on payroll and supplies.
So much of our mortuary school education was about handling decedents safely and legally. Sometimes elegantly. This will define us less, and the “show” will define us more. And a well designed and executed “show” certainly has more room for earnings than a $495 cremation.
Other considerations….
– New construction. A successful funeral home will use lots of glass to invite in green life-affirming plants, water, and stand far off the street, protected by privacy hedges and berms. It includes an auditorium or theater. Maybe the project is in partnership with others (city or county government, service clubs, event planners) to both pool capital and avoid labeling as “that new funeral home.” Instead, maybe it’s a “Community Center” or “Meeting House.” The more (and varied) users, the better — including weddings, receptions and Rotary Club meetings.
– Offer to re-write your pre-need contracts. First, it’s an opportunity to contact your customer base. Second, it’s a great way to update those old “traditional” services. Why hold an inventory of pre-need services which, when executed, will be wrong? Addressing this is a HUGE credibility builder and “burns your ships,” as warriors did to signal 100% commitment to their new venture and eliminate the possibility of retreat.
– Finally, “do the math” through financial modeling. You’ll need to get your arms around the numbers to determine if this new business model is even worth pursuing, or you should cash in your chips and find another game to play.
Some key calculations to make are:
— income generated from disposing of real estate and investing in new construction
— savings in payroll and supplies (prep room, caskets) no longer needed
— market share: how much do you expect to “win”?
— market based pricing: what are consumers willing to pay, bundled or individually, for each segment of the business? What will it cost you to provide them? Are there sufficient margins to make it attractive as an independent, standalone decision?
Final words
In today’s economy, it’s not unusual for people and industries to re-invent themselves.
Many do it to respond to change, to remain competitive, to gain an edge or to start something new. This strategy may be mandatory in order to save the future of the funeral service profession. Knowing this, as well as knowing how, is critical to our success.
How was your funeral home achieved success in a changing economy? Share your thoughts in the comments below!
ABOUT THE AUTHOR
F. Todd Winninger has been in Funeral Service for twelve years, and is currently a Licensed Funeral Director with Aden Funeral Home, in Tampa, Florida. Prior to funeral service he was in marketing and sales for 25 years. He is the founder of “Funeral Shows,” an alternative to traditional services. Details: www.linkedin.com/in/funeralshows/
I hear all this talk of “the show” but in my area I just don’t see it at all. Our cremation rate is maybe 10% – 12% and no one has ever wanted to make a full blown “show” of their funeral; quite the contrary. The vast majority still want a traditional service with casket, embalming and viewing followed by burial or entombment. To say that embalming and viewing are “of the past” is simply not accurate. Tell parents who have lost a precious child in a terrible accident that embalming, reconstructive techniques and viewings are things of the past and they should just have a nice “celebration of life” and forego all the sadness and ritual. You see, I am just such a parent. When my beautiful 24 year old daughter died tragically in 2007, I had to see her, to spend time with her and tell her goodbye. I am forever thankful to the skilled embalmer/restorative artist who allowed me this priviledge. No, embalming and viewing are not outdated. Their importance have just been trivialized by the type of fluff being promoted here and a society that has become “death immature” because of it. While we would certainly do anything a family wants as long as it’s not illegal or immoral, there is comfort in traditions and rituals. I totaly disagree that “low cost producers usually win”. This flies in the face of reality. People will spend money on things in which they see value. I am far from wealthy but cost was not a deciding consideration when my daughter died. The “show” may become the norm in the years ahead but I will venture to guess I will be long gone before it comes to this very conservative and traditional area I live and work in and I’m thankful for that. I rue the day our proud and honorable profession is reduced to a meaningless sideshow.
Shane — I am so sorry for the loss of your daughter; of course, anyone experiencing a loss of any type should be drawn to what works best for them.
The article is based on proper methodology using consumer data, which, to be useful and actionable, requires generalizations. “The show” was a primary observation and deliverable — along with its requirements of connections and transformation. Nowhere in the research did consumers, directly or indirectly [the research method], talk about wanting more emphasis on embalming, RA or traditional services.
But of course, there are exceptions and regionalization; Your 10% cremation rate is the first clue [any FD would give their eye teeth for that market]; West v. South v. Midwest v. East has always had strong differences; And not seeing evidence could mean it is happening quietly, independently.
Todd,
You have made some great observations here and I agree with most. But what you have described is really a different business that will require a traditional funeral home to completely dismantle the staff they have in favor of a more artsy-entertainment-production one. And that is just not practical for most firms.
In order for your “funeral show” concept to work you need to have a system that allows/assists a regular funeral director to consistently create a production that celebrates a life. It cannot depend on just hiring the right “theater guy” to make it happen. Successful theater is not just the result of the artsy people that think it up but the crew behind the scene that makes it happen and the performers that deliver the lines that are scripted for them. That cast and crew uses the same systems over and over to deliver a wonderful production.
The Life Story Network has developed just such a system. For 10 years life story funeral directors have asked families those same questions listed in the “Talk of
a Life Time” brochure. Then the Life Story professional writers take the answers and write the story that becomes the script for the celebration. And the graphics and video people take that script and photos and create elements of the production. Then the funeral home staff sets the stage for the production. Then the Life Story Funeral director puts on the show that celebrates the unique life.
In a way it is magic. But it can be delivered consistently over and over again. And each show is unique because each life is unique. Yet there are similar elements in
everyone’s life and those similarities can be systematized to make creating the a new show every time much easier.
Every funeral has always been a production and a show. It’s just that the star of the show has been the dead guy in a box sitting on the stage. Just a part of the set. The
future of funeral service requires us to make the Life Story of the dead guy the star of the show by sharing all the stories that made that person who he was with the audience.
When we gather together and share stories to celebrate a life it helps heal our hearts.
I read the “research” and noticed a very interesting piece of info. The people quoted are not relaying the experience of the death of a close relative or dear child. It is even unclear if some have really ever even attended a funeral at all. I see this as a classic case study on what I term “death immaturity” which is prevalent in America now. People have become so far removed from death by virtue of modern medicine that many are middle aged before ever having to deal with the death of a loved one. This has made death, which was once considered a normal part of life, a very unfamiliar. So unfamiliar that adults often react as children when confronted by death. One major sign of immaturity is avoidance. This experiential avoidance and the desire to replace funerals with parties is a symptom of death immaturity. This trend, however pleasant it may seem, is not healthy. As Thomas Lynch so eloquently put it…”You can pay the shrink, pay the bartender, or pay the undertaker, but the death will exact its pound of emotional flesh on the living.” You stated “Nowhere in the research did consumers, directly or indirectly [the research method], talk about wanting more emphasis on embalming, RA or traditional services.” I’m sure this is true judging from the death immaturity of the individuals questioned. Having been involved in the funeral profession for a number of years, I have seen first hand the regret of people who opted for the quick cremation and the emotionally empty “celebration of life” ceremony which followed. If my reason for being in the funeral profession was just to make as much money as possible, I would find your suggestions exciting. Unfortunately, I believe that God put me in this profession not to sell trinkets and parties, but to minister to the emotional needs of those who are are hurting by caring for them and their dead in a compassionate, meaningful and respectful way. Nothing starts the healing process like a good funeral where the family has the opportunity to say goodbye and then accompanies the body to the grave, the fire, or wherever the door to eternity lies. It has been so with humankind since the beginning of time. We are losing our way and the emotional health of an entire society is at risk.
From a revenue perspective, I find it ironic to hear many funeral businesses complain about the bottom line, and yet they don’t change their business in any way. Whether it be new creative ways to celebrate lives, or new service offerings. We have had many conversations with Directors that say they “want” to offer new services, but they rarely do. Our service at LegacyPreservation.org is a perfect example. Our service compliments existing services and increases revenue for the funeral home.
[…] celebrate their loved one’s life in a unique and meaningful way. Today is the era of the “crowning performance”. We’re the writer, director, and our families’ loved ones are the stars. A casket won’t […]