Business, Cremation

An Idea for Cremation Pricing

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Yesterday we published an article dealing with the on going price wars for “Simple” cremation in the United Kingdom.  It made me wonder about the different pricing methods used by full service funeral establishments in dealing with their cremation clients.

For the sake of our discussion, in this article, we are dealing with those full service funeral homes outside of the large metropolitan area that don’t directly have to deal with the price sensitivity of low cost direct cremation because they are far enough away by distance.  These are the firms that tend to be in communities of 75,000 population or less — a community similar to what I served.

Most of these funeral home owners would prefer cremation services following a traditional funeral consisting of embalming, viewing, etc. with a rental or inexpensive veneer casket that could be cremated.  From a financial point of view to the funeral director, that scenario makes the most sense.  However, when a family calls you upon the death of a loved one and says, “We want grandpa cremated”, I’m guessing that less than 10% have that type of service in mind.

What they do have in mind is a cremation followed by a memorial service or a direct cremation with no services planned.  And, as we know, the direct cremation with no services planned is the fastest growing, by choice, type of funeral service in the United States today.

In my opinion, looking into the cremation market as it stands today, if I was to price cremation for a funeral home I don’t believe I would necessarily want to be the low price leader in my community.  So often, low price is equated with low quality and I am still one that believes quality is still a virtue in funeral service.  Nobody wants poor service for their loved one.  Don’t get me wrong, price does have to be competitive, but value also matters.

For service plans that are a cremation followed by a memorial service or a direct cremation with no services planned, I would offer package pricing where legal.

In the “Package Pricing” I would include two things not normally offered (even for Direct Cremations with no services planned):

  1. An included urn in the price.  This would be an inexpensive ceramic or wood urn with, let’s say, about eight choices available to the family.  You could purchase in quantity for about $50 and include in the package at about a $200 retail value.  If families choose to purchase a better quality urn, give them a $100 retail credit and you are still up $50 over the normal retail price of a better urn that they purchase.
  2. I would offer in the package “Help with cemetery arrangements and assistance at the cemetery committal service at no extra charge.”

Here’s my reasoning.  With cremation services the more opportunities we have to sell products the more products we will sell.  I am of the opinion that families when receiving a suitable urn will more likely than not think twice about scattering the remains.  To them, in a package price, it appears like they received a free urn – and this would not be the cardboard type urn most funeral homes have them walk away with — that incents scattering.  Now that they have the remains in a nice urn they will be more inclined to bury the ashes in a cemetery or place in a columbarium somewhere.  A columbarium placement may not help the funeral director in sales, but if the remains were to be buried in a local cemetery, the funeral home has the opportunity for the sale of an urn vault and a monument.

The part about helping with cemetery arrangements and assistance at the committal is to make sure that you are the person they are relying on and not going to a cemetery who may try to make the urn vault and monument sale.  However, as most of my colleagues know, cemeteries in communities of under 75,000 people generally don’t offer products and leave them to the funeral director.

This simple idea is not a cure all for falling revenue per case, however, it is a way to try to bring back some ancillary revenue on cases where you thought none was available.

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