Finance

Great Britain’s Dignity plc reports 2020 results. . .digital marketing important and growing

Foundation Partners why I partnered

Great Britain’s largest purveyor of death care services, Dignity plc, reported their results for 2020 last week in a very comprehensive report.  The results show increased revenues on more death calls, but because of choices made in taking financial impairments on goodwill and trade names it is difficult to get actual year over year comparables.

However, the report is very comprehensive and gives great insight to what is happening in the cremation markets, the direct cremation markets, and, quite frankly, on how digital marketing channels seem to be an ever growing reason for death calls to the company.  That item has been discussed in the North American markets, but probably not to the extent that you will see in the Dignity plc report.

Deaths in Great Britain for 2020 totaled 663,000 which is a 14% increase over 2019 and the highest number of deaths in the United Kingdom since 1918 where deaths included both World War I and the Spanish  Flu pandemic.  Dignity plc numbers somewhat mirrored that increase, although slightly better, in that they reported conducting 80,300 funerals in 2020 as compared to 69,400 in 2019. . . an increase of 15.7%.

In U.S. dollar amounts, Dignity plc recorded revenue of US$ 496.4 million as compared to US$ 469.6 million in FY2019, a 5% increase, but, because of the aforementioned impairments reported an operating profit of only US$22 million as compared to 2019’s operating profit of US$ 62.0 million. . . a 65% drop.

We also noted that the average service revenue dropped about 12% from US$ 3,739 in 2019 to US$ 3,321 in 2020.  A big part of that drop can probably be attributed to the social distance requirements in Great Britain as what Dignity plc calls their “full service volume as a percentage of all services” dropped from 79% of services in 2019 to 61% of services in 2020.

Following are some remarks from Marketing Director Mark Hull that appear in the report which you can access here, especially pertaining to digital marketing and branding:

“A leading digital offer
Like many businesses today, our client journey now typically begins online. In 2010, only nine per cent of our Dignity
Funeral clients found our details through the internet, last year it was over half. For Simplicity Cremations with no
physical branches, every single Simplicity client will have started online.

Therefore, it is essential that we make it easy for potential clients to find us online then provide meaningful help and
advice when they reach our websites. Our websites provide comprehensive guidance from subject matter experts on
everything to do with funerals or funeral plans. Each branch also has a micro-site containing localised information about
that business and its products and services, including pricing.

We have achieved a lot in the past three years – our combined website traffic has grown from just over 1 million hits in
2017 to 5.13 million in 2020. Our digital channels are continuing to generate increasing volumes of calls into our
branches, enquiries to our Simplicity call centre and sales of Funeral Plans. . . . .

. . . Providing digital solutions during the pandemic
The pandemic has increased our clients’ digital interaction with us. Our websites provide the latest information and help
clients understand what type of funeral is still possible within the Government restrictions – both through our funeral
business and at our crematoria. We adapted our processes and products, including distanced arrangements being
made using digital information packs and we’ve enabled more people to view funeral services through streaming.

Providing greater choice and flexibility
The pricing of funerals is complex and requires testing to ensure that it’s easy for the bereaved to understand exactly
what they are paying for. The pace of change and evolution in the funeral market has accelerated significantly with
increased demand for personalised funerals, products such as direct cremation and woodland burials; and specialist
needs in areas of the UK where traditions, strength of religious beliefs and the demographic make-up are all changing.
During 2020, we constantly trialled different products and prices and we haven’t been afraid to try alternatives that
benefit both the business and clients. Over 250 branches currently have comprehensive price lists online, with the
remainder to be updated by Summer 2021. . . . .

. . .42.5 per cent increase in call volumes
Our website continues to provide an increasing volume of calls into our local businesses, with 228,673 trackable calls in
2020 (+42.5 per cent year-over-year).

Creating a clear brand identity
We continue to develop the identities of the Group and its component businesses. In the past, funeral directors had
little need for marketing, however, in an increasingly competitive sector, with demand for a wider range of products, it’s
imperative to differentiate ourselves from other providers.”

This quote was also in the report, but attributed to Mr. Alan Lathbury, Business Development Director of Dignity plc, “The UK funeral market is becoming more dynamic – it is more digital than ever before, and more driven by the evolving client needs. . . . . The funeral director market remains very fragmented, with approximately two-thirds of funeral directors being small owner managed businesses. . . . It is estimated that three quarters of all funerals result in a cremation with the remainder being burials.”

According to the report, Dignity plc has 820 operating branches and 46 crematoriums as of 2019.

Funeral Director Daily take:  We found this report to be an excellent barometer of the United Kingdom death care business, at least from the perspective of the Dignity plc executives.  They touch on several aspects of death care.

One aspect that they touch on is that they are reviewing what they call their “root and branch” operating model.  As they discuss their success, or possibly their lack of success with this system and, their apparent lack of picking up a higher market share of Great Britain’s deaths even as they have expanded their locations, they make these statements which I found very interesting as it pertains to what in North America we might call our “roll-up” business model.  It also, in my opinion, had Dignity plc questioning its own acquisition strategies and decisions:

However, it is the shortcomings exposed by the root and branch review, arguably self-inflicted by torpid strategic direction over the last decade, as exacerbated by the extreme volatility in volume created by the pandemic, that exposed the business most during the year. . . . (Dignity plc) had elected for many years to utilise the majority of its capital investment buying its way out of deteriorating funeral market share. . . .At best that consolidated the heritage of strong family businesses and staff that perform well to this day, at worst business integration ceased at legal completion: leading to Dignity essentially becoming the industry retirement plan for independent funeral directors. “

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