Jake Johnson: “What we can expect to see in funeral business for the rest of 2023”

April 4, 2023/Business/

Today we are fortunate to have Jake Johnson, CEO of Johnson Consulting Group contribute an article that he has titled, “What we can expect to see in funeral business for the rest of 2023″. As can be expected from an article with that type of title, you will probably come to some conclusions that there are challenges as well as opportunities around the corner for death care.

Here is the article:

The year 2022 was an extremely unique year for M&A in our profession. We saw an increased death rate of the baby boomer generation which was a direct result of COVID. These factors put a huge strain on funeral homes to keep up with demand including labor shortages and difficulty keeping valuable staff.

Johnson Consulting Group (JCG) is always keeping an eye on how buying habits and trends change from year to year. With over three decades of observing these changes, we wanted to recap the 2022 year and make predictions for the rest of 2023.

Increased Succession Planning/Divesting

Many firms are busier, which at first seems like a great thing. However, the lack of help to handle that additional growth has been a huge stress for owners. This is causing many owners to consider selling earlier, which is why we are seeing an increase in succession planning or divesting to a third party. In addition, because of the inflation and additional money in our economy, we’re seeing values for funeral businesses as high as they’ve been for quite some time. In summary, with valuations continuing to be at an all time high, it’s certainly created some interest in funeral businesses that otherwise would not have considered selling right now.

Increase in wages of 20% or More

As we’ve said, there is a big lack of staff in our profession. Firms are still trying to solve this problem from the demand COVID brought and the need for more staffing. In order to obtain the kind of help they need, and keep their current staff, funeral businesses are going to have no choice but to increase wages.

Incentive compensation plans are going to be critical to the owner’s success. Without planning, budgeting, and giving your staff something to work towards, this will put some firms in a tough spot.

Continued Adoption into Online and Digital Platforms

We’ve seen this increase in technology adoption over the past 5 years especially. There are so many more options for funeral home and cemetery owners and operators to enhance the way they do business and their day-to-day operations.

However, it’s really the only way to stay ahead of your competition in our space. At the end of the day, consumers are doing most of their daily lives electronically. From ordering groceries, to scheduling appointments, and more. Our profession has been behind in this, but we are finally starting to see a shift in the direction of technology. Families are still wanting different experiences out of funeral service. There are still families that want the full in-person experience, however we are starting to see that there is a segment of the population that would rather do it online rather than be involved with a funeral professional, forcing our profession to adapt.

Focus on Customer Service Culture Integration

Customer service goes beyond just providing a good product or service – it is about creating a unique customer experience. The great news in funeral service is that the opportunities for a unique experience are endless, as we primarily work with families directly. As owners and managers, we should strive to integrate customer service into the culture of our organization in order to meet our customer’s changing preferences. This means getting all the staff together and really defining what this looks like for your business.

We utilize a popular Customer Experience Workshop program that helps train through the entire customer journey. It is important to define what customer service defects can occur, what the standard should be, and what an “above and beyond” customer experience looks like. This will ultimately lead to a customer-centric culture that leads to higher customer satisfaction, loyalty, and retention rates, leading to increased company success.

How to Stay Ahead

At JCG, we always encourage our leaders to work from the top of their organizations down. Buying into prioritizing the customer experience is going to be huge, and having your leaders live that out every day is going to have an impactful domino effect.

In addition, quality staff is going to continue to be valuable. Invest in their growth by giving them extra training. Develop a compensation plan that will be a win-win for everyone.

And finally, continue to research technology to adapt to today’s family. Remember, our profession is going to continue to change. Whoever continues to adapt in real time is going to end up on top.

About Jake Johnson

Jake Johnson
Johnson Consulting Group

As President & CEO at Johnson Consulting, Jake began his career at Keystone Group Holdings (now Dignity Memorial Network) as Associate Director, Corporate Development, where his financial analysis and forecasting expertise was foundational to the firm’s growth. Jake’s unique ability to problem solve complex business problems and communication leads his success in owning a funeral home and cremation center in Sun City, Arizona. Jake’s educational credentials include a BSBA degree in Management with an emphasis in Accounting and Financial Analysis from Xavier University in Cincinnati, Ohio. His strong foundation in accounting, financial analysis and EBITDA forecasting is complemented by technology savvy and broad general management qualifications in business development and operations.

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